Where's the Money?

Will Connell
©March 2004

http://www.gv.net/~edconco/Where_is_the_Money.html

Preface

Many of you may remember the TV commercial with the little old lady lifting the bun of the meager hamburger she was being served at the franchise counter.
"Where's the beef?" she demands.

Confronted with the upcoming presidential election, voters should now be demanding, "Where's the money?"

Here is why:

The nation's money has disappeared. That disappearance will ultimately govern your future.

So what happened? Where did our money go? Why should the reader care to read further?

Five years ago the federal budget surplus was $236 billion. That surplus has been turned into a federal budget deficit of more than $500 billion

Your surplus has evaporated!

Interest rates have fallen to levels not experienced during our lifetimes.

The income of our elderly and retired has collapsed.

During this same time, unemployment has risen from 4% in 2000 to about 6% now. It approaches 9% if one includes those who no longer actively seek work. And during the past four years the number of working-age adults has grown. Thus in 2000, 65% of working-age Americans held jobs, but now that has slipped to 62%. To return to that higher percentage level requires the addition of putting almost 5 million people to work! All this has occurred despite the supposed stimulation of low interest rates, repeated tax cuts, and government spending programs.

Unless some 2 million new jobs are created before the November elections, George W. Bush will become the first president since Hoover to oversee a net loss in employment during his administration.

Personal debt and bankruptcies of Americans have exploded.

Family debt has risen to truly dangerous levels.

In the last three years our trade balances with foreign countries have collapsed while the trade deficits have soared.

America's wealth is being transferred to foreigners.

Two years ago our dollar was strong and sought-after around the world.

Since 2001 it has lost 30% of its value.

The price of oil has reached record highs, and this has erased any economic benefits that the Bush tax cuts may have brought you. Think for a moment of the immense wealth and blood America has spent in the Middle East. If we factor in the perpetual unrest there, the costs of our military expenditures and wars there, are we not forced to the conclusion that the true price oil to us is hundreds of dollars a barrel?

The Bush family fortunes have been intimately connected to Middle East oil for three generations. Are we to conclude that maintenance of the Bush fortune depends on gaining control of Iraqi oil to add to their Saudi interests?

You may not think that the conditions mentioned above and illustrated in the following chapters mean much right now. But they show the true economic forces that govern your life, and soon they will dominate the lives of your children and grandchildren. The nation's economic future is deeply compromised and getting worse every day.

You have a personal stake in what is happening to our nation. You may not be affected right now. You may not really care if gasoline prices are at record highs, or that your neighbor down the street has lost his job. What does Saudi Arabia have to do with anything in our daily lives, anyway? And who cares whether or not the value of the dollar is falling, or that the federal deficit has soared? What does that have to do with you? As far as you know your retirement plan is working, and you put food on the table and gasoline in your car. And work seems stable as far as you can see. "What," you may ask, "does all this have to do with me and the well-being of my family?"

The purpose of this report is to show in how much danger you are, and how your future will be taken out of your hands if the current policies in Washington continue. Every effort is being made by those in Washington to prevent you from reaching conclusions based on the facts of the situation. And we are about to be inundated with political rhetoric designed to divert your attention still further from what is really going on.

Not only do many prominent politicians work to confuse you and hide what is really happening, but government agencies themselves are now revising economic definitions, manipulating raw economic data, and even issuing outright false information. For example, earlier this year the government re-defined manufacturing workers to include many workers previously listed under the service sector. This added to the improved employment statistics presented to the public. The constant revision of economic data supplied by the government is thus suspect, particularly the timing and use of the original data release and its effect on financial markets. Many financial experts find it almost impossible now to reach conclusions based on accurate and factual data. All facts and figures are now suspect.

This is a new phenomenon in our experience.

We are now engaged in a struggle with organized foreign terrorism here and abroad, while at the same time suffering under distorted and damaging economic conditions at home.

Why is any of this relevant to you?

The White House and its congressional associates have brought to Washington a new idea of what a "democratic" society ought to be. The changes have just begun, so many of us remain unaware of what the future will bring. We cannot feel the impact as yet. Henry Kissinger long ago wrote that a society that has been accustomed to stability can't bring itself to believe what is happening when such a major shift is taking place. There is a saying in finance that people who reside within a bubble cannot see it. But by examining the economic forces now brought into play and looking at a brief history of the Bush family, we see a world view that is defined by the accumulation of money and power to the exclusion of almost all else.

Do we really know who is running our country? For the first time since the Cuban missile crisis our safety is at stake.

This singular focus of three generations of the Bush family on money and power has brought them great wealth and the highest public offices in the land. That focus is now being played out on the international level. Thus, the financial health of our nation is now at risk, as shown by the charts presented in this report.

At almost every turn you are being harmed, whether or not you realize it. Your economic security is being eroded. Let's look at the disappearing money act. Just consider the money flows and ignore all the political rhetoric.

The purpose of this report is to follow the money and try to answer where it has all gone.


From now on forget everything but the money trail. Let the money tell the story.

And while looking at our financial books, you will want to ask yourself how much more money will be taken out of your pocketbook if present policies are allowed to continue.

Where's The Money?


Contents

Introduction
Chapter One: The Nation's Financial Health
Chapter Two: Flow of Funds to OPEC and Saudi Arabia
Chapter Three: Prescott Sheldon Bush
Chapter Four: George Herbert Walker Bush
Chapter Five: George Walker Bush
Chapter Six: Conclusion
Reference and Information Sources
About the Author
Tables:
Table 2-1: OPEC Petroleum Exports
Figures:
Figure 1-1: Federal Reserve Interest Rate Cuts
Figure 1-2: Fall of Dollar Value
Figure 1-3: US Trade Deficit
Figure 1-4: Exploding Federal Deficit
Figure 1-5: US Unemployment
Figure 1-6: US Personal Debt

Introduction

The year 2004 is important for America.

It is an election year and a great deal is at stake. Most of us focus directly on our daily lives and have little time to consider the long-term aspects of the nation's financial health. We are intimately wrapped up in our own financial health matters. But this time we owe it to ourselves to consider larger events because so much is at stake in November.

This election may be more significant than is believed by the general public because:

Threatening financial, monetary, and fiscal trends now are solidly in place. These trends, if allowed to continue, will determine the future of our society for decades to come.

They will directly affect you, your family, and your future.

You should know about the nation's financial health because it will determine your own financial health. Indeed, such notable financial figures as Warren Buffett and George Soros believe that the handwriting is on the wall, right in front of us, if we will only look. Most of these warnings are falling on deaf ears, and Washington will do all in its power to hide the true situation from our view. This summer we will be inundated with diversionary ploys to take our attention away from reality. That reality comes down to bare facts:

* The US Government Deficit: The nation's budgetary deficits are not manageable. Even the comptroller general of the United States has said he has no idea of the full amount of the nation's debt!

The difference between the debt Washington calculates (more than $6 trillion!) and the real amount owed is trillions of dollars more. Washington has been cooking the books for years. By fooling itself, the deficits have become unmanageable. They will remain so without major changes in the course Washington is now following. Actions now proposed to deal with the situation are not feasible. We cannot be expected merely to grow our way out from under this debt load.

A budget disaster looms before us. Three presidential advisors, (Rubin, Orszag and Sinai) say our budget deficits are thus unsustainable, and this fact will erode the quality of your life. As a tax payer you will be asked to continue paying them, but the services that you expect from your government will be greatly reduced. Your pocketbook will be increasingly attacked, while at the same time the social services that you expect in return will be cut.

These cuts have already begun. Budget cuts in education, in social services for the elderly and retired, reduction of funds for basic research and for infrastructure improvements may not be noticed now. But you are already being harmed, directly by taxation and by the creation of an environment that is far from what we now enjoy. All of our traditional social services are being curtailed right now. Indeed, The Washington Post revealed that a 19 May White House budget memorandum to all government agencies indicated that if re-elected, President Bush would propose cuts for virtually all agencies in charge of domestic programs, and this includes education, homeland security, and many others that Bush backs during the campaign. This memo, which is being commented upon more and more in the press, is in sharp contrast to what Bush is telling us in his campaign speeches.

The International Monetary Fund has issued a warning that US debt threatens the entire world. Can the nation ignore such warnings? If so, continuation of this situation will rob you of your future.

What does this mean to you? Leading and respected economists now warn that the deficits have the power to collapse the stock, bond, and Treasury markets and threatens possible default on our government's debt. Economist Paul Krugman of the New York Times says "investors will eventually conclude that America has turned into a third-world country and start to treat it like one." Your life will change if this occurs. There will be nothing you can do about it when such a day arrives.

* Consumer Debt Is Not Manageable: American citizens are over their heads in debt. Consumer debt, including credit card debt, is about $10 trillion, a number that is so staggering it is hard to absorb. Are we to assume that, like the federal government, we can just pile debt upon debt forever with no consequences? How will we work our way out from under this burden?

