First, Clinton's spokesman Jay Carson sent this note to Purdum, responding to Purdum's Vanity Fair article: "The ills of the Democratic Party can be seen perfectly in the willingness of fellow Democrats to say bad things about President Clinton. If you ask any Republican about Reagan they will say he still makes the sun rise in the morning, but if you ask Democrats about their only two-term president in 80 years, a man who took the party from the wilderness of loserdom to the White House and created the strongest economy in American history, they’d rather be quoted saying what a reporter wants to hear than protect a strong brand for the party. Republicans look at this behavior and laugh at us.”
The more I read that, the truer is is. But this is the part that stuck in my mind all day: "If you ask any Republican about Reagan they will say he still makes the sun rise in the morning..."
That's an article of true faith among the GOP, for sure. Republicans began the canonization of Reagan before George Herbert Walker Bush put his hand on the Bible. They started naming everything clean and pure and fruitful after him: major thoroughfares through the prettiest parts of town (unlike the many MLK Boulevards), major buildings, major open spaces. Hell, they even pushed George Washington himself -- first president of nation, for God's sake -- aside to make room for Ronald Reagan's name on Washington National Airport, serving Washington, D.C. itself! And on top of all that, there's still an effort under way to erect some sort of Reagan monument on the Washington mall.
And remember the weeklong funeral production staged for him two or three years ago -- what Kabuki theater that was: it felt like there was a funeral every day for a week, for the same man, with the same commentators saying the same things over and over and over. By the end of it, Reagan must have already sprouted wings and taken a seat at the right hand of God.
Why the Hollywood production for Reagan? Because, as the legend goes, Reagan single-handedly defeated the Soviet Union and won the Cold War. Brought the Russkies to their knees and made 'em beg for mercy. Then he gave them mercy, letting them live and demanding only that they bow and scrape to America and our political philosophy, and that they apologize for Khrushchev. And keep us supplied with Beluga.
How did Reagan do all that? He outspent them, enabled by a pliant Congress. He poured more money into the Pentagon than Russia could spend on its own military -- at the expense, of course, of America's domestic programs, ones that benefitted America's poor, its working class, its children, its elderly. Year after year through the 1980s, the biggest challenge at the Pentagon was figuring out how to spend all the cash flowing its way, borrowed from Japan through Treasury notes, under the public banner of "peace through strength."
It left us -- for those who don't remember -- with the largest budget deficits and highest debt in American history. When Reagan left office, the nation owed more than it had ever owed before -- in fact, more than all the budget deficits of all the previous administrations combined, Washington through Carter -- an achievement surpassed only by his successor, George I, whose campaign theme was "Stay the course."
Which brought us to Clinton's election in 1992 and his first budget proposal to Congress in 1993. Remember, he had a Democratic majority in Congress that year, and still his budget proposal -- titled the "Deficit Reduction Act of 1993" -- passed by a single vote and is largely credited with costing Democrats their control of Congress in 1994. Yet it was precisely this budget that set America back on the road to fiscal responsibility, which led then to the longest period of sustained economic growth in the history of the world.
By his last year in the White House, we had erased our budget deficit and were paying down the national debt -- including debt to foreign interests. In essence, Clinton spent his eight years making historic strides toward cleaning up the fiscal mess left behind by Ronald Reagan, whose name stains public property from Bangor to Boca to Malibu.
Then came Dubya. Poster Mike McL wrote yesterday here at Kos,
We have an obligation to pay our national debt (and yes, it is ours, yours and mine alike, and it presently stands at $9,391,228,825,656.43 as of May 29, 2008, which, with our present population being 304,231,448 as of June 2, 2008, means we each owe 10,868.70). There isn't a chance in hell that every man, woman, and child could come up with that kind of money to fork over right away to pay off the debt.
So, we pay interest on it. How much?
For Fiscal Year 2007, we paid $429,977,998,108.20 in interest, or given a population estimate for 2007 of 301,621,157 works out to $1,425.56 per person. 2007 tax revenues (PDF) were approximately $2,396,290,997,000.00. So for every dollar paid in taxes, $0.179 (almost 18 cents) went just to pay interest on the debt. If we could begin to responsibly pay down the debt, we could ultimately end up cutting taxes 10% across the board and still have extra revenue to invest in our military, our infrastructure, and our other important programs.
