crying out loud

For Crying Out Loud!

The neo-conservatives who drove our country over a cliff

are now complaining about the parachute.

The conventional wisdom of the moment is that the housing market, and bad mortgages in particular, is to blame for the current global economic crisis.

Conventional wisdom is wrong, or at least short-sighted

Look back in time just eight months, before the metaphorical “house of cards” began to fall, and you’ll find the tipping point on the front pages of newspapers and in the lead stories of television news broadcasts: fuel prices.

There’s no question that the housing market was overpriced and lending was out of control in the U.S., but the avalanche of failed mortgages did not begin until speculation on oil drove up fuel prices, which in turn inspired a blizzard of food price increases and commodity speculation. Rising prices on those two essentials — food and fuel — affected everyone, but none more severely than dangerously indebted homeowners.

For crying out loud! How many mortgages failed as a direct result of the surge in food and fuel prices early in 2008? How many foreclosures would have been avoided if family budgets hadn’t been busted by those unexpected cost increases?

The current economic crisis is a direct result of the Bush Administration’s failure to thwart the speculation on oil by either putting restrictions on trading or releasing oil from the nation’s strategic reserve. In hindsight, selling off oil from the reserve at $150 a barrel and replenishing the reserve when prices dropped below $100 a barrel would have been a stroke of genius.

Instead, the Bush Administration chose to hoard rather than invest and to use the crisis as an excuse to open up the Arctic Wildlife Refuge to oil drilling. No serious attempt was made to stabilize oil prices and we will live with the consequences for quite some time.