* The nation's Trade Deficit: The nation's trade deficit, something that we rarely consider in our daily lives, is soaring. It now approaches some $500 billion, the worst of all time. Writing in the 10 November 2003 issue of Fortune, Warren Buffett, says that America's trade deficit with the rest of the world is "selling the nation out from under us." For the very first time in his investing life he is investing in foreign currencies. He believes this situation must be contained and offers a solution in his Fortune essay. He points out that the rest of the world owns more than $2.5 trillion of America more than we own of it. Our trade deficit with other nations now approaches 5% of our GDP. That is to say we consume 5% more than we produce. In past years America was always the producer to the rest of the world, and that made us extremely strong. Right now our country's net worth is being transferred abroad at an alarming rate.

All this means that foreigners are increasing the net ownership of our country by about one percent a year. Keep this up for a few more years and the negative compounding will trap us all. Right now we are the world's largest debtor nation and our citizens are the most debt-ridden citizens of all time. Are you aware of this? Excessive debt and consumption has brought down every major power in history. Buffett says solution to this looming problem will place the most severe test on us as a nation.

* The fall of the US Dollar: The American dollar is falling in value against gold, most commodities, and against almost all other currencies, including some third-world countries. The price of oil is soaring as a result. Why would any oil-producing nation wish to sell us their resources and be paid by increasingly worthless currency? Rising petroleum costs act as a tax on the consumer. You have less to spend or save as a result of oil's recent rise. In fact, the rise to $40 a barrel has already canceled out the "benefits" gained so far by the Bush income tax cuts!

This may not be evident to most to us while running our daily lives except, perhaps, at the gas pump. But it will impact us in many hidden ways. It will bring higher costs to our manufactured goods and higher prices for all imported goods, and American goods will have to compete around the world. It poses a significant danger to bonds, stocks, and most other traditional investments. A falling dollar implies rising values for everything else, which means inflation is just around the corner. How did you fare in the inflation of the 1970s and early 1980s?

Currently, foreigners hold $10 trillion of our dollars and are suffering losses every day. Right now foreign investors and foreign governments own an estimated $1.3 trillion of US government securities, plus a similar amount of US corporate bonds. There will come a time when they will dump that dollar hoard for something they can rely on, gold for instance. The global panic out of the dollar may already have begun, some say. The Federal Reserve, in attempts to prop up our stock market and re-inflate our sagging economy, has created all those dollars out of thin air. The time may come when foreigners view them as we might the currency of some third-world country. If this bubble is pricked, then we risk the collapse of US and even world financial systems.

* Interest Rates at Record Lows: Because of the Federal Reserve's attempts to re-inflate our economy, interest rates have fallen to levels not experienced in our lifetimes. This has compromised the well-being of our elderly and retired citizens. Their income has just vaporized. Counter to what was expected, the artificially low interest rates have failed to fully stimulate our economy properly, no matter what we are being told by Washington.

In order to protect that falling dollar, the Federal Reserve will be forced by the rest of the world to raise interest rates. What will this do to you, or your home buying needs, or to the value of your present real estate holdings? How will you protect yourself from what is to come?

You can see the dilemma the Federal Reserve has now created for itself. In 1994, under similar financial conditions, the Federal Reserve boosted interest rates. The result forced several hedge funds to go belly-up, and California's very wealthy Orange Country went bankrupt. Today, with far heavier debt loads all through the economy the jolt to our system may be far worse.

Your major financial asset, your home equity, may be under attack within a year.

* Unemployment Has Been Rising: Our nation is now experiencing the highest unemployment rise since the Great Depression of the 1930s. Some say that we are standing on the edge of still another depression, and that our current debt loads may well make the next one even larger. If such a catastrophe arrives, will you be safe?

Of course, with the massive stimulation by successive tax cuts, record low interest rates, and over-spending by the federal government, the economy appears to be gathering a head of steam at last. Surely employment would rise on such measures! This has brought a sense of relief, especially in Washington. But there is a cost to all this and it is yet to be paid. Many suggest that this time something really is wrong with the basic economy, since nowhere in our past history did such massive stimulation have so little effect and take so long to get things moving again. This may reflect the fact that the tax cuts were not distributed evenly down the income scale. But it also may reflect the fact that economic gains are upside-down in this recovery; that is to say, opposite to previous recoveries. Profit growth now rules and profits receive a disproportionate share of national wealth than do wage earners. This can explain why corporate profits are high, all the while unemployment is rising and wage earners are strapped for buying power. In May 2004, the Economic Policy Institute reported that corporate profits have risen by more than 62%, but take home pay by workers has dropped by 0.6%. And this only adds to the problem of the weight of debt on our society. Wages and benefits have suffered from the emphasis for profits.

Some respected money managers believe that this stimulation will soon wear off, resulting in slower growth later this year. They believe that business activity will slow because for the first time in four years consumers will not have an income tax rebate to spend. With no further tax rebates to add to our wallets, can we expect to see the recent spending rate to continue? Worrisome still is that consumers for the most part have not saved the tax cut benefits. Rising costs have forced them to spend more on basic items. Our savings rate is still at very low levels. And at the government level debt is rising from this stimulation. Inflation is rising soon to catch us all in a new cycle.

Real unemployment is above 9%, but the past three months show a sizable increase in employment. Did you know that the actual manufacturing job category actually lost jobs during this recent increase? But the government presented us with an increase in manufacturing sector jobs. This was done by a re-definition of manufacturing jobs, transferring many service sector jobs, such as fast-food hamburger flippers from the service arena to the manufacturing arena. After all, these hundreds of thousands of job holders are actually manufacturing hamburgers, aren't they? Are we to believe any government figures when we see this? Is the government playing games with us to cover reality?

The constant corrections and updates to previously issued data by the Labor Department causes a remarkable lack of credibility in the marketplace. Every month major revisions, or the discovery of new jobs that somehow had been overlooked, the shifting of service jobs to manufacturing jobs, and the inclusion of merely temporary jobs, have still left the unemployment rate basically unchanged. Many believe that the new jobs being reported are minimal in their quality as compared to those lost over the past four years. Many financial notables now reject the statistics that come out of Washington.

Industrial production is down. Despite the reported May jobs increase, April's factory orders fell 1.7%, the biggest drop in a year. Durable goods orders we revised to show a 3.2% decline, the worst in two years. What are we to make of this? American consumers borrowed almost $900 billion last year, after almost $780 billion the year before. Most of this money went into home and stock purchases, rather than into living expenses. But consumer spending for the first quarter of 2004 fell to $37 billion versus $97 billion in the prior quarter. US corporations are experiencing negative retained earnings for the first time since the Great Depression. We are not producing as many automobiles as planned, or for that matter, almost anything that is traditionally manufactured in our country. Out-sourcing of jobs to foreign countries is rising. Jobs are leaving America by the millions, and India, China, and many third-world countries are benefiting from the exodus. The future of American jobs is that our country will experience a permanent long-term, large-scale and chronic unemployment condition. Will you be threatened if this continues?

The Social Security Dilemma: Three years ago Federal
Reserve Chairman Greenspan told Congress that the tax cuts would not in any way endanger Social Security. At that time he said that the government was in some danger of running excessive surpluses! In an about face, the government now confronts the lowest income level as a share of the economy since 1950. Greenspan now warns that your Social Security benefits will need to be reduced. Are you prepared for that eventuality? Is this statement a preparatory admission that the funds held for your retirement are in jeopardy? If so, what are our bedrock guarantees? As working Americans we contribute to a government-guaranteed retirement trust, and we are now being told by the government itself that this trust will not honor its commitment to us. How are we to plan for our retirement years? Social Security's long-term unfunded deficit approaches $4 trillion, which is about a third of GDP. This deficit can be reduced only by increased payroll taxes or reduced retirement benefits.

Are you working hard now, only to find one day that the government will renege on paying you your hard-earned benefits?

Neither the White House, nor the Congress, appears willing to confront the conditions that threaten our future. Indeed, both branches of government are exacerbating these mounting problems. If we as voters fail to bring about a different course, our future liberties and safety will be seriously compromised.

If George W. Bush is reelected in November, even by a slim margin provided by Ralph Nader, it will be interpreted by The White House and Congress as vindication of the economic policies already begun. Indeed, expect them to continue, even accelerate. Seth Glickenhaus, the famed Wall Street money manager, in the 7 June 2004 Barron's magazine agrees, saying that the deficits will grow in this instance.

We cannot expect direction from the current administration or Congress. Recent publications bring us evidence of the Bush family's generations-long association with the forces the entire nation is now confronting. The history of the Bush family shows its close connections to the House of Saud, which include the bin Ladens, and the deeply imbedded relation to foreign oil interests. It also shows an abuse of secrecy and fabrication in government, and the use of money and corporate power for political gain. These traits are so ingrained that no alteration of can be expected.

Do you fully understand that those relationships control your life?

Do they help us understand why the United States is enveloped in such constant Middle East turmoil? Do you know how much you are truly paying for your gasoline?

