RIP: The American Dollar (Or Why You May Be Able to Use Your Paycheck to Wipe Your Butt RSN)

Well, the ruination of the economy and the labor market the Bush-Cheney Administration worked very hard to bring about in record time between the December day they stole the election from Al Gore in 2000 and the first 100 days of them "presuming" office in January 2001, and continued throughout their absolute monarchy is almost complete.

We've already seen - for the first time - economists in many other lands besides our own say the American dollar is increasingly useless and is shunned compared to many other emerging players like China and yes, even Iran and the Euro. Also a firstie: the Canadian dollar has become (significantly) more valuable than its U.S. counterpart, a phenomenon many said would never happen. We've seen the middle class grow poor and more home foreclosures in this country than at any time since the stock market crash and resulting economic phenom known as "The Great Depression" began in 1929. [As Bush would say, look at the good side: at least poverty is up and those we owe money TO are making huge additional money in obscene charges for debt).

Now, many are saying flat out that the dollar's days are numbered, which means ours as an economic superpower also are numbered. I can't help but think that it's all too apt to say that the buck stops with Bush and Cheney, because it quite literally may, even before they leave office on January 20th, 2009.

Here's one example of the dollar's funeral dirge submitted by Reader Sharon (whose typing is only slightly better than her marksmanship).

From Surplus To Deeper In Debt Than EVER: The Bush Economy

Well, Bush managed to push us $9 trillion in debt (and some economic forecasters say this is nowhere near how much we owe since much is still hidden from accounting eyes).

Remember the surplus Bill Clinton left us with?

No?

Ah, that’s because of the 7 years of Bush who can veto health care for kids but demands tax breaks for Dick Cheney and friends.

Oh, and you likely owe at least $32K grand per person in your household for the “war that will pay for itself, guaranteed! cakewalk” called Iraq”.

Sorry, no checks. Only blood and sweat and your hopes and dreams are tender we accept, please.

Putting A Face On The American Home Foreclosure Crisis

As some of you kindly noticed, I've been absent a great deal lately (although I believe the situation is now corrected... especially once my DSL begins to work). Although I really hate airing dirty laundry in public, I feel obligated to tell you a bit of why I've been missing, since it ties directly into a very serious situation here in America: a record of primary home foreclosures that now EXCEEDS that of the Great Depression that began in 1929.

I am one of 1.6 million home mostly middle class home owners whose home was foreclosed upon. Obviously, my financial problems were a big part of it; like many, my principal income post September 11th nose-dived and (also a sad norm with foreclosures and bankruptcies) a catastrophic illness in 2003 left me unable to work the 20 hours a day, 7 days a week I had for many years. By 2005, every effort I engaged in to secure my home went boom.

Though financial advisors always say to contact your mortgage company, lay out the case, and work with them to find a solution, my mortgage holder - the largest in the U.S. - never returned my calls. In fact, in the 7 years I had a mortgage with them, I never managed to speak to one single human being. When I tried to sell the home (tough in a bad market), the mortgage holder fought that, too, going to court to prevent me from doing so.

Sadly, my case is becoming the norm. Millions and millions of homes have been taken back since Bush took office (the "ownership" society he talked about really only meant the banks owning us), and though 1.6 million have been lost this year alone, some figures cite that at least 20 million other home owners are in serious danger of bankruptcy/foreclosure in the next year. Millions more are at risk of losing homes within the next two years. (More than half of all bankruptcies in the U.S. have as their initial factor medical bills - but, of course, universal health care isn't needed by anyone except Congress for themselves. ::cough::choke::

This crisis does NOT just affect the home owners. Mortgage companies have no reason these days to work with home owners because the federal government gives them a wonderful out: all the laws are written to their favor AND the Federal National Mortage Association (aka Fannie Mae) comes in and buys these foreclosed homes with our tax dollars to save the mortgage holders. Since homes aren't selling, this is only going to worsen... and get much worse if we continue to have someone like Bush (aka Giuliani, Thompson, etc.) in the White House and running Congress.

Massachusetts is talking about trying to intercede to provide some kind of bridge between distressed home owners and their mortgage holders to try to help people stay in their homes and save tax dollars being lost to "help" mortgage companies when it's American families who need the assistance.

I'm not asking for sympathy here, but to help put a face on this crisis. So many of my friends have been totally perplexed how someone like me, hardworking and frugal, could be caught. The answer is, this can happen to anyone. And does.

White House Lies, Damned Lies, And Infidelities: "Whatever Shall We Tell The Children?"

