Fictional action trumps real impotence

On the front page of CNN.com, I read two headlines this afternoon, in this order: "Paulson braces public for months of tough times" and "Batman dethrones Spidey as superhero king." Without having seen "The Dark Knight" but being reasonably familiar with the characters involved, I believe the two stories are related.

First, I click on the Paulson story and find that the appointed leaders of our corner of the Free World have abdicated their authority to fix our broken system. Paulson is the U.S. Secretary of Treasury but speaks in this report as if he's merely the town cryer, impotent and clueless, able to report what we all see, hear and feel, but incapable of fixing a damn thing. He speaks, and he engenders no confidence whatsoever:

"I think it's going to be months that we're working our way through this period - clearly months," he said.

Paulson said the number of troubled banks will increase as they struggle to cope with big losses on bad mortgages. The government this month took over IndyMac (IDMC) after a run led it to become the largest regulated thrift to fail.

"Of course the list is going to grow longer given the stresses we have in the marketplace, given the housing correction. But again, it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation," he said in broadcast interviews.

He enumerates the nation's economic ills like a trained medic, but the best medicine he offers is a stroke to the forearm:

"We're going through a challenging time with our economy. This is a tough time. The three big issues we're facing right now are, first, the housing correction which is at the heart of the slowdown; secondly, turmoil of the capital markets; and thirdly, the high oil prices, which are going to prolong the slowdown," he said.

"But remember, our economy has got very strong long-term fundamentals, solid fundamentals. And you know, your policy-makers here, regulators, we're being very vigilant."

His activism to correct economic course begins and ends with the advice an old uncle might give to a couple weighing a mortgage:

"Our first priority today is the stability of the capital markets, the stability of the system. And these institutions have investors all around the world ... and those investors need to know that we in the United States of America understand the importance of these institutions to our capital markets and to our economy and to our housing market," he added.

There is no sense of urgency, no commitment to act, not even an indication that he and his orbiters have any idea of what steps are needed to find the Titanic's leaks, marshal the resources necessary to plug them, hoist ballast and pump for dear life. Rather, there's admission of failure, married weakly to admission of incompetence:

Paulson acknowledged the U.S. is continuing to lose jobs, though he said the $168 billion economic relief plan approved this year has created jobs that would not otherwise exist. The plan included tax rebates for people and tax breaks for businesses.

This is not service, not leadership, not action; this is the ghost of a dead ideology, teetering in Purgatory and unsure of which direction to fall.

In case the reader needs further information, CNN kindly includes a link on that story's page to a series of analysis called "Scary economy, real solutions." Following that link leads to a series of briefs with titles like "A looming recession," "Weak dollar," "Falling stock market," "Unemployment anxiety," "Inflation," "Gas prices rising," "Home prices sinking," "Tightening mortgage market." The briefs dispense advice that wasn't fresh when Ben Franklin offered it under the name of Poor Richard: "Beef up emergency savings," one text offers, with nary a glimpse of irony.

It is no wonder, then, that America's moviegoing public has fled the real world where walking apparitions promise volumes of nothing and given a record-breaking opening weekend to a film about one disciplined hero battling one agent of chaos, neither of whom suffers from impotence, incompetence, bureaucratic malaise or a lack of creative ideas to resolve problems. Neither the superhero nor the supervillain are trapped in merely diagnosing and rediagnosing a situation; both see the matter at hand and move, by God, to handle it.

Would that America's leaders had a fraction of the simple gumption necessary to do the same.

Dubya: Master of the obvious

Moments like these make me proud to be an American.

'It's been a difficult time for American families," Bush said at a press conference. "We must ensure we can continue providing credit during this time of stress."

Odd that the solution to our woes is to announce artificial actions that don't solve anyone's problems. Maybe next year we can begin rebuilding.

China's pulling a "Reagan" on America

Monday morning, I read about some squabble between Todd Purdum of Vanity Fair, who published an extensive and fairly brutal critique of former President Bill Clinton, and the former president himself, through his spokesman. A couple of lines from the response that Clinton's office issued came back to me on Monday afternoon when I read another article at CNN.com, titled "Is there a short-term fix for high gas prices?". I'll share both and explain the connection between the two.

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.

Does Dubya buy his own food or gas?

To all those who voted for George W. Bush -- even once -- this summer belongs to you. His free market is alive and well, and we're all going broke.

In the first five minutes or so that I spent clicking through CNN.com, I found reason to spend this summer at home, indoors, in the dark, with a pantry full of Top Ramen noodles and glasses of tap water.

First, CNN tells us that it's going to cost us a lot more money if we go to the grocery store.

Food inflation is the highest in almost two decades, driven by record prices for oil, gas and mounting global demand for staples such as wheat and corn, and for proteins such as chicken. And that's reaching into Americans' backyards.

The price of an average barbecue -- with burgers, hot dogs, beer, soda, condiments, salad, paper plates and lighter fluid -- could run families about 6 percent more than last year.

