The American economy just finished its worst two-week performance since the stock market crash in 1987. These financial troubles do not seem likely to stop in the near future.
Guardian
First of all, let’s assess the damages. Last week, the Dow Jones industrial average dropped 14.3 percent. That was its greatest weekly loss since 1933. In addition, the Nasdaq composite index lost 16.1 percent last week.
Furthermore, the usually robust aviation industry suffered nearly irreparable damage; stocks in the sector fell more than 60 percent since the four hijacked American commercial airliners hit and destroyed two monuments of the American way of life. This is despite a $15 billion government-funded cash- and loan-guarantees package.
Consumers have been absent from malls and theaters since the tumultuous day of Sept. 11, 2001. According to a recent New York Times article, Bloomingdale’s and Macy’s have encountered sales 20 percent less than forecasted. Auto sales have seen a 33 percent plunge since the attacks. One shouldn’t stop to think for a second that the economy hadn’t already been heading for a nosedive since President George W. Bush entered office.
In a recent New York Times article, Robert J. Barbara, the chief economist at Hoeing & Company, was quoted as saying that “”there were painful profit pressures in most sectors of the economy in the months leading up to the attack.””
Corporate earnings shrinkage will cut into federal and state corporate tax revenue. In effect, the author of the article, Jonathan Fuerbringer, argued that this means that “”the federal budget will shrink faster, and that will put pressure on states to reduce spending because most of them cannot run deficits.””
Although stocks did spring back considerably Monday, Treasury Secretary Paul O’Neill said that the terrorist attacks could delay recovery in the world’s top economy by a “”quarter or so.”” It would be a broad and dangerous statement to say that the recent tumble of the economy as well as the terrorist attacks could be blamed on an act by a single person.
All the same, I think a very capable argument could be made that Bush’s “”hands-off”” policy toward the Middle East since his election has not only strained relations between the United States and its OPEC friends and turned the stock market from a bull to a bear, but it may have also provoked the attacks.
Since his election, President Bush has employed and instructed his subordinates to employ a very isolationist foreign policy toward the Middle East. He has made no effort to facilitate a peace agreement between Yasser Arafat and current Israeli Prime Minister Ariel Sharon. Consequently, the war has raged on in the Holy Land for a year now. The years of diplomacy efforts made by former president Bill Clinton have been for nothing. The proximity to a peace agreement and establishment of a Palestinian state with Israeli approval, which seemed possible just a year ago, now seem like a century ago.
In addition to his lack of concern for peace in the Holy Land, Bush has recently attempted to use the “”Big Stick”” technique popularized by Theodore Roosevelt. Since the terrorist attacks, he has sent orders and ultimatums daily throughout the Islamic world. This is not a good path to take when one is not showing concern for what is thought to be most important to many in the Middle East: peace between the Israelis and Palestinians. His “”Big Stick”” may become a stick of dynamite for our down-home country president.
I realize now may not be the time to poke fun at Dubya; after all, it is a time of national crisis and he is the one in charge. Nonetheless, the techniques he may have used to order ranch hands around back home will not be as influential in the current situation.
Bush has already declared that anyone harboring terrorists is an enemy of the United States. So far, he has not revealed what military procedures he will use to combat this “”aiding and abetting.””
However, as earlier noted, the president must be very careful. His current nonchalance toward the violence continuing in Israel and Palestine, in addition to the continual U.S. support of Zionism, has already tensed relations between the United States and its OPEC trading partners. In addition to this, many Middle Eastern countries think the United States should drop Iraqi economic sanctions, which have been active since the Persian Gulf War.
There is a deep dislike held by many Persian Gulf countries toward the United States. Neela Banerjee of the New York Times argues that “”many Arabs blame the American thirst for oil for miring them in shaky economies run by corrupt leaders.”” Although Arab countries such as the United Arab Emirates, Pakistan and Saudi Arabia have been extremely cooperative with the United States since the attacks, at the same time these governments hold a hidden fear.
Because of their already unstable governments, if these countries align themselves too closely with American anti-terrorist efforts and if Washington targets many Islamic countries in its own efforts for revenge, moderate Arab regimes could be crippled by uprisings.
This is not to mention that these same Arab regimes control two-thirds of the world’s oil supply under lock and key. According to the Bush administration, the United States has let the OPEC cartel “”know”” that it would like the output of oil to increase so that prices would drop and counteract the current American economic recession. With such a basic need as oil hanging in the balance, the White House has been carefully analyzing which forms of retribution it will employ in response to the terrorist attacks, keeping in mind, of course, that these actions could affect American oil supplies.
Hopefully the White House will make significant preparations so that the huge backswing of Dubya’s big stick does not hit himself, as well as the American economy, in the ass, causing even more domestic turmoil.
It is important to consider that the OPEC cartel had no problem placing an oil embargo on the United States in 1973 in response to American Support of Israel in the Middle East War.
There is no doubt that the American economy is headed for a deep recession. Conflict abroad has made consumers wary of delving deeper into credit debt. Huge layoffs have been made in both the aviation and technology industries in the last couple weeks.
I myself have even felt the effects of the approaching economic troubles. My roommate, who until recently worked in the real estate industry, just got laid off. Supposedly the real estate business in San Diego is booming. Nonetheless, he and 40 other employees were let go by Commonwealth Land and Title two weeks ago. Obviously, the economic hurt has already begun. Usually the American economy is prosperous during times of war; this time it is quite the opposite.
In order to fight a war we need oil. Unfortunately, oil is strategically placed within many countries the citizens and leaders of which may support our alleged enemy, the Taliban of Afghanistan.
If Bush’s reckless yet patriotic political maneuvers continue, there is no doubt that our country is headed for a severe recession and a costly war with an invisible enemy. The effects felt at home could be a combination of Vietnam and the oil embargo of 1973.
