"The newly elected President blamed excesses of big business for causing the unstable bubble-like economy. Democrats believed the problem was that business had too much power and regulation of the economy was necessary." Is this Barack Obama in 2009? Nope, Franklin D. Roosevelt in 1933. The Great Depression did face an unemployment rate of 25%, which is now 6.1%. There was also an accompanying Great Drought beginning in the early 1930's. But the stock market largely recovered only a few months after October 29, 1929. Ironically enough, while the New Deal should be given some credit, the beginning of World War II in the later 1930's was the spark that boosted the economy, and there are respected historians who today partially blamed conflict over oil as an important catalyst for war.
Today, we are faced with the same, but more complex world, again spurred by petroleum. Crude oil futures experienced an all time high jump of $25/barrel on Monday, and settled at $121/bbl for the day. This was more than double the previous high spike of June 6, when the increase was $10.75/bbl. Okay, pundits blame the arcane future's trading process, not necessarily the Congressional mortgage bailout. Further, we can expect Congress to reign in that market, as it is doing with Wall Street. Sure, oil prices descended to $106/bbl the next day, but the metastable nature of the beast is ominous. Do you get a sense that we are beginning to lose control?
How does the $700 billion to $1 trillion bailout compare to other wartime expenditures and rescues? On July 29 I published a HuffPo article entitled, Billions and Trillions. I reported that the sum total of the Manhattan Project (Atomic Bombs for Hiroshima and Nagasaki), Marshall Plan (to save West Berlin and post-war Europe) and Apollo Project (Man on the Moon) in terms of 2008 dollars, was roughly $240 billion. The amount of money actually spent was only $38 billion, but inflation relative those times brings this value in the range of a quarter trillion today, about a third the amount being discussed to resuscitate Wall Street.
First, where is this money coming from? Well, the combination of your tax dollars and foreign investments. If that was so easy, why didn't we solve our energy problem when voters were asking for relief a couple of months ago?
Through the summer we all decried the sorry state of our energy condition and wondered why we were not more prepared, for we should have learned our lesson after the First Energy Crisis of 1973, but did not, and certainly after the Second Energy Crisis of 1979, but, again, did not. As we talk about billions and trillions, and reflect on the nearly $2 billion we were spending daily on gasoline in America in July and continued to look away at how much our federal government was allowing for renewable energy research (only an average of $1 billion/year for the past decade), our Democratic Congress still could not even bother to renew those renewable energy tax credits nor approve any global warming rescue package. As early as June 14, my HuffPo was entitled, Piffle Squared, lamenting the idiocy of this all.
Now, what makes the most serious environmental challenge ever presented to humanity and $147/barrel oil so insignificant? Why is saving Wall Street so important? Is it because the White House likes high oil prices and mocks the Greenhouse Effect? Could it be that Republicans can identify with high finance and were put into office by those who are today being rescued? Secretary of the Treasury Henry Paulson came from being the CEO of Goldman Sachs (which was also saved). Incidentally, he worked for President Richard Nixon, and more specifically, was an assistant to John Ehrlichman.
Nah, my sense is that we are in serious trouble and the White House just had to take those bold steps. I congratulate our leaders for taking action. I do, though, wonder about the attitude of the American Public when it comes to the looming dual hammer of Peak Oil and Global Warming. There is no National Will to do anything on this front. Somehow, I think that these virtual news portals might well be the solution to galvanize instant public reaction. Protest marches are so last generation. The world-wide web is the mechanism best suited to prevent what appears to be an imminent economic and environmental calamity. But how? You, out there, help!