The consumer price index for food rose 4 percent last year, compared with an average 2.5 percent annual rise for the last 15 years. On Monday, the U.S. Department of Agriculture raised its forecast for next year by half a percentage point, to a range of 4.5 to 5.5 percent.

Basic economics account for most of the increase: Bad weather has hurt crops, economic prosperity has driven up demand in developing countries, and surging fuel prices have raised transportation costs.

Economists and food scientists have argued that biofuel production is also a major factor in rising food costs, particularly corn, and that it should be scaled back. Meat and poultry executives have come out against federal ethanol mandates, which they say is driving the cost of corn higher.

Next, today's news brings word that crude oil has just shattered another record. What was it before Dubya was elected the first time, about $20 a barrel or so? I remember reading back then that if oil crossed $30 a barrel, there would be terrible consequences.

Today, however, oil crossed $133 a barrel, and CNN hasn't reported any response from the White House. One bright guy writing in today's Las Vegas Sun says it's the Democrats' fault, because Democrats have blocked efforts to drill in Alaska (where global warming has turned the potential drilling ground to slush and muck, but who's bothered by that?). The letter writer, Lee S. Gliddon Jr. of North Las Vegas -- a town renowned worldwide for conservation of energy and natural resources -- writes that the Bush administration bears no blame for these turns of events.

The Democrats continue their efforts to blame the rising prices of gasoline and fuel oil on the Republicans and, in particular, the Bush administration. There is no bigger lie to be foisted upon the American public.

Since 1980, almost 29 years ago, the Democrats began their refusal to allow offshore drilling, Alaskan oil drilling, the construction of nuclear power plants and wind farms off the coast of New England. Their claims, however foolish, were designed to protect the interests of their political contributors, not the pocketbooks of the American citizenry.

Now the Democrats want to blame the Republican Party for failure to levy fines for “price gouging” by Big Oil. Never mind the fact that they, the Democrats, ran on the promise to keep gasoline prices low and punish Big Oil for price gouging.

The Democrat spokesmen all say that if we were to allow drilling offshore, in Alaska, and that if we were to allow nuclear power plants, it would be at least 10 years before we would realize anything in production. That may be true, but if we had begun to act in 1980, 29 years ago, the “10 year” claim would be a moot point! We would have had energy prices under control, and facts are facts!

Even Forrest Gump had a little more rattling around than this fella, but Lee S. Gliddon Jr. has his admirers. Among the online responses to his screed: "Speak it, brother."

There will be blood, right? I think Lee S. Gliddon Jr. is drinking my milkshake.

Anyway, the hits just keep on comin':

NEW YORK (CNNMoney.com) -- Oil prices hit a fourth straight closing record Wednesday - shooting over $133 a barrel - after the government said crude and gasoline stockpiles decreased last week, surprising analysts who were expecting an increase. U.S. light crude for July delivery settled at $133.17 a barrel, up $4.19, on the New York Mercantile Exchange. Prior to the 10:30 a.m. ET report, oil was down 29 cents to $128.69.

Over the last four days, oil has gained more than $9 per barrel.

"There is a tremendous amount of fear and greed driving this market," said Stephen Schork, publisher of industry newsletter The Schork Report. "This is a runaway train. I don't think the fundamentals justify the runup."

Earlier Wednesday, oil prices soared past $130 a barrel for the first time amid continuing supply concerns and a weakening dollar. The contract retreated just before the government data were released.

"If you don't get a break in crude oil prices, you won't get a break at the pump," said Schork. "This is going to be a long, painful summer."

The price of a gallon of regular unleaded gasoline hit a record high for the 14th straight day, according to AAA's Web site. The nationwide average for a gallon of regular unleaded rose to $3.807, up from $3.80 the previous day and up 19% from year-ago levels.

The weakening dollar has also contributed to the rising cost of crude oil. Crude oil is traded in U.S. greenbacks across the globe, which means that a less valuable dollar sends the price of crude up.

I wonder if Dubya knows the average price of gas within a mile or so of the White House. I'd bet not. Buying gas is for the proles, not the kakistocracy. What has Dubya actually done about it?

Well, there was this trip to the court of King Fahd last week, in Riyadh, Saudi Arabia, where the supposed leader of the free world begged the tinhorn patriarch of a third-world dictatorship to turn up the oil spigots a little, just for old time's sake.

You know, if no oil flowed under the sands of Saudi Arabia, that entire nation might be just the world's largest landfill, with the nomadic Fahd family tending to the gates. But because there's oil, he gets all the Grecian formula he wants for his goatee, and he gets the occupant of America's White House begging him for favors. And, as we saw again, he gets to turn down that Boy King's pleas.

Or, from last week's New York Times,

Saudis Rebuff Bush, Politely, on Pumping More Oil
By SHERYL GAY STOLBERG and JAD MOUAWAD

RIYADH, Saudi Arabia — President Bush used a private visit to King Abdullah’s ranch here on Friday to make another appeal for an increase in oil production that might give American consumers some relief at the gasoline pump. The Saudis responded by announcing they had decided a week ago on a modest increase of 300,000 barrels a day.

