Bush Defends Free Markets

Please!  Stop using that term!  It is a LIE!

Setting a tone for an economic summit on his turf, President George W. Bush plans to tell world leaders that reforming financial markets alone won’t help if they abandon the free market and restrict trade.

Bush, in his comments to be aired in his weekly radio address to the nation, made public a day ahead of the G-20 Summit, also highlighted the need for broader reforms to adapt the international financial systems to the 21st century.

“And the answer is not to try to reinvent that system. It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people around the world,” he said.

But the broader focus is on the deteriorating economy, which has millions of people grappling to keep their jobs, their homes and their hopes. The most severe economic downturn in decades threatens to end Bush’s tenure on the most sour of notes before President-elect Barack Obama takes over.

To rally a more coordinated world response, Bush is convening representatives of some of the world’s biggest industrial democracies, emerging nations and international bodies in Washington. He will host the leaders at a White House dinner Friday and review causes and solutions for the financial mess Saturday.

In the short term, the world leaders are expected to focus on ways to stimulate economic consumption, free up credit and ensure that international financial institutions have the money to respond. Goals include making financial markets more open and less risky for millions of investors.

Some critics have blamed lax oversight and failures by regulators in the U.S. and elsewhere to detect problems before the current meltdown. It began with the collapse of the U.S. housing market, froze up credit lines and the broader financial sector and rippled overseas.

In the United States alone, the nation’s jobless ranks zoomed past 10 million last month, the most in a quarter-century, as 240,000 more people lost jobs. In the latest dire sign, American automakers say they are struggling to survive.

Just how many times do I need to say this….if the markets need reforming by governments then they are NO LONGER free markets!  Calling them such does not make them so.  Sorry people the free markets died many years ago.  Please do not take my word for it–GO!  Read Adam Smith.  The idea of free markets today is just a slogan that has nothing to do with reality.

Is It Official Now?

Many have said that we are now in a recession and then there are those who say that there is NO recession is an adjustment.

The U.S. economy is in recession and will contract at a faster pace in the fourth quarter, extending the decline into early 2009 as high unemployment crimps consumer spending, a survey showed.

The National Association of Business Economists’ poll of 50 professional forecasters released on Monday found that real gross domestic product was expected to fall 2.6 percent in the fourth quarter and slump 1.3 percent in the first three months of 2009.

About 96 percent of the NABE forecasters believed that the world’s economic power house was already in recession. Half of them estimated the downturn started in the fourth quarter of 2007 or in the first quarter of 2008.

More than a third reckoned the recession began in the third quarter of 2008, and nearly three-quarters believed it could persist beyond the first quarter of 2009. Over 60 percent expected the depth of the recession to be contained, with the decline in GDP bottoming below 1.5 percent.

Overall GDP growth in 2008 was expected to come in at around 0.2 percent and top 0.7 percent next year, according to the survey. This compares with predictions of 1.2 percent and 2.2 percent respectively in October’s survey.

The unemployment rate was likely to peak at 7.5 percent by the third quarter of 2009, according to the survey. In the October poll, the jobless rate was seen topping out at 6.4 in the second quarter of next year.

With household spending weak, auto sales forecasts were slashed to 13.4 million units this year from October’s estimate of 14.0 million. Sales for 2009 were likely to fall to 12.5 million instead of rising to 14.2 million, as had been predicted in the October survey.

On an optimistic note, analysts said the housing sales rout was likely to bottom out by mid-2009, but a lot of uncertainty remains as new home inventories run at 10-months’ supply, the survey found. Inflationary pressures would be contained as the economic downturn caps demand for oil, it showed.

Can we now stop lying to the American people and tell them the truth of the economic woes…..they already know, but we hoping that it was just them individually, that was having the woes….now tell therm they are not alone.

And we are not alone.

Japan’s economy, the world’s second largest, entered its first recession since 2001 last quarter and the government and economists say conditions may get even worse.

Gross domestic product shrank an annualized 0.4 percent in the three months ended Sept. 30, the Cabinet Office said today in Tokyo. Economists predicted the economy would grow 0.1 percent after contracting a revised 3.7 percent in the previous period.

