U.N. panel says world should ditch dollar - March, 2009

U.N. panel says world should ditch dollar


U.N. Panel Says World Should Ditch Dollar: http://www.youtube.com/watch?v=5pYJhLyAdpU

Ron Paul on Glenn Beck: http://www.youtube.com/watch?v=o_sCQk5s3sw

March, 2009

A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar. Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket. Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform. "It is a good moment to move to a shared reserve currency," he said.

Central banks hold their reserves in a variety of currencies and gold, but the dollar has dominated as the most convincing store of value -- though its rate has wavered in recent years as the United States ran up huge twin budget and external deficits. Some analysts said news of the U.N. panel's recommendation extended dollar losses because it fed into concerns about the future of the greenback as the main global reserve currency, raising the chances of central bank sales of dollar holdings. "Speculation that major central banks would begin rebalancing their FX reserves has risen since the intensification of the dollar's slide between 2002 and mid-2008," CMC Markets said in a note. Russia is also planning to propose the creation of a new reserve currency, to be issued by international financial institutions, at the April G20 meeting, according to the text of its proposals published on Monday. It has significantly reduced the dollar's share in its own reserves in recent years.


Persaud said that the United States was concerned that holding the reserve currency made it impossible to run policy, while the rest of world was also unhappy with the generally declining dollar. "There is a moment that can be grasped for change," he said. "Today the Americans complain that when the world wants to save, it means a deficit. A shared (reserve) would reduce the possibility of global imbalances."Persaud said the panel had been looking at using something like an expanded Special Drawing Right, originally created by the International Monetary Fund in 1969 but now used mainly as an accounting unit within similar organizations. The SDR and the old Ecu are essentially combinations of currencies, weighted to a constituent's economic clout, which can be valued against other currencies and indeed against those inside the basket. Persaud said there were two main reasons why policymakers might consider such a move, one being the current desire for a change from the dollar.

The other reason, he said, was the success of the euro, which incorporated a number of currencies but roughly speaking held on to the stability of the old German deutschemark compared with, say, the Greek drachma.Persaud has long argued that the dollar would give way to the Chinese yuan as a global reserve currency within decades. A shared reserve currency might negate this move, he said, but he believed that China would still like to take on the role.

Source: http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318

Review: Reinventing Collapse by Dmitry Orlov


March, 2009

I had already had my world rocked by the implications of the PowerPoint that Dmitry Orlov first created on the topic of collapse here in the US, so was excited to learn that he had expanded his insights to book length in Reinventing Collapse. While you can get the gist of his message from the PowerPoint [Closing the 'Collapse Gap'], the book fills in details that bring the full implications of his points into broader focus while offering fascinating insights into the cultural underpinnings of both the US and the SU (Soviet Union) as they danced the superpower tango. This all makes sweet reading for me as a foreigner, living in the US, having long been subjected to the self-important stories fellow citizens have told themselves to keep this whole mirage of greatness afloat, be it the one about intellectual freedom and self-governing democracy (while carefully self censoring themselves), or less often in my circle, cultural superiority and the rightness of world domination. All the while ignoring the major flaws of an overblown infrastructure that would ultimately be the country's undoing.

In comparing the two superpowers as two ideologically different sides of the same flawed empire coin, Orlov confirms the premise that empires fall and the US would fall particularly hard and perhaps quite soon. He takes on the task of breaking it to American readers that the very successes that made them so rich (a few anyway) and so great, will help not at all, and this is where his best jokes are embedded-allowing me to laugh wryly out loud throughout his short book.

Along the way, he reveals pithy insights to explain how the American system works in contrast with the Russian one. For instance the story of the classless society is exemplified by the concept of a middle class — something Americans have proudly espoused — which he points out is held together by the common denominator of everyone owning a car. That's right, not education, not equal opportunity, or equal rights but the one-ton behemoth that we must have to get around the wasteful geography created by suburbia.

We know about this waste from the film The End of Suburbia and James Kunstler's Geography of Nowhere and all the other peak oil fellows, but Orlov points out that because we are so identified with owning a car as part of this American middle class identity we will be hard put to let it go. And when we are forced to (due to diminishing and increasingly expensive gasoline supplies) so will go the myth of the middle class. In turn he explains how the Russians lost faith in the classless worker's paradise because they could clearly see that there was an elite strutting around in cool Armani threads. Meanwhile the lack of consumer goods and trendy fashions meant that a good life for all never became a reality.

And because our ideologically indoctrinated minds are so closed to such deep seated change and so invested in our "can do" innovation, we will, like Napoleon, be unable to retreat from the overextended, oil fueled, debt based economy which is poised to come crashing down, financed as it is by foreign investment that will eventually decide that we are not a good credit risk.

And there was the revealing insight about each country's self-image regarding defense. That the Russians were all about being undefeated while the Americans were all about victory, leading both to overextend themselves in the weapons department. Both can say they won, because the SU did indeed remain undefeated by the US and the US gets to cry "victory" every time it bombs somebody back into the stone age.

