What will the next four years of Bush bring?
by William Engdahl
There is an ominous mood in the United States over the
recent US elections and what they might bring. There are two
broad areas where events will be dramatic, namely in the
domestic US policy area and in the area of foreign policy.
It is worth citing the comment of Tim Adams, Bush policy
director just after the vote. Using an image from horse
racing, appropriately, Adams said, "We need to charge out of
the box, with a mandate to be bold." Now the first Bush
administration, failing a popular vote mandate, and with
dubious Florida results hardly was a picture of "caution."
So what is a "bold" Bush Presidency likely to bring?
First, as a result of the haste with which John Kerry
conceded Ohio, and the claims of Bush to have won a
convincing popular vote mandate, the world will never know
the accuracy of the vote. Preliminary independent attempts
at local audits in Florida, Ohio and other states indicate
that the scale of vote manipulation exceeded that of a
normal election in Ukraine or Nigeria in its level of fraud.
This we will never know. Alone the sudden shift from a
strong pro-Kerry exit poll in Ohio and Florida to a dramatic
Bush shift a few hours later, something US election experts
say is impossible, suggest foul play. Election experts say
the vote in key states like Florida was so statistically
spectacular it is unbelievable that he scored huge gains
across the state compared with 2000. His vote exceeded
official Republican registration, which is itself almost
impossible because of non-voters. In 2000 Bush got only 85%
of Republicans registered. Exit polls after people voted
showed Kerry won in Florida. Surprising jumps in Bush votes
took place across the country, despite exit polls giving
Kerry 51% to Bush 48%. The pattern in six key states
election eve, according to former political strategist, Dick
Morris-- in Florida, Ohio, New Mexico, Colorado, Nevada and
Iowa – was inconceivable. Morris noted, "Exit polls are
never wrong. So reliable are the surveys that actually tap
voters as they leave polling places, that they are used as
guides to the relative honesty of elections in Third World
countries ... To screw up one exit poll is unheard of. To miss
six of them is incredible." TV stopped citing the exit
Second, the way the Republican Governor Bob Taft used his
power. He installed thousands of Republican poll "watchers"
in traditional poor Democrat areas, and made certain enough
voting machines were in Republican areas and far too few in
Democrat so people had to wait in line sometimes 8-10 hours
to vote. There are some very disturbing indications of
fraud, prima facie, in that under the new Help America Vote
Act, at least 30 states have installed Diebold, ES&S or
Sequoia touch-screen voting machines, which have no
verifiable paper trail. For the first time there is no
possibility of a vote recount in 30 states. This despite
Congress hearings on the problem last year and major reports
from numerous computer voting experts warning that the
control of the vote would be "privatized" into the hands of
3 companies. Curiously, the ownership of these three is all
Republican and is openly pro-Bush. The Diebold CEO is a
major Bush contributor who has hosted Ohio Cheney campaign
fundraisers. He controls the software codes to the machines.
Sporadic reports in Ohio districts and elsewhere were that
voters voted Kerry on such machines only to see the name
Bush appear. They could only file a complaint. Once Kerry
conceded Ohio, those complaints became worthless.
If we leave to the side for the moment the disturbing
thought that the integrity of the American electoral process
has become as debased, and even assume that Bush won the
vote, however, we face a situation in which the Bush faction
now controls 55 of 100 Senate seats, and a majority in the
House of Representatives. Leadership is hand-picked to be
loyal to Bush, from Frist in the Senate to Delay in the
House. All candidates were chosen by Karl Rove and Bush who
The new Bush Agenda?
So far Bush has been very careful to reveal Cabinet changes.
Ashcroft, the Born Again Attorney General and religious
fanatic of the far right has resigned for health reasons.
This takes out an easy target, to put someone less known in
place. Cheney is in the hospital with heart problems ... Is it
possible he too will leave to create a different
The crucial point is that Bush now controls all Congress. In
2006 he is almost certain, especially with more Diebold
e-voting, to gain 5 more Senate seats to give him 60 votes
making any filibuster by Democrats impossible. At that point
it becomes a total one party system. In the meantime, Bush
is now likely to be able to name 4 Supreme Court justices
giving his neo-conservative Born Again faction control of
the Constitutional review process. This, in short, was no
normal election in consequence. And Bush is no normal
President subject to traditional checks and balances.
What then will be the policy agenda? First, Bush has given
some indications to domestic economic policy. He is out to
dismantle the entire Social Security government system,
step-by-step. His several tax cuts have already turned a
major surplus during Clinton into the worst deficit in US
history. Now Bush demands making the tax cuts permanent,
which will concentrate wealth into the top 10% even more.
The US family household debt is at record highs, with home
mortgage loans in the past 3 years making the difference.
Interest rates remain extremely low despite last Fed rate
hike to 2%. If rates rise even 1-1.5% from here it will
trigger a wave of home bankruptcy and mortgage loan
defaults. Families are not saving, they are buying homes as
a substitute. Household debt is 114% of disposable income.
In 1980 it was 65%. That is near double debt burden. Only
record low rates from the Greenspan Fed have managed to
avoid a default bloodbath to date. Mortgage debt as share of
disposable income has also doubled from 1980 at 40% to 85%
today. Record low personal savings and record high debt
creates huge risk of a depressed housing sector. The Fed
claims home values have risen so the debt is manageable. In
reality millions of Americans have taken too much debt to
buy their homes, and that is unsustainable in a weaker
economy. If the inflated home market begins to collapse as
the economy worsens, inflated home assets suddenly become
less and illiquid, as no one is buying and more try to sell.
