April 16, 2005
Well, That's One Way To Create Your Own Reality
October, 2004: ''We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors ...and you, all of you, will be left to just study what we do.''
April, 2005: The State Department decided to stop publishing an annual report on international terrorism after the government's top terrorism center concluded that there were more terrorist attacks in 2004 than in any year since 1985, the first year the publication covered.
We already know that the Bush Administration is probably U.S. history's most depraved. But we might ask ourselves whether it's also U.S. history's most entertaining?
Update, 4/18/05: From today's Paul Krugman column:
Last week fears of a return to stagflation sent stock prices to a five-month low. What few seem to have noticed, however, is that a mild form of stagflation -- rising inflation in an economy still well short of full employment -- has already arrived. [...]
Things could be, and have been, worse. But those whose standard of living depends on wages, not capital gains -- in other words, the vast majority of Americans -- aren't feeling particularly prosperous. By two to one, people tell pollsters that the economy is "only fair" or "poor", not "good" or "excellent".
Why, then, has the Fed been raising interest rates? Because it is worried about inflation, which has risen to the top end of the 2 to 3 percent range the Fed prefers. [...]
We shouldn't overstate the case: we're not back to the economic misery of the 1970s. But the fact that we're already experiencing mild stagflation means that there will be no good options if something else goes wrong.
Suppose, for example, that the consumer pullback visible in recent data turns out to be bigger than we now think, and growth stalls. (Not that long ago many economists thought that an oil price in the $50s would cause a recession.) Can the Fed stop raising interest rates and go back to rate cuts without causing the dollar to plunge and inflation to soar?
Or suppose that there's some kind of oil supply disruption -- or that warnings about declining production from Saudi oil fields turn out to be right. Suppose that Asian central banks decide that they already have too many dollars. Suppose that the housing bubble bursts. Any of these events could easily turn our mild case of stagflation into something much more serious. [...]
So if any of these things does come to pass, we'll just have to see how well an administration in which political operatives make all economic policy decisions, and the Treasury secretary is only a salesman, handles crises.
I think we all know precisely how the Bush Administration would handle the crisis: it would "create its own reality" by ceasing to make economic data available to the public.
Posted by Eddie Tews at April 16, 2005 11:44 PM
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