BUSH WILL LEAVE US WITH MORE THAN JUST IRAQ-- STAGFLATION IS A DIRECT RESULT OF RIGHT WING ECONOMIC POLICIES

When I woke up this morning Fed Chairman Ben Bernanke was droning on in front of some semi-somnolent congressional committee about The Economy, carefully tiptoeing thru the tulips mine field of a shaky stock market. Tomorrow's NY Times emphasizes what he was trying to say without saying it: "Who cares about inflation, anyway."

From what I gathered from his nearly indecipherable and overly tepid blathering is that we have the worst of all possible worlds coming on: slowing (i.e.- no or even negative) growth coupled with rising (i.e.- out of control) inflation. That's stagflation and it's bad news. Is it Bush's and the rubber stamp Republicans' fault? Do you really have to ask?

At the behest of their big corporate contributors, the entire GOP and all the Blue Dog Democrats and their allies have allowed the regulatory reforms of the financial industries enacted since the 1930s to wither and die, not as fast as the far right would have liked, but fast enough to bring on a strong dose of the economic catastrophe headed our way. This has been great for quick turn-over profits, and disastrous for our nation's long term prospects-- and for everyone's pocketbook who isn't in the top one-half of one percent of income earners. "Don't bother us with rules," they demanded (as they handed out the fat bribes); let the free market soar." What goes up...

The Fed chairman acknowledged that the central bank faced increasingly contradictory pressures of slowing growth and rising consumer prices. But his bottom line was that, for now, the top priority would be fighting a recession rather than fighting inflation.

Mr. Bernanke’s view of the state of the economy, part of his semiannual appearance before Congress, came as the dollar sank to a historic low against other major currencies, introducing a possible third dimension to the economic problems the Fed chairman must tackle all at once.

Having already cut short-term interest rates by almost half since September, Mr. Bernanke painted a grim picture of consumers reluctant to spend, businesses reluctant to invest and banks reluctant to lend. On top of it all, housing prices keep falling.

“The economic situation has become distinctly less favorable” since last summer, he told the House Financial Services Committee. In words that investors immediately recognized as a hint of lower rates, he vowed to “act in a timely manner” and “provide adequate insurance against downside risks.”

The Fed’s decision to err on the side of faster growth poses risks. Ever since the wrenching experience with stagflation in the late 1970s, the rule of thumb in monetary policy has been that revving up a slow economy is far easier than slowing inflation once it becomes entrenched.

Several friends of mine-- each gainfully employed in campaign work-- have been urging me to support Blue Dogs against Republicans-- the lesser of two evils. Tuesday I explained why a Blue Dog is not the lesser of two evils and in some ways is the greater of two evils.

When Steny Hoyer was willing to anything to get the House Leader's post he called me and told me how he wasn't such a bad guy and how he supports civil rights and something else; Choice I think. That's good. As Leader he has presided over a decline in respect for Congress that makes that institution less admired by Americans than even George Bush, the most hated man in the entire world. He has also guaranteed that Bush would be able to continue, relatively unmolested, with his Iraq agenda. And Hoyer isn't even a full fledged Blue Dog, just a fellow traveler.

My friends, as my friend John McCain might say, if you care about building a progressive coalition on a foundation of values and principles, do not consider supporting, or even voting for reactionary Democrats. They are our enemies, on balance, as much as Republicans. I would rather invest in authentic high quality Democrats like Donna Edwards, Jim Himes, Darcy Burner, Howard Shanker, Vic Wulsin and Alan Grayson, than help election two dozen Democrats who will wind up voting with the Republicans to destroy the environment, enrich their campaign contributors to the detriment of the rest of us, and refuse to the courage to stand up to petty tyrants like Bush and Cheney and their henchmen and cronies.

Today Bernanke made it as clear as he's capable of that he and the Fed are "more worried about a sharp slowdown and rising unemployment than they are concerned about inflation. (And then there's the rising unemployment numbers, another effect of the MBA-President's economic policies.) His muddled reasoning-- "that slower economic growth will reduce inflationary pressure in the months ahead, because debt-laden consumers will be far more wary of spending money and businesses will be more cautious about investing in plant and equipment"-- leads no where but straight down the toilet.

'Til then... something about writing this piece made me think of this song. So I made a clip for ya: