Wednesday, January 16, 2008
Bend over, pull out your wallet and kiss your Abe ‘goodbye.’ The Lincolns have got to go – and so do the Hamiltons and Jacksons.
Those bills in your billfold aren’t yours anymore. The landlords of our currency – Citibank, the national treasury of China and the House of Saudi – are foreclosing and evicting all Americans from the US economy.
It’s mornings like this, when I wake up hung-over to photos of the King of Saudi Arabia festooning our President with gold necklaces, that I reluctantly remember that I am an economist; and one with some responsibility to explain what the hell Bush is doing kissing Abdullah’s camel.
Let’s begin by stating why Bush is not in Saudi Arabia. Bush ain’t there to promote ‘Democracy’ nor peace in Palestine, nor even war in Iran. And, despite what some pinhead from CNN stated, he sure as hell didn’t go to Riyadh to tell the Saudis to cut the price of oil.
What’s really behind Bush’s hajj to Riyadh is that America is in hock up to our knickers. The sub-prime mortgage market implosion, hitting a dozen banks with over $100 billion in losses, is just the tip of the debt-berg.
Since taking office, Bush has doubled the federal debt to more than $5 trillion. And, according to US Treasury figures, on net, foreign investors have purchased close to 100% of that debt. That’s $3 trillion borrowed from the Saudis, the Chinese, the Japanese and others.
Now, Bush, our Debt Junkie-in-Chief, needs another fix. The US Treasury, Citibank, Merrill-Lynch and other financial desperados need another hand-out from Abdullah’s stash. Abdullah, in turn, gets this financial juice by pumping it out of our pockets at nearly $100 a barrel for his crude.
Bush needs the Saudis to charge us big bucks for oil. The Saudis can’t lend the US
Treasury and Citibank hundreds of billions of US dollars unless they first get these US dollars from the US. The high price of oil is, in effect, a tax levied by Bush but collected by the oil industry and the Gulf kingdoms to fund our multi-trillion dollar governmental and private debt-load.
The US Treasury is not alone in its frightening dependency on Arabian loot. America’s private financial institutions are also begging for foreign treasure. Yesterday, King Abdullah’s nephew, Prince Alwaleed bin Talal, already the top individual owner of Citibank, joined the Kuwait government’s Investment Authority and others to mainline a $12.5 billion injection of capital into the New York bank. Also this week, the Abu Dhabi government and the Saudi Olayan Group are taking a $6.6 billion chunk of Merrill-Lynch. It’s no mere coincidence that Bush is in Abdullah’s tent when the money-changers made the deal just outside it.
Bush is there to assure Abdullah that, unlike Dubai’s ports purchase debacle, there will be no political impediment to the Saudi’s buying up Citibank nor the isle of Manhattan.
So what? I mean, for the average American about to lose their job and their bungalow it doesn’t matter a twit whether it’s Sheik bin Alwaleed who owns Citibank or Sheik Sanford Weill, Citi’s past Chairman.
It’s the price paid to buy back our money from abroad that’s killing us. Despite the Koranic prohibition on charging interest, the Gulf princes demand their pound of flesh, exacting a 7% payment from Citibank and 9% from Merrill. That hefty interest bill then pushes adjustable rate mortgages into the stratosphere and pushes manufacturing into China by making borrowing and energy costs impossible to overcome. Forget the cost of health care: General Motors’ interest burden quintupled in just two years.
As the great economist Paddy Chayefsky wrote in the film The Network:
“The Arabs have taken billions of dollars out of this country, and now they must put it back. … It is ebb and flow, tidal gravity…. There are no nations, there are no peoples. There is only one vast and immense, interwoven, multi-national dominion of petro-dollars. … There is no America. There is no ‘democracy.’ The world is a business, one vast and ecumenical holding company, for whom all men will work.”
In 2005, the US consumer paid Arab and OPEC nations a quarter trillion dollars ($252 billion) for oil – and the USA received back 100% of it – and then some ($311 billion) via Gulf nations’ investment in US Treasury bills and purchases of US businesses and property. Bush’s trip to Abdullah’s tent is all about this vast business of keeping this petro-dollar treadmill spinning.
The Bush Administration, rather than tax Americans to cover our deficits or make the banks suffer the consequences of their predatory lending practices, is allowing the Saudis to charge us big time at the pump with the understanding they will lend it all back to us – so the party never has to stop.
It has been reported that the President’s Secret Service men traveling with him seemed embarrassed by the eye-popping loads of diamond and gold gifts which they have to carry back for President Bush. They need not feel they have taken too much from their hosts: Bush has assured Abdullah that the King can suck it back out through our gas tanks.
Greg Palast is the author of The Network: The World as a Company Town, in the New York Times bestseller, Armed Madhouse. Hear Ed Asner read from the book and the film ‘The Network’ at www.gregpalast.com