Stygius

Trade deficit record

This is what happens when soft service jobs are the only thing your economy can create, and manufacturing job growth is stagnant.

The monthly July 2006 trade deficit in goods and services shot up to $68.04 billion, the highest monthly total on record, and a nearly 5-percent jump from June's revised figure of $64.82 billion. A sharp increase in the deficits for manufactured goods and especially high technology products led to the July deficit that topped the previous record of $66.30 billion set in January by 2.62 percent.

Things are going great!

[Sorry for the spotty posting. I actually forgot my password this morning!]

Proof that the Bush Economy is doing just great, via the New York Times:

America's trade deficit improved slightly in June as record sales of U.S. farm products and other exports blunted the impact of soaring crude oil prices.The deficit for June dipped 0.3 percent to $64.8 billion, which was still the fifth largest deficit on record.

He'll probably have a press conference.

Virtuous junk

Brad Plumer at his best with a post on the production of junk packaging with just the right whiff of conspiracy:

Litter's awful. It's disgusting. We're all agreed. But it seems that the nationwide anti-litter campaign, which began in the 1950s, was a bit less pure in its origins. According to Heather Rogers' Gone Tomorrow: The Hidden Life of Garbage, the entire anti-litter movement was initiated by a consortium of industry groups who wanted to divert the nation's attention away from even more radical legislation to control the amount of waste these companies were putting out.

A Shanghai realignment?

Blogging will continue to be light.

I've written previously a bit on the Shanghai Cooperative Organization, a multi-lateral group of Central Asian nations organized under China and Russias' mutual desire to counter-balance the US's growing presence in the region. It is a young effort -- and I don't think the SCO has much in the way or credibility yet -- but reading two stories this morning really makes clear the cooperative attempt to force a global realignement right now.

AFP reports that the SCO is talking about letting Iran join. Given the West's attempt to turn Iran into a pariah nation, even the discussion of this is a blatant shot across the bow.

Likewise, the New York Times piece on the oil-producers' increasing use of increasingly expensive oil as a political tool, points to the great strategic weakness this country faces.

As energy-rich countries feel empowered by high oil prices, they are increasingly using a blunt instrument to make their influence felt. Call it the power of the pipeline.

He who grows food has far less power than he who supplies the farmer with water. There's the dependency dynamic in a nutshell.

Thus, having a US vice president rail against Russia about energy prices -- even if on Russia's doorstep, is a sign of incredible weakness. And this was the same vice president who equated national security with oil access, when the oil itself is the insecurity.

The voodoo's got no mojo

The claim that lower taxes are increasing revenues overall? In other words, are tax cuts self-financing? Better yet, do they pay for themselves? Sebastian Mallaby:

Nobody serious believes that tax cuts pay for themselves, as I noted last week. But most senior Republicans flunk this test of seriousness.

In January, George W. Bush declared that, "by cutting the taxes on the American people, this economy is strong, and the overall tax revenues have hit at record levels." Regrettably, this endorsement of what his dad called voodoo economics was not a one-time oversight. The next month, Bush told a New Hampshire audience, "You cut taxes and the tax revenues increase."

Yet the administration's own economists' contradict the wishful thinking:

Mankiw is a top-notch economist hired by Bush and Cheney to advise them. And last year he published a paper [PDF] on how far tax cuts pay for themselves, reporting enthusiastically that this self-financing effect is "surprisingly large."

How large, exactly? Mankiw reckons that over the long run (the long run being generous to his argument), cuts on capital taxes generate enough extra growth to pay for half of the lost revenue. Hello, Mr. President, that means that the other half of the lost revenue translates into bigger deficits. Mankiw also calculates that the comparable figure for cuts in taxes on wages is 17 percent. Yes, Mr. President, that means every $1 trillion in tax cuts is going to add $830 billion to the national debt.

"Voodoo" economics? More like "hoodoo voodoo, chooka-chooky-choo-choo" economics.

Here's something of a truism; something that initially seems stupid to even write down, but a truism increasingly obscured by ideological jibber jabber: Deficit spending increases the deficit. There.

The military and fuel dependence

Envivronmental degradation, strategic dependence on loathsome regimes, economic wealth flowing out our borders to said regimes, all conributes to the national security crisis this country faces as a result of oil dependence. And what can be a starker example of that, than our military's dependence on imported oil.

The New York Times has a piece on the Pentagon's baby-steps towards addressing that.

By late this summer, on the hard lake beds of the Mojave Desert, where the Air Force tests its most secret and high-performance aircraft, a lumbering B-52 is scheduled to take off in an experiment in which two of the giant bomber's engines will burn jet fuel produced not from crude oil but from natural gas. The plane's six other engines will burn traditional jet fuel — just in case.

The Air Force consumed 3.2 billion gallons of aviation fuel in fiscal year 2005, which was 52.5 percent of all fossil fuel used by the government, Pentagon statistics show. The total Air Force bill for jet fuel last year topped $4.7 billion.

Although the share of national energy consumption by the federal government and the military is just 1.7 percent, every increase of $10 per barrel of oil drives up Air Force fuel costs by $600 million per year.

Oil and Water

Cruising the streets of Fort Collins, Colorado, the Biofuels Demonstration Vehicle -- which runs on 100% vegetable oil -- has been drawing stares. Check out www.oilandwater.org. Adorned with kayaks and New Belgium Brewery cases, the truck struck a proper Colorado pose.

Monday listenings

Two items on Morning Edition that struck me this morning:

• Steve Inskeep reports on Savannah, GA.'s "poverty simulation" program as an inspiring and innovative way to stimulate ideas and solutions from business and community leaders.

Each month, the city sponsors "poverty simulations" to raise awareness among its citizens. Government leaders, heads of businesses and civic groups spend an evening role-playing as people living in, or on the brink of, poverty. The experience has inspired some participants to join the city's anti-poverty effort, called "STEP UP."

• Mike Schuster gives a handy timeline of the adminstration's construction and implosion of its case for war.

 

Energy security; art of the possible

This Unbossed.com post reports on a Sen. Dick Lugar talk at Brookings on energy security for America.  On this, I  will even happily go the dance  with Frank Gaffney (see Set America Free).

Indebting towards Gomorrah

What he said. Robert Reich's Marketplace Morning Report commentary is right on. This is getting beyond insane. We are squandering Hamilton's blessing with our spending and taxation policies. And for supposed benefits that remain fantastical.