The Economic Tsunami

From CounterPunch:

There are a number of signs that the economy is close to meltdown-stage. Even with cheap energy, low interest rates and $450 billion in borrowed revenue pumped into the system each year, the economy is still barely treading water. This has a lot to due with the colossal shifting of wealth brought on by the tax cuts. Supply-side, trickle-down theories have been widely discredited and Bush's tax cuts have done nothing to stimulate the economy as promised. Now, with oil tilting towards $60 per barrel, the economic landscape is changing quickly, and shock-waves are already being felt throughout the country.

And

Just as the economy cannot float along with sharp increases in oil prices, so too, Bush's profligate deficits threaten the dollar's status as the world's reserve currency. This is much more serious than a simple decline in the value of the dollar. If the major oil producers convert from the dollar to the euro, the American economy will sink almost overnight. If oil is traded in euros then central banks around the world would be compelled to follow and America will be required to pay off its enormous $8 trillion debt. That, of course, would be doomsday for the American economy. But, a recent report indicates that two-thirds of the world's 65 central banks have already "begun to move from dollars to euros." The Bush plan to savage the dollar has been telegraphed around the world and, as the New York Times says, "the greenback has nowhere to go but down". There's only one thing that the administration can do to ensure that energy dealers keep trading in dollars: control the flow of oil. That means that an attack on Iran is nearly a certainty.

Click here for the rest.

Of course, virtually no one, on the left or the right, is talking about Iraq in these terms. It appears that the occupation of Iraq is simply one part of a very high stakes economic game being played by weird neo-liberal and neo-conservative ideologues who couldn't care less about the impact their high rolling has on ordinary Americans. Or Iraqis, for that matter. "Freedom for Iraqis," "No blood for oil," these slogans don't even come close to making understandable what's actually going on: this isn't about simply controlling oil; it's about controlling the world economy, and cleaning up the financial mess caused by Republican initiatives to destroy domestic social programs, with oil. If the analysis in the above linked essay is correct, the US is in Iraq forever, or at least until the oil runs out, because at this point, the elites don't have a choice--if the US doesn't control world oil supplies, the US economy crashes and burns, taking numerous elites down with it. All you and I can do is sit on the sidelines and hope that when America becomes a third world nation, which will happen regardless of the oil situation, we still have food to eat.

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