The videos below are the first two in a series on money economics. Additional lectures in the series will be posted sequentially in this article.

The Dark Wraith encourages readers to enjoy.

The Equal Rights Amendment (ERA) was first brought before the Congress of the United States in 1923 and was finally passed in 1972, thereby initiating what began as a seven-year period in which passage of the Amendment by 38 states would be required for ratification and consequential inclusion in the Constitution of the United States. By 1978, 35 states had passed the Amendment; but during the year that followed, it carried in no further states. Congress extended to 10 years the time period for ratification, but it passed in no further states, and so the Amendment died in 1982.

The sudden turn-around in the popularity of the Amendment was due almost exclusively to the efforts of Phyllis Schlafly, head of the Eagle Forum. In his book, Conservatives without Conscience (Viking Adult, 2006), John Dean fetes Mrs. Schlafly's tireless work recruiting thousands of grassroots volunteers, mostly women, across the United States to lobby their state legislators in opposition to the passage of ERA. Mr. Dean describes her work as virtually seminal in effectively rallying, organizing, and managing political foot soldiers--largely inexperienced as they were in political matters--to a conservative cause. Her work paid off: 35 states had passed the Amendment in a matter of fewer than seven years; and yet, even with an extension, the Amendment could not attract so much as one more state in the subsequent three.

Proponents of the Amendment have long argued that, because the United States Supreme Court has never once invoked the Equal Protection Clause in the 14th Amendment to strike down a sex-based classification, and because the Civil Rights Act of 1964, as amended, does not elevate non-discrimination on the basis of sex to a constitutional right, only by amending the Constitution can the federal government through legislation and the courts through judicial review have the full power to consistently and effectively enforce equal protection for women as public policy throughout the land.

The parsimonious language of the proposed Amendment has not changed substantially over the years since it was first brought before the Congress. In its modern form, this is the proposed Equal Rights Amendment:

• Section 1. Equality of Rights under the law shall not be denied or abridged by the United States or any state on account of sex.


• Section 2. The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.


• Section 3. This amendment shall take effect two years after the date of ratification.

A revitalized effort is underway to ratify the ERA. An argument is being advanced that precedent exists for according the proposed Amendment no time limit on passage by the required 38 states: specifically, the Madison Amendment, finally ratified in 1992 to become the 27th Amendment to the Constitution, was passed by the Congress 203 years before its passage by the 38th state.

While Mrs. Schlafly and her Eagle Forum never actually disappeared, the revitalized push by pro-ERA forces has brought her back into the news and under scrutiny by progressive bloggers. Radical Russ, writing at Pam's House Blend, published an article on March 28, 2007, in which he highlighted recent remarks she made concerning her renewed work against the Equal Rights Amendment and her very conservative views on certain women's issues.

Mrs. Schlafly, at the age of 81 and with what appear to be positively archaic views on women's issues, might seem no longer relevant or threatening to the process of ratifying the ERA. To deal with her as a distraction without currency is, in my judgment, folly. In edited and expanded form, I herewith conclude this article with the comment I published in response to Radical Russ's post at Pam's House Blend.

Although I could mince few words in describing Phyllis Schlafly's positions, I would prefer to take the opportunity to set forth a warning about her.

More than a generation ago, she was responsible for stopping a momentous amendment to the Constitution of the United States of America; and by the word "momentous," I mean exactly that: the Equal Rights Amendment had momentum at a scale that, historically, indicates its approval by more than the required number of states in the statutory time period for ratification.

She stopped it dead in its tracks.

More importantly, her organizational skills set forth the model by which, across the next generation and a half, various Right-wing secular and religious single-interest groups would be able to effectively derail legislation, reframe social issues, reconstruct the federal judiciary, take over the executive and legislative branches of state governments, and ultimately redirect the trajectory of public policy in this nation at both the federal and state levels. Mrs. Schlafly is, then, a force to be reckoned with.

