Severe

Since the beginning of this blog, the one element for a perfect political storm, which has been missing, is the economic 'hard times'. Bush has managed to alienate a solid majority, without the usual critical ingredient of hard times. But, maybe that's about to change. Nouriel Roubini sees a hard landing.

It is increasingly clear that by now that a severe U.S. recession is inevitable in next few months. Those of us who warned for the last 12 months about a combination of a worsening housing recession, a severe credit crunch and financial meltdown, high oil prices and a saving-less and debt-burdened consumers being on the ropes causing an economy-wide recession were repeatedly rebuffed [by] the consensus view about a soft landing given the presumed resilience of the US consumer.

But the evidence is now building that an ugly recession is inevitable.

The Economic Consequences of Mr. Bush

A political storm, as I have written many times, is a dramatic event, the telling of a moral fable as it were, on the political stage. It is an almost inevitable consequence of policy, which is so catastrophically bad and unwise as to have highly visible catastrophic consequences. The political storm is the accountability moment.

Not all bad policy has such immediate consequences. And, plenty of bad policy, due to the ideological blindness of its progenitors or the self-interest of its beneficiaries, resists any accountability moment.

Joseph Stiglitz writes in Vanity Fair, on The Economic Consequences of Mr. Bush

Getting it Wrong

Michael Hirsh
Newsweek.com:

"After six years of propping up and making excuses for Pervez Musharraf, . . .

"Washington doesn't have many friends left to call on in Pakistan -- perhaps the No. 1 generator of anti-U.S. terrorism in the world today. That's the dilemma that democracy crusader George W. Bush faces after Musharraf, one of his firmest allies, took the dictator's path and declared martial law on Saturday. . . . "

"Musharraf has completely de-legitimized himself in the eyes of the Pakistani public, and Washington has virtually no friends in a part of the world where Al Qaeda has established a new safe haven. 'I agree with [Musharraf] that we are facing a political crisis, but I believe the problem is dictatorship, I don't believe the solution is dictatorship,' Bhutto told Sky News. 'The extremists need a dictatorship, and dictatorship needs extremists.'

"Americans have always been uneasy about dancing with dictators. But in the age of terror such a policy can be very costly. Musharraf's method of maintaining his thin legitimacy is an example of just how costly. In order to keep himself in power, Musharraf has cut deals with the Mutahhida Majlis Amal (MMA, or United Action Council), a coalition of Islamic parties, and barred the parties of his main secular political rivals, former prime ministers Bhutto and Sharif. This was an attempt to 'create the illusion that radical Islamist groups were gaining power through democratic means, thus minimizing the prospect that the international community—especially the United States while Pakistan offers support in the war against al Qaeda—would press for democratic reform,' scholar Husain Haqqani wrote in his recent book, Pakistan: Between Mosque and Military. But because these Islamist groups have continued to grow in power and influence, they may no longer be controllable.

"The monster that Musharraf cynically nurtured to keep himself in office is now threatening him personally: Al Qaeda elements that have found increasing support in friendly areas of Pakistan controlled by Islamists have tried to assassinate him twice. Some U.S. officials now fear that that this nuclear-armed nation is teetering on the verge of chaos, and the result could be every American's worst nightmare: that nuclear material or knowhow, or God forbid, a bomb, falls into the hands of terrorists."

What Digby said

Political storms are transformative -- a critical mass of the population realize the error of their ways, or at least an error in the way of some elite and powerful group, and sweep away that group and the supporting assumptions, which kept that group in power.

One reason, aside from the impotence of the Democratic Congress, that I know that The Political Storm has not swept America is the Giuliani Campaign -- really the whole Republican field apart from Ron Paul seems majorly detached from reality, but Giuliani is both the front-runner, and the Republican candidate most favored by Bush, himself. As digby at Hullabaloo puts it: ". . . it really appears to me that the Republicans may just nominate someone dumber than Bush and crazier than Cheney. And without the morals of either of them. How is that even possible? "

How indeed?

The Logic of Empire

Anthro writes on the critical logic of Empire versus the Logic of Democracy.

He explains why Cheney may have already won, or why he may well win the game, even as he loses power. Those, who follow have many strong incentives to mirror the behavior of Cheney, even in trying to reverse what he's done, and so may end up just accepting revolutionary premises Cheney has brought to American foreign policy and American conceptions government.

There's a strong case to be made that 2004 was the critical election, and the good guys lost, and there's no going back.

