We admit it.
We are prone to excessive pessimism regarding the impending catastrophe facing you; to exaggeration; to hyperbole – indeed, you can even say we underestimate your ability to muddle, once again, through the dark tragedy which is about to descend on you.
The United States is not Argentina, the Dollar is not the Peso, you say.
Read this nasty little item from the Australian site, The Age:
A high-ranking Chinese economist has put his nation’s cards on the table in the global financial poker game by effectively telling the US to fix Freddie and Fannie … or else.
“A failure of US mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system”, Yu Yongding, a former adviser to China’s central bank, says.
“If the US government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic,” Yu said in e-mailed answers to Bloomberg. “If it is not the end of the world, it is the end of the current international financial system.”
“Men like Yu Yongding don’t just get up one morning and say this sort of thing.” We are told by the writer. “He is possibly the most highly accredited economist in China. A list of his positions would fill a little red book.”
Not a word this week from a single member of the elite bosses of the Party of Washington. Not a peep from the economic vandals of the Party of Wall Street.
Not a single response from The Presidency, the office of the Speaker of the House, nor from the office of the Senate Majority Leader.
Not a word of this and its implication for you and those you love from the lips of the nominee of the Party of Washington, who waxed eloquent regarding how life will profoundly change under his enlightened term in office.
He went on for forty-two minutes, we are told, yet found not ten seconds of it where he could have told the nation, “Uh, sorry. The Chinese just sent us an ultimatum: Either we fix our economy, or we are cut off from the spigot.”
Not a peep.
Let us speak frankly, so that you are clear about the stakes for you and your family, when next John McCain or Barack Obama hold one of those town meetings in your area.
There are only two choices here:
- Dismantle America’s Empire – withdraw from Iraq, Afghanistan, all overseas bases, pull back the fleets, recall the submarines, and stand down, or,
We would note that Senator Obama’s speech accepting the nomination of the the Party of Washington – the Democrats – was of remarkable quality, and justly impressive to the throng of Washington sycophants, would-be inheritors of the machinery of State, and even representatives of the Party of Wall Street – the Republicans.
You too were probably well entertained by the pageantry and stagecraft of the event.
We would simply ask, if you are inclined to be overwhelmed by the emotional power of seeing this triumphant moment of American racial progress, that you download the text of the Senator Obama’s speech and read the substantive parts aloud in the voice, not of the first African American candidate of a major American party, but the less impressive voice of your congressperson, or town selectman.
You will immediately note, as David Broder has observed, far from the promise of, “fundamental systemic change,” this speech was little more than, “a checklist of traditional Democratic programs.”
Two promises, in particular, are of note:
Now is the time to finally meet our moral obligation to provide every child a world-class education, because it will take nothing less to compete in the global economy. Michelle and I are only here tonight because we were given a chance at an education. And I will not settle for an America where some kids don’t have that chance. I’ll invest in early childhood education. I’ll recruit an army of new teachers, and pay them higher salaries and give them more support. And in exchange, I’ll ask for higher standards and more accountability. And we will keep our promise to every young American – if you commit to serving your community or your country, we will make sure you can afford a college education.
Now is the time to finally keep the promise of affordable, accessible health care for every single American. If you have health care, my plan will lower your premiums. If you don’t, you’ll be able to get the same kind of coverage that members of Congress give themselves. And as someone who watched my mother argue with insurance companies while she lay in bed dying of cancer, I will make certain those companies stop discriminating against those who are sick and need care the most.
In these two paragraphs are the heart of the program of the Party of Washington – that children will be educated, and the sick will be provided medical care.
We are reminded of Chris Rock’s joke about black men who brag self-righteously, “I take care of my kids.”
“You know the worst thing about niggas? Niggas always want credit for some shit they supposed to do. A nigga will brag about some shit a normal man just does. A nigga will say some shit like, ‘I take care of my kids.’You’re supposed to, you dumb motherfucker! What kind of ignorant shit is that? ‘I ain’t never been to jail!’ What do you want, a cookie?! You’re not supposed to go to jail, you low-expectation-having motherfucker!”
In the same sense we might judge the promises of Senator Obama, that children will be educated and the sick provided medical care, against the common practice of all civilized nations on this planet, to arrive at how little he actually offers in his platform of change.
Educating children and taking care of the sick is what modern civilized nations do, yet Senator Obama delivers this promise to the nation as if he were delivering the Emancipation Proclamation, not merely hoping to preside over its final realization.
How little he offers in the way of change is graphically framed by this small notice:
In the last two months, Bank of China cut its portfolio of the debt 29 percent, or about $3.14 billion, to $7.5 billion as of Monday, the Beijing-based bank said in an earnings report. Holdings of mortgage-backed bonds guaranteed by Fannie and Freddie were cut 22 percent, to $5.17 billion, the bank said.