Furthermore, a broad branch of conservatism that is now in decline could well be revitalized by her re-establishment of the model of social change brought about by grass-roots conservatism animated by a strong (and natively brilliant) central figure. Mrs. Schlafly was, in the 1970s, considered something of a dowdy old woman, almost a self-caricature of the "church lady," without a clue about how modernity was impacting the lives of women and recasting their lives far more deeply and swiftly than laws and courts were willing to accommodate. It was in part because liberal and Leftist forces could not grasp that a fundamentally conservative woman could be the paradigm of feminist strength, even as she repudiated that characterization of and very right within herself, that she virtually single-handedly crushed what would otherwise have been easy ratification of a thoroughly reasonable, entirely necessary Amendment to the Constitution.

Progressivism does not need such a trouncing right now, especially considering that, in my judgment, the public persona of progressivism has still learned so little from the beatings it took from the late 1970s clear through until 2006. (Quite bluntly and specifically, the 2006 elections were not about Democrats winning; they were about Republicans losing.) Given a tried-and-true organizational model and a new generation of social policy leaders, the Right could very well rear its ugly head swiftly and to the utter destruction of a nascent, growing strength of progressivism that is finding a toe-hold in the politics of this last half of the first decade of the new century.

While a general disgust with her attitudes, her words, and her mind-set might well be in order, allow me this counsel in dealing with Phyllis Schlafly on a political level:

Fear her.

Then learn to overcome the fear not with outrage, not with chants, not with comforting group-think about how wrong she is, but instead with effective countervailing political action right on the battlefield she will, whether we like it or not, define. Only then can she be defeated. Maybe.

But first and foremost, fear her.

The Dark Wraith has spoken.

UPDATE: Your host is grateful for the comments that have been offered concerning the visual appearance and functionality of this new version of The Dark Wraith Forums. I have yet to rectify what seems to be a slight problem experienced by a few with how the right column is laying out against the middle column, but I shall endeavor to fix that over the coming days. Additionally, I shall be trying to install a javascript so that returning visitors will see how many new comments have been posted to articles since their last visit rather than how many total comments have been posted. This was a feature at the legacy version of The Dark Wraith Forums, but the script will have to be somewhat different for this version. That means things could get ugly as I install the script, see it turn the place into a disaster zone, and then curse myself for not leaving well enough alone. Once I get through that lamentation, I'll figure out what I did wrong, and I'll get it to work properly. What this means to you is that you might see things get a little strange looking around here every now and then for a while. Just keep in mind that it's only temporary.

Again, a sincere expression of thanks is extended to all those who have commented or sent e-mail messages to me about how good it looks or what the problems are.

And always remember: it's Bill Gates's universe; I'm just a lousy hacker in it.

Welcome. You are now seeing the new version of The Dark Wraith Forums.

The transition to Nucleus CMS from Blogger was a lot like work. The principal difficulty was making this site look and function as much like the old version as possible. I have accomplished at least that much, although I have yet to work out how to operationalize a few features of the old site, which I developed over a considerable length of time. Only to a limited extent were the methods and tricks I used there portable. Features from the old site like toggling comments won't be here for at least a while, but the commenting system you'll find here is pretty nice, anyway. So, too, is the speed with which this site loads.

You will also notice that, as on the old site, you have your choice of color themes here. In fact, there are two alternatives to the default classic (and Dark Wraith trademark) Midnight Embers: Autumn AshFire is almost the same color scheme alternative that was available at the old site, and I've added Icy Cinders, too, this one having been inspired by a suggestion from Liz Smith of BlondeSense. It was, in part, these alternate style sheets and making the switcher work here that took so long. (That and getting three columns to fit together without having a knock-down, drag-out fight.) Readers should note, by the way, that this is a Website best viewed at monitor resolutions of 1024x768 or higher.

As far as the old blog is concerned, although it has now been decommissioned, the articles and associated comments from the launch of The Dark Wraith Forums until today are still available as legacy archives. Readers can find the links to old content by major article or by month, from December 2004 to March 2007, along the left sidebar. Those archive pages will display in the old template. Essentially, before cutting off Blogger access to the domain dark-wraith.com, I captured as static pages everything I had written and moved it all to safety in a sub-directory. Commenting on the old articles is, of course, no longer possible because the Blogger platform through which articles and comments were published is now cut off from my server.