I knew very little about the scope of the information presented here until I asked myself, three months ago, for whom and for what I am voting in November. Now that I see more clearly the outline of what lies ahead of us, for the first time in my almost seventy years, I do not feel safe being an American.

What is the bottom line the financial notables are trying to tell us? It is that your future is being taken away from you. George Soros eloquently writes that the squandering of our financial resources will ultimately result in a squandering of our power and influence in guiding world affairs. He says that most likely the peak of our influence in the world lies behind us.

Where is the money?

What follows is a more expanded discussion of the points made above. There are several charts and graphs that verify the trends I point out here. These are obtained from reputable sources and the federal government. I will not burden the text with footnotes. The chapter on "References and Sources" provides those references and the sources of data I employ. Hopefully, these will alert you to finding even more.

I also provide a short history of the Bush family, which verifies their ingrained attitude regarding money and power, and reference sources for your further investigation. An examination of these chapters should indicate how the Bush family obtained its wealth and how it employs power. These chapters should go a long way toward understanding what is happening in Washington and in answering the question as to where your money has gone.

We all have an obligation to know for whom and for what we are voting.

Hopefully, this report will answer both the "who" and "what" questions implied in our obligation.

Chapter One

The Nation's Financial Health

What follows is a presentation of various economic facts that are understandably glossed over in the political dialogue. This is because they represent truths that are not welcome in the national debate. But the debate, if it is to give substance to the choices before us, must be honest. Just as honesty is required in fighting terrorism and dealing with foreign countries, honesty is important so that we can fully grasp the realities that stand before us. Personal honesty with ourselves also is mandatory, and not merely a demand for our politicians be honest with us. It is one thing to be misled by Washington, but each of us has a responsibility if only to protect one's own family, to avoid self-delusion. The charts that follow are not difficult to understand. They represent the true nature of our nation's economic health.

In the coming campaign a huge amount of money and creative expertise will be expended to distract you from considering the nation's true economic health. Stop up your ears and keep your eyes on the numbers.

Before we look critically at the current financial health of the nation let's look at the recent financial history of the state of Texas. The ideology that prevailed in Texas now guides Washington and the governance of the United States.

Texas
In 1994, when George W. Bush defeated Ann Richards as governor, the financial condition of Texas was healthy:

The budget had a surplus of some $4 billion, and the state's outstanding debt was placed at $9.4 billion.
Income to the state's treasury (Texas was third in the nation) was placed at $45 billion.
The books of the University of Texas retirement funds were healthy and open to scrutiny.

In 2000, after six years of "faith-based" governance under George W. Bush, the financial condition of the state was as follows:

The budget was in disarray and the state's debt had exploded to $100 billion, making Texas the third most indebted state.
Income to the state's treasury was now registered at $120 billion, doubling over 1994, yet the debt increased.
The condition of the University's endowment is now hidden. As governor, Bush changed the rules concerning these investments and eliminated the requirement to publicly disclose the details of the trust. The government no longer had to reveal to the public the condition of this trust, because it had "privatized" this $9 billion trust. The private investment group now running this trust operates behind closed doors, and was under the chairman, Tom Hicks. Hicks is an old Bush family associate (and now co-owner of the 1,250 station monopoly Clear Channel), and there is concern as to whether or not the value of this trust has collapsed. Public scrutiny forced the resignation of Hicks in 1999. Harper's Magazine in 2000 reported that some $10 million dollars of the University of Texas Trust were placed with Carlyle Group.

The Nation
Republican administrations have for some years promoted the idea of "privatizing" the nation's Social Security system. We have to ask ourselves whether or not it will be the public "shareholders" of the system who will profit by such a maneuver. In late February 2004, Federal Reserve Chairman Alan Greenspan declared that future benefits owed the retired will have to be curtailed in order to keep the system solvent. In 2000, however, Greenspan, urging Congress to cut taxes, warned that otherwise the government could run excessive surpluses, and assured Congress that such cuts would not endanger Social Security. Bush stated that his tax cuts would leave Social Security solvent, as he would set aside $2.4 trillion to strengthen this trust. It is now 2004 and that $2.4 trillion has vanished. Income tax cuts, repealing inheritance taxes, and tax breaks on dividends that benefit the wealthy, have undercut the future safety for those of us looking forward to a secure retirement.

As a preview of things to come, the current Bush administration is trying to abolish the Office of Federal Housing Enterprise Oversight, which is an independent regulatory office that oversees the government-sponsored mortgage agencies, Freddie Mac and Fannie Mae. These two agencies own or guarantee fully 70% of all outstanding mortgages in this country! The lending practices of these agencies, which underwrite and guarantee an astonishing $4 trillion worth of home mortgages, are under suspicion. These numbers are so large that even a minor difficulty can have a major impact on the economy and the federal budget. Many observers believe a crisis looms ahead, since real estate lending debt has doubled in the past five years. Some observers believe that any crisis here will dwarf the S&L debacle of a decade ago. The Fed cannot be expected to handle this huge debt because it is just too huge. To even suggest the removal of an independent watchdog agency evokes past actions in Texas and makes this move totally political. Right now this agency is being starved of funds, so it lacks ability to monitor the situation fully, a ploy that relates to past arguments. If a crisis appears, the administration will surely argue that "regulations do not work, so why not do away with them altogether?" If such a crisis appears, who will pay for the damage? The S&L scandal under the first Bush administration was paid for by the taxpayers.

In early 2004 the International Monetary Fund issued a report on U.S. finances and in it they surmise that if we fail to get our house in order, the budget and trade deficits threaten world order. Soon, US financial obligations to the rest of the world will reach 40% of our economy. Furthermore, they warn that under-funding of Social Security will lead to a shortage of some $47 trillion. This is five times the current GDP!

But demographic facts will soon put us all in an even greater bind. Public debt is always paid, either by default, hyperinflation, or higher taxes. This means that government services will be reduced. Indeed, economist Paul Krugman has argued that the Bush plan is to place Congress in a "fiscal straightjacket," so that major down-sizing of the federal government will be forced upon us. Tax cuts lead to budget deficits and those deficits give the White House and Congress an excuse to curtail government spending, especially for social services. The "fiscal gaps" our society is now facing "cannot be closed without either redefining the role of government or by sharply raising taxes. The astonishing political success of the anti-tax crusade has, more or less deliberately, set the United States up for a fiscal crisis. For the starve-the-beast tax-cutters, the coming crunch is exactly what they had in mind." Social Security and Medicare are the biggest targets to attack because that is where our money is, or at least is supposed to be.

If Bush is re-elected in November, expect to see and hear more about the "privatization" of Social Security to "save" the system and entice you to earn more on your money. This will result in worsening the situation, while at the same time allowing further transfer of funds to the financial corporate insiders.

Barron's points out that "Bush is transforming the income tax into a pure tax on wages." George Soros concurs, writing "one cannot describe it (the transfer of the tax burden from the wealthy to the middle class and poor) as an unintended consequence, because that was exactly what the market fundamentalists intended." And Nathan Littlefield in the January/February 2004 Atlantic Monthly shows that "the gap between tax revenues and entitlement expenditures is so large that not even reducing the federal government to a shell would close the long-term deficit."

Do you understand that what you think you "gained" with your tax cut, will cost you ten times over in future losses to your pocketbook?

All this leads to profound moral questions regarding the kind of society we want and what will be available to us in coming years.

Will democracy as we know it survive at all?


Where Are We Now?
Since 2000 the nation's economic condition has deteriorated markedly. The fiscal health of the federal government is in serious jeopardy:
Since 2000, three massive tax cuts have been enacted, with the stated, but perhaps deceptive, argument that the economy will be stimulated to greater creation of jobs, resulting in increased tax revenues. The Bush administration, failing to see any job stimulation from the first attempt, has followed up with more of the same. Paul Krugman points out that if all the cuts become permanent they will reduce revenue by at least three times the amount needed to fund Social Security at current levels for the next 75 years. These massive cuts still are being debated as to whether or not they really stimulate the economy as advertised. Note the "stimulus" engineered by interest rate cuts, adding to the money supply, and expanding the federal deficit in the following charts. If the current and proposed tax cuts are made permanent, as "conservatives" desire, it will cost the country $1.1 trillion over the next decade. These cuts are taking place not only in the face of record deficits, but also during a time of war! Whatever we are told, we must conclude that job creation and economic growth are not the administration's goals at all.
The Federal Reserve has cut interest rates 13 times in succession since 2000. This was supposed to encourage job growth. Thus far it has failed. Financial analyst James Grant suggests that "so great is the weight of debt on the back of the US economy that monetary policy is impotent." The interest rate cuts are shown in Figure 1-1.

The value of the US dollar in foreign exchange has fallen more than 30%. The argument is that a cheaper dollar will stimulate exports to foreign countries, thus bringing more profits to US companies and providing more jobs to American workers. This decline is shown in Figure 1-2.

Many reputable financial experts caution us about this argument, saying that history shows that a nation's standard of living declines as its currency falls. During the Clinton years when the economy was strong, tax revenues were greater, and the country registered a budget surplus. The dollar was strong. Now that the treasury has been drained of the surplus, the dollar has collapsed, and "collapse" is the proper word to describe it.