If the past few weeks - give or take seven years - have taught us anything, it's to yearn for the days when a president merely lied about a question that was simply NOT the business of special counsel Ken Starr or the American press corps to ask: whether he engaged in any form of adulterous sexual activity with a consenting adult.

True, it's sad as hell that the Clinton-Lewinsky cigar/blue dress debacle would seem like the good old days. Yet, back then, we weren't at war with everyone and everything, more Americans were earning a living wage while far fewer were forced into bankruptcy and home foreclosures, and Washington's only seeming grave concern was "What shall we tell the children?" about a lie that was really none of our business when, today, the people getting screwed are American workers and other citizens (and it's sure as heck not consensual!), the lies told undercut not the sanctity of marriage but the entire U.S. constitution, bill of rights, and the ever-declining integrity of a democracy.

Indeed, we really SHOULD be asking the question now, "Whatever will we tell our kids?" because, if we don't figure out how to address what the Bush Administration is doing to us and America and the world, our kids stand almost no chance whatsoever of living in a country of which they can be duly (rather than artificially) proud.

Paul Krugman: "The Big Meltdown"

While a House reprehensible from Texas (naturally), on the chamber floor, blamed this week's nasty stock market crash as the fault of the Democrats, Dr. Krugman sees a bigger picture at work here. Read it all at Rozius, or content yourself with this whopping sniplet:

The great market meltdown of 2007 began exactly a year ago, with a 9 percent fall in the Shanghai market, followed by a 416-point slide in the Dow. But as in the previous global financial crisis, which began with the devaluation of Thailand’s currency in the summer of 1997, it took many months before people realized how far the damage would spread.

At the start, all sorts of implausible explanations were offered for the drop in U.S. stock prices. It was, some said, the fault of Alan Greenspan, the former chairman of the Federal Reserve, as if his statement of the obvious — that the housing slump could possibly cause a recession — had been news to anyone. One Republican congressman blamed Representative John Murtha, claiming that his efforts to stop the “surge” in Iraq had somehow unnerved the markets.

Even blaming events in Shanghai for what happened in New York was foolish on its face, except to the extent that the slump in China — whose stock markets had a combined valuation of only about 5 percent of the U.S. markets’ valuation — served as a wake-up call for investors.

The truth is that efforts to pin the stock decline on any particular piece of news are a waste of time.

Wise analysts remember the classic study that Robert Shiller of Yale carried out during the market crash of Oct. 19, 1987. His conclusion? “No news story or rumor appearing on the 19th or over the preceding weekend was responsible.” In 2007, as in 1987, investors rushed for the exits not because of external events, but because they saw other investors doing the same.

What made the market so vulnerable to panic? It wasn’t so much a matter of irrational exuberance — although there was plenty of that, too — as it was a matter of irrational complacency.

After the bursting of the technology bubble of the 1990s failed to produce a global disaster, investors began to act as if nothing bad would ever happen again. Risk premiums — the extra return people demand when lending money to less than totally reliable borrowers — dwindled away.

For example, in the early years of the decade, high-yield corporate bonds (formerly known as junk bonds) were able to attract buyers only by offering interest rates eight to 10 percentage points higher than U.S. government bonds. By early 2007, that margin was down to little more than two percentage points.

For a while, growing complacency became a self-fulfilling prophecy. As the what-me-worry attitude spread, it became easier for questionable borrowers to roll over their debts, so default rates went down. Also, falling interest rates on risky bonds meant higher prices for those bonds, so those who owned such bonds experienced big capital gains, leading even more investors to conclude that risk was a thing of the past.

Sooner or later, however, reality was bound to intrude. By early 2007, the collapse of the U.S. housing boom had brought with it widespread defaults on subprime mortgages — loans to home buyers who fail to meet the strictest lending standards. Lenders insisted that this was an isolated problem, which wouldn’t spread to the rest of the market or to the real economy. But it did.

For a couple of months after the shock of Feb. 27, markets oscillated wildly, soaring on bits of apparent good news, then plunging again. But by late spring, it was clear that the self-reinforcing cycle of complacency had given way to a self-reinforcing cycle of anxiety.

There was still one big unknown: had large market players, hedge funds in particular, taken on so much leverage — borrowing to buy risky assets — that the falling prices of those assets would set off a chain reaction of defaults and bankruptcies? Now, as we survey the financial wreckage of a global recession, we know the answer.

In retrospect, the complacency of investors on the eve of the crisis seems puzzling. Why didn’t they see the risks?

Read the rest here.