Eden Hill Journal

Comments, dreams, stories, and rantings from a middle-aged native of Maine living on a shoestring and a prayer in the woods of Maine. My portion of the family farm is to be known as Eden Hill Farm just because I want to call it that and because that's the closest thing to the truth that I could come up with. If you enjoy what I write, email me or make a comment. If you enjoy Eden Hill, come visit.

My Photo
Location: Maine, United States

Thursday, November 27, 2008

Two Terrified Turkeys

Is it my imagination or has President Bush taken on something of a terrified persona? And what has become of Dick Cheney? Even here in this pre-Thanksgiving ceremony at the White House where Bush is attempting humor, he doesn't seem relaxed at all. He seems stressed, nervous, stumbling over his own script which focuses, believe it or not, on the pardon of two White House turkeys!
If I were Bush (God forbid!) I think I might be concerned about a pardon as well. I have no doubt that Bush and Cheney were hoping for a McCain/Palin victory. They didn't get one. Now their one remaining hope is that Obama's outspoken desire to sweet-talk the opposition party into cooperation leads him to overlook Bush and Cheney's many misdeeds.
What misdeeds are you referring to, some may ask. Yes some in America still see Bush as flawless. Some even go so far as to give Bush God-like powers where good is defined by what He, Bush, does. Whatever Bush says is, by definition, Right since Bush Himself is "The Decider."
I'm not that generous, as you may know.
I still haven't gotten past the 9/11 thing, the remarkable coincidence of it. You had the Project for the New American Century white papering its way out of the 20th Century about how essential it is becoming at the turn of the century for America to build up its military so we can protect our strategic energy interests in the Middle East. They state that the only thing holding us back is the American public's resistance and that this resistance will block this neo-conservative dream unless some Pearl Harbor type catastrophe hurls public opinion forward.
Next you have Bush taking over the White House and this neo-conservative PNAC dream team taking over America's offense - Cheney, Rumsfeld, Wolfowitz, Libby, Bolton, you name it.
Then, oddly enough but conveniently, you have the new Pearl Harbor happening not even a year into Bush's presidency - 9/11.
Immediately you have the neo-conservative dream team taking the field and planning the offensive that would take over and essentially colonize the Middle East. You have dream team neo-conservative think tanks within the Pentagon coordinating with their counterparts in the Vice-President's office to feed bogus "intelligence" to the White House and the State Department as well as to the head of the Defense Department. This bogus intelligence is fed to the American people and the world and leads to the US invasion of Iraq, presumably to rid Iraq of its massive stockpile of WMDs.
Then just to put icing on the cake, you have Rumsfeld himself testifying to the 9/11 Commission that 9/11 was a "blessing in disguise." To back him up you have both Rice and Powell testifying essentially the same thing, although without the use of that term.
So you have prescience, coincidence, conspiracy, and thanksgiving. And on top of that you have an intense politicized media campaign geared to assure that we have those four things in exactly that order. Heaven forbid that we should have the conspiracy component happening prior to the miraculous coincidence that was 9/11. How unpatriotic it would be for any red-blooded American to think that was possible!
We all know that McCain and Palin would have been OK with it even if it somehow turned out that conspiracy did precede coincidence, that somehow this prescience demonstrated so clearly by PNAC's white papers actually led to some plan of action that resulted in 9/11. After all, conservatives all knew that the American public needed a jolt. Conservatives pretty much are unanimous in believing that the US invasion of the Middle East was necessary and good. Conservatives all know that the end justifies the means.
But what does it mean to have Democrats in power?

