The Daily Reckoning’s

Tomorrow we pause to commemorate the achievement of the Founders in 1776.  Today we reflect on the botch that subsequent generations have made of it.

Osama bin Laden just got his wish:  Oil at $144 a barrel, which ten years ago he figured would be America's undoing.  Of course, maybe he meant that in 1998 dollars.  In which case our undoing will come at $190.  So not only did our clueless leadership blunder into two guerrilla wars on Muslim lands, but they're wrecking our economy too.  Any more of bin Laden's wishes they wish to accomodate?

Oh, and for further reinforcement of the economic thesis, Bloomberg reminds us on the eve of another one of these idiotic, pointless G8 summits that the dollar index has fallen 41% against the euro during the Bush 43 presidency.  But have no fear.  The wizards at the Bureau of Labor Statistics have somehow found unemployment still at 5.5%.  (Contrast that with John Williams's latest estimate of a Carter-esque 14%.)

Imagine how much worse it would all be if 43 hadn't set a record for vacation time among two-term presidents and actually had worked harder at fouling things up.

Back to oil.  Strangely, one of the reasons for the spike today, if the AP's account linked above is to be believed, is the threat of the fallout from a U.S. (or Israeli) attack on Iran.  Traders supposedly fixated on the remarks of the Iranian foreign minister threatening a shutdown of the Straits of Hormuz.  But what about his potentially more significant remarks that his government is ready to suspend the enrichment of uranium?  Or the remarks of Joint Chiefs Chairman Michael Mullen that sure look as if they're designed to put Cheney's bomb-now faction in a cage?

Granted, that faction might not stay caged for long, and 43 might not take "yes" for an answer on the enrichment issue.  I don't buy the argument bruited about lately that the inevitable further spike in oil prices will dissuade Team Bush from their one last stab at Churchillian/Trumanesque glory.  But unlike the attack on Iraq, there will be no big buildup this time.  It will be a Black Swan.  The key to an attack on Iran will be public support, and the key to public support will be some sort of Tonkin-type "incident," be it in Iraq or in the Gulf, that can be pinned on Iran.  

We shall see.  In the meantime, I'll be kicking back over the holiday weekend with Bad Money, Kevin Phillips's latest tome.  Yes, he's a leftist, but in his previous volume, American Theocracy, he clearly grasped that the problem with our banking and credit system is not deregulation per se — but rather deregulation combined with the implicit promise of bailout for whatever fool thing the bankers (and now investment bankers, too) subsequently do.  So happy Independence Day.  Praise Jefferson.  Damn Greenspan (and Hamilton, his forebear).