How Bush Screwed Our Thanksgiving

There is a compelling article in yesterday's New York Daily News by Pulitzer Prize winner William Sherman.

Sherman shows that there is not much for us to be thankful for in terms of the cost of food we put on the table this week.

Consumers are getting slammed with the biggest increase in food prices in a decade -- fueled by a perfect storm of rising grain prices and a falling dollar.

Poultry -- including your Thanksgiving Turkey -- along with dairy products have risen the most. A glass of milk costs New Yorkers up to 42% more than last holiday season.

The wholesale price of eggs has soared 86% compared to last fall, at one point.

"I'm spending $50 to $80 more a week on food than last year", according to one Harlem shopper.

The surge is driven by a ripple effect -- the Iraq war, the rise in oil prices, the growing deficits -- and a confluence of factors beginning with corn and wheat crops diverted to ethanol production, according to economists.

Demand for ethanol, caused by the surging price of oil, drives up the price of feed grain. High oil prices also affect the cost of running tractors and combines and transportation.

In the food chain -- from the corn fed hens and cattle to the meal on the dinner table -- just about every menu is affected. Pizza prices in New York are up 15% since last year. Filet mignon has jumped 10% in the last two months. Striped bass, according to one luxury restaurant owner, has gone up from $3 per pound to $8 per pound in one year. The average turkey is up 15% since last year.

Another prime factor in food price increases has been the steady decline of the US dollar relative to other currencies. The price of imported olive oil is up 25%. The weak US dollar allows foreign countries to buy US foodstuffs for less than American buyers. Increased foreign demand raises domestic prices.

In the first nine months of this year, writes Sherman, US food, feed and beverage exports were up $12 billion over last year. China has been a big buyer of poultry and pork.

This may be good for the farmers, but horrible for everyone else.

The implications of all this are:

Every time the Federal Reserve cuts interest rates to provide a temporary boost to a weakening economy, the dollar goes down, the price of oil goes up and the price of food skyrockets for ordinary people.

Looks like the chickens, and turkeys, are coming home to roost as the doomsayers have been predicting for years. In the past decades world confidence in the U.S. economy created a very favorable global business climate and powered much of the U.S. political and economic clout. Perception is everything.

But with a humongous trade deficit -- $700 billion last year -- and a $150 billion annual Iraq war bill, it could all come apart.... very quickly.

America's powerhouse economy depends on global confidence in the stability of the dollar which has traditionally attracted the world's surplus savings. But with the rapid fall of the dollar, other nations are increasingly indicating that they will invest in other currencies. Confidence in the US greenback is waning among foreign businessmen, a finding that in itself may be a self-fulfilling prophecy.

The U.S. exports 70 cents worth of goods for every dollar it imports. The U.S. has borrowed more than $3 trillion in the last six years. Money moves across markets with the push of a button.

If foreigners lose confidence in the U.S. economy, they will want their money back, the dollar will fall, and foreign investments will tumble, triggering an even weaker dollar. To an amazing extent, the U.S. economy has relied "on the kindness of strangers" to fuel its domestic and international investments and the recent real estate boom.

The consequences for our American Empire may be disastrous and swift, if the "kindness" and confidence of global investors is shaken. Will America succumb to the same imperial overstretch as the Roman, Dutch, Spanish, Soviet, and British? Hubris does not allow us to see much in the future. Every empire thinks that it is different, but....?

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Follow Blake Fleetwood on Twitter: www.twitter.com/Blakefleet

Comments

[IMPRISONBUSH]

I went to my sons for THANKSGIVING and I was supried I have been growing all my veggies for the past five years.
ONE because I love my tomattos and I live in florida so er grow 8-9 months a yearplus others.
WELL I got to his house and he took me out to the yard and along his fence he had
TOMATTOS
PEPERS
CABEAGE
GREENS
ETC.
HE SAID TO ME DAD YOU WERE RIGHT I SAVE MONEY PLUS I KNOW ITS NOT TANATED FOOD FROM ??
NO I KNOW HE DOSE HEAR ME WHEN I TALK.

[disenfranchised]

I think he has screwed more than just our Thanksgiving...

The administration has made sure that the minimum wage stay low for years, so that the administration can use low unemployment as a media talking point.

They have bullied the Fed into cutting interest rates continuously for years, even though we have an enormous and growing national debt and trade deficit, so that the administration could use the growing economy as a talking point.

We have yet to hear a thorough or truthful explanation on anything that is going on with our country, domestic or foreign.

As soon as the president started using ethanol fuel as yet another talking point, there was obvious need for concern.

