At The End of the Day, It's Energy!

To quote the Reverend Jeremiah Wright, America’s chickens are coming home to roost. Use whatever euphemism you want, the events in the nation’s financial markets indicate that the party is finally over. In the late 1990’s, Bill Clinton rode the crest of the computer productivity wave to a national surplus. Contrary to the politicos’ efforts to make you think it was his economic policies that generated the surplus, it was the explosion of productivity resulting from the digital age.

Bush came to office as the Clinton boom was slowing down, and presided over a terrorist induced recession, resulting in an easy-money monetary policy and the now collapsing housing boom and resultant financial crisis.

Of course, there is plenty of blame to go around for the Freddie and Fannie mess, the unintended consequence of the Community Redevelopment Act as amended under Clinton and reinforced under Bush. It required lenders to loan money to nonqualified borrowers in the government’s noble, but now failed, experiment in home ownership for all citizens, credit worthy or not; hence the word: subprime mortgage.

Finally, there are all of those sanctimonious Democrats and Republicans who passed the bailout bill last week, but were at the receiving end of the money largesse from the chairmen of Freddie and Fannie causing Congress to look the other way when the John McCain was sounding the alarm two years ago. Congress most certainly won’t investigate itself, especially if the Dems control both houses and the Presidency, but the FBI will. Powerful heads will roll from the White House if Obama wins, to the Capitol Building. It is a dirty mess.

That being said, while we boo-hoo about the $700 billion bailout, the country continues to ship that much money every year, year after year, for energy. The bailout is a drop in the bucket to our nation’s financial woes continually fed by misguided energy policies from the extreme left, mostly, and the extreme right, partially, of the political spectrum. At the end of the day, it is not the economy, stupid; it is energy, stupid.

The spike in energy costs was the tipping point for shaky mortgages, and hastened the collapse as families chose gasoline over their mortgage payments. Energy allowed Russia to invade Georgia as Russia reaped the rewards of $150.00/barrel oil. Energy is the root of America’s long standing disastrous mid-east policy that I have been hearing about since grade school. Our horrendous energy policy is the fertilizer for terrorism. Energy holds the key to America’s future.

The banking crisis will work itself out. I don’t mean to minimize how bad things are, but one radio commentator likened it to being afraid of the mighty Oz. Look behind the curtain, and it’s not near as bad as you feared. The fight over Wachovia Bank by Citigroup and Wells Fargo shows that what was needed was a floor value for the so-called toxic mortgages. The passage of the bailout bill by itself helps establish the “floor” even before the first mortgage is “bailed.” There are rough times ahead, but this time next year, it will be a distant memory.

The real financial crisis is the continual imbalance of trade caused by high energy costs. If we are to survive as a nation, we have to drill now, upgrade our electric grid, generate alternative fuels and the cars to use them, be smart about the environment, but not extreme. We can have both energy and a safe environment. American ingenuity and know-how can save the day.

The biggest problem I have with Barack Obama, if he is elected, is that he would be beholden to the whacky left wing environmental nut cases that would stifle American energy independence. If he can’t stand up to the left wing of his party and implement a sane energy/environmental policy, the country will be in big trouble. If Obama is elected, and he does what I think he is going to do, George Bush’s no-policy approach to energy would actually look good.

The energy issue is the root of all other issues. We must pay attention in this election cycle.

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