Asian investors are retreating despite U.S. Treasury Secretary Henry Paulson’s pledge July 13 to provide government support to Fannie and Freddie should their financial conditions deteriorate further. The government-sponsored enterprises, which own or guarantee at least 42 percent of the $12 trillion in U.S. home loans, have posted $14.9 billion in net losses the last four quarters amid rising foreclosures rise and falling home prices.
From this notice we see that the People’s Republic of China has begun the long process of withdrawing its capital from American markets. Perhaps, six decades ago this notice might not have been of the least importance to the average American. But, now, in the midst of collapsing credit and housing markets, this small withdrawal signals the most deadly of threats to your living standards, and that of your children.
We cannot emphasize this enough: You are on the edge of the most dire economic catastrophe humanity has ever witnessed – and, the leader of the Party of Washington delivers, as a promise, what is the minimal requirement for modern civilized society: that children should be educated and sick provided medical care!
Perhaps, the most significant line is his speech was this:
Tonight, I say to the American people, to Democrats and Republicans and Independents across this great land – enough! This moment – this election – is our chance to keep, in the 21st century, the American promise alive. Because next week, in Minnesota, the same party that brought you two terms of George Bush and Dick Cheney will ask this country for a third. And we are here because we love this country too much to let the next four years look like the last eight. On November 4th, we must stand up and say: “Eight is enough.”
It was with these words, Senator Obama revealed his willingness to ignore of the depth of the problems he and the nation faces. We love this country too much to let the next four years look like the last eight?
No B, not the last eight, the last sixty!
The insignificant report of the Bank of China makes clear that the rest of the human family is gradually becoming nervous about underwriting the American Empire, and this, above everything else this election might involve, signals its end.
The litany of marginal policy proposals at this time, in that place, by that man, before a rapt nation – the largest ever to witness such an event – underscores the complete failure, complete incompetence, complete paralysis and lack of vision of both the Party of Washington and the Party of Wall Street.
Make no mistake, if you will not reach for your own survival against these two parties, and the empire they have spawned and managed these sixty years, the consequence for you and your family is unimaginable.
We were able to recover the the missing portion of Nancy Pelosi’s speech to the Democratic National Convention from her hard drive before it was deleted. You can find her speech, as delivered and posted on Huffington Post, here:
WE LET A WAR CRIMINAL AND HIS AIDES RUN FREE FOR TWO YEARS AND STUCK OUR HEADS IN THE GROUND SO FEARFUL OF BEING POLITICALLY INCORRECT, WE MADE A MOCKERY OF “NEVER AGAIN,” AS 1.2 MILLION IRAQIS DIED WHILE WE SAT ON OUR HANDS.
BUT STILL YOU APPLAUD US.
HAVE YOU NO SHAME?
DON’T YOU UNDERSTAND HOW WE HAVE BETRAYED YOU AND THE AMERICAN PEOPLE?
CAN’T YOU SEE HOW WE HAVE REDUCED THE PEOPLE’S HOUSE TO A DEBASED TEMPLE OF WORSHIP FOR THE IMPERIAL MORON?
IS THERE NOTHING YOU WILL NOT ACCEPT, AS WE LIE TO YOU, BETRAY YOU, LAUGH AT YOU WITH OUR REPUBLICAN COLLEAGUES ON THE GOLF COURSE?
From Huffington Post:
LONDON — Margaret Thatcher’s daughter says she first realized that her mother was having memory problems when the former prime minister struggled to distinguish between the 1982 Falklands War and the conflict in Bosnia.
In an excerpt from her memoir, due to be published next month, Carol Thatcher charts her mother’s decline _ and describes the day in 2000 that she first understood her mother was being robbed of her memory.
Barack Obama, an interview from Fareed Zakaria GPS, rerun today:
And one of the things that I want to do, if I have the honor of being president, is to try to bring back the kind of foreign policy that characterized the Truman administration with Marshall and Acheson and Kennan — but also characterized to a large degree the first President Bush, with people like Scowcroft and Powell and Baker, who I think had a fairly clear-eyed view of how the world works, and recognized that it is always in our interests to engage, to listen, to build alliances, to understand what our interests are, and to be fierce in protecting those interests — but to make sure that we understand it’s very difficult for us to, as powerful as we are, to deal with all these issues by ourselves.
We need to show leadership through consensus and through pulling people together wherever we can. There are going to be times where we have to act unilaterally to protect our interests. And I always reserve the right to do that, should I be commander-in-chief. But…
We have already noted that famous statement of Karl Marx, “History repeats itself, first as tragedy, second as farce.” In fact, the actual quote is from the opening sentences of The Eighteenth Brumaire of Louis Bonaparte (1852), to wit:
“Hegel remarks somewhere that all great, world-historical facts and personages occur, as it were, twice. He has forgotten to add: the first time as tragedy, the second as farce.”