Time For US To Go

As reported in the NY Times

Iraq’s cabinet on Sunday overwhelmingly approved a proposed security agreement that calls for a full withdrawal of American forces from the country by the end of 2011. The cabinet’s decision brings a final date for the departure of American troops a significant step closer after more than five and a half years of war.

The proposed pact must still be approved by Iraq’s Parliament, in a vote scheduled to take place in a week. But leaders of some of the largest parliamentary blocs expressed confidence that with the backing of most Shiites and Kurds they had enough support to ensure its approval.

Twenty-seven of the 28 cabinet ministers who were present at the two-and-a-half-hour session voted in favor of the pact. Nine ministers were absent. The nearly unanimous vote was a victory for the dominant Shiite party and its Kurdish partners. Widespread Sunni opposition could doom the proposed pact even if it has the votes to pass, as it would call into question whether there was a true national consensus, which Shiite leaders consider essential.

The proposed agreement, which took nearly a year to negotiate with the United States, not only sets a date for American troop withdrawal, but puts new restrictions on American combat operations in Iraq starting Jan. 1 and requires an American military pullback from urban areas by June 30. Those hard dates reflect a significant concession by the departing Bush administration, which had been publicly averse to timetables.

Iraq also obtained a significant degree of jurisdiction in some cases over serious crimes committed by Americans who are off duty and not on bases.

Could it be?  We can only pray that our troops can come home.

Economy Is In A Pickle

The capitalist world is in turmoil, with widespread financial crisis, bankruptcy of the largest investment and insurance corporations, massive injection of state funds to avert banking collapse, stock market declines world wide, capital flight, and the onset of economic recession in the US and the Euro-zone. The US is in recession and the Euro-zone’s expected 2009 growth rate has been revised down from 1.9 to 0.1 percent. There is downturn in employment in countries closely integrated through trade with these industrial regions, especially in China. A number of countries have already seen capital flight and currency depreciation of such severity that they have been forced to turn to the IMF (Iceland, Ukraine, Pakistan ) or enter into emergency financial arrangements (Hungary, South Korea). Many observers call it the severest crisis since the Great Depression. Reportedly world leaders are pouring over the works of not only J. M. Keynes but also of Karl Marx in a desperate search for a way out.

There are certainly many points of similarity of the present situation with that in the late 1920s. A recession in world agriculture from 1925 preceded manufacturing slowdown and the 1929 stock market crash, similarly there has been agrarian depression in the developing world for a decade before the 2008 crash. However this pervasive agrarian depression has been entirely ignored by economists, who cannot see the connection between increasing poverty in the global South, and the world of high finance. Another point of similarity is the undermining of the position of the world capitalist leader. From the mid-1920s Britain, the then capitalist leader, found it increasingly difficult to maintain external lending to support growth abroad while keeping its own markets open to imports. The US, the present world capitalist leader similarly finds its position severely undermined: it is unable to shore up demand in the world by keeping its own market open and expanding at an adequate rate. Despite borrowing massively from other countries to sustain its import-dependent consumption it is now unable to avoid domestic recession. This is the stuff of serious crisis, when the capitalist leader can no longer lead effectively, and there is no substitute leader or set of institutions in sight.

Who will emerge as the world leader on the economic crisis?  But do not worry, the government is here to help!  (sarcasm intended)

Air Force Flunks Inspection

Now here is a story that ought to send a chill down your spine.  This from wired.com.

It’s confirmed: The atomic missile team at Malmstrom Air Force Base, Montana “failed its nuclear surety inspection” earlier this week, Air Force Times is reporting. Inspectors found problems that 341st Missile Wing’s “weapons storage area and its personnel reliability program, which monitors who can work with nuclear weapons.” As Danger Room reported on Monday, the 341st will be allowed to keep its nuke certification. A testing team returns in 90 days, to take a fresh look at the missileers.

The Air Force’s nuclear mission has come under increasing scrutiny, after a series of embarrassing mishaps, damining reports, and fired officers. Which means these nuclear surety inspections (NSIs) have become much more rigid, and hard to pass.

Now you may sleep well tonight all is ok in the land of Nod–or should I say the land of nukes?