Subject: [big campaign] America's Economic Power Wanes Due to Failed Conservative Approach
From: Adam Blickstein <[email-masked]>
To: "[email-masked]" <[email-masked]>
Date: Mon, 15 Sep 2008 12:07:04 -0400
List-Id: <bigcampaign.googlegroups.com>

NSN DAILY UPDATE: America's Economic Power Wanes Due to Failed Conservative Approach

This weekend's financial turmoil spotlights how, like America's diplomatic and military power, American economic power has eroded over the last eight years. The U.S. financial system has again been pushed to the brink, as Lehman Brothers moved toward bankruptcy and Merrill Lynch was sold late last night to Bank of America. Fears of a worldwide sell-off appeared to be realized, as markets in Europe and Asia dropped sharply today. This financial crisis will have powerful consequences not just for Americans' personal circumstances but also for our power and security as a nation.

The collapses of America's foreign and economic policies are connected. The approach that characterized the Bush Doctrine in foreign policy also aptly characterizes the Bush administration's approach to the economy - creating or worsening the skyrocketing budget deficits and indebtedness, lax corporate oversight, credit and housing market crises that plague us today. In foreign policy, the Bush administration pursued a dogmatic and radically determinist view of the world that was rooted in the belief that America's overwhelming military power could be the sole determinant of international relations.  Similarly, on the economy, the Bush administration pursued a dogmatic and determinist agenda based on cutting taxes and aggressive deregulation. In both arenas, policy over the last eight years has been characterized by incompetent management and a total lack of transparency.  Moreover, the cost of the Bush administration's foreign policy misadventures has contributed significantly to our indebtedness. Now, evidence is mounting that the Bush administration's policies in both arenas are reckless and unsustainable - yet John McCain is now running for president saying today that the "fundamentals of our economy our strong"<http://www.huffingtonpost.com/2008/09/15/mccain-fundamentals-of-th_n_126445.html> and pledging to continue more of the same.

Turmoil on Wall Street highlights continuing U.S. economic woes.  "The American financial system was shaken to its core on Sunday... the latest consequence of a storm that began last year with the sharp decline in American housing prices and losses on loans and other assets tied to home values."  The consequences abroad have been immediate and steep. The position of the dollar continues to deteriorate, "posting its worst one-day decline against the euro in six months, as weak economic data and uncertainty over the future of troubled investment bank Lehman Brothers prompted investors to lock in recent steep gains."  Finally, in a testament to global unease about the current U.S. crisis, NPR reported this morning that representatives of the IMF have recommended the first-ever comprehensive assessment of the condition of the U.S. economy, a step which the U.S. Treasury Department has accepted.  [WSJ, 9/15/08<http://online.wsj.com/article/SB122145492097035549.html>. Reuters, 9/12/08<http://www.guardian.co.uk/business/feedarticle/7793644>. NPR 9/15/08]

The Bush administration economic policies, coupled with foreign policy overreach, have eroded the U.S. economic position worldwide.  "The run-up of U.S. debt testifies to the shift of the global economic center of gravity. The $127 billion budget surplus Bush took over will melt into what is projected to be a record deficit of $482 billion in the year starting Oct. 1."  "During the same span, China's holdings of U.S. government securities mushroomed to $504 billion from $62 billion. China is now the second-biggest U.S. government creditor behind Japan, with $584 billion."  The Bush administration's foreign policy, specifically the $858 billion which has been spent on combat operations in Iraq and Afghanistan, has exacerbated U.S. budgetary problems. According to Thomas Friedman, the policy priorities of the U.S. need serious re-evaluation: "there is no sustainable political/military power without economic power, and talking about one without the other is nonsense. Unless we make America the country most able to innovate, compete and win in the age of globalization, our leverage in the world will continue to slowly erode." [Bloomberg, 9/15/08<http://www.bloomberg.com/apps/news?pid=20601103&sid=aCuk6vYyYAAw&refer=us>. Reuters, 9/09/08<http://www.forbes.com/reuters/feeds/reuters/2008/09/09/2008-09-09T161711Z_01_N09257030_RTRIDST_0_USA-BUDGET-CBO-UPDATE-2.html>. NY Times, 9/14/08<http://www.nytimes.com/2008/09/14/opinion/14friedman.html?hp>]

McCain's policies offer more of the same on the economy.  Senator McCain's economic plan would not only fail to reverse U.S. economic decline, it would continue and expand the disastrous policies of the Bush administration.  "After all, Mr. McCain proposes continuing the policies of a president who's had a truly dismal economic record - job growth under the current administration has been the slowest in 60 years, even slower than job growth under the first President Bush."  According to the New York Times, "Mr. McCain still 'dials up' Phil Gramm, the former senator who resigned as co-chairman of the campaign after calling America a 'nation of whiners' and dismissing the country's economic woes as nothing more than a 'mental recession.'" And, in a strong critique of the Senator's fiscal policy, former Federal Reserve Chairman Alan Greenspan said that without cuts to government spending, the country could not afford McCain's tax cuts, which amount to a $3.5 trillion reduction in government revenues. [NY Times, 8/17/08<http://www.nytimes.com/2008/08/18/opinion/18krugman.html?scp=10&sq=krugman+and+mccain+and+economy&st=nyt>.  AP, 9/14/08<http://ap.google.com/article/ALeqM5iE2JCSH5p9r2GBkQWS9TWAMzmuvQD9362OS01>. Tax Policy Center, 6/20/08<http://www.taxpolicycenter.org/publications/url.cfm?ID=411693>]

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