The White House said the increase would not be enough to lower gasoline prices, which are nearing $4 a gallon, and industry analysts called it mostly symbolic.

But Mr. Bush’s request, his second in five months, coupled with rising anti-Saudi sentiment in the Democratic-led Congress, underscored the growing tensions between the countries over oil. The issue is also dominating the domestic agenda in Washington, where the Energy Department said Friday it was suspending shipments of oil to the strategic petroleum reserve.

Mr. Bush’s visit here was, in many respects, a reprise of a trip he made to the king’s ranch in January, when he asked for an increase in production and was rebuffed publicly by the oil minister and privately by the king. This time, the Saudis again resisted Mr. Bush, while offering at least the appearance of a concession.

The White House billed the visit on Friday as a way to celebrate 75 years of United States-Saudi relations...

In other words, the answer was, "No; hell, no; and stop coming over here begging us like a little girl for more oil. You want oil, you better ask someone who owes you something."

And the Bushes thought the Fahds were their friends. Guess this means no more canasta on Thursdays.

Do you ever wonder who's to blame, if not Dubya, for rising oil prices? Apparently Congress wonders it all the time. So, from time to time, it hauls up a menagerie of oil company executives to answer that very question in committee hearings. Funny thing is, Congress keeps getting the same answer: "It ain't us -- it's YOU. And by the way, don't stick your finger in the free market. (Greed is good. Long live Gordon Gekko!)"

The Senate Judiciary Committee called the hearing to explore the skyrocketing price of oil, which jumped over $4 a barrel to a new record of over $133. The committee grilled executives from Exxon Mobil, ConocoPhillips Co., Shell Oil Co., Chevron and BP as to how their companies can in good conscience make so much money, while American drivers pay so much at the pump.

"You have to sense what you're doing to us - we're on the precipice here, about to fall into recession," said Sen. Richard Durbin, D-Ill. "Does it trouble any one of you - the costs you're imposing on families, on small businesses, on truckers?"

The executives said it did, and that they are doing all they can to bring new oil supplies to market, but that the fundamental reasons for the surge in oil prices are largely out of their control.

"We cannot change the world market," said Robert Malone, chairman and president of BP America Inc. "Today's high prices are linked to the failure both here and abroad to increase supplies, renewables and conservation."

Malone's remarks were echoed by John Hofmeister, president of Shell. "The fundamental laws of supply and demand are at work," said Hofmeister.

The testimony was colored by a few outbursts of protest from members of the public. Before the hearing even began, a heckler in the crowd shouted: "Stop ripping off the American public - bring these oil prices down."

The panel took issue with the amount of money oil firms are investing in finding oil, and investing in renewables. "You know how much cash you have on hand compared to capital investment," said Durbin. "They are begging us for more refineries, for more exploration, when their refineries are only operating at 85 percent."

Chevron's Robertson said the issue wasn't really one of refining, and more just the price of crude. "We are investing all we can [in finding new oil] given the limitations of access and our own human capacity," he said. "We have adequate refined capacity, inventories are at an all time high. The issue is the price of crude."

The hearing marked the second time in as many months that top oil industry officials have been called before Congress. In April, roughly the same lineup defended their firms before a House committee. The hearing was ostensibly called to ask the executives why they needed some $18 billion in federal subsidies in light of their record profits, but quickly became a Q&A on bigger questions in the energy business.

So food prices are skyrocketing, energy prices are skyrocketing, the president of the United States travels all the way around the world to get emasculated by men dressed in flowing robes, and nothing is the fault of oil execs whose take-home pay, after bonuses, roughly the GDP of a small European nation.

Surely things this bad have to begin turning around soon, right?

Not that soon.

NEW YORK (CNNMoney.com) -- The Federal Reserve sees worse economic problems ahead, according to new forecasts from the central bank released Wednesday. The central bank said it now believes full-year economic growth will be between 0.3% and 1.2% this year, significantly below its previous forecast of 1.3% to 2% growth in January.

The Fed said in its minutes that members now expect the economy to shrink in the first half of the year -- the clearest signal yet that Federal Reserve chairman Ben Bernanke and other bankers believe the economy is in a recession.

The Fed also raised its unemployment forecast for the year to between 5.5% and 5.7%, up from its earlier estimate of 5.2% to 5.5%. The unemployment rate was 5% in April.

In addition, the Fed boosted its projection for inflation. It said it now expects personal consumption expenditures to rise between 3.1% and 3.4% in 2008, a full percentage point more than its earlier expectation. Even when soaring food and energy prices are stripped out, the Fed expects steeper "core" inflation than its previous estimate.

But while it said it expects the economy to recover a bit next year -- forecasts call for growth of 2% to 2.8% in 2009 -- the Fed still sees some weakness lingering into next year.

Anyone want the rest of the Top Ramen? I don't want them to go to waste.