There will be a few residual glitches with which I shall deal as time goes on; some of those problems I will know about only as users put this place to the test. I shall be most grateful if readers let me know about technical problems with this site. (I do, however, reserve the right to say, "Grr," or even "GRRRR.") I suspect, for example, that the color theme selector does not have persistence: in other words, if you select a non-default color theme, the theme will probably revert to Midnight Embers when you come back. I do not know that for sure, though. I'm also concerned about the columns fitting together properly. I think they do, and I've tested this site on a number of computers; but I know that what I am seeing with my lying eyes is what I want to see at the end of a long coding journey.

I am very excited about the prospect of the after-life being sort of like that.

Anyway, this is The Dark Wraith Forums 2.0, a fully independent site free of third-party publishing services. I have kicked Blogger out of my domains and will never again let its nonsense vex me or my work product. Google, the disreputable parent of Blogger, will be the subject of my wrathful writing at some point in the near future.


For now, though, I am too giddy ("punchy" might be a better term) about having this site up and running to have anything but good thoughts, which will probably dissipate as visitors come here and tell me all the things that are going wrong with the site.

For a moment, though, I shall bask in the joy of having built quite a castle, one that will endure for a long time to come. Once I am through that moment of refreshing pleasure, I'll get down to work on fixing the technical problems and publishing new content. A whole lot is going on in the world, and I have more than few words to say.

Consider this an open thread for the new Website. Post a comment or two. Let me know you're here. It's really creepy when I know people are lurking about but not saying anything: it makes me wonder if the visitors are the live sorts of folks or those ghosts and apparitions I've read about.

Come to think of it, though, if you are a ghost or an apparition, it's probably best if you don't say anything: I think I'd rather leave abject terror to my imagination.



The Dark Wraith is now officially babbling.

U.S. stocks declined sharply on Tuesday. The Dow Jones Industrial Average fell 242.66, or -1.97 percent, to 12,075.96; the Standard & Poor's 500 dropped 28.65, or -2.04 percent, to 1,377.95; and the NASDAQ Composite index slid 51.72, or -2.15 percent, to 2,350.57.

This broad-based stock slaughter occurred despite the fact that Vice President Dick Cheney was not disturbed today by an Afghan suicide bomber blowing himself up along with a whole bunch of other people within earshot range of our war-hero Veep. As I pointed out after the last plunge two weeks ago, the stock markets didn't give a rat's hind end about what had happened to disturb Mr. Cheney's Happy Place that day. More broadly, today's slam on stock prices wasn't merely the result, as some in the media have claimed, of sub-prime lenders shutting down their easy-loan money windows, either.

What's happening is the result of an accumulation of events that are, in their aggregate, deeply changing the configuration of the United States with respect to the rest of the world insofar as financial matters are concerned. Whether or not these sea changes are permanent, they are certainly long-term. Later this week, I shall offer Part Two of my series, "The Economics of Wreckage," of which Part One was published here last week.

For the time being, suffice it to note that there is good news and bad news. The good news is that we shall slowly close the trade deficits we have run for so many years, and we shall eventually close our federal budget deficits, too, the ones—quite ironically but not surprisingly—systematically racked up by the fiscally conservative Republicans over the tenure of the Presidency of George W. Bush. Furthermore, we might even see a nice little side effect of fewer illegal aliens slipping into the country, something that has frothed the mouths of populist neo-fascist commentators like CNN howler Lou Dobbs, who pretends to be for some middle-class America of which he is not a part while he foments hate against people who aren't the root of the decay this country is experiencing.

More good news, notwithstanding the posturing of Rep. Henry Waxman (D-CA), is that Halliburton might not be the only corporate parasite on the United States Treasury that will decide it's time to set up base in more profitable lands of far away places.

Athough we shall become a poorer nation—quite noticeably so—over the coming years, we shall make exports that are cheap in other countries, we shall—quite likely, though, with a considerable amount of pain—learn to lose our appetite for borrowed success, and we shall become less beholden to the fascists, Communists, mercantilists, and all manner of other thugs to whom we have been groveling in this new century for the money to pay for the Republicans' wildly irresponsible tax cuts and the neo-conservatives' wildly irresponsible wars.

