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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: mt_mike who wrote (2293)	7/16/2002 10:36:04 AM
From: stockman_scott	Respond to of 89467

Bush Foreign Policy and the Failing Stock Market by Jon Basil Utley 7/16/02 antiwar.com Unending war, sacrificing free trade, breaking with Europe and telling allies to shove it, spending his time on planning a new war, neglecting domestic issues, foreign policy made by the Christian Right and Israeli Lobby, disaffecting his Republican base, fumbling the battle against terrorism, and more. No wonder the stock market is afraid. World prosperity is necessary for American prosperity and history teaches that wars have always drive the market lower. A former Reaganaut warns , "The way things are going, it will soon be the United States against the world." That comment, by a top political leader in Kuala Lumpur, was just one of hundreds of expressions of a new and disturbing alienation from America that I heard during a recent swing through 14 Asian, European and Latin American capitals. What a contrast to the supportive attitudes abroad immediately after Sept. 11! Then, the sometimes anti-American French journal Le Monde captured the world's sentiment with a headline proclaiming: "We are all Americans." Ten months later, sympathy for the victims of the terror attacks remains. However, the American image is increasingly perceived as ugly, and support abroad for U.S. policies is plummeting. Bush's speech at West Point that threatened dozens of nations with American bombing attacks totally ignores what such threats mean to world trade. This threat could make American civilians overseas counter targets of terrorists all over the world. Already the jokes are beginning about President Bush appalling ignorance of the world. He allegedly told Tony Blair that he now knew the reason the French economy did not do better: the French language lacks a word for "entrepreneur." Moreover, columnist Paul Craig Roberts warns, "It is absurd for the Bush Administration to spend so much time on Afghanistan, Palestine and Iraq when its position in the world rests much more on its stock market than on its armaments…....Today, Washington is focused on wasting resources on wars….." Foreign Affairs (July-August 2002 – "Is Southeast Asia the Second Front?") is inflaming local Muslims. This is further reinforced by Washington's foreign policy, which appears to parallel the interests of the Arms Lobby and Christian Right Armageddonites. Meanwhile China is on notice that it may be our next target under the Wolfowitz Doctrine. The Defense Department Deputy Secretary, who now appears as the main spokesman for Bush foreign policy, argues that no other major regional power may be permitted to arise. Thus, we are on the verge of making China into an enemy as well as much of the Muslim world. Fortune Magazine warns that the market is nervous about a Bush attack on Iraq, specifically because there is no rational thinking or discussion in Washington about the consequences post-"victory". For Bush's worldly advisor Dick Cheney that is nothing new. Twelve years ago, before the first attack on Iraq he was asked, "What will we do after we win?" His answer – "Well, I don't know, we haven't thought much about that." Well the stock market is thinking about it. The unknowns include possible destruction of oil production, further alienation of other Muslims by killing tens of thousands more Iraqis, possible overthrow of the Saudi government and other chaos. The greatest threat is the collapsing consensus in Washington for free trade. Bush steel tariffs and his complementary caving in to new agricultural subsidies are serious threats against international trade. These policies weaken the pro free trade constituency. In response to these policies, Europeans have threatened reprisal tariffs. Supply sider Jude Wanniski made his first mark as a young economist researching how the stock market crash of 1929 came about the day after the coalition to block the Smoot Hawley tariff fell apart in Congress. The President, like his father before him, is so preoccupied with war and foreign interventions that he and his top staff are neglecting vital domestic policy battles, and scaring the American public in the process. Fortune Magazine foresaw that threat last October: "A Fortress America mentality in security matters could spill into economic ones...a short hop from nationalism to protectionism...all sorts of parochial interests in the U.S. are much more likely to get the upper hand." Bush's call for a Homeland Defense reorganization of tens of thousands of government workers may bring chaos to the functioning of many government bureaus; a fear of many businesses which depend upon smooth functioning, e.g. customs procedures. This impending dilemma is analyzed in the Washington Post. The Bush White House is noted for its "go it alone" foreign policy with no considerations for our Allies on issues such as trade, attacking Iraq, the World Court and so on. Powell, the only Administration counter weight, has caved in to the Neo-conservative "empire hawks." World markets have responded by selling off dollars and buying Euros, another major reason for declining stocks. Every time Bush makes a speech on the stock market, stocks drop further. Monday's big crash was the final warning. War is bad for the stock market and unending war is worse. But making war can be exciting and almost addictive for those who don't suffer from it. Bush is so keen to launch a new war (on Iraq) that he ignores what is vital here at home. Markets can recover from an Enron or a WorldCom, but not from catastrophic foreign policies. __________________________________________ Jon Basil Utley is the Robert A. Taft Fellow at the Ludwig von Mises Institute. A former correspondent for Knight/Ridder in South America, Utley has written for the Harvard Business Review on foreign nationalism and Insight Magazine on preparation for terrorist threats.

To: mt_mike who wrote (2293)	7/16/2002 11:51:10 AM
From: Jim Willie CB	Respond to of 89467

housing bubble likely to grow again how low on rates? 5.5% maybe but mortbacked securities may not link tightly with Trez bonds soon this could be a new wrinkle stress & strain among FannyMae and FreddyMac indicate to many that the game is late as for how long bubble remains with us, my take is that is all depends upon jobs and layoffs maybe about another 6-9 months the dollar will cause untold havoc soon in ways that cannot be totally foreseen but lost capital flows affect our entire economy we live in a debt-based economy, and funding of debts is in jeopardy now I expect soon to see a stress signal emerge very soon spreads rising between Trez and Corp bond yields already started, I believe, and will get worse Greensperm will go down in our modern history as the Premier Architect of Bubbles he has moved the stock bubble to housing and now is desperately attempting to keep housing inflated how low can he go? well, in Japan they have 1% interest rates we could go there but on the way to that Destructive place, all bubbles will bust this is a real drama, as GreenFlimFlam is caught in a box lowering rates will cause extreme dollar drops I dont think they are prepared for such pain the moronic stock players will jump in, only to get whacked time after time by professionals who know that the dollar downtrend will be getting OUT OF CONTROL one thing is for sure, any attempt to lower US rates might require GreenSnot to get agreements among Europeans to do the same !!! that way the current damaging differential will not worsen the USdollar has been selling because of that diff agreed on gold implications if shortend rates are cut, then Real Rate of Return drops near zero again if not negative, which is great for GOLD we have to believe that our policymakers will prevail in producing INFLATION again GOLD will win if deflation wins GOLD will win big if inflation returns soon the USTBond market might give us stress signals also as in headlines "STOCKS AND BONDS FELL FOR THE 2ND WEEK" / jim