Friday, January 21, 2005

Are We a Banana Republic Yet?

Today, George Will, provided commentary for ABC during the inauguration, and he mentioned that all the military and security at the affair was unattractive and makes us look like a banana republic. His comment was repeated on Peter Jenning's evening news.

George Will is not the only one who has used that term about our government lately. Here's a quote from Paul Krugman.

Social Security doesn't need to be fixed:The American economy cannot withstand another round of massive debts. Last year Congressional Republicans, those famous warriors of fiscal discipline, increased the federal borrowing ceiling, and the international response was a steady decline in the value of the once coveted dollar. Initial debt like that noted by the White House memo on privatization, and long-term unbearable debt like that predicted by Paul Krugman (his numbers coming from the Congressional Budget Office analysis) would produce even more grave consequences, both for the dollar and the economy at large. Krugman speculates: 'And when investors started fleeing because they believed that America had turned into a banana republic, they wouldn't be reassured by claims that someday, in the distant future, privatization would do great things for the budget.' "

And here:
"So if you ask the question do we look like Argentina, the answer is a whole lot more than anyone is quite willing to admit at this point. We've become a banana republic."

Crisis might take many forms, he said, but one key concern is the prospect that Asian central banks may lose their appetite for U.S. government debt, which has so far allowed the United States to finance its twin deficits.

A deeper plunge in the already battered U.S. dollar is another possible route to crisis, the professor said.

The absence of any mention of currencies in a communique from the Group of 20 rich and emerging market countries this past weekend only reinforced investors' perception that the United States, while saying it promotes a strong dollar, is willing to let its currency slide further.
"The break can come either from the Reserve Bank of China deciding it has enough dollars, thank you, or from private investors saying 'I'm going to take a speculative bet on a dollar plunge,' which then ends up being a self-fulfilling prophecy," Krugman opined. "Both scenarios are pretty unnerving."

In the longer-term, Bush's version of social security reform, which Krugman says would relegate pensions for the elderly to the whims of volatile financial markets, could have wide-ranging implications for future generations.

The only bright spot in having Bush in power for another four years, said Krugman, is that further economic mismanagement might trigger some sort of popular outcry.

"I do believe at some point there is going to be a popular tidal wave against what has happened," concluded Krugman. "In the meantime, you keep banging on the drum, you keep telling the truth.

"And then eventually we have the great demonstrations, which I think are important to let the government know that many Americans are not happy with what is happening," he said.

The FDA is failing to protect us from dangerous prescription drugs and Republicans are trying to take away our right to sue the drug companies who knowingly release this profitable drugs on an unsuspecting public. Corporate influence rules Washington and our mass media, our leaders lied to us and got us into an illegal war. In the Ukraine exit polls were used as evidence that election fraud had taken place, but here when exit polls don't agree with the "offical" results, we are told that the exit polls were wrong. Our democracy, if not dead, is in critical condition. Indeed, we may already be a banana republic.