The bad news is that we shall make cheap exports in part because we shall be the cheap labor, and the companies that hire us will be those from other countries who gathered American dollars in massive quantities during the years when we were sending greenbacks overseas by buying cheap foreign imports. We shall close our budget deficits because we will have no capacity whatsoever to afford a government that hands money to the people in social welfare programs, universal health care, or even rigorous enforcement of regulations on food, workplace safety, and a whole host of other luxuries to which we thought we might be entitled in the here and now or in some not-too-distant future.

We shall remain, of course, a sovereign nation, but ours will be the sovereignty of the weak, and this in a world of great and small predators building powerful, adventuresome armed forces, monstrous weapons, and exclusionary alliances drawn in a world soil fertile with the toxic stew of ancient sectarian religious bonds, unmitigated economic greed, and unstoppable sensibilities of destiny.

Others of this harsh world will pick up the ball our own neo-conservatives so wrongly thought was our comparative advantage. It wasn't, and the legions of the secular and religious Right simply didn't understand that. Neither did most Americans, particularly those who voted so cynically for the promised fist that never should have been raised the way it was.

On a personal, I shall perhaps live long enough to see life in America become difficult enough that the Christian extremists wagging their finger at me to live by their morally miserable code will be too busy finding food to fund their polemical demagogues. To the same extent, perhaps I shall live long enough to see people grasp that Al Gore's finger-wagging on "THE Single Most Important Issue of Our Time," isn't quite so important for an average American as finding a job that pays enough to keep body and soul together in a degraded economy where high-minded "futures" must yield to daily survival imperatives.

I might even, in my most fantastic moments of hope, imagine people coming to learn the sheer power that arises from a moderation that rejects fear-whipped policies of the extremists and embraces carefully planned, frugal behaviors of far more enduring benefit to the individual and to the society.

I shall do everything I possibly can to suppress those flights of personal fantasy; but should I fail to keep myself from a short moment of false hope, I shall, at the very least, stop myself from laughing hysterically in the aftermath of such fond weakness.



The Dark Wraith trusts that each and every reader has a good place far from the grim land of the future.

I. Lewis "Scooter" Libby, formerly the Chief of Staff to Vice President Richard Cheney, was convicted last week on four counts of lying to FBI investigators and a grand jury about when he disclosed to outside sources that Valerie Plame was a non-official cover CIA operative. The most serious of the charges upon which he was convicted was obstruction of justice in the investigation of the circumstances that led to the outing of Ms. Plame, whose husband, Joseph Wilson, had investigated and publicly debunked claims by the Bush Administration that former Iraqi President Saddam Hussein had tried to procure partially processed uranium from Niger.

The White House had been using the mainstream media, particularly certain reporters like Judith Miller of The New York Times, to promote a largely false case for waging war on Iraq based upon claims by Administration officials that Saddam was seeking to procure, develop, and deploy nuclear, chemical, and biological weapons of mass destruction. Evidence put into the record at Mr. Libby's trial confirms long-standing suspicions and open allegations that the White House, faced with challenges to the credibility of its representations regarding the Iraqi dictator, engaged in a systematic pattern of revenge upon critics who had evidence or belief that the Administration's case was, at best, overblown and, at worst, entirely fabricated. The outing of Ms. Plame sent a strong signal to the intelligence community that taking public exception to the White House would be at the high risk of professional and possibly even personal harm: an exposed undercover operative, as well as his or her contacts, faces permanent, possibly life-threatening dangers after being revealed, and few career employees, especially those working in law enforcement at the national or international level, would be willing to bear such dangers merely to express a judgment in dissent to the highest ranks of a powerful, single-minded, vengeful Executive Branch.

Mr. Libby has vowed through his attorneys to seek a retrial and, failing to obtain such, has vowed to appeal his conviction in federal court. In fact, the appeal of the conviction is automatic; but the point of Mr. Libby's stance is that he will not take the adverse judgment of the federal jury lying down. The arguments he will set forth in seeking retrial are still to be fully formed, as are the arguments that will be placed before the Court of Appeals. As a matter of statistics, the likelihood of Mr. Libby being granted a retrial are slim, and the prospect that an Appeals Court will find substantive error in the trial is even more so.