Our trade balance with other countries is shown in Figure 1-3.

Currently, it shows a significant rise in deficits, counter to what we are told to expect. The danger and likelihood is that some day soon the weakness of the US dollar will cause a loss of confidence among foreign investors in the "safe-haven" status of our currency.

The federal deficit has exploded to levels undreamed of in the past, as shown in Figure 1-4.

The total federal deficit now has reached $7 trillion for the first time. This has taken place at the same time interest rates are at historically low levels. In 2000, after finally reaching a budget surplus after many years in the red, the budget returned to a deficit. In five short years the federal budget has receded from a surplus of $236 billion in 2000 to the more than $500 billion deficit expected for 2004. The deficit is expected to increase for the rest of the decade. Aden Research reports a study that shows if the present rate of debt growth continues, before the decade is out all of our tax revenues will go to service only the debt.

The present situation has caused alarm among many financially responsible experts. Even conservative members of Congress are now expressing doubts about the future. How will we ever pay off this debt burden? If one believes that our current tax burden is excessive, imagine what the burden will be for our children.

How will you be affected if the federal government goes bankrupt? Of if inflation becomes out of control?

Job growth is not responding to all these stimuli, as we are told it should. Despite the recent improvement in employment, unemployment has soared since year 2001. In stark contrast to the 22 million new jobs that were created during the eight Clinton years, 2.3 million US jobs have been lost, the great bulk of them in manufacturing, since January 2001, when George W. Bush took office. No administration has had such a loss of jobs since the Great Depression of the 1930s. Figure 1-5 shows this alarming trend. Economist Paul Krugman points out that this trend would even more dramatic if so many people had not dropped out of the search for work. If they were reported, the unemployment rate would be approach 9% percent! This helps explain the fluctuations in the reported employment numbers while the rate of unemployment has remained essentially flat.

Figure 1-5, US Unemployment

Finally, Figure 1-6 shows the trend in the personal debt burden of average Americans, a huge increase in debt despite the rate cutting by the Federal Reserve. Debt of individual revolving home equity loans, for instance, has grown rapidly, from $128 billion in January 2001, to $326 billion in May 2004. This is an all-time record high. Home equity loans turn assets into debt, a debt that produces no income, only future burden to households. Thus, the Federal Reserve's most aggressive rate-cutting in history has turned home assets into a huge liability.

These dramatic facts are not suspect; they are real and understood by responsible men around the world. What is suspect are the motives and actions that are promoted and implemented, actions which have led to the sorry state these charts show us.

Kevin Phillips points out that whenever a Bush is President, both government debt and private debt explode. Joe Conason's work also points this out. This is clearly shown in Figures 1-4 and 1-6. If past is prologue to the future, we should take a harder look at the Texas experience. Phillips points out that under these administrations, oil and favoritism toward capital and industry over workers, is the policy. Almost two-thirds of US corporations pay no federal income taxes. Financier George Soros points out that "the balance of advantage has swung so far in favor of financial capital that it is often said that multinational corporations and international financial markets have somehow supplanted the sovereignty of the state." We now suffer massive private and governmental indebtedness, while oil and munitions interests reap large profits and add to their power to alter the nation's economy and even our basic political structures.

Phillips also points out that America now has one of the world's greatest gaps between rich and poor within its society. The transfer of a nation's wealth from the poor and middle class to the rich is achieved by diverting the public's attention from the rising inequality; by tax cuts, by a focus on religion, by initiating foreign interventions or wars, and by appeals to the public's patriotism.

Some of these themes already have appeared in the national debate. Many of them, especially the religious one, were successfully employed in the Texas races of the 1990s. Fully 15% of that state's population is officially classified by the federal government as poor.

The shift of money takes place behind the scenes. Right now, 38% US wealth is held by the top 1% of the population. The tax cuts and estate tax arguments are valid only for this 1% of the population.

Do you belong to that 1%? Are the tax cuts and estate considerations valid for you?

Phillips is angry when he writes, "if hypocrisy is the tribute vice plays to virtue, compassionate conservatism is the policy hypocrisy uses to disguise economic vice." The new president's ideological offensive in the spring of 2001, proposing legislation that abolished the inheritance tax, cut income tax brackets, slammed organized labor, further deregulated the electricity industry, weakened occupational safety, and reversed election-year pledges to curb carbon dioxide emissions, seemed on its face to be the very opposite of compassionate governance."

Taken as a governing philosophy, these actions mean the White House and the Congress have shifted tax burdens from the rich onto you. And at the same time, they have attacked education budgets, decimated public services, and reduced corporate responsibility for protecting the environment. Many of these new policies are designed to maximize corporate profits, but at your expense. These actions will be to your detriment and will affect your wealth and health and your children's. Our future is being compromised by the Bush administrations' actions and policies, on almost all fronts, no matter where we look.

To get a proper sense of exactly what "compassionate conservatism" really means, just look at the numbers, and ignore the political rhetoric. It may not seem apparent to the reader, but your life is being controlled by the forces the numbers represent. If these forces are not reversed soon, your children and grandchildren will be held hostage to them.

The following chapters will show how 50 or 60 years can compound the financial wealth of a single American family to enormous wealth. In this chapter we will show how that amount of time can compound the size of an Arabian family. In 1932 the Saud tribe comprised perhaps a few thousand members. After a long struggle, they took over the ruling of the 1.2 million square mile Arabian Peninsula and renamed it Saudi Arabia. At that time the country had a population of about 7 million. It now has a population approaching 25 million, while the House of Saud is composed of no less than 30,000 princes and princesses. This number will double again in the next generation! Saudi Arabia's birth rate is among the highest in the world.

Abdul-Aziz (1880-1953), the founder of modern Saudi Arabia, had 42 sons. These married a total of 1,400 women, an average of 33 each. One of these sons, King Fahd, the now stroke-ridden ruler, took 100 wives. (Perhaps this explains the stroke). After only two or three generations one is dealing with almost incomprehensible numbers of Saudis.

With extreme population pressures such as these, even a resource-rich country is soon forced into foreign adventures. Thus, this family indirectly impinges upon our personal lives, even without our realizing it.

Ironically, the population explosion in Saudi Arabia has negated the vast increase of wealth in that country. In 1981, with oil selling at approximately $40 a barrel, the per capita income was $26,000. Today that barrel fetches about the same number of dollars, but the per capita income has plummeted to about $7,000. Unemployment has reached 30%. The population has outrun the creation of revenues, even in a country as rich as Saudi Arabia.

The major oil deposits were discovered in 1938 (the first success coming from Standard Oil of California), just six years after the Saud family organized the various tribes into the unified whole of Saudi Arabia. In 1930, before the big oil discoveries, exports to the United States of horses, wool, dates, and pearls, amounted to just $66,000. This is the entire trade balance with the United States for that year, hardly a sum worth mention. But it was all the trade they had 70 years ago, before the big oil discoveries.

Now the Saud family is the controlling entity of the world's economies as the modern world demands millions of barrels of oil daily to sustain its economic engines. The industrialized world has fallen into an extreme dependence on oil from Saudi Arabia. Saudi Arabia now holds about 24% of world oil reserves, some 260 billion barrels, and is the world's leading exporter of oil. (Iraq is second with about 120 billion barrels). Saudi Arabia was instrumental in creating OPEC in 1973.

We all know the power of OPEC, the consortium of eleven oil producing countries. In 1975 the United States imported 1.2 million barrels of oil from the Persian Gulf every day. We now import fully 12 million barrels of oil daily from all foreign sources. The exports of oil to the west from just OPEC is shown in the following table. Of this total, Saudi Arabia provides fully 34% of the amount of oil exported to the United States. In 2004 Saudi Arabia's petroleum income amounted to $65 billion.

Saudi Arabia is now awash with petrodollars. The wealthy recipients of these dollars must invest them somewhere, and in-country infrastructure seems not to be on the list. It has been estimated that over the past 25 years the 85,000 wealthiest Saudis have invested almost one trillion dollars in American companies. And the country has purchased more than $200 billion in American arms and airport and port construction programs.

Oil production in the United States peaked in 1970. We now produce only about 6 million barrels daily. Foreign imports account for two-thirds of our total daily petroleum consumption of about 18 million barrels per day. We are increasingly dependent upon Saudi oil, so the Bush family's closeness with the Saudis is understood. Fully 18% of our country's oil consumption is supplied by Saudi Arabia alone. And the need to support the House of Saud from increased pressures of being overthrown by the Saudi Arabia population is also understood by the Bush family. This results in massive arms sales to the House of Saud. One expert showed that the US has supplied more than $42 billion in military "aid" to the six Arab states just between 1990 and 1997. A subsidiary of Carlyle Group, Vinnell Corporation, trains the 75,000 man Saudi National Guard, the royal family's internal security force. Many observers of the Saudi scene predict the fall of this regime within a few years, no matter what the US does or doesn't do.

