To explain presidential elections, my cousin, an A.P. U.S. History teacher who puts American trivia questions on his answering machine, gave me a beaten-up paperback from 1983, America in Search of Itself: The Making of the President, 1956-1980. I didn’t think it would be relevant, since Reagan, Clinton and Bush have re-shaped the job description for Leader of the Free World. But now I wonder if I was wrong. Theodore White’s book is about the past, and was published in the past , but the last chapter I read got me thinking about the 2008 election.
Already bored with the horse-race of 2004, reporters at the Republican National Convention amused themselves with the mental exercise of who would succeed Bush in 2008. As far as we know, all of the men discussed, including Rudy Guiliani and George Bush’s nephew, may drop out of politics and raise sheep on an organic farm by then. No one can see the future.
Even more of a possibility is that the issues will be radically different in 2008. Who in January 2000 thought we’d be worried about wars in Iraq and Afghanistan, a jobless recovery from a recession, and (the one I can’t believe is an issue) a boundless deficit? Still, when I read the chapter on inflation in White’s book, I paused. Maybe I was looking into the future.
White blames the uncontrollable inflation of the 1970’s on government “entitlement” programs, deficit spending for Vietnam, linking Social Security payments to the Consumer Price Index (whenever the dollar’s value went up so did payments) and oil. That means high spending, an expensive war, large Social Security payments, and an oil shortage that caused the worst inflation our country has ever seen.
Sounds like the opening credits of the next four years.
Right now the Federal Reserve is inching up interest rates. When the rates get to a certain point, money will become more expensive to borrow. That will slow down the flow of dollars entering our marketplace. That’s important because inflation is supposedly the problem of having too many dollars and not enough goods to buy with those dollars. And, according to the Consumer Price Index report released last week, it worked in August. We aren’t seeing any inflation.
But the hurricanes that ripped through the American south have cut down our access to oil, something the index hasn’t recorded yet. Platforms and production facilities are shut and the price of crude oil futures is going up.
Then, last week OPEC, the cartel of oil-producing countries, increased its production numbers. Each country in OPEC agrees only to pump out a certain amount of oil, as a way of controlling prices. Most news outlets reported that raising the amount was only symbolic, because OPEC countries had already exceeded the current limit.
And now the United Nations is considering punishing Sudan for the mass ethnic murders happening there (it’s debating whether enough people have died for the murders to qualify as “genocide”). Part of the sanctions would bar Sudan from exporting oil. The country produces a quarter of a million barrels each day. ABC’s story is here
So, two sources of oil have drifted away and the increase in OPEC production is symbolic, not real, and won’t make up for any losses.
And, no, the trend toward hybrid cars won’t erase the problem. The registration for SUVs in California, at least, is still rising. With reports of U.S. Airways filing for bankruptcy again, we can’t expect the airlines to absorb any rise in the cost of jet fuel. Then, there are factories, homes and even streetlights that all rely on oil.
I’m not saying George Bush is to blame for the situation, just that it’s possible his second term will preside over a land of inflation.
During his first term, we’ve accrued a record-breaking deficit of more than $400 billion . Even though the Republican Party speaks out against domestic spending, it looks like implementing the agenda Bush proposed in New York will only increase what the feds pay out.And, spending for programs already in place is predicted to increase.
With the wars, the military budget has nearly doubled, and won’t drop any time soon. The intelligence report on Iraq that came out this week could have been written about Vietnam. Our current war will be long and expensive.
Already, we have three of the major elements White describes from the 1970’s. Social Security is an unpredictable factor, but we do know that there will be more Social Security paid out as the Baby Boom retires from work.
If we do live through an inflation disaster like the one our parents experienced, the person we elect in 2008 will have to address that issue above all else.
Does that mean Republicans should forget Guiliani and simply clone Reagan?
Posted by Lisa Lambert at September 19, 2004 12:27 PM