So many people seem to be hypnotized by the logic of illogic. Simply arresting Bush and Cheney and the rest and shipping them off to stand trial for war crimes at the Hague is apparently unthinkable. Simply withdrawing posthaste from Iraq is simply unthinkable.

Well, the U.S. has been going down the tubes, because so few have been willing to think. So, maybe it is time some started.

Atrios on Peak Oil and Supply disruption

Atrios on Peak Oil and Disruption: "I think some people assume that an inevitable result of lower oil supply/rising oil demand is disruptive supply shortages. Widespread persistent supply disruptions would indeed be a big deal, but they just aren't an inevitable result of peak oil concerns. Arguably political instability caused by the economic pain of higher oil prices could lead to such disruptions, but there's no simple cause and effect there."

Atrios, aka Duncan Black, recovering economist, isn't often wrong on economics issues, but this comment was not particularly enlightening.

Here's the thing about the oil economy: for a fairly simple commodity, it is a long supply-and-value chain.

At one end of the chain, are the people, who are extracting petroleum as mineral wealth from the ground, and at the other end, are people, who invest in transportation and industrial infrastructure, which consume petroleum energy -- the people in James Kuntsler's suburbs and SUV's -- and, in between, a large infrastructure for processing (refining) and distribution.

Here's the thing about the refiners and distributors in between: If the world is at a Peak, that means that the world will never again be producing/consuming more oil than right now. So, there will never be more oil products to process or distribute, than right now. So, if you are a distributor, you have no incentive to add to your capacity, because the one thing you know abut the future is that your future capacity utilization will be lower than it is now.

So, yes, Atrios, supply disruption is built into the situation, at least right now, in the short run, because distribution and refining capacity is so highly utilized and so little investment is being made in expansion or, even, in the repair of marginal capacity, which might be near obsolescence and retirement.

The great danger of supply disruption is in that part of the supply chain. A hurricane in the Gulf of Mexico is a bigger deal, consequently, than war in the Persian Gulf. But, this is a temporary circumstance, which will change radically, as oil production declines quantitatively, and the refining and distribution infrastructure develops huge redundancies.

As production sags in the years ahead, the profit will go out of distribution. Declining quality of oil will push up the costs of refining, particularly the energy costs of refining. Refining oil products will become a much less profitable business as well, at least in consuming nations. The economics of refining will drive oil refining to the countries producing an exportable oil surplus, and the exporters will export product rather than crude.

The declining profitability of refining and distribution is not something I have seen discussed much, although I am sure people in the industry anticipate it in detail. The U.S. oil giants will probably migrate abroad, as Halliburton has already done. Those, which remain will decline precipitously as an industry. The Energy industry will be very powerful, as always, but the oil industry will be a sad, fading memory.

And, big surplus or high-idle capacity in distribution and refining will tend to dampen the effects of disruption. While inventory is inadequate, now, to buffer disruption, in the future, a distribution net with a high-degree of idleness will be able to cheaply hold and manage larger (relative to rates of consumption) inventories of crude and product. So, the threat of disruption will fade away.

The scenario favored by James Howard Kunstler and fans, of a huge escalation in oil price to an astronomical price, leading to total economic meltdown is just not a realistic prospect.

The global warming problem, however, may be exacerbated. Like a cigarette producer going down-market in search of addicts, oil producers will go to the relatively un-developed world with refined oil product, at an assured price, which does not require large investments. Oil will be the energy source of choice for the under-developed world -- which is most of the world, after all -- for the same reason that they favor cell-phones: if your society cannot afford or maintain a complicated infrastructure, the technology with the simplest infrastructure wins out.

The Washington Monthly

Kevin Drum, the Political Animal: "Democrats have gone from 30% of all health industry donations in 2000 to 44% in 2004 to 57% this year. This is, obviously, good news and bad news. The good news is that lobbyist money follows winners, and the healthcare lobby seems pretty confident that a Democrat will become president next year. The bad news is that they might just get what they paid for."

I increasingly fear that this may be the case. What ought to be an election year of revolutionary change appears to be heading toward a coronation for Hillary Clinton, and no change at all -- just a confirmation that all the horrendous changes, wrought by Bush and the Republican Thugs for Plutocracy, have become the new foundation stones of American Life.

The underlying dynamic, which is driving the greatest political storm in half a century into blowing itself out in irrelevance, is clear enough. Politicians recognize that Media blessing is more important to achieving office than the welfare of ordinary People, who remain sheepishly willing to respond predictably to the Media message machine.