In 1980 home mortgage debt was 30% of home value. Now it is
45%. If housing prices fall back to normal levels it means
an asset drop of 20%, hitting 25% of all families with
unmanageable debt loads.
If the home bubble pops, what can the Fed do? At near
alltime low rate levels it can cut very little more. Major
rate rises are impossible without triggering a wave of
bankruptcies. The Government is unable to use deficit
spending very much more to create economic stimulus with
deficits already at all time highs and the world warning it
Yet this is just what Bush plans. His "privatization" of
Social Security, allowing private investing in stocks
instead of tax payment deduction to Social Security Trust
Fund would cost an estimated $1-2 trillion to finance the
transition from the present payment obligation.
Now that elections are past, Bush has no obligation to
create an artificial economic recovery. With oil prices
hovering near $50 a barrel, likely to rise in the near term
to $60 or more, private debt at record highs, corporate debt
manageable but high, and Government debt out of control, the
amount of savings Bush must attract from outside the US
simply to keep interest rates at present levels becomes
The foreign relations
The only reason US interest rates have not risen
dramatically with such debt numbers in the past 3 years is
because Japan, China and foreign central banks continue to
"recycle" their record trade dollars into US Treasury bonds
and such, despite the very low interest rates. Now, as the
US Treasury is apparently deliberately trying to shock the
world into continuing their dollar buying by letting the
dollar fall freely in the past two weeks, the question is
whether China or other Asian governments will continue to
bow to Washington and buy Treasury bonds to finance the US
deficit at a big loss. So far they have. It is a
geopolitical calculation by them. They have not dared risk
losing their economic lifeline and dollar investments. Now
China is rapidly and quietly moving to build a regional
economic trade zone in Asia, and moves to secure energy on
its own. This insures a dramatic US-China confrontation in
the coming year or so. Can Bush alienate his most important
trade and dollar partner China? Will he now use he Big Stick
not the trade carrot? What will China do?
China signed a major deal with Kazakhstan to build a $3.5
billion gas pipeline two months ago. Early this month she
signed another gas deal this with Iran worth perhaps $100
billion initially to export 10 million tons LNG for 25 years
to China in special Chinese LNG ships being built at a fever
pace in China shipyards. Washington under Bush will regard
these natural Chinese attempts to secure its vital energy
supply as "against US national interest." The
neo-conservatives like Feith and Frank Gaffney have been
demanding a crackdown for several years on China as a
potential threat. Now that will have added impetus as China
threatens to become "energy independent" of US control. As
Washington strategists have repeatedly said and as the Bush
Doctrine makes explicit, no even "potential" rival or
regional power can be tolerated to US global hegemony.
With Russia deeply engaged with Teheran in nuclear and other
energy and military trade, and now China in Iran in energy,
the coming together of an Eurasian bloc of substantial power
begins to suggest itself, even if only embryonic.
This suggests that Bush II will accelerate its geopolitical
attacks on the "Axis of evil". As Iran is a far more
formidable military target that Iraq, it is likely to first
come in major diplomatic pressure on Iran, isolation tactics
that try to break their Russia and China cooperation. This
might take the form of a military strike on Syria first, or
increased military action in Iraq that threatens Iran
stability. One possible route would be inciting Kurds in the
area bordering Iran. Already large teams of Israeli
intelligence special forces have flooded into Kurd areas to
the dismay of Turkey. That is a potential for detonating
conflict that Iran would have to respond to. So far Teheran
has been cautious, knowing the game and trying to signal
just enough compliance to Europeans, to keep the pressure at
bay. Fallujah actions show Washington is not concerned about
winning "friends" in Iraq for "democracy". This suggests
what future plans might look like. In such a situation, it
is increasingly clear that winning world opinion is the last
thought in Washington.
A hint at the Bush II agenda has come from a leading
neo-conservative, Frank Gaffney of the Center for Security
Policy (CSP) in Washington, a think-tank tied to Richard
Perle and friends. Gaffney wrote in the neo-conservative
National Review on Nov. 5, that Bush will now use his
mandate "for defeating our Islamofascist (sic) enemies and
their State sponsors." The words are his and indicate the
mindset. Gaffney then lists future targets: "the reduction
in detail (sic) of Fallujah and other safe havens in Iraq;"
Regime change one way or another in Iran and North Korea;"
enough funds to complete transformation of US military and
intelligence branches to "fight World War IV". The neo-cons
call the war on Islam WW IV, and the Cold War WWIII.
Then after the usual remarks about "keeping faith with
Israel" Gaffney details "contending with China's
increasingly fascistic (sic) trade and military policies,
Vladimir Putin's "accelerating authoritarianism ... the
worldwide spread of Islamofascism and the emergence of a
number of aggressive anti-American regimes in Latin
Washington optimists argue Bush is spread too thin in Iraq
to risk further divide with key allies and that he will cut
the power of the neocons now that he has won another 4 years
and cannot be reelected. There is little evidence of that.
No major neo-con has resigned during the enormous scandals
of the Iraq debacle. All remain in place including Paul
Wolfowitz, Doug Feith, John Bolton, Lewis Libby. Washington
insiders now expect a purge of old State Department
traditionalists who are tied to Arab détente by the neo-cons
now that they can claim a "mandate".