The U.S. stock market got smacked down yesterday – ending the day with a loss of 355 points on the Dow.

The proximate cause of this punishment, according to the papers, was yet more bad news from the oil market. The oil pot bubbled up yesterday. The price of crude rose more than $5 to close at its highest point ever – $139.

Hey, where’s all that cheap oil the neo-cons promised when they invaded Iraq? We seem to recall three major routes to the war. First, of course, was the high road – we were going overthrow the wicked Saddam Hussein; the Iraqis would kiss our feet and become good democrats; the world would be a better place for it.

Second, there was the hard road – where the world’s leading hegemon shouldered its imperial responsibility by dutifully eliminating weapons of mass destruction, establishing a base of freedom and military force in Mesopotamia; as a result, the world was supposed to a safer place, remember?

And then, there was the low road – where if we could knock off Iraq’s legitimate leaders, we would have the country’s oil to ourselves; we could pump up the world’s supply of oil and lower its price; the world would surely be more prosperous as a consequence.

But all the roads led to Hell. ... And today’s news tells us that 75% of Americans blame George W. Bush for it.

Wait a minute. That’s a lot of blame to lie on single man. It doesn’t seem fair. Poor George W. is getting the highest Disapproval ratings of any president in history. He’s dissed because he got us into the Iraq War...he’s dissed because oil has gone up 40% this year...he’s dissed because houses are falling in price...and he’s even dissed because inflation is increasing.

We hate to kick a man when he’s down. But we like kicking George W. Bush so much, we’ll make an exception. Better yet, we’ll prop him up...just so we can have the pleasure of kicking him down again.

Let us make one thing perfectly clear; as another disgraceful ghost of the ’70s would put it, all these problems are not the president’s fault. Let’s face it, invading Iraq seemed like a good idea at the time – at least to most right-thinking Americans. And as for the price of oil, who could have imagined that all those people in the East would start using so much of the stuff? And who could have imagined that the Iraqis would be such meatheads as to drag this war out so long...and make such a mess of their own most profitable industry? Well, anyone might have, but we’re talking about George W. Bush.

Yes, poor George II lacked imagination. But is it his fault that houses are going down in price, or that Americans have too much debt, or that when the going was good, Wall Street went too far?

Meanwhile, our favorite metal GOLD seemed to take advantage of all the commotion yesterday to sneak up a full $32.

Before 1935, you could have bought a whole ounce and a half of gold for that money. Today, you get 1/27th of an ounce. Of course, you could have bought the whole Dow for the amount the Dow fell yesterday, too. And, not forgetting the black goo, you could have purchased a barrel of oil for yesterday’s price increase.

As to the ’30s, the ghost apparently spooked Wall Street...and then flew off to scare ordinary people coast to coast.

“More Pain Seen for US Banks,” reported the International Herald Tribune.

“Low rated borrowers squeezed out of debt markets,” the Financial Times followed up.

“Fears grow of a new stage of credit crisis,” the FT went on.

Homeowners continue to get slapped around. From California, the latest report says the typical house is worth only about two-thirds as much as it was two years ago. Nationwide, houses are down for the first time since the Great Depression...with the go-go markets of Miami, Las Vegas and Washington, D.C. area, hit hardest.

With house prices falling so much, you’d think that fewer people would be left without roofs over their heads. Not so. USA Today tells us that the ranks of those with no roofs over their heads are swelling with “new faces” of those who hitherto had passed for normal, folks-next-door.

Among those most haunted by the specter of the ’30s are the people who were always closest to that era – old people. They’re going broke faster than any other age group.

What is driving these fossils into the poor house? We can guess. They live on fixed incomes. While the ghost of the ’30s lowers the price of their main asset – their houses – the ghost of ’70s inflation is making their bare lives more and more expensive.

Everyone is driving less, as a consequence of higher fuel prices; but these graybeards didn’t drive very much anyway.

Everyone is cutting back on air travel; but even before the price increases, these antiques didn’t get into the air very often.

Everyone is trimming his budget, taking out the whimsical and witless spending; but old people often don’t have much left in their budgets but the necessities.

They’re in a classic ’70s trap – hard against the rock of fixed income, crushed by the boulder of rising prices.

Yesterday, the CRB commodity index rose to a new record high – at 595.

“Buffett says inflation is exploding,” according to CNNMoney.

What can people do? A report in today’s news tells us that many are “delaying health care.” Probably a good move for the oldsters. If they put it off long enough, they won’t need it at all.

You could hang George W. Bush for inflation too. It would be fine with us. He let government spending get out of control.

“Deficits don’t matter,” said his #2, Dick Cheney.

More new federal spending and US financial commitments were added in the Bush years than under all the rest of America’s presidents put together; and more new money was created while George W. Bush was president than in all the years since the Declaration of Independence combined.

Legally, we don’t know if that charge is enough to hang a man. Besides, it seems extreme. In the middle ages, if the keeper of the mint allowed monetary inflation, the king had him castrated. That seems like punishment enough.

Buffett says he is supporting Obama.

*** Bill Gates retired.

*** Now it’s the winemakers who are “on the rampage,” says today’s paper. In Montpelier, France, they burned cars and smashed up supermarkets.

What’s their beef? Same as everybody’s; they say they can’t make any money. Their costs are rising faster than their incomes.

Enjoy your weekend,

Bill Bonner