In the absence of relief in retrial or appeal, Mr. Libby faces a maximum of 25 years in prison and a fine of one million dollars. While it is unlikely that the presiding trial judge, Reggie Walton, will "throw the book" at the convict, it is equally unlikely that Mr. Libby will altogether avoid serving prison time and paying a huge amount of money in fines. As a so-called "white collar criminal," and especially one who served at the behest of a sitting President of the United States, Mr. Libby's prison term would be served in a minimum security facility, quite possibly the one at Eglin Air Force Base. While nothing like living as a free person, the convict serving time in such a facility certainly does not suffer many of the deprivations and physical dangers that those serving in higher-security prisons face day in and day out. The penal colony at Eglin AFB, for example, is known for the nearby golf course where convicts are permitted to be taken for foursomes by visiting officials and base officers. Given the choice, of course, Mr. Libby would probably prefer to choose his own golf courses and foursome partners, so he'll make every effort to avoid what would otherwise be a stint in the gilded confines of a minimum security federal prison, comfortable as it might be.

Absent the retrial or overturn of his conviction on appeal, Mr. Libby's only chance of avoiding the certain, permanent stain of being a convicted felon and the near-certain, fairly long pain of confinement is an official pardon for his criminal acts by the President of the United States. Article II, Section 2 of the U.S. Constitution reserves to the sitting President the privilege of "Power to Grant Reprieves and Pardons for Offenses against the United States except in Cases of Impeachment." The language is clear, simple, and without recourse by those who might object to any particular case in which the President has granted clemency. Presidents, including the incumbent, have used this power with greater or lesser liberality, particularly in the waning days of their Administrations, when personal political backlash would be minimal or when legacy of mercy was being burnished. The constitutional provision is given procedural specificity by Part 1 of Title 28 of the Code of Federal Regulations, which sets forth the steps by which a convict may seek, through the Pardon Attorney in the Department of Justice, clemency from the President. While quite specific, the statute is entirely non-binding upon the President, who may, at his or her discretion, choose to partially or wholly circumvent the steps set forth therein. Even at that, though, it is quite likely that Mr. Libby, having exhausted all personal avenues of possible exoneration, would follow the steps prescribed in Title 28, provided President Bush had not already pardoned him.

While many commentators have expressed the opinion that a Presidential pardon (the highest of possible grants of clemency) is almost certain for Mr. Libby, such mercy granted by Mr. Bush would be highly problematic for those in an Administration hoping that the conviction of Mr. Cheney's former Chief of Staff is the official end of the so-called "Valerie Plame Scandal."

Any pardon Mr. Bush would grant Mr. Libby would have to be broad in scope, expressly protecting the latter from future prosecution on charges related to, but separate from, those for which he was just convicted. Such protective wording of a pardon would be along the lines of "...any and all acts carried out in the course of duties." While not rising to the level of so-called "blanket" immunity (exempting the individual from prosecution for any prior acts), such a pardon would have the effect of being an extraordinarily broad "use" immunity to keep any future investigation from leading to charges against Mr. Libby for what he did for and at the behest of higher White House officials. In other words, in any future trials involving White House officials who were part of the smear campaign against Valerie Plame and her husband, Mr. Libby's pardon would have to ensure that he would not face "jeopardy" in both the common and legal senses of that word.

But therein lies the problem: in any future legal proceeding, be it at the level of a federal grand jury, in a District Court, or before a congressional commmittee, Mr. Libby could not decline to respond to any question by invoking the Fifth Amendment, which would otherwise protect him from being compelled to give self-incriminating statements. Mr. Libby could, in fact, not incriminate himself in any manner that would lead to jeopardy for him.

Worse, if he were to decline to speak fully and truthfully anyway, he could at a minimum be charged with contempt of court and quite probably also be charged with obstruction of justice; and no such charges against him would be covered by the Presidential pardon because they were ex post acts in transgression of law and were committed subsequent to his "official duties" since he is no longer an officer of the Executive Branch.

