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发帖数: 29846 | 1 By DICK MORRIS
Published on TheHill.com on March 1, 2011
Obama's failure to support America's allies in the Middle East and his
dithering endorsement of chaos in the region will send oil and gasoline
prices skyrocketing, triggering a massive bout of stagflation. This vicious
cycle of rising prices, decreased consumption, and ever higher prices (as
vendors seek to recover higher fixed costs) will cripple the American
economy for years to come.
This is Obama's true legacy.
Consider what he has done to push up oil and gas prices:
Endorsed spreading chaos in the Middle East.
First banned and now slowed down offshore oil drilling.
Considered curbs on fracking (horizontal drilling to unlock shale
deposits in the Northeast -- a potent new source of oil).
Imposed a carbon tax on domestically produced coal and oil through EPA
mandate.
Proposed an end to tax advantages designed to encourage oil drilling and
exploration.
Now Obama is reaping the fruits of these misguided policies -- $4-per-gallon
gas, soon to go up to $5 or $6!
And the fuel-price increases will take their place alongside food-price
rises. Food prices for corn, soybeans, wheat and other basic crops have
almost doubled in the past year.
(The Consumer Price Index deliberately understates fuel and food inflation
in its formula to avoid triggering cost-of-living adjustment increases in
private pay and government programs.)
Finally, he has encouraged the Federal Reserve Board to almost triple the
money supply, over $1 trillion of it based on the purchase of worthless
mortgage-backed securities.
The combination of reduced confidence in the dollar (at home and abroad) and
the rises in fuel and food prices will force up prices as costs push them
higher. Already, the International Monetary Fund (IMF) has pressed for the
replacement of the dollar as an international currency by "drawing rights"
printed by the IMF. Such a policy, of course, would be a disaster since it
would attempt to base global currency on an institution without the power to
tax. But it is a measure of how far faith in the dollar has fallen that it
is being seriously urged. U.S. inflation can only fan that movement.
Since the Fed has got to stop printing money soon -- lest it become
wallpaper -- interest rates, too, will rise, also contributing to the cost
push price inflation.
But the economy cannot afford to pay these higher prices. Consumer demand,
which accounts for three-quarters of GDP, is already stagnant. With
inflation, it will drop. Then, unable to recoup their costs, vendors will be
forced to raise prices even higher. An inflationary psychology will take
hold of the economy. Higher interest rates will be needed to break its hold,
forcing us into yet another recession, this one fully courtesy of President
Obama.
For months now, political pundits have wondered if the economy would improve
, helping Obama's reelection chances. It now appears that the exact opposite
is likely and that his reelection chances will be washed away by a massive
flood of inflation as a consequence of his misguided policies.
Obama will doubtless blame oil companies and speculators for the fuel price
increases, but his role in encouraging instability in the oil-producing
regions of the Middle East is apparent enough. He put the demand of the
Egyptian people for political change ahead of America's need for financial
stability. He was so enraptured by being "on the right side of history" that
he forgot about his role as the head of our economy and its vulnerability
to the very instability his policies fanned.
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