Wednesday, October 05, 2005

October 4, 2005

The End is Near

Of course he will blame it all on the war and two hurricanes. But in fact, it's a direct result on his own flawed economic policies and the "borrow & spend" lifestyle he sparked, not only within government, but consumers as well.

I am referring to the looming recession. And it's going to be a dozy. And it has begun, as it always does, when consumers suddenly discover they can no longer keep pace with their bills.

That would have happened a couple of years ago already, had it not been for the housing bubble. Like all bubbles it was ordinary folk who eagerly fueled the Ponzi, an inverted pyramid sure to topple once it became top heavy. And, like all previous bubbles, everyone of those crushed by that inevitable collapse, figured they were too smart to get caught by it. No, they figured, they'd be well out of Dodge with booty long before that happens.

So they bought homes bigger than they needed and, if each time rates dropped or prices jumped in their area, they refinanced, pulling a bit more booty out each time, for a pool, or landscaping, or a new car. They had time. The economists said there was no bubble, anyway, that prices were going up because of natural demand, not speculation. And so they stayed in Dodge. They let it ride, they let it all ride on successive spins of the wheel of fortune.

But now that hot housing market has begun to cool. Prices in the hottest markets have flattened. Houses listed for sale have grown as those who waited too long rush to cash in. Days on the market are marching upward as buyers become increasingly scarce.

It is only one of indications that "the end is near," for George W. Bush' phony "recovery," a recovery he bought with tax cuts he cannot repeat, and by consumer spending fueled with borrowed money, which they can no longer get. Hell, consumers may not even be able to make good on the money they've already borrowed. The indicators indicate that is so:

The percentage of overdue US credit card accounts jumped to a record in the second quarter as gasoline prices surged, the American Bankers Association said. Consumers had more trouble making payments on personal, auto and home-equity loans during the three-month span, the bankers group said. Delinquencies on these loans, collectively, rose to 2.22 percent from a revised 2.03 percent in the prior quarter, the group said. Delinquencies on home-equity loans increased to 2.75 percent of all such loans, up from a revised 2.61 percent. Delinquency rates for indirect auto loans, which are made by auto dealers and held by banks, increased to 2.08 percent from 1.87 percent the previous quarter. Those for direct auto loans gained to 2.07 percent from 2.04 percent.

This is a particularly bad time for consumers to be tapped out. It comes at the beginning of the holiday spending season which can account for nearly half of many retailers income for the year. It comes just as gasoline prices reach European levels, hitting low-wage workers hardest, especially if they have to commute to work. It comes just as the first chills of winter begin spreading south from Canada and as heating oil and natural gas prices spiral to unheard of highs.

Here's where it starts:

Minimum Credit Card Payments on the Rise
San Diego, CA (PRWEB) October 4,2005 -- The minimum payments that credit card companies charge on a monthly basis are increasing. For credit card customers that either pay their bill in full every month or those that can afford substantially more than the minimum, this isn't going to be an issue and could even be benefit to them. For the approximately 40 million people that only pay the minimum, however, this could be devastating. (Full Story)

When the recession can no longer be denied, the President will, as I said above, blame it on 9/11, the war he started, the hurricanes and the disruption in energy production they caused. Like Michael Brown, he will blame everyone and everything, but himself.

But we know.

Harriet Miers Update
Here's a story from the Daily News in Philadelphia that may just explain Ms. Mier's meteoric rise from spinster Texas lawyer to Supreme Court nominee.

Miers Key Player in Bush Guard Cover Up

Breaking News: President Bush on Monday nominated White House counsel Harriet Miers to replace retiring Justice Sandra Day O'Connor on the Supreme Court, reaching into his loyal inner circle for a pick that could reshape the nation's judiciary for years to come.

Last week, we looked at a troubling episode in Miers' past -- we're reposting for anyone who missed it:

White House counsel Harriet Miers has never served as a judge before, and while this career "hard-nosed lawyer" (as she is invariably described) from Texas certainly deserves some kudos for a trailblazing career as a female lawyer, she's not a legal scholar, either.

