When America died!
In case you haven’t realized it, the last vestige of America, the World’s leader America, died during the financial meltdown of the past week. The only thing we have left to decide is whether we will evolve into a dictatorship as we devolve away from once being the envy of the World, the World’s only superpower and leader of the “free world’s” financial system. The country that was once the envy of the World has become the model to avoid. As John Gray in The Guardian has noted, we are no longer in a position to admonish other countries as we used to do through the IMF, when we told each country that applied for assistance, they were spending too much on social programs and had too much control over their financial system. Of course many of these countries complied in order to get loans, only to go through a period of instability or meltdown of their own. We had one model we wanted to impose on the rest of the World, but it was a model we could not fully impose on ourselves. In this fiscal crisis, the countries that have kept the controls in place are doing much better, whereas our system has brought us to a state of near collapse and the perpetrators are easy to identify: the free market economy of America is dead! It was a quick burial with few mourners at the graveside.
At this point of the crisis, it doesn’t matter what form our bailout takes or the degree to which it stabilizes our financial system insofar as our global reputation and leadership are concerned. What is more important for our place in the World, is that everyone, with the possible exception of most Americans, realizes that our model is badly flawed–it was doomed to failure for the very reasons that we once advocated it as the solution to the World’s financial model. Wealthy individuals or hedge funds can manipulate markets and currencies such that the disparity between the wealthy and the poor grows and grows. The poor get poorer and the rest of us get sprayed with RoundUP! Our system died because it does not insure long-term stability and equitable economic growth. Throw in the lack of trust which has now smothered Wall Street. FDR prevented the 20 year boom and bust cycle and Ronald Reagan brought it back, with a vengeance. Eventually, as John Kenneth Galbraith once warned, the speculative bubble produces a new financial disaster, for throughout our history they have all failed and collapsed only to rise again in the not too distant future.
The other mythology of America, that of an invincible military culture and armaments industry, was exploded on the battle fields of Vietnam, but more recently in the desert of Iraq. In both cases, we demonstrated that our giant military cannot win a war in a small country, even though we may destroy it in the process. Now we must examine both sides of our coin of the realm–the over costly military and intelligence system that supports it and the financial system that collapsed and must be something brand new when all of this is over. The two are in fact related to each other: they are joined at the hip, but no politician is yet willing to point out the umbilical cord that connects them. The $700 billion dollar bailout is peanuts compared to what Bush has given us as the cost of the war in Iraq: from Tom Englehardt and Chalmers Johnson, “Estimates of the true long-term costs of the President’s war of choice, including payments of health care and veterans benefits into the distant future, soar into the budgetary stratosphere. They range from the Congressional Budget Office’s $1-2 trillion to an estimate by economists Joseph Stiglitz and Linda J. Bilmes of up to $4-5 trillion. So we’re talking somewhere between one-and-a-half and seven bailouts-worth of taxpayer dollars flowing into the morass of disaster, corruption, and carnage in Iraq.” Whether the military bailout comes as a financial crisis or simply in the form of a never-ending debt payment remains to be seen.
Under Bush’s impulsive decision on the bailout, he did what he was trained to do–attempt to grab more executive power through the shock doctrine so brilliantly described by Naomi Klein; his reach for more executive power with the bailout plan was evident as Paulson put forward the following language in the first bill he presented to Congress: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” This was straight out of Bush’s playbook. Fortunately, there was enough intelligence left in Washington to see through Bush’s last stand on power, but it remains to be seen whether the dictatorial language of the first bill cast such a pall on the public’s perception of the process, that a vote to pass a modified version can be achieved anytime soon. Many in Congress are arguing for a more measured pace to this bailout. FDR carried out his massive reforms during the first 100 days of his first term. The current problem is serious enough that perhaps we should do the same.
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