Indeed, one of Osama bin Laden's stated goals is the overthrow of the House of Saud. He believes this monarchy to be corrupt and his violent activities to overthrow it appear to have begun in earnest. Increasing instability in Saudi Arabia can only lead to serious consequences for the global economy.

OPEC holds more than half the world's petroleum reserves, while currently providing about one-third of the world's consumption. The Saud family is the controlling power in OPEC. Economist Larry Kudlow writes that the United States currently imports 4 billion barrels of oil each year. This costs U. S. consumers more than $100 billion each year, which is truly a massive income transfer from us to OPEC producers. Of that, 34% ($34 billion or more) goes to the Saud family to be distributed amongst themselves. Far lesser amounts trickle down to the Saudi people.

Every penny increase in the price of gasoline costs US consumers about $1 billion a year. So far in 2004, as Barron's points out, this hidden "tax" has canceled out the benefits that the Bush administration's tax cuts might have brought our economy. OPEC currently is cutting oil production because of the decline in the American dollar. After all, in a world defined by money and power, they wish to maximize their members' incomes.

They do not care about you.

Kevin Phillips writes, "clearly, the Bush family's place in US history must rise or fall on its ability to deal with the Middle East." Does this affect you? So long as you consume OPEC oil and buy into the Bush family agenda, you are involved.

Our knowledge of that involvement now has expanded with the 18 April 2004 release of Bob Woodward's book, Plan of Attack. In it he reveals that the family ties between the Bush White House and House of Saud are so strong that Saudi Arabia has promised to increase oil production and create a decline in oil prices in the months immediately before the November elections.

We are seeing international trade secretly used to favor a political party here in America and influence our elections!

Craig Unger, author of House of Bush, House of Saud, is even harsher than Phillips when he writes; "horrifying as it sounds, the secret relationship between these two great families helped to trigger an age of terror and give rise to the tragedy of 9/11." He also provides an accounting of Saud family financial transactions that have directly benefited the Bush family, Bush companies, and close associates.

It amounts to $1.5 billion.

This sounds like a big sum to us, but if you are really buying power and influence, it is petty change for the House of Saud. And it is well-spent money. It supports the aims of the Saudi Arabians and many Islamic fundamentalist organizations.

Those aims have nothing to do with your goals, nor improving your well being.

Why should you care about Saudi Arabia aside from rigged oil prices? Well, as a consumer you are funding the House of Saud. Vito J. Racanelli, in the 31 May 2004 issue of Barron's, writes, "we recognize that OPEC is simply a cartel that fixes prices and sucks wealth from consumers around the globe for deposit in the accounts of governments that are, in the main, ruthless dictatorships." Think about this perspective, and how it affects you.

Be aware also, that you have been funding the Bush family fortune (as you will see in the next chapters), and the revolutionary philosophy they and the Republican Congress have brought to Washington. You have been funding the adventures of both these families. Whether you know it or not, you may have been funding Osama bin Laden and Islamic terrorism.

We now turn to a brief history of the Bush family and its connection with the House of Saud, and the bin Ladens. Hopefully, this will provide some insight on just how the nation arrived at the current financial and foreign policy dilemmas.

What do we really know about the powerful Bush family and how it views the world? On the surface it may seem to you that Americans know a great deal about it. But several recently published books by respected political and social researchers show that what we know is little more than is what is convenient for the Bushes to reveal to us. Who are the various members of this family? The next three chapters briefly outline the Bush family history. We need to know the basics of how the family obtained such enormous economic and political power. How does this history relate to the geopolitics of the past 80 years, and what role does it play in our lives today.

My investigation into this unique family has led me to believe that its single-minded pursuit of money and power is what has now trapped us all in the webs of political and oil intrigue. The deep connections with the Saudi royal family and the bin Laden family are integral to our foreign policy. Are we to conclude also that the war in Iraq is part and parcel to their oil interests? One is drawn to this conclusion more strongly every day.

The socio/economic conditions we now live in can be traced, in large part, to the beginnings of the Bush family's rise to political power. The business activities of this singular family began with George W. Bush's great-grandfather, Samuel Bush. His son, Prescott Bush, married the daughter of his father's business partner, George Herbert Walker. This is the foundation on which this dynasty rests.

The activities forged by succeeding generations of Bush family members have trapped all Americans in the current dilemma the nation now faces. These activities start with questionable armament sales and political ties during and after World War I. Complicated business arrangements evolved to include economic and business ties with Germany before and during World War II.

After the war, the development of oil fortunes abroad intimately tied the Bush family to the Saud family, which rules Saudi Arabia. The interrelations between three generations of the Bush family and Middle East oil interests have placed us in great peril. And this relationship has caused a deeply distorted perception in the elite as to what is best for the entire nation.

Why should we care?

We should care because the world-view that this family developed over three generations now controls your life. This may sound a bit extreme, but we are beginning to see how these interconnections developed and how they affect us now. If the daily news headlines and current economic conditions are not enough to alarm you, then perhaps some background and perspective will help you understand why we are confronted with those headlines, and the dilemma we face as a democratic society.

The Bush family has spent a great deal of effort and money to hide its wealth and the methods it employed to obtain it. Recently released and published tax records for the Bush and Cheney families give us a hint of the immense wealth involved here. The average American has no idea of this history, as images of normalcy have been created and maintained, when in actual fact, the Bush family is one of the nation's wealthiest and most powerful. Contrary to the public images, these are not the "down-home" folk they would have you believe.

What follows is a brief introduction to the Bush family, how it obtained its wealth and power, what foreign connections it maintains which impinge upon all of us. References provide sources on how to find additional information.

The methods used by the Bush family to acquire its immense wealth should concern any thinking American.

Background
Prescott Sheldon Bush was born in Columbus, Ohio, on 15 May 1895. His father was investment banker Samuel Prescott Bush and his mother was Flora Sheldon.

Prescott Bush married Dorothy Walker, the daughter of his business partner, George Herbert Walker and his wife, Lucretia Wear, on 6 August 1921, in Kennebunkport, Maine. They produced the following children:
1. Prescott Sheldon Bush, 1922
2. George Herbert Walker Bush, 1924
3. Nancy Bush, 1926
4. Jonathan James Bush, 1931
5. William Trotter Bush, 1938

Prescott Sheldon Bush died of cancer in New York on 8 October 1972.
Dorothy Walker Bush died in 1992.

Education
Graduate of Yale University, 1917, in economics.
Yale trustee.

Military Career
WW I artillery, but as liaison between US and British military intelligence, 1917-1919.

Business Activities
Munitions, Investment Banking, and Oil
Prescott Bush, at age 22, became a director of Dresser Industries, an international oil enterprise, which was run by George Herbert Walker, his future father-in-law. Walker, over his career, was director in some seventeen corporations. Kevin Phillips (American Dynasty, page 336) shows tables of brokerages, banks, shipping companies, arms manufactures, and Soviet oil companies in which Prescott and his father held positions of either officer or director. Dresser was involved in war weapons production from WWI through WWII. Dresser Industries was incorporated into Halliburton in 1998. Dick Cheney, now our vice-president, was CEO of Halliburton at this time. This merger was valued at $7.7 billion. During the 1930s, and even into WWII, Prescott Bush was connected to various Wall Street giants, such as the Rockefellers, the Harrimans, and various banking concerns.

Prescott's role with George Herbert Walker and German financier Fritz Thyssen in the Union Bank Corporation is critical to following money flows into the Bush family. Walker was president of UBC, a bank that helped German industrialists prepare for the coming war, funding Adolf Hitler before and during WWII. Thyssen was a Nazi industrialist instrumental in financing Hitler's war and extermination programs. Ultimately the financing of Hitler's armaments helped kill American soldiers in the European theater of the war. This information was recently revealed by Dutch intelligence officers and is also available from the US government archives. Senator Harry S Truman, who chaired the Senate committee looking into war profiteering and waste, said in public that this relationship verged on treason for profiting from Nazi war manufactures. The US government filed charges of conspiring with the enemy in 1942 and seized the New York UBC banking operations run by Bush. In 1943, Prescott Bush was forced to resign from his director's position at UBC. But, he maintained his stock holdings with the corporation. These holdings helped provide the base for the family fortune. In 1951 Prescott and his father-in-law each received $1.5 million upon the sale of their shares - a considerable sum at that time.

John Loftus, a former prosecutor in the Justice Department's Nazi War Crimes Unit, has presented considerable evidence of these varied interwoven connections. He cites Allen Dulles as the lawyer chosen to hide the family's assets.

Further Investments
Resumed his banking and investment interests after leaving the Senate in 1961.

Public Career
Unsuccessful Republican candidate for US Senate, 1950.
Selected to fill that position upon the death of the incumbent, 1952.
Reelected in 1956 and served until 1961.

Estimated Wealth at Time of Death in 1972
There are several references to be found in the search for Bush family wealth, some suggesting a family wealth figure above $100 million. These are unsubstantiated estimates, however, as a great deal of effort seems to have been given to hiding this information and covering tracks that might lead to it.