Wednesday, November 26, 2008

Housing Inflation

Here's a prescient article from 2006, just as the housing bubble was bursting. This isn't too far off from what I've been thinking, that somehow the inflation calculations weren't taking into consideration the rising cost of owning a home. This article certainly explains that clearly enough.
But imagine where the economy might be right now if the housing bubble had been factored into the inflation rate over the past ten or twenty years, especially over the past eight years of the Bush administration. During the Bush years we were seeing low rates of inflation being driven up mainly by the rising cost of energy - and here again there must be some way that this rising cost of energy is masked over by inflation calculations. Meanwhile housing costs were skyrocketing, being driven up by the demand side of the supply/demand curve which was being driven up by historically low interest rates. People buying houses weren't paying much attention to the actual cost of the houses they were buying. They were paying attention to the monthly payments. It wasn't can I afford a $250,000 home, it was can I afford the payment and with record low interest rates, the answer was yes.
So under this demand-side pressure, house prices rose sharply during the Bush years. But because Washington in its wisdom has elected not to factor housing costs into the inflation rate, we all perceived that inflation was low, insignificant, nothing to concern ourselves about. And by we, I am including the investors who were making all this inflationary mortgage money available in the first place. We did not exercise the caution in lending that we would have exercised had we known the real inflation rate. Again, read that article to see what I mean by that. It was the perception of inflation that dried up the mortgage credit market.
Had that perception been there all along, investors would never have made low interest mortgage money available in the first place. There wouldn't have been the inflationary demand for housing at any cost that created the housing bubble. There wouldn't have been a housing bubble at all and our economy might be strong right now instead of stumbling drunk into the ditch.
But instead, here we are still trying to ignore the fact that the actual price of houses has anything at all to do with inflation. Here we are again trying to re-ignite the fire that inflated the balloon in the first place, easy credit. Here we are still stuck in the Reagan mentality that we have inflation by the tail because of free trade. Here we are, Democrat and Republican alike, wondering when this train wreck will be back on the tracks.
Maybe when we all begin to wrap our heads around the concept of housing inflation, inflation in the cost of buying and owning a house, maybe then we can lay a foundation for a new economy. But I don't see that happening any time soon, do you?
And for those of you who still argue that housing costs shouldn't be factored into inflation because house prices never fall since houses are an investment from which you always get a return, it should soon become clear to you that this is delusional reasoning. Calculating inflation in such a way that it masks the real increases in the daily, weekly, monthly, and yearly cost of living might help politicians stay in office, but it is crippling the economy. There is absolutely nothing wrong with keeping housing costs down. This trend to drive housing prices up as high as they can stand to go to get a better return on investment is not a good thing. It is a bad thing. It's time we began to understand that fact again. We need to avoid conditions that encourage house prices to rise. We need to remove speculation from the calculation of a house's worth and get back to the real value again. Real value is the value of property right now, as it is being used right now. Speculation over what the value would be if this or that were to happen has become so normal that we now base property taxes on the speculative value of property instead of its real value. The housing bubble was fueled by speculation about the future value of property. The sale prices of homes were based not on anything real, but by speculation of future value. Now we are in a race to the finish to discover what the real value actually is of all this inflated property.
But have no fear, Chris Dodd is here. If there's any way in the world to keep that from happening, he's on the case.
Change we can believe in doesn't have white hair, have you noticed that?

Tuesday, November 25, 2008

No Clue

So today it was another how much? 800 billion US dollars? For what? The credit card industry? The mortgage industry? The lenders? Again? And are they lending what we handed them before? Has that money run out already because Americans are just borrowing so much these days? Not.
I've recently been hearing the Diane Rehm show on Public Radio in the afternoons. Yesterday they were talking about the Citibank thing and today it was this new $800 billion bailout. She takes calls but also has a panel of "experts" to answer questions. What I noticed yesterday and today is this growing uneasiness and even disgust with the way that even the experts have absolutely no clue where this money is going or what it is doing to help the economy. There is zero transparency and so far, no results. "It could have been worse" is the best anybody has come up with so far and even that comes without references to support the claim.
But doesn't it strike anyone yet that it is ironic the way Middle Class America is loaning all this money to the rich so the rich will agree to loan Middle Class America enough money so they can afford to go to work tomorrow? I mean what in Hell is going on here? The banks have money. The wealthy are still wealthy. If the point of going through this economic slide-down is to rid us of "easy money," then what's the point of working-class America investing our future prosperity trying to keep easy money flowing? The economy will recover when the wealthy want it to recover and not one day sooner. What's so hard about that to grasp?
But we go on and on about how this or that bailout kept it from getting worse while all around us it keeps getting worse and there's nothing to show for all the bailouts so far other than that the corporate executives are still getting their bonuses and living high on the hog.
No, these "stimulus" bonuses that the Fed (a private bank, if you recall) and the US Treasury are giving away to the wealthy aren't about saving the economy. These are just payback from the Republican Party as this Reagan wave of conservatives fades away. Consider this an investment in the future of the Republican Party. This money raised on the backs of working class Americans will finance the next wave of right-wing politics which is coming closer and closer to inevitability the more we send taxpayer money off into the abyss. Between this (stimulus) tax burden and direct conservative obstructionism, Obama doesn't stand a chance, or so the thinking goes. And when conservatives rise again, this money will be there waiting for them.
They wanted to rob us blind by using our Social Security withholdings to pump up Wall Street. They failed at that, but they aren't failing this time. The wealthy have Middle Class America by the balls this time. The squeeze is on. And when Obama moves in, watch out. There are a lot of people in this country who have a lot of money and influence who don't want Obama and the Democrats to succeed. Obama's stated goal is to bring the Middle Class back their wealth. There are a lot of wealthy people in this country who see working class wealth as socialism. A lot of wealthy conservative Americans don't believe that working class Americans deserve good pay.
These last few months of Bush economics are contributing hard to that goal.