Our national debt stood at $5,728,195,796,181.57 on January 22, 2001, the day after George W. Bush took office. In other words, during his term in office, our national debt has so far increased by $3,663,033,029,474.86. Had we continued with the policy of pay-go and not enacted the President's inane tax cuts, we might instead have seen a decrease in the national debt. We certainly would not have seen the level of increase we have been burdened with.
Get that? We owe $9.4 trillion dollars to various debtors; Dubya and his own pliant Congresses are directly responsible for $3.6 trillion of it, or 38 percent of the total. And since we can't afford to pay it off under present economic policies, we pay only the interest on it.
And to whom do we now owe $1.53 trillion of that total? China. (Or, as Lou Dobbs calls it, Communist China.)
As one blogger puts it,
Apparently, when referring to America as the 'ownership society,' we forget to note that it's the f-ing Chinese government doing the owning. China's state-run central bank owns $1.53 trillion in U.S. holdings (including debt), an amount that increases by over $1 billion per day (it saw an increase of $470 billion in 2007).
Forget f-ing Osama bin Laden: This is a real national security problem. Or doesn't anyone else think that having a foreign totalitarian government able to completely eviscerate the dollar in one fell swoop (not that we can't do that job very well on our own, thank you very much) is a bad thing?
Yes, China had a great year in 2007, collecting $462 billion -- more than $31 billion in December alone.
China's foreign exchange reserve had reached 1.53 trillion U.S. dollars by the end of 2007, up 43.32 percent from 2006, the People's Bank of China announced on Friday. A total of 461.9 billion U.S. dollars were added to the country's forex reserve in 2007, said the central bank. In December alone, the forex reserve rose by 31.3 billion U.S. dollars.
China's forex reserve kept a sharp growth in 2007, reaching 1.2 trillion U.S. dollars by the end of March, 1.33 trillion U.S. dollars by the end of June, and 1.43 trillion U.S. dollars by the end of September.
China's soaring trade surplus is the major contributing factor to the forex reserve boom. Data newly released by the General Administration of Customs show that China's trade surplus surged to a record 262.2 billion U.S. dollars in 2007, representing a 47.7 percent growth over a year earlier.
The huge forex reserve is considered the main reason for excess liquidity in China, as the central bank has to spend quantities of basic money to purchase foreign exchange, thus aggravating the problem of surplus fluidity. By the end of 2007, the M2 -- a broad measure of money supply, which indicates the monetary demand of the whole of country and possible inflation -- grew by 16.72 percent from a year ago to 40.34 trillion yuan.
The growth rate is 0.22 percentage points lower than the end of 2006, but still higher than the target growth of 16 percent set by the central bank at the beginning of 2007. A total amount of 330.3 billion yuan was poured into the market in 2007, 26.2 billion yuan more than 2006.
On the other hand, continuous growth of the forex reserve has in fact increased the pressure on appreciation of the Chinese currency, which in turn has exerted greater pressure on value preservation of China's forex reserve.
In a move to make better use of the country's huge forex reserve, China established the China Investment Corporate Ltd. (CIC), the country's state forex investment company in 2007. The state-owned investment company will invest in overseas financial markets. The registered capital of 200 billion U.S. dollars of the CIC all comes from the forex reserve of the country, which have poured into the company so far.
Catch that? China has taken ownership of so much American currency that it had to form a brand-new investment corporation just to handle the SURPLUS American money it's collecting, a corporation that will invest these billions of dollars in foreign markets.
China -- once the technological and manufacturing backwater of the world economy -- now holds America's financial fortunes on a leash. Which brings me back to the CNN.com article I read yesterday:
(CNN) -- Rising oil and gas prices have lawmakers and consumers scrambling for solutions, but it is unclear whether anything can be done to lower energy costs in the short term, experts say. A confluence of factors, from supply and demand to speculation and a weakened dollar, are driving gas prices higher. The price of oil has doubled over the past year. A barrel of crude oil cost about $65 in June 2007; it is currently hovering around $130 a barrel.
Gas prices have skyrocketed as a result, with some American consumers paying more than $4 a gallon. The national average is $3.95 per gallon, according to a AAA survey published May 29. A year ago, the national average was about $3.20.