But she does know better than just about anyone else where the bodies are buried (relax, it's a just a metaphor...we hope) in President Bush's National Guard scandal. In fact, Bush's Texas gubenatorial campaign in 1998 (when he was starting to eye the White House) actually paid Miers $19,000 to run an internal pre-emptive probe of the potential scandal. Not long after, a since-settled lawsuit alleged that the Texas Lottery Commission -- while chaired by Bush appointee Miers -- played a role in a multi-million dollar cover-up of the scandal.

Whatever Miers knows about the president's troubled past, she may soon be keeping that information underneath the black robe of an Associate Justice of the U.S. Supreme Court. Miers, who not long ago succeeded Attorney General Alberto Gonzalez as White House counsel, is now Bush's pick to replace retiring Justice Sandra Day O'Connor:

Miers is a skilled lawyer -- mainly on behalf of big business, including Microsoft and Disney -- and the first woman elected Texas State Bar President. But her main qualifications for the highest court in the land appear to be the same as most of Bush's recent appointments: She is unfailingly loyal to George W. Bush.

Here's how Newsweek's Michael Isikoff, on July 17, 2000, described her initial foray in the morass of Bush's Guard service:

The Bushies' concern began while he was running for a second term as governor. A hard-nosed Dallas lawyer named Harriet Miers was retained to investigate the issue; state records show Miers was paid $19,000 by the Bush gubernatorial campaign. She and other aides quickly identified a problem--rumors that Bush had help from his father in getting into the National Guard back in 1968. Ben Barnes, a prominent Texas Democrat and a former speaker of the House in the state legislature, told friends he used his influence to get George W a guard slot after receiving a request from Houston oilman Sid Adger. Barnes said Adger told him he was calling on behalf of the elder George Bush, then a Texas congressman. Both Bushes deny seeking any help from Barnes or Adger, who has since passed away. Concerned that Barnes might go public with his allegations, the Bush campaign sent Don Evans, a friend of W's, to hear Barnes's story. Barnes acknowledged that he hadn't actually spoken directly to Bush Sr. and had no documents to back up his story. As the Bush campaign saw it, that let both Bushes off the hook. And the National Guard question seemed under control.

So far, intriguing...but it gets better, and more complicated. At roughly the same time all of this was happening, Miers was also the Bush-named chair of the scandal-plagued Texas Lottery Commission. The biggest issue before Miers and the commission was whether to retain lottery operator Gtech, which had been implicated in a bribery scandal. Gtech's main lobbyist in Texas in the mid-1990s? None other than that same Ben Barnes who had the goods on how Bush got into the Guard and avoided Vietnam.

In 1997, Barnes was abruptly fired by Gtech. That's a bad thing, right? Well, on the other hand, they also gave him a $23 million severance payment. A short time later, Gtech -- despite the ongoing scandals -- got its contract renewed over two lower bidders. A former executive director thought the whole thing stunk:

The suit involving Barnes was brought by former Texas lottery director Lawrence Littwin, who was fired by the state lottery commission, headed by Bush appointee Harriet Miers, in October 1997 after five months on the job. It contends that Gtech Corp., which runs the state lottery and until February 1997 employed Barnes as a lobbyist for more than $3 million a year, was responsible for Littwin's dismissal.

Littwin's lawyers have suggested in court filings that Gtech was allowed to keep the lottery contract, which Littwin wanted to open up to competitive bidding, in return for Barnes's silence about Bush's entry into the Guard.

Barnes and his lawyers have denounced this "favor-repaid" theory in court pleadings as "preposterous . . . fantastic [and] fanciful." Littwin was fired after ordering a review of the campaign finance reports of various Texas politicians for any links to Gtech or other lottery contractors. But Littwin wasn't hired, or fired, until months after Barnes had severed his relationship with Gtech.

Littwin reportedly settled with Gtech for $300,000. This all could be interesting fodder for a Miers confirmation hearing this fall. But Bush apparently went for Miers' top two credentials:

Loyalty...and a little inside information.