by Laura Snedeker
The widening gulf between the political elites and the people they supposedly serve is never more obvious than in times of economic distress.
Oil companies make record profits and Congressmen drive to work in gleaming Cadillacs as consumers face record prices at the pumps. Wall Street rises from the ashes of the mortgage crisis as Main Street struggles to avoid financial collapse. And the government throws the nation a $150 billion bone and tells Americans to go on a shopping spree.
There was a time that $30 a barrel of oil seemed outrageous, a temporary effect of the Iraq War. Hardly anyone believed that the United States could see oil prices as high as $70, but they climbed to just below $100 by the end of 2007, translating into higher prices at the pumps and in the grocery stores.
The burden of America’s dependence on foreign sources of energy fell squarely on the backs of consumers as oil companies made a killing. Exxon Mobil, the world’s largest oil company, posted record profits for 2007, although lower-than-expected profits in the first quarter of 2008 disappointed investors hoping for a new record high. Chevron, America’s second-largest oil company, reported a nine percent increase in profits in the first quarter of 2008 as oil headed toward $120 a barrel.
As oil companies fleece American consumers, government officials continue to use taxpayer dollars for their own enjoyment. The New York Times reported last week that 125 members of the House of Representatives lease expensive, gas-guzzling cars paid for by the federal government – just one of the perks of being a Congressman. In addition to paying for the lease, taxpayers also foot the bill for gas, maintenance, insurance, registration, and excess mileage charges.
That this use of taxpayer money is perfectly legal makes it no less corrupt. Americans have already resigned themselves to higher gas prices and more fuel-efficient vehicles, yet their Congressmen behave more like CEOs than elected representatives. This is not surprising, given the degree to which the political elites are answerable to the financial elites who fund their campaigns and pave the way for successful lobbying careers.
As Wall Street bounced back, economists predicted that the rest of the economy would soon follow. Treasury Secretary Henry Paulson declared that “we are closer to the end of this problem than we are to the beginning,” as if an 11 percent rise in the stock market were a divine signal. Yet 45 percent of Americans rate the economy as “poor” and 86 percent think that it is getting worse, according to a recent Gallup Poll.
Instead of fixing a broken system, the government tossed a $150 billion check to Americans and told them to go stimulate an economy in which they have little faith. President George W. Bush assured the nation on Saturday that the rebate would “help American families increase their purchasing power and help offset the high prices that we’re seeing at the gas pump and the grocery store.” But when that $150 billion band-aid is gone, will Americans be better off?
More importantly, even if the U.S. economy can dig itself out of this mess, what happens when the next economic crisis hits?
For more background on this subject, please see:
- “Let’s Play the Wall Street Hypocrite Game!”
- “The Bush Recession: Spending is the Solution?” and
- “Recession Fears Crowd Out Iraq.”
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