While it is difficult to obtain reliable data on the family wealth, we can make a number of assumptions that may be of value. Each of Prescott Bush's parents were wealthy in their own right and brought power, influence, and industrial expertise to building the family wealth. The basis of the future family wealth is centered around the activities of Prescott's father, Samuel Prescott Bush, and his father-in-law, George Herbert Walker. Starting with Prescott Bush, where political aspirations began, each generation has worked toward creating a public image of a down-home family of modest means.

The reality is that this family approaches Rockefeller-level wealth and is a very patrician one that rivals, and perhaps dwarfs, the Kennedys. The estate at Kennebunkport, Maine was built in 1904. At the time of Samuel's death in 1948, he had estates in Palm Springs and Santa Barbara, California, an upscale residence in Manhattan, a mansion on Long Island, and a 10,000 acre South Carolina hunting preserve.

There is every reason for respected historian Kevin Phillips to refer to the family in dynastic terms, as the tile of his recent book illustrates

Since George Herbert Walker Bush held important government positions, including director of the CIA, one can assume that all tell-tale tracks of family finances have been thoroughly removed.

Accurate financial data have been hidden and are unavailable to us. However, we can make some reasonable assumptions about family wealth and get a clearer picture of this family's place in our society.

George Herbert Walker and Prescott Bush each received $1,500,000 from their sale of UBC bank shares in 1951. Prescott Bush's wife left a considerable estate in addition. Thus both sides of the family had attained a wealthy status even before 1951, and this is not widely known.

Kevin Phillips indicates that Prescott's estate was probably worth between $5 million and $10 million when he died in 1972.

Assuming a starting point of only $2 million in 1951 for Prescott's account and compounding it at 10% per year, a conservative return considering the financial expertise available to the family, in 50 years this would total more than $200 million. Even when we factor in taxes and living expenses, this family rivals the Rockefellers.

Considering this record, the eagerness of the current president to cut taxes and abolish estate taxation is understandable.

Think about what you are giving up to achieve his goals.

George Herbert Walker Bush, worked quietly behind the scenes for many years, cemented Bush power within the Republican party and obtained the presidency that had eluded his father. Moreover, he was able to cover up most of the unsavory family dealings that preceded him. It was this son who brought respectability to what came before.

Background
George Herbert Walker Bush is the second son of Prescott Sheldon Bush and Dorothy Walker. He was born on 12 June 1924, in Milton, Massachusetts .

Education
A student at Phillips Academy in Andover, Maine, and later Yale University, graduating with a degree in economics, 1948.

He married Barbara Pierce, daughter of McCall's publishing magnate Marvin Pierce, in January 1945. This union produced six children:
George Walker Bush, 1946-
Robin, who died as a child, 1949-53.
John (Jeb) Bush, 1953-
Neil Bush, 1955-
Marvin Bush, 1956-
Dorothy Bush, 1959-

Business Activities
Munitions, Investment Banking, and Oil
Position at Dresser Industries, subsidiary of International Derrick and Equipment Company in Odessa, Texas, 1948.

Funded by Prescott Bush and Brown Brothers Harriman, with partners Hugh and Bill Leidtke, he formed Zapata Petroleum in 1953. All partners were millionaires in their own right by decade's end. Bush bought Zapata subsidiary Zapata Offshore in 1954 and sold it in 1966 for $1.1 million dollars when he became more fully engaged in politics. The company's success was almost guaranteed when Prescott Bush's work in the Senate influenced Congress to table the efforts then underway to federalize the offshore waters out to the 12-mile limit.

It appears that this company also was involved in CIA spying in Cuba prior to the Bay of Pigs invasion, the code name being "Operation Zapata." John Loftus points out that just after the installation of Bush as vice-president in 1981, all Securities and Exchange Commission filings for years 1960 and 1966 were mysteriously destroyed, along with all records of possible CIA activities using Zapata as cover.

Military Career
Naval aviation pilot in WWII, serving in the South Pacific theater, 1942-1945.

Public Career
George Herbert Walker Bush regarded Richard Nixon as his mentor, and Nixon supported his first political engagements, as well as appointing him to several sensitive assignments and to Republican party positions:
Served two terms as representative from Texas, 1966 to 1970.
Unsuccessful in two attempts for the US Senate.
Appointed to the following high-level positions:
Ambassador to the United Nations, 1971 through 1974.
Chief of the US Liaison Office in Red China, 1974-1975.
Chairman of the Republican Nat'l. Committee, 1975-1976.
Director of the CIA, 1976-1977.
Elected vice-president of the US under Ronald Reagan, 1980-1988.
Elected president of the US, 1988-1992.

Further Business Activities
The Carlyle Group
The Carlyle Group is a $16 billion private equity fund that is now the nation's eleventh largest defense contractor. It is run by several prominent members of the Reagan and first Bush administrations. These include Frank C. Carlucci, the Reagan Secretary of Defense, and James Baker, who was Secretary of Defense in the first Bush administration. These men use their widespread contacts to increase profits to the shareholders. The Carlyle Group is owned by 18 men who share in its current market value. Two sons of bin Mahfouz of BCCI fame, invested $30 million in Carlyle, according to Craig Unger. Unger shows that a total of $80 million from the House of Saud is invested here. Carlyle has returned more than 30% a year in dividends over the past decade.

Carlyle also owns health care companies, telecommunications companies, real estate, internet companies, bottling companies, and newspaper corporations. In fact, its ownership incorporates some 165 companies throughout the world. Carlyle employs some 70,000 people.

Since the 9/11 terrorist attacks, major defense contracts have been given to Carlyle corporations, and this resonates with the WWI businesses of Samuel Bush and George Herbert Walker. Judicial Watch, a public interest law firm that monitors, investigates, and prosecutes government abuse, called upon George H. W. Bush to resign during at least the period that his son remains in office. Judicial Watch sees an obvious conflict of interest with the Carlyle arrangement. This situation has been reported by the New York Times, the Nation, and other respected news publications. Bush has not resigned.

And who should appear to be involved in this well-connected Washington investment bank, but the bin Laden family, according to the Wall Street Journal, 27 October 2001. While the family claims to be estranged from Osama, it is an investor in Carlyle and will participate in dividends generated by the increase in our defense budget to fight terrorism. All the Carlyle principals know the royal Saudi families and have traveled extensively to Saudi Arabia. Does George H. W. Bush now have current business relations with the bin Laden family via his position with Carlyle? If so, Osama bin Laden's attack on the World Trade Center and the Pentagon is increasing the Bush family's fortunes by the massive defense budget increases that have resulted from the attacks.

The annual US outlay for military expenditures is some $400 billion. The US accounts for almost 50% of global weapons sales. Our sales are twice that of all NATO nations combined. One is reminded of President Eisenhower's farewell address warning of the dangers of the powers accumulating to the military-industrial complex. After some 40 years, we have arrived at that danger.

A constant focus for George H. W. Bush during his time as CIA director, vice-president, president, and now with Carlyle, appears to be the weapons trade and secret deals with several oil-rich Islamic countries.


Speaking Fees
George H. W. Bush commands up to $100,000 per speech.

Estimated Wealth at Present
The inheritance given to Prescott's son, George Herbert Walker Bush, must have been considerable, despite any estate taxes that should have been removed at the time. Continued compounding of the estate would have tripled the original base by the time Prescott died in 1972, and this agrees with Kevin Phillips' estimates.

Prescott's marriage to McCall's heiress, Dorothy Pierce, surely enlarged the fortune base for this branch of the Bush family. Her father died in 1969, her mother in 1949.

In 1980, when he entered the election race with Reagan, Bush placed his family inheritance in a blind trust, as was appropriate for a political contender on the national level. Interestingly, this trust was administered by old friend William Farish, III, the grandson of William Farish Jr. Farish was president of Standard Oil in New Jersey, and was forced to plead "no contest" to conspiring with Nazi Germany while holding this position during the war.

Compounding at 10% for yet another quarter century to the present generation triples the value of the family's wealth once again.

The Bush family fortunes continue to advance, as this Bush's son is engaged in several wars. You may be paying for them with the lives of your children. If not, at the very least you are contributing to Bush wealth because of the increase of military expenditures that benefit Carlyle. Do you not think it unethical that the first President Bush is representing Carlyle while his son is contracting with him for weapons now being used in the new Middle East wars?

Expanding on thoughts in his book, Kevin Phillips writes in the Los Angeles Times, "the Bushes' apparent deceits span two generations, two presidencies, and two Iraqi wars."

If this insight is correct, we are on new moral ground in our country's history.

The son, resting on the respectability provided by the father, has brought a religious fervor to the White House, and this brings with it an assurance that his decisions are always correct. This has cemented not only the right wing of the Republican Party, but has brought about a complete philosophical revision of the rules of a democracy. Why should this concern you?

Paul Krugman points out that the current administration is a new revolutionary power in our society. The usual rules of governance no longer apply, "because a revolutionary power, which does not regard the existing system as legitimate, doesn't feel obligated to play by the rules." Surely this insight should engage your attention.