Even future claims by Mr. Libby of defects in his memory of certain events would surely lead to punishment because that defense had already been rejected at trial and could not be revisited by Mr. Libby in future proceedings. To do so would virtually ensure a finding of contempt of court were he to persist in representing that he could not remember when events occurred.

Granted a Presidential pardon, then, Mr. Libby would be an extraordinary legal danger to those in the White House who directed, participated in, or subsequently obstructed the investigation of the Valerie Plame Scandal. A Presidential pardon broad enough to protect Mr. Libby would turn him into a veritable treasure trove of information awaiting responsible congressional and law enforcement authorities willing and able to fully extract from him what he most certainly knows about the possible criminal acts of Administration officials who, in their wildly imaginative case for war, used the power of their offices to wreck those who knew they were lying.

Key, however, to Mr. Libby's possible future role as an informant with no meaningful right against self-incrimination is a thorough investigation, followed by a comprehensive prosecution of all involved. That federal prosecutor Patrick Fitzgerald was inadequate to that large, grave, and necessary work must not disabuse other officials of what is not merely their constitutional duty, but is more to the point their moral obligation to right this one of many wrongs committed by an Administration unfettered by any internal sense of its own responsibility to adhere to the rule of law.



The Dark Wraith encourages President George W. Bush, in the spirit of mercy and friendship, to pardon I. Lewis "Scooter" Libby.

This is the first of a three-part series on macroeconomic financial effects of the Presidency of George W. Bush. On Tuesday, February 27, 2007, stock markets around the world dropped precipitously, led into the vortex by China, where the Shanghai Stock Exchange lost almost nine percent of its value. Major stock indices in the U.S. followed suit, wiping out recent gains that had brought forth breathless praise from the mainstream media about near-record highs that were nothing more than a brief, illusory departure from the pattern of abysmal real returns that common stock portfolios have offered investors over the past six years.

This first part of the series is the latest in a continuing program of index portfolio analyses that have been an on-going project here at The Dark Wraith Forums. Readers who have followed previous installments may recall that negative or miserably weak positive returns on equity index investments have been the typical outcome of these calculations in the past. Only in the last installment, published just after the sixth anniversary of President Bush's inauguration in 2001, did even one of the major indices, the Dow Jones Industrial Average, register a barely positive annualized real rate of return over the six years, and the decline in that and the other U.S. indices served to bring all three of the averages surveyed here back into line with the overall negative performance they have displayed over the tenure of the Bush Administration.

This first part, then, is a reminder to all who would offer even a modicum of praise for the Bush Administration's record as the steward of the American economy. Financial markets do not lie. They do not fabricate numbers, nor do they manipulate quantitative outcomes to suit the public relations purposes of the neo-conservatives; instead, the inflation-adjusted returns on investment in the three major stock indices of the United States calculated and presented below deliver the stark, objective assessment generated from trillions and trillions of trades involving nearly incomprehensible amounts of money: the Bush Administration has been an engine of financial depletion of the value of claims on ownership in American companies publicly listed by the three largest, most comprehensive stock indices.

The second part of this series will provide a standard, relatively simple macroeconomic model of the distribution of spending that comprises the total national income of a country, and that model will be applied to explain the way in which the United States government has financed hundreds of billions of dollars in deficit spending through the use of its trade deficits, particularly those it has run with China, which has for years deliberately manipulated the exchange rate of its currency, the yuan, with the U.S. dollar to the end of causing American greenbacks to flow to the central bank of China, which then used those dollars to finance the staggering budget deficits the Republicans have created year after year.

The third part of the series will review the dynamics by which the U.S. trade deficits with China have fostered the conditions the Bush Administration exploited to maintain abnormally low tax rates concomitantly with profligate spending, particularly on wars of opportunity. That third installment will conclude with the explanation of why the Shanghai stock market necessarily had to crash and what will be the likely consequences of recent economic events on the long-term prospects of a United States weakened by the irresponsible incompetence of the Bush Administration and its Republican cohorts who, until just recently, served as the exclusive, if unworthy, stewards of a nation that could have been far better off than it will be as the incontrovertible result of their time in power.