We would note, with regard to Sen. Obama’s desire to resurrect, “the kind of foreign policy that characterized the Truman administration with Marshall and Acheson and Kennan…” that unlike President Truman, a future President Obama administration will not have:
- a current account surplus,
- a trade surplus,
- a balanced federal budget,
- an American voter with a net saving account, and,
- an economy which is the unrivaled industrial power of the global economy.
He will actually be inheriting from the Moron – a man more like Mr. Truman, than Barack on his worst day – a nation as dependent on subsidies from Russia and China, as were Britain, France and Germany on the United States in Truman’s day.
The irony of this fact has, we hope, not escaped you.
“When Mikheil Saakashvili attacked the Russian peacekeepers in Tskhinvali, he expected to find success, or, at least, some cashable Western support. Part of his wish was granted. As soon as the Russians counter-attacked, an American politician was ready with threats and dire prophecies. John McCain was out of the gate on Georgia long before George W. Bush or Condoleezza Rice or Robert Gates made their first statements for the record. Why? Who gave McCain his early cue?
“A fair bet is Saakashvili, through his closest American friend and former agent, Randy Scheunemann. Since Scheunemann is John McCain’s adviser on foreign policy, this looks like a dangerous contact — dangerous, that is, for the security of the United States. Yet it follows a pattern. Scheunemann was the agent of Ahmed Chalabi in agitating for the war against Iraq. He is a former director of the Project for the New American Century, which welcomed a world at permanent war, dominated by the U.S., as the order of the 21st century. And Scheunemann is as closely linked as it is possible to be — while holding a nominally different post — with the American Enterprise Institute, the Office of the Vice President, and the Weekly Standard: the most drastic and persistent lobbying network for the Iraq war, and the group that lately pressed the hardest for a war with Iran.
“The idea of bombing Iran did not catch fire this summer. But these people are ambitious; they never let up one project without starting another. In their way of thinking, the United States — to keep the archaic Constitution at bay, and our enemies on the run — must always be occupied with a war somewhere. Iraq may be turning into a peaceful occupation; Afghanistan is getting to be an old story. Why not start a war in Georgia? At best, you push back against Putin, and show him to be a hollow threat. Or — a different advantage — you make a pitiful spectacle of the tears and the trampled pride of Saakashvili, and prove the brutality of Russia which has never really changed. So you restart the Cold War — a very good thing indeed. As for the run for president: on this issue as on FISA and Iran, Barack Obama can easily be shown to be a diluted version of McCain.”
Full piece here:
Continued from here.
Here is an excerpt from Bill Moyer’s recent interview with Andrew Bacevich which touches on the issues raised by this series. In particular, Bacevich surveys the period we will now cover:
BILL MOYERS: You say in here that the tipping point between wanting more than we were willing to pay for began in the Johnson Administration. “We can fix the tipping point with precision,” you write. “It occurred between 1965, when President Lyndon Baines Johnson ordered U.S. combat troops to South Vietnam, and 1973, when President Richard Nixon finally ended direct U.S. involvement in that war.” Why do you see that period so crucial?
ANDREW BACEVICH: When President Johnson became President, our trade balance was in the black. By the time we get to the Nixon era, it’s in the red. And it stays in the red down to the present. Matter of fact, the trade imbalance becomes essentially larger year by year.
So, I think that it is the ’60s, generally, the Vietnam period, slightly more specifically, was the moment when we began to lose control of our economic fate. And most disturbingly, we’re still really in denial. We still haven’t recognized that.
BILL MOYERS: Now you go on to say that there was another fateful period between July 1979 and March of 1983. You describe it, in fact, as a pivot of contemporary American history. That includes Jimmy Carter and Ronald Reagan, right?
ANDREW BACEVICH: Well, I would be one of the first to confess that – I think that we have misunderstood and underestimated President Carter. He was the one President of our time who recognized, I think, the challenges awaiting us if we refused to get our house in order.
ANDREW BACEVICH: Well, this is the so-called Malaise Speech, even though he never used the word “malaise” in the text to the address. It’s a very powerful speech, I think, because President Carter says in that speech, oil, our dependence on oil, poses a looming threat to the country. If we act now, we may be able to fix this problem. If we don’t act now, we’re headed down a path in which not only will we become increasingly dependent upon foreign oil, but we will have opted for a false model of freedom. A freedom of materialism, a freedom of self-indulgence, a freedom of collective recklessness. And what the President was saying at the time was, we need to think about what we mean by freedom. We need to choose a definition of freedom which is anchored in truth, and the way to manifest that choice, is by addressing our energy problem.