Almost all maneuverings of the current administration and the Republican Congress bear out the truth of his insight.

Background
George Walker Bush is the first child of George Herbert Walker Bush and Barbara Pierce. He was born in New Haven, Connecticut, on 6 July 1946.

He married Laura Welch in 1977. This union produced twin girls, Jenna and Barbara in 1981.

Education
Phillips Academy, Andover, Maine
Yale, 1964-1968, with a major in history
Harvard Business School, 1973-1975. MBA in 1975

Business Activities
Oil
George W. Bush traced almost identically the early steps his father had taken in his schooling, his first business experiences, and his political connections in Texas. His first venture was Arbusto Energy, which was financed in 1976 by a close family friend, James Bath, of Houston. At that time, Bath was the sole US representative for Salem bin Laden, the head of the wealthy Saudi construction company and brother to Osama bin Laden.

This is as questionable to us now as was the grandfather's participation in financing German industrialism in the 1930s and 1940s. President Bush, after the 11 September 2001 terrorist attacks, denied even knowing Bath, or that Bath had a $50,000 stake in Arbusto Energy. Bath currently handles the Houston interests of the BCCI rogue bank principal Kalid bin Mahfouz, who inherited the business interests of Salem bin Laden upon Salem's death in 1988. This "bank" was heavily involved in arms traffic with Saddam Hussein and other CIA covert operations. Unknown to us, as Craig Unger points out, BCCI seems to be the leading institution for financing terrorist activities around the world, including, apparently, Al Qaeda. Richard Clarke, the US counter-terrorism chief, seems to agree with this perception. The Bush family may have had important connections with this scandal-ridden bank. In the 1980s BCCI defrauded investors of some $10 billion, and is acknowledged as being the greatest bank fraud in history. According to the records of the 1992 Senate investigations, the Bush Justice Department worked against prosecution of BCCI.

Arbusto Energy morphed into several other enterprises, such as Bush Exploration (with several million dollars in new family financial contributions), Spectrum 7 Energy Corporation, and finally, after these endeavors failed, Harken Energy Corporation in 1986. This enterprise, too, met with difficulties within a year or so. Who, then, should appear to the rescue but Kalid bin Mahfouz! He and his Saudi connections, bought a 17.6% share of the failing company. With its connection to national political figures, Harken was able to surprise giant Amoco by obtaining offshore drilling rights in Bahrain. The prime minister of Bahrain was yet another stockholder.
In 1990, George W. Bush sold his shares despite the potential for an S.E.C. insider-trading investigation. Paul Krugman suggests that any SEC investigation was stopped because this George's father was President of the United States. Furthermore, the SEC chairman was a personal friend of the president, and the SEC general counsel had previously been George W. Bush's lawyer for the Texas Ranger enterprise.
Harken Energy soon afterward announced major losses. Bath came under FBI investigation in 1992 for possibly funneling Saudi money through Houston in an attempt to influence foreign policies of the Reagan and first Bush administrations. The Bush administration was pushing hard for energy de-regulation at that time.

The sale of Harken allowed George W. Bush a sense of financial independence he had, as yet, not achieved. With sale of the Texas Rangers while Bush was the sitting governor of Texas in 1998, Bush could stand on his own two feet at last. Thus, despite many failed ventures, he was kept afloat thanks to family connections and international financiers who were close to the Bush family.

There is also a strong suggestion that Saudi notables financed, and continue to finance, terrorist activities around the world. If the current President Bush is linked ultimately to those who fund terrorist activities, it is an ironic, if not downright eerie, link back to the operations of his grandfather. Is it any wonder why, immediately after the 9/11 terrorist attacks, the Bush administration flew the main Saudi and bin Laden family members out of the country? Another curious link in this web is the fact that bin Mahfouz' sister is one of Osama bin Laden's wives, a fact revealed by CIA Director James Woolsey in 1998 Senate testimony.

Professional Sports Team
George W. Bush's ownership in the Texas Rangers baseball team is important because, for the first time, he was able to reap financial rewards that were not fully realized in his oil ventures. Here an original 1989 investment of $606,000 was turned into a profit of some $15 million. Richard Rainwater, the investment manager who rocketed the Bass family's fortune from some $50 million to more than $4 billion in the 1970s and 1980s, took control of this operation. After Bush, as governor of Texas, arranged for the city of Arlington to foot the $191 million bill to build the Rangers a stadium, his fortune was made. The city later had to raise taxes to cover this debt. But Bush, at last, was a millionaire in his own right.

In 1990, George W. Bush was made a director of Carlyle Group's subsidiary Caterair, an airline-catering company.

Military Career
Texas Air National Guard, 1968-1973. He was barred from flying in 1972 and released almost a year prior to the expected term of his commitment was to end. This Guard unit never saw combat.

Public Career
Ran for US House of Representatives from Texas in 1978, losing to conservative democrat, Kent Hance.
Governor of Texas, 1994-2000.

Estimated Wealth
The compounding of family financial assets will have continued since George Herbert Walker Bush created the blind trust in 1980. We do not know whether this trust is still in existence. But whether or not it is, the compounding of assets have most likely accelerated from the modest 10% rate. Carlyle Group returns more than 30% per year to its owners and stockholders. Other sources of wealth surely contribute to the family accounts.

Since 1980, it is likely that the total family wealth has tripled once again. An estimation of $200 million by year 2000 may be a rather conservative number.

Thus, in addition to the urging by the second President Bush to cut taxes and abolish estate taxation, it makes sense for him to have withdrawn the United States from the international treaty talks regarding cleaning up money-laundering activities around the world. Success in implementing new regulations could seriously damage Bush family finances.

This brief history shows how the current president has thought and acted in the past. These traits and practices are still being employed now that he has reached the White House. The groups that embrace the new revolutionary ideas on how to administer our democracy are in full concurrence with these actions.

We stand at a major divide in the nation's history.

These brief chapters provide information that is not mere opinion, but published fact. Most of the economic data are provided by statistical financial services and government agencies. We ignore the implications of these numbers at our peril.

The numbers, not political rhetoric, tell the truth.

By now we all realize that the major themes in George Walker Bush's life are to follow in the footsteps of his father, to exceed his success, and to re-orient the nation to a governance by a rigid fundamentalist Christian theology. If these themes hold merit it seems likely that George W. Bush will do anything necessary to secure a second term as president, something that his father glaringly failed to do.

The 7 June 2004 Barron's interview with Seth Glickenhaus is more explicit. He points out that the focus of George W. Bush has always been on his next election bid. The result, in his words, is that "fiscally, Bush has been totally irresponsible ... The political picture has never been as negative as it is today."

We are being asked to return George W. Bush to the White House for another four years.

What will be the financial cost to you and our society in doing so?

We now suffer under the greatest loss of jobs experienced in any
term since the Great Depression of the 1930s. If privatization of many government agencies and departments to the private sector continues, will America's corporations then out-source the jobs to employees in India, Russia, or whichever country has the lowest contract labor force in place? What will happen to our tax base if this process continues? And what will happen to the federal budget deficit? What will this cost you and your family?

The dollar decline in foreign exchange will ultimately cause
foreign governments to turn their backs on supporting our nation's debt. This may not mean much to you now, but British historian Paul Johnson points out that "ultimately a falling currency reflects the intrinsic strength of a national economy." Continuation of this trend will raise serious suspicion as to how much trust can be placed on any administration's ability to run our country. We cannot risk such a loss of confidence in our country. Yet, the argument will be that a lower dollar will spur greater exports, thus making our economy stronger.

But the dollar has been declining strongly for almost four years, and at the same time our trade deficits have actually increased. This is counter to what we are being told should happen.

The dollar decline is resulting in higher oil prices, and OPEC is becoming richer and more powerful still. One day OPEC surely will decide that payments for oil must be made in a currency other than our own. Robert Baer, who has served 21 years with the CIA as a Middle East field officer, shows that with more than $2 trillion of Saudi funds residing in US banks and US stock and bond markets, Saudi Arabia is in the driver's seat for your own financial future.

In attempts to engineer a robust economy, the Federal Reserve has lowered interest rates to levels not seen in our lifetimes. This collapse has hurt the elderly who rely on stable fixed-income investments for their secure retirement. That security is being deeply undermined.

All during this time the federal budget deficit has exploded, from a healthy surplus, obtained from a strong economy prior to 2000, to what appears to be a looming disaster for America. If George W. Bush is reelected it will mean that the electorate, whether or not it understands or intends it, will have endorsed the policies that have led to the economic conditions outlined above. And it is our children and grandchildren who will pay for them.

From top to bottom America is awash with debt. It is the great weight on society's shoulders, a weight that is making the United States more and more impotent in the world. We are, in fact, drowning in debt. There is no life-saver in sight so we must generate a collective will to right the situation and keep our ship afloat, and then redirect its course.

