Political Cortex: Brain Food for the Body Politic

Yes, Bush is busily at work on all those fronts, but there is also the domestic scene.  Since so much devastation has been wreaked in the foregoing areas, highlighted by the trampling of the U.S. Constitution, Bush has failed to receive the credit he is due for what has transpired with the U.S. economy since a Supreme Court one vote majority installed him in office.

It will be recalled that America actually had a surplus when Bush took office.  It becomes increasingly harder to remember that in view of the wreckage that has transpired since January of 2001.  While it is true that Bush cannot be blamed for the dot com bubble burst, his antidote can be roundly criticized as he initiated tax cuts that he seeks to this day to perpetuate.

The tax cut targeted toward Bush's wealthy base was supposed to produce an infusion of prosperity via the ripple effect.  Reagan tried the same trickle down theory of economics and tripled the U.S. debt before leaving office.  Bush was not about to be undone by Reagan or anyone else as the whopping debt has now surpassed the $8 trillion mark, shredding the old mark established by Reagan.  

According to Paul Krugman, as reported recently in his syndicated column, "Last year the United States spent more than it earned on world markets.  That is, our imports were 57 percent larger than our exports."  Huge debts were run up to Japan, China and Middle Eastern oil producers, leading  Krugman to conclude, "We're as addicted to imported money as we are to imported oil."

During Reagan's second term the real estate market was temporarily demolished as an effective working tool when an Administration emphasizing the stock market, headed by top Reagan domestic adviser Donald Regan, formerly of Merrill-Lynch and by then known as Reagan's Prime Minister, led the charge toward a tax bill passed and signed in 1986.  

All kinds of healthy loopholes, the kind that encourage investing, were dried up in the interest of efficiency, led by real estate deductions that had been employed as an incentive to trigger investment.

So along came Bush, and after the stock market cooled following the Reagan-Regan directed emphasis through use of the tax code, essentially compelling investors in that direction, a new ploy was invoked.  That abandoned stepchild, real estate, became the focus and Alan Greenspan at the Fed cooperated as interest rates were slashed to cooperate.  

So the push was on and homeowners were encouraged to take out fresh mortgages on their properties.  The process was akin to tapping ATM machines.  But oops, the devil was in the details and oh so many were condemned to crash landings due to adjustable rates.  

"There's never been a better time to sell your home!" the trumpet blowers exhorted.  "Yes, but where do you go from there?" with skyrocketing prices at the other end when one sought to buy another place, a point conveniently forgotten by many.

So now we have a "bubble zone" along America's coastal lines with housing costs rising higher than economic fundamentals warrant.  According to a detailed new study by HSBC, a multinational bank, it is estimated that houses in the bubble zone are overvalued by between 35 and 40 percent.  

The result is the creation of trillions of dollars of illusory wealth, which sounds a lot like the dot com stock bubble that got us in trouble earlier.

We are seeing the dire consequences of the bubble zone effect.  It was recently reported that a flight is in progress out of New York and California occurring as a result of affordability.  

The empire state flight has occurred chiefly in the greater New York City area in the wake of rising prices and has resulted in an overall population decrease.  The only thing that has prevented a decrease in California is a rise in birth rates among current residents.

Meanwhile, in a nation of outsourcing and Wal Mart mania, more families are without health care and more individuals are slipping below the poverty line.  There has been a recent rise among highly educated Americans, and with states and cities deprived of funds they once received from the federal government, homelessness is increasing.

Meanwhile the sycophants of Fox News continue to trumpet the "achievements" of Bush's stewardship.  

In a realistic context, if a Darth Vader from another galaxy had been determined to internally destroy America in one fell swoop, that force could not have made a shrewder move than to tap the team of Cheney and Bush to plunder America both domestically and internationally.