He had a profound understanding of the dilemma facing the country in the post Vietnam period. And of course, he was completely hooted, derided, disregarded
In this interview, which we consider one of the most enlightening we have read this year, Andrew Bacevich so completely disagrees with the main thrust of our series, it is simply a matter of taking his entire argument and turning it on its head for you to grasp the essential point we are making here.
The war against Vietnam marks the critical turning point when the United State’s trade balance descended into a deficit from which it has not since recovered.
So far we agree with Bacevich until we reach this:
By the time of the Carter administration, Bacevich paraphrases Jimmy Carter, “we’re headed down a path in which not only will we become increasingly dependent upon foreign oil, but we will have opted for a false model of freedom. A freedom of materialism, a freedom of self-indulgence, a freedom of collective recklessness.”
This is the typical interpretation of post-war American history as conveyed by that section of the American intellectual class who believe the economic problems the US currently faces amount to the vice of rampant materialism.
In this argument, for instance, the wars and occupations of Iraq and Afghanistan, as well as the intimidation of Iran, the current conflict with Russia over Georgia, can all be traced to the desire of The American People for cheap oil. (A variant of this theory also includes the profits of American oil companies.)
Bacevich advances that argument this way:
Our foreign policy is not something simply concocted by people in Washington D.C. and imposed on us. Our foreign policy is something that is concocted in Washington D.C., but it reflects the perceptions of our political elite about what we want, we the people want. And what we want, by and large – I mean, one could point to many individual exceptions – but, what we want, by and large is, we want this continuing flow of very cheap consumer goods.
We want to be able to pump gas into our cars regardless of how big they may happen to be, in order to be able to drive wherever we want to be able to drive. And we want to be able to do these things without having to think about whether or not the book’s balanced at the end of the month, or the end of the fiscal year. And therefore, we want this unending line of credit.
Thus, we are led to believe, our sons and daughters are killing Arabs in Iraq because we want cheap oil, and the Washington elite is trying to deliver on that demand. But, as we have seen, NSC-68 and Washington’s military buildout long preceeded the dependence on foreign oil or the trade deficit.
The argument, in other words, tries to ascribe to the allegedly materialistic and debt ridden population of selfish insatiable baby boomers, and their equally selfish and insatiable progeny, a result which was already in existence when the baby boomers were babies!
Still, we have to admit, to get from Bacevich’s view of American history to our view only requires the substitution of a few words:
The Bacevich argument is this:
Since 1970, Americans have become increasingly dependent on imported goods purchased on credit, which led Washington to erect a massive national security state in 1950.
Our argument would be this:
Since 1970, Americans have become increasingly dependent on imported goods purchased on credit, because Washington erected a massive national security state in 1950.
The leading economic concern the authors of NSC-68 was the impact of an aggressive policy of containment on domestic consumption of Americans. Keyserling argued, as we have seen, that impact would be offset by greatly accelerated economic growth increased defense spending would generate.
But, then again, Keyserling was an idiot.
Military spending is not for human consumption – one can live in a bomb shgelter, but not in a bomb. Bullets can’t be eaten, aircraft carrier hangers can’t be used to assemble cars.
Military expenditures are productive effort expended on unproductive goals.
Beyond the aircraft carriers, and submarines, and tanks, and bombs, and bullets, which require the diversion of human effort from the satisfaction of human needs, those who will employ these weapon systems must be themselves fed, clothed and provided the comforts of civilization – as thinly measured though they may be for the average soldier and his/her family.
But, in addition to these two categories of cost – and, setting aside any destruction of productive capacity which ensues from their actual employment on the field of battle, such as civilian lives lost, rice paddies poisoned, villages torched, and the decline of the birth rate of the local population – one must also figures in the lost output of those employed as service men and women, and, therefore, withdrawn from the productive labor market.
Only an economist could call this waste economic growth. Just as it takes an economist to describe both the activities which create a superfund site, and the activties which clean up that site as GDP.
It is what economists do. There is no cure for this, we fear.
Since, in the real world, where you live ( the planet where bullets can’t be eaten by the soldier, who didn’t produce them, because he was too busy killing the peasants who grow the rice we all need to satisfy our hunger) all that effort is a diversion from human consumption, a substitute for this wasted human effort must be found.
For any nation hoping to maintain their standard of living while wasting human effort on this scale, of course, imports fill in the difference. But, to import, one must export to pay for the things imported, and by 1970, the United States had exhausted its trade surplus and was running a deficit.
From that point forward, the American standard of living could only be maintained by one of two choices:
- Dismantle the national security state. or,
- Convince everyone else on the planet to feed and clothe you.
Amazingly, Henry Kissinger figured out how to do the latter.
To be continued