Observers say several factors, domestic and global, are responsible for the price increases. Although demand is falling in places like the United States and Europe because of high prices, it is surging in emerging markets like China and India.
Every time I call for tech support from the manufacturer of my computer, I'm reminded why India has the financial wherewithal now to place such demand on petroleum products; we've exported so many of our high-tech service jobs there that we're probably the engine of India's growing middle class.
And it's no wonder that demand is surging in China, thanks to the billions in T-bills we've sold them to finance this idiotic war on Iraq.
Isn't this formula mindlessly simple? Dubya wanted to have a war AND wanted to give massive tax breaks to his base, so there was no tax revenue to pay for his war. He wouldn't forego the tax breaks, and wouldn't propose to raise taxes to pay for it, because Americans don't want the war and won't stand for paying for it through higher taxes. So his Commerce Department approved the issue of billions of Treasury bonds, which we sold to China to raise fast cash. We used the cash to pay for the war, so it's gone, Daddy, gone now. China's left in the catbird seat -- holding our promissory notes in a vice-grip.
America squawks about a trade deficit; they twist that vice-grip and the squawking goes away.
America wags its finger over some human rights abuses; they twist tighter and we tell our human rights activists to shut up and sit down.
Americans stage protests to disrupt the Olympic torch route over China's crackdown on Tibetan monks; they twist tighter still.
At the end of all this twisting, we're on our knees, clutching the weakest dollar we've had in ages, whimpering in nauseated anguish and inviting China over for dinner, our treat.
Just in case no one's yet paying close attention: Inflated gas prices, inflated food prices, inflated prices for everything are just the front edge of the great payback to China.
And that doesn't yet take into consideration the role of the Saudi royal family, who have their own little racket going. Foreseeing a Democratic administration that's committed to green energy, it's apparent that the Sauds are equally committed to wringing as much profit out of America as possible until the Great Wean begins.
Meanwhile, concerns are rising that supply -- battered by political instability in some oil-rich countries and a decision by others to not increase production substantially -- is not keeping up with demand.
Additionally, the declining value of the dollar, the currency used by the international oil market, has made it easier for Asian and European countries to purchase oil.
Some experts say speculation may also be playing a role in the rising price of oil. Many investors look to commodities like oil to act as a buffer against inflation, which typically occurs when -- as is the case now -- interest rates are low and the dollar is weakened. Other experts say the effect of speculation is minimal to negligible.
Whatever the cause, federal and state lawmakers are anxiously searching for short-term relief. Their options, however, seem limited.
Limited is right. Both McCain and Hillary have proposed a federal gas tax holiday, which Obama calls a gimmick. Analyses suggest such a holiday would give little relief.
"There is very little the government can do in the very short-term, other than providing misinformation about the potential for government to act," said Gilbert Metcalf, an economist at Tufts University.
He said that raising the price of energy may prove more beneficial. It seems counterintuitive, but the high prices could reduce demand and fundamentally alter consumer behavior, he said. "We are not going to do it by reducing the price," he said. "It's saying to people: 'Don't go buy a fuel-efficient car; we'll just lower the price when it's too painful.'"
"Our best bet is to wean us off oil."
So here's the conclusion I reached last night: China studied well Ronald Reagan's bankruptcy of the Soviet Union in the 1980s, and it's applying those tactics to America now. Does it warm the hearts of Republicans that their sainted godfather -- dare I say "Beloved Leader"? -- taught the Chinese how to rip out the economic underpinnings of our country? Mourning in America, indeed.
And here's the question that come on that conclusion's heels: How well did we learn from Bill Clinton's economic plan of 1993, the one that dragged us back from the road to oblivion? Yes, Clinton benefited mightily from the naturally-occurring tech boom of the mid-1990s, but I assert that another boom is waiting in the wings. John Edwards talked about it in greatest detail, having studied well Al Gore's proposals of recent years: Green Energy.
Just as the combination of Clintonian economics and the tech boom gave America's economy back to Americans, a return to those policies and adoption of policies that spur green energy innovation can lead us back from the brink again -- AND solve our energy crisis, AND create more American jobs.
And maybe, one day many years from now, someone may offer legislation to put Bill Clinton's name on something, giving credit where it's due.
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