What's up for your summer plans? Well, If you're Barack Obama, you shouldn't exactly be planning a long vacation. Why not? If you thought things were percolating already, you'd better sit down. As Obama, said in another recent money grab in LaLa land, "You ain't seen nothing yet." This was the trite phrase Al Gore used frequently in the 2000 Presidential campaign. Al was right, but in a way neither he nor anyone else foresaw.
The election that never ended, (in one sense, it still hasn't ended, as Democrats are still sore over losing) wracked America in ways not recently seen. There were slow-burning dramas (ah, those chads) to lighting-quick events (the tossing of the military ballots) to events we still have questions about (how many people in the Florida Panhandle didn't bother to vote because NBC called the election for Gore?) Some periods of time that span an event are simply so pregnant with so many ramifications, it takes a wise man years to digest them. This summer promises to be one of those time spans. Better hold off on those vacation plans, Mr. President.
The slow-burning dramas are probably the best place to start. The festering sore once known as the American auto industry is most salient now. As the government acknowledges, to dispose of this shell in bankruptcy will take months. Most of the dealerships, where most of the jobs reside, will be gone by next year. Obama will continue to pour money in, so the unions will get enough for their dues and a healthy Obama 2012 contribution, but the end is near. This sad story will be the news media's version of a funeral dirge played throughout the summer. Think Beethoven's Seventh.
Interest rates and their effect on the economy will be another slow-burning drama. A Reuters story today (5/31/09) was almost cute in its doe-like tone. In "Federal Reserve Puzzled by Yield Curve Steepening" by Allister Bull, the puzzlement concerned why long bond yields are rising. With the government not only printing money at a breakneck pace, but also buying its own debt, it's a wonder this hadn't started months ago.
Wait, think about that prior point: buying your own debt. Wouldn't it be great if you could run up a big credit card bill then call up the credit card company and say, "Tell you what, why don't I just buy my bill from you?" Now if you're printing money in your basement, you just send them newly printed cash. If they accept it, then things roll merrily along. This is roughly what the US government is doing now.
The Fed said in March it will buy $300 billion of its own debt. In other words, print money to buy money it has already spent. Want more? The Fed is also buying $1.25 trillion of mortgage-backed securities and $200 billion in debt from bankrupt Fannie Mae and Freddie Mac. What this is worth is anybody's guess, but what's a few hundred billion between friends? Oh, and the Fed must also sell $2 trillion in new debt to cover Obama's porkulus bill, falling tax revenues from newly jobless Americans and "various and sundry bailouts." This slow burn of rising interest rates could quickly turn into full-blown fire, scorching the economy and Obama. Speaking of roaring conflagrations, let's move on to what could be this summer's major flash point.
With Iranian presidential elections out of the way by mid-June, the window of opportunity for Israel to clock the Persian nation will officially open. Widely reported accounts in the international press have Iranian centrifuges producing enough material for a nuclear bomb by December. Since the Jewish state has never been known to shortchange its own security, we can expect a strike some time this summer. Israel could wait, but the intelligence estimates are just that, estimates. The centrifuges could be running ahead of schedule or North Korea may give Iran material or expertise to speed up the process. Defense Secretary Gates warned North Korea two days ago not to give away anything nuclear, though the U.S. has virtually no leverage over North Korea now that they're a nuclear state. On this score, Israel knows once the Ayatollah has the bomb, any strike besides a nuclear one would be a waste. A conventional first strike to prevent an Iranian nuclear first strike becomes a necessity now. Cancel those beach plans, POTUS, this could be 1914 all over again.
What effects the strike will cause falls into the category of events we still have questions about. Will a strike appreciably slow down the Iranian nuclear program? How will it affect U.S. wars in Iraq and Afghanistan? Will a shaky Pakistan topple? What about the price of oil? The list of questions stretches far into the distance.
Another event for the category of unanswered questions could include the Supreme court nominee Sonia Sotomayor. While a Democratic majority makes this, to a degree, a moot point, the race card has popped up in this event. Much like the jack-in-a-box springing open, we don't really know which way the clown or the issue will go. In good times, the nation might be willing to put somebody at the head of the line because they have "empathy", but with jobs disappearing overnight, the case for pushing someone because of lifestyle qualifications, as opposed to actual job qualifications, seems blatantly political and thus, somewhat awkward.
Obama himself has been forced to defend Sotomayor in a rather limp manner, saying she meant something other than what she said. This rather artless attempt at changing someone else's words may work with the left wing press, but it remains to be seen whether this will convince the center and allow red state Democrats to vote for her. She may get on the court, but another question is how much political capital will Obama have to spend to get her confirmed. With a major health care debate revving up this fall, time and political capital are not something the President can spare. Looks like the schedule is full this summer.
Sorry, Barack, no vacation this year, but there's always next summer. Didn't those perennial losers the Brooklyn Dodgers say that every year? Well, Mr. President, you can always sneak around the corner and check out the Washington Nationals. They're every bit as bad as those old Dodgers of Brooklyn.