Responsibility Assigned
George W. Bush became the 43rd President of the United States on January 20, 2001. Until January 4, 2007, when the Democrats took control of both the U.S. House of Representatives and the Senate, the Republicans had controlled both the Executive and Legislative branches of the federal government, save for a brief period in mid- to late-2001 when a Republican-turned-Independent caused an even split in the Senate. Over the past six years, then, the financial house of this country has been in the virtually uninterrupted hands of the GOP, during which time the federal government went from running growing budget surpluses in the last years of the Clinton Administration to bleeding hundreds of billions of dollars in red ink every year under President George W. Bush and his congressional allies.

The Republican Party, through its legislators in Congress and its President in the White House, has overseen the abysmal performance of the U.S. stock markets, which represent the overwhelming bulk of the value of all public ownership of American corporations. It is in the stocks traded on these exchanges that much of the wealth of the nation is invested by everything from huge pension and mutual funds to individual speculators.

The GOP has no one but its own elected representatives to blame, notwithstanding any possible obfuscation by its elected representatives or their apologists in the mainstream media or among the tap-dancing ranks of the Right-wing punditry brigade. Republican economics has been a failure: it is based upon budget deficit-driven fiscal stimulus financed by trade deficits that have had the effect of causing the sell-off of the American capital base, which America's trading partners have then lent back to the United States government to finance its budget shortfalls. The irresponsible policy pursued by Mr. Bush, the Republicans in Congress, and their neo-conservative pseudo-intellectual backers is a twist on Keynesian economic policy prescriptions, but true Keynesians would never have abided fiscal health-draining deficits for more than a short period of time, and they never would have even so much as suggested hocking the American economy to an enormous, mercantilist-Communist country that has cynically, systematically distorted exchange rates to draw American dollars and jobs from America's shores.

Index Portfolio Performance during the Bush Administration to Date
As of (and including) Friday, March 2, 2007, George W. Bush had been President of the United States 2,233 days. As pointed out above, responsibility for the huge federal budget deficits year after year that have hallmarked the rule of the Republicans rests squarely with their party, its legislators in Congress, and the policy-makers in the White House, including George W. Bush, himself. Similarly, the Republicans have no one but themselves to blame for what is shown below to have been an unconscionable erosion of the purchasing power of dollars invested in the three largest U.S. stock indices over the six years that George W. Bush has been President of the United States.

From the first day of trading, January 22, 2001, after President Bush became the 43rd President of the United States, until the last trading day, March 2, 2007, before the publication date of this article, the performance of the major stock markets—measured by the index portfolios of the Dow Jones Industrial Average, the Standard & Poor's 500, and the NASDAQ Composite—has been abysmal: all three indices have delivered negative real returns on investment over the term of the past six years.

January 22, 2001, was the first day of trading after Mr. Bush became President. The three major stock market indices stood at the following levels at the close of trading on that day:

January 22, 2001, Index Closing Values

Dow Jones Industrial Average	10,578.24
Standard & Poor's 500	1,342.90
NASDAQ Composite	2,757.91

At the close of trading on Friday, March 2, 2007, these same three averages stood at the following levels:

March 2, 2007, Index Closing Values

Dow Jones Industrial Average	12,114.10
Standard & Poor's 500	1,387.17
NASDAQ Composite	2,368.00

If an investor were to have formed a portfolio based upon each of these three indices and managed each portfolio in terms of composition and balance to mirror the relevant index, the investor would have earned the following total nominal returns on investment over the 2,233 days from January 22, 2001, to March 2, 2007:

Total Nominal Portfolio Returns from 1/22/2001 to 3/2/2007

Dow Jones Industrial Average	14.52%
Standard & Poor's 500	3.30%
NASDAQ Composite	-14.14%

Expressing these returns on an annualized (that is, "percentage return per year compounded") basis, the nominal results just presented are as follows:

Annualized Nominal Portfolio Returns from 1/22/2001 to 3/2/2007

Dow Jones Industrial Average	2.24%
Standard & Poor's 500	0.53%
NASDAQ Composite	-2.46%

