It's the economy, stupid

Call me an idiot if I deeply believe the American economy is not turning a corner any time soon. And call me an ignorant if I also believe that the small-scale depression choking us up is not all driven by the mortgage loan fallout. This is just a microscopic example of a greater problem.

The problem is multifaceted. The US is pumping $3 billion a week into Iraq with less than perfect oversight. The overall US debt is about $9 trillion excluding state-level debt and social programs like Medicare and Social Security which amounts to about $29 trillion. America is an import culture. Look at the computer you type on, the pen you write with, the cell phone you carry. These little things add up; in 2006 they amounted to the $765 billion American trade deficit, writes Economy in Crisis, a conservative blog.

China is our personal banker, and as such has allowed us to withdraw as much credit as we can incur. According to a Forbes article, several countries including Japan and China hold about 44% of the US debt, a powerful leverage against US interests. Just recently, China’s massive recall on several products containing toxic chemicals has put US interests at odds. While we recoil in disgust at the massive outsourcing of our manufacturing jobs to places in Asia, and cry in despair for the Chinese recalls which have killed our pets and sickened our children, we ironically continue our high demands for subsidy-level prices of Chinese imports by continuing to shop at places like Walmart. See the link. But who is at fault? The US government or the US consumer? I say, both.

But enough said, the truth is, the housing market bubble was due to crash eventually, like it has in the past, the problem lies in our overall domestic economic policy: consecutive tax cut laws which have been now renewed for the 3rd time during the Bush Administration, the outsourcing of manufacturing jobs, the failed enforcing of trade agreements, the never-ending US agricultural subsidies, the continuous funding of an open-ended war, the increased military spending and on top of everything a housing market crash. How could we have missed the warning signs of an economic crisis? Simple. If Iraq is our guiding principle, we can’t expect much economic shrewdness from this administration.

Latin America: US involvement a decade too late....

So, Bush wraps up a 5-day tour in Latin America, but brings back nothing with him.

This tour has come too late at a moment when US diplomacy is at its weakest in decades, even in recent weeks of renewed diplomatic talks with countries in the Middle East and China, and only thanks to Rice, who has been eargely making the rounds, in a move to clear up and wash out the Bush Administration's lack of foreign diplomatic overtures.

Latin America, with all its complexities and problems, seems to be hanging tough, as they have waited years to see trade agreements finalized, economic aid disembursed, and political commitments materialized. South America has for now found their guy in Venezuela's Chavez, who is more than willing to fill in the vacuum and which has plenty of cash and free advice to give.

This is exactly the danger and the frivolity of territorial politics, and the Bush Administration never seemed to capitalize on it. As Lebanon fell to Hizballah when Syria pulled out, everyone seemed too busy with the 'terrorists' and insurgents in Afghanistan and Iraq, including the US.

Now, it is too late for US deals and cheap talk; China has moved in to provide trade and aid and Chavez has continued to engulf South America and Central America with his populist rethoric. Today, Venuezuela's political and economic influence in the region is proportioned to Russia's oil supply to China's economy. China is always shopping for oil suppliers and has found a loyal one in Venezuela, which only helps to fuel Chavez's regional agenda.

I say this to Bush: go back to your drawing board and come up with a new set of economic and political policies that can efficiently compete with Chavez's own.