In the next six months the nation will be inundated with diversionary political proposals and arguments. Many of these have little or nothing to do with our survival as a free democratic nation. They will be designed to maximize media coverage and divert the public's attention from the basic facts that will affect our future. The reader should be aware of such practices and focus on the numbers, numbers that are increasingly gaining control over our lives.

The continuance of the trends shown by the numbers will one day be viewed as a great moral economic dishonesty. That Washington is working hard to hide their significance cannot be in doubt. If you have not experienced any personal fiscal crisis yet, you are, nevertheless, being set up for a great crisis yet to come. Perhaps the crisis can be postponed for a decade or so. But it will come, if we are not honest with ourselves, if we shield our eyes and ears, and if we then allow the present conditions to prevail.

We are not being told the truth about the tax cuts. Deficit spending continues as if there is no tomorrow. There is a tomorrow, and you need to be ready for it.

We are not being told about the security of Social Security and other social programs that resulted from the collapsed economy in the early 1930s. Continued official dishonesty ultimately will result in another such period in the nation's life.

Do not assume that anything that official Washington says or
promotes has anything to do with the stated objectives. This report shows you that what has been going on over in the last four years stems from political and economic relationships going back to World War I. Do not be diverted from the facts.

The very security of our democracy is being jeopardized by the lack of fiscal discipline coming from Washington. Abandonment of this discipline is an attempt to assure the continuance of the Bush franchise and the revolutionary approach it has brought to democracy.

Perhaps this report will encourage you to exercise your right to ask,

"Where's the money?"

And,
"Where's my money?"

We are being asked to pay ever-higher prices for our hamburgers, gasoline, housing, government, college tuition, and everything else our society needs to remain democratic. The upcoming advertising campaigns will urge you to continue with the current franchise. They will offer inducements such as tax cuts, repeal of estate taxes, low interest rates, religious rhetoric, same-sex marriage diversions, shifting of blame, development of fear in our society, and finally wars and the appeals for your patriotism.

Let us ignore all these sales gimmicks, remain prudent and insist on a more responsibly run country.

This report presents information from what are deemed reliable sources. All materials used in this treatise can be obtained from sources available to the public, many of them from the government. Nevertheless, the author cannot verify that all these are accurate or truthful; hence he takes no responsibility for facts and comments inherent in them. Nevertheless, he urges the concerned reader to look into the following sources of information.

Chapter One, The Nation's Financial Health:
<www.latimes.com/news/politics/la-op-phillips8feb08,1,4377350.story?coll=la.home-politics>. Los Angeles Times book review of Kevin Phillips.
Aden Research, St. Louis, April 2004
Barron's, 16 February 2004.
Joe Conason, Big Lies, St. Martin's Press, New York, 2003
James Grant, Market for Speculators, Forbes, 19 April 2004
Information Line, Jan/Feb. 2004, Asset Strategies International, Rockville MD, 20652.
Lisa Keister, Wealth in America, Cambridge University Press, 2000.
January/February 2004.
Paul Krugman, Steps to Wealth, New York Times, 16 July 2002.
Paul Krugman, The Great Unraveling: Losing Our Way in the New Century, Norton, 2003.
Paul Krugman, Tax-cut Trickery at the Expense of the Middle Class and Jobs, Times Magazine, September 2003.
Paul Krugman, No More Excuses on Jobs,, New York Times, 12 March 2004.
Nathan Littlefield, The $45 Trillion Problem, Atlantic Monthly,
George Soros, The Bubble of American Supremacy, Public Affairs, 2004.
Figure 1-1: Federal Reserve
Figure 1-2: Leuthold Research
Figure 1-3: US Commerce Dept.
Figure 1-4: BCA Research
Figure 1-5: Federal Reserve
Figure 1-6: Federal Reserve

Chapter Two, Flow of Funds to OPEC and Saudi Arabia:
Information on oil consumption and the flow of funds to OPEC and Saudi Arabia can be found on:
www.eia.doe.gov
www.saudi-arabia.asinah.net/en/wikipedia/e/ec/economyofsaudiarabia.html
Said K. Aburish, The Rise, Corruption and Coming Fall of the House of Saud, St. Martin's Press, 1995.
Robert Baer, The Fall of the House of Saud, Atlantic Monthly, May 2003.
Barron's, 15 March 2004.
Barron's, 22 march 2004.
Reuters News Service, 2003.
Craig Unger, House of Bush, House of Saud, Scribner, 2004.
US Department of Commerce, Statistical Abstracts of the United States, 1997, 2003, Washington D.C.
Bob Woodward, Plan of Attack, Simon and Schuster, New York, 2004
World Almanac Books, The World Almanac and Book of Facts, 1932, 2004, New York.
Table 2-1: OPEC Revenues Fact Sheet.

Chapter Three, Prescott Sheldon Bush:
By entering the World Wide Web and addressing "Bush family fortune" and "Prescott Bush," the reader will find hundreds of entries directing him to facts, figures, and comment. Some of these are politically suspect, but many links will prove valuable, some presenting alarming documentation on Bush family members. The sites listed here are believed to be legitimate source of information:
<www.nhgazette.com/cgi-bin/NHGstore.cgi?user action=detail&catalogno=NH Bush Nazi Link.html>. This article by investigative reporter, John Buchanan in the New Hampshire Gazette, 19 Feb. 2004, will provide evidence and links to the connection between the Bush family and Nazi Germany.
<http://.azplace.net/index.php?itemid=165>. Further information and links regarding Prescott Bush's role with UBC, and with a great number of American corporations, such as Standard Oil, GM, IBM.
<www.scoop.co.nz/mason/stories/HL0306/S00055.htm.> Translation of Polish Newsweek article on Bush ties.
www.realchange.org/bushjr.htm
John Loftus, and Mark Aarons, The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People. St. Martins Press, 1994.
Kevin Phillips, American Dynasty, Aristocracy, Fortune, and the Politics of Deceit in the House of Bush, Viking 2004.
US National Archives, Suitland, Maryland Annex. Office of Alien Property Custodian, Vesting Order Numbers. 126, 248, 259, 261, 370. 1942.

Chapter Four, George H. W. Bush:
Addressing the Web for George H. W. Bush produces the many interesting links:
<www.suntimes.com/loutput/books.sho-sunday-phillips18.html>. Book review by William O'Rourke for the Sun Times.
John Loftus, and Mark Aarons, The Secret War Against the Jews, St. Martin's Press, 1994.
Kevin Phillips, American Dynasty, Aristocracy, Fortune and the Politics of Deceit in the House of Bush, Viking 2004.
Kevin Phillips, Bush May Find He's Running Against Sweep of History, Los Angeles, Times, 11 April 2004.

Chapter Five, George W. Bush:
Addressing the web for George W. Bush brings the several provocative links:
<www.bushnews.com/bushmoney.htm>. This site directs the reader to a number of compromising corporation relationships that Texas governor, now President Bush has. These include the Carlyle Group, where his father maintains an equity stake, Maverick Capital Fund, Bass Brothers Enterprises, Kohlberg Kravis Roberts, Evercore Partners, which is favored in buyouts of television stations, and American Securities Partners. This site also links both Bush presidents to various Saudi families, including the bin Laden family.

Joe Conason, Big Lies, St. Martin's Press, New York, 2003
Paul Krugman, The Insider Game, New York Times, 12 July 2002
Paul Krugman, Steps to Wealth, New York Times, 16 July 2002.
Herbert Parmet, George Bush: The Life of a Lone Star Yankee, Scribner's, New York, 1997.
Kevin Phillips, American Dynasty, Aristocracy, Fortune and the Politics of Deceit in the House of Bush, Viking, 2004.
Craig Unger, House of Bush, House of Saud, Scribner, 2004

Chapter Six, Conclusion:
www.publiccampaign.org
www.cppp.org.
Barron's, 7 June 2004
Robert Baer, The Fall of the House of Saud, Atlantic Monthly, May 2003.
Joe Conason, Big Lies, St. Martin's Press, New York, 2003.
Paul Johnson, President Bush and Mr. Micawber, Forbes, 19 April 2004.

Will Connell was born in 1935 and raised in Los Angeles. After attending the University of California at Berkeley and receiving a degree in mining geology he obtained a commission with the United States Coast and Geodetic Survey. While with the Survey he spent almost three years engaged in oceanographic and hydrographic work at sea.

After graduate work at Berkeley and at the University of Southern California, where he studied astro-geology, he spent 15 years working in the aerospace engineering field. Work here included experiments on the X-15 rocket plane, and with our manned lunar missions.

He has two grown children, each following professional careers.

Since 1990 he and his wife, Judie Rae, have lived in northern California, where they pursue their various interests.

Publications:
2000 Prostate Cancer Treatment Options. A Guide to the Basics, Edconco Press.
1996 "Beyond Buyer Beware": In Evaluating and Implementing Hedge Fund Strategies. Euromoney Books.
1970 Contrast Improvement in Display Systems. McDonnell Douglas.
1966 Remote Multispectral Sensing of the Earth. McDonnell Douglas. Used as textbook at UC.

Campaign 2004