Just what we need now: our farming industry further dependant on 1 or 2 crops when we are facing increasing dry seasons and decreasing water supply, marketed to us as our alternative energy salvation by GWB.

[insanityfollows]

Grocery prices have been climbing pretty aggressively for about 18 months, and was somewhat limited to a few categories and mainly because of fuel prices. Now, the article is right, we have exorbidant fuel costs, anything that takes fuel to produce, harvest, process, or make is going up exponentially (which is pretty much everything). We have a lousy dollar, and killer droughts Between grocery costs and fuel costs, the amount we are shelling out with increases is about 40% higher than any raises anyone is getting, and plenty of people are not getting any raises at all. Does GWB care about this at all? Of course not. The middle class is screwed. Fuel, food, housing, a lousy dollar, a killer trade defecit, and the list goes on. Like I said, food has been going up for a while, and finally everyone is reporting on it. Well, better late than never, though I am not sure what anyone can do about it. We have some alternatives to cutting fuel consumption (a few, anyway), but we have to eat.

[yukoner1]

It will take the world a few more years to understand the damage Bush has. It will take the Americans a decade. Perhaps, after a generation or two Americans will understand that Bush wasn't the beginning of the end, he was in fact, the end of the American Dream. Your great-great-great grandchild will be paying for Bushs' legacy.
Steve

[peterg76]

It's amazing how people can watch the likes of Bush make the most dreadfully awful economic decisions and then react in surprise when the consequences affect people in the real world.

4000 years ago your religious belief system was the foundation of economic policy. I'm not sure anything has changed.

[Advocate123]

Stop the nonsense.

The reason you pay more for food is because the Department of Agriculture advocates farm subsidies and the artificial inflation of food prices to "protect" small farmers at the expense of the consumer.

Then add to it all the environmental regulations, which create more transaction costs.

It is incredulous how liberals do not understand economics and then whine for the wrong reasons when it is their policies that hurt the poor.

You have to make a decision: You either say you want to help farmers and "save the planet" or you say you want lower food prices.

Advocate123
http://copiousdissent.blogspot.com

[BeyondPopper]

And when the crash finally comes, the shills in the corporate media will not say that this was because of the BushCo service to the corporate agenda, but because the corporations did not get their way ENOUGH!!

No matter the outcome, it will be used to justify even more obscene corporate profits, even more illegal stomping on the rights of workers and citizens, and even more abandonment of the New Deal policies and programs that helped generate the record economic growth of the 50's and 60's.

Because we now know that as far as the government, the media, and the corporations they serve are concerned, screwing the American people -- and everyone else -- is the best way to ensure their power and profits continue to grow.

The truly sad part is that they're wrong. When the economy falls apart, their prosperity will suffer as well as, though not, perhaps, as much as, ours.

After all, to people to whom failure means taking home a fifty million dollar bonus, what's a depression or two?

[mommadona]

"He's a mean one, Mr. Grinch....."

I am absolutely in awe at the lack of understanding of Bush and his Mayberry Mafia.

This has been the plan all along.
Bankrupt the Federal Government.
Kill 'the beast'.
Make it small enough to 'drown in the bathtub'.

Then PRIVATIZE THE HELL OUT OF EVERY ASPECT, including our very security.

Bush is a proud son of a bitch.
Literally.

He don't need no stinkin' 'nation' or 'borders'.

[Dap]

Dear Mr. Fleetwood,

To add insult to injury we as a Nation were among the worst savers, before this, how much can one save now?

Plus, Municipalities, Counties, and States are all experiencing higher costs and have to raise taxes just to cover their costs.

And, there are other ramifications, take the Chicago board of Education, they used to get their State funding and bank it, receiving almost $10,000,000. ten million dolars in interest for the fiscal year, not any longer, because the money is not there to bank. This muct be happen in other parts of the country also.

I seen an interview with Karl Rove on Charlie Rose, Charlie asked him about regrets or mistake he made? Rove replied: "Yeah... not fixing Social Security, if I'd of moved sooner before 2006 when Congress changed hands it would have been a done deal."

Yeah, they would have fixed it alright, fixed it so the pockets of their rich buddies were full, and We, the People were eating mac and cheese seven days a week.

Your post is quite poignant. Agape.

[SwampeastMike]

If only it were just Thanksgiving that is screwed and just Bush who did the screwing.

[maddogbitesback]

The Romans brought law. The Dutch brought trade. The Spanish brought inflation and religious war. The United States has brought looting on a global scale and a complete disregard for the well being of anyone. At least the Romans gave the poor bread and circuses. And the English did do a few good things as well as stopping slavery and bringing habeas corpus. Americans have gone back to no habeas corpus and looting and pillaging.