The above are nominal (that is, "not corrected for inflation") results. Taking into account the erosion of purchasing power (that is, "the effect of inflation") on portfolio values over the holding period requires adjusting each of the current values to its equivalent purchasing power value on January 22, 2001. From the Bureau of Labor Statistics Consumer Price Index data for January 2001, the CPI stood at 175.1, and for January 2007, the CPI stood at 202.4. The February 2007 figure can be estimated by various methods, and here, a conservative projection of 202.76 is derived from the three-month moving average of the CPI, implying an annualized inflation rate for the February of 2.2 percent, based upon the average of the annualized inflation rates for the previous three months.

Expressing the closing index portfolio values as of Friday, March 2, 2007, in terms of their January 2001 purchasing power equivalents provides the following results:

March 2, 2007, Index Values in January 2001 Purchasing Power Value

Dow Jones Industrial Average	10,461.55
Standard & Poor's 500	1,197.94
NASDAQ Composite	2,044.97

The total real return on investment for each portfolio is then the quotient of the January 2001 index value when divided into the adjusted March 2, 2007, value:

Total Real Portfolio Returns from 1/22/2001 to 3/2/2007

Dow Jones Industrial Average	-1.10%
Standard & Poor's 500	-10.79%
NASDAQ Composite	-25.85%

Finally, expressing these real returns on an annualized (that is, "percentage return per year compounded") basis, the total real return results just presented are as follows:

Annualized Real Portfolio Returns from January 22, 2001, to March 2, 2007

Dow Jones Industrial Average	-0.18%
Standard & Poor's 500	-1.85%
NASDAQ Composite	-4.78%

The results above are summarized in the following table:

Index	1/22/01 Index Level	3/2/07 Index Level	3/2/07 Index Level in 2001 $s	Total Nominal Return on Investment	Annualized Nominal Rate of Return	Total Real Return on Investment	Annualized Real Rate of Return
Dow Jones Industrial Average	10,578.24	12,114.10	10,461.55	14.52%	2.24%	-1.10%	-0.18%
Standard & Poor's 500	1,342.90	1,387.17	1,197.94	3.30%	0.53%	-10.79%	-1.85%
NASDAQ Composite	2,757.91	2,368.00	2,044.97	-14.14%	-2.46%	-25.85%	-4.78%

The total and annualized real returns to the selected portfolios are presented below in graphical form:




As is plainly evident, real returns on investment in three large U.S. stock indices, representing as they do the majority of ownership value in publicly traded U.S. corporations, have been negative. Investing in even the very largest, presumably safest public corporations would have led to an actual loss of money in real terms, and that loss would have been worse by investing in smaller-cap public companies through the NASDAQ Composite.

In practical terms, the numbers above mean this: an investor putting $100 on January 20, 2001, into a portfolio of the Dow Jones 30 Industrials and maintaining the index balance until March 2, 2007, would now have the purchasing power of $98.90; an investor doing the same but investing in the Standard & Poor's 500 would now have the purchasing power of $89.21; and an investor doing the same but investing in the NASDAQ Composite index would now have the purchasing power of $74.15.

Investing in stocks, particularly in well-balanced portfolios, is supposed to create capital appreciation in real terms over a long period of holding time; instead, over the course of the Bush Administration, investments in well-balanced, standard index portfolios have resulted in real purchasing power erosion of dollars invested.

This is objective evidence, accumulating over more than six years, of fiscal mismanagement on a scale that will be felt for generations to come. This, then, is objective evidence of a degraded future for the United States, whose citizens will labor mightily under the after-effects of economic degradation caused by men and women in Washington who posed as prudent, fiscal conservatives, but instead acted in a more economically reckless manner than any American leadership in decades.

This series will continue in the next installment with a survey of the national income allocation model, which will be used to explain the way in which the Republicans propelled the economy far too long on funds borrowed from overseas investors who got their money to make the loans by bleeding the American economy of both its greenbacks and its jobs.


The Dark Wraith trusts that readers will stay tuned.