While these cultural details make the book a fascinating read just for his pragmatic sociopolitical perspective, Orlov's main goal is to get Americans to understand what it will mean to live without an economy, when cash is virtually useless and most people won't be getting any income anyway because they'll be out of a job. Peak oil gurus already talk about how economic growth will be curtailed by decreasing supplies of energy, but Orlov takes it one step further by adding currency collapse and the collapse of the known economic system into an unknown bartering system. The reader cannot escape his picture of inevitable collapse as he takes pains to explain that the usual channels of activism, politics and private enterprise, if we use them to attempt to mitigate the collapse, will only make things worse because these systems are ideologically driven and incapable of putting into practice what is needed to happen to ensure survival.

Since his book will likely be read chiefly by those already inclined to accept that collapse is inevitable, I don't think we need worry about attempts to mitigate collapse. Indeed the public is only just beginning to be able to hear the news that peak oil is a phenomenon that must be managed. The end result of the collapse of the Soviet Union was to pronounce that it was no longer a country, no longer a controlled political entity under the superpower operating system. So game over.

What I imagine we will get is a whole lot of denial about how collapse won't happen here. Joseph Tainter, in his 1988 classic, The Collapse of Complex Societies, after first describing how collapse is inevitable (because of diminishing returns on investment of energy and labor), goes on to give three reasons why collapse is not likely in modern times. 1) Absorption by a larger state or neighbor. 2) Economic support by a dominant power or by an international financing agency. 3) Payment by the support population of overhead costs to keep the society going. He added a telling little aside. Complex societies, he claimed are excellent at solving complex problems and if they fail to, then it is not because they are incapable of it, but because of some psychological underpinning in the society itself. He did not delve further into these underpinnings. The mirror that Orlov holds up shows us that this very psychosis is built into the society that attempts to play the game of empire. Why else would a people believe such delusions about themselves? P.S. Nobody bothered to save Russia, preferring, instead, to loot it.

After offering this futile outlook, he does give some practical tips on what individuals can do to prepare. In this he shows a kindness and compassion for his American reader, much as he did for his Russian countrymen when he returned to visit after the collapse of the Soviet Union. As a non-superpower foreigner reading this, it is tempting to use his book as a launching pad to spew forth a backlog of pent up sentiments held back (mainly for lack of scholarly ammunition) after the ideological righteousness became even more unbearable once it was declared that free market capitalism had beat out socialism (thus justifying all that anti-communist sentiment that had driven foreign military intervention all over the world and into my backyard in South East Asia). And held back again (just barely), out of compassion, after 9/11, when the tales used to justify a war against terrorism became even more transparent, given that the US was the only remaining superpower left.

In the face of a people whose very earnestness would have one convinced that a single person/small group of passionate individuals can bring about social change, it is not up to me to take away this last vestige of self determination as those vaguely aware of what the future holds strive to achieve yet another false ideology of high-tech "sustainability".

Some of the consequences of not having an economy, as Orlov describes it from the Russian experience, sound really grim - especially given the uncertainty of how Americans will respond. It makes me want to always have a viable first class plane ticket out of here. Orlov does mention that most immigrants (the ones doing all the skilled and unskilled work around here) are going to go home. At the same time he describes a lot of skills and psychological resiliency that I already possess, making it possible to think of staying (as opposed to the psychologically daunting task of persuading my American partner that we must sell the house, spend all our savings on durable, useful goods and move to a completely foreign land that will, incidentally also suffer in the backwash of American collapse in the urban parts where it has bought into the American lifestyle). At least I will have a model, from my formerly considered backwards, peasant country, of how one can live a viable low tech sustainable existence that has already proven to be collapse proof following the economic collapse of the Asian Tigers. In fact not having America's consumer glory around as an example to strive for will help a lot both for the self-esteem of these peasants and the well-being of the planet.

In the end the picture that emerges is that of a simplified America based on complex interrelationships between people one can trust, hand skills to make things work, an ability to relate up and down the social classes and left and right to different social groups, being able to grow food, being able to downgrade living standards dramatically and manage expectations, being self-sufficient, flexible and adaptable sounds like a big improvement to the hollow, consumer driven, meaningless, success culture we do live in.

In his conclusion, Orlov neither tries to sell cheerful optimism, Al Gore style, or grind you to a pulp Kunstler, Long Emergency style. For that I am grateful, as well as for the experience of having my mind opened to the view while drifting silently to earth wondering what crocodiles will be lurking in the swamps of post-collapse America.

Source: http://www.energybulletin.net/node/42910

The American Empire: A Finale

Where is America headed?

I am not cheered by the subject of my talk here today, which is the decline and fall of the American empire, first, because I am an American, and, second, because the description of America as an empire fits it all too well. When you remember that the American Revolution was fought against an imperial power, that the U.S. was born in a struggle against an occupying army, and that its victory against the British was an inspiration to anti-imperialist liberals everywhere, it is a shaming thing to have to come here to describe how it ended in tragedy, betrayal, and a short and ugly decline.

That decline was not written in the stars but made inevitable by the actions of individual men (and women!), the men and women who rule us, the elites in government and the corporate world, in the media and the white-collar classes. Their mindset was best summed up by an anonymous top White House official who spoke to journalist Ron Suskind, in answer to objections against the Iraq war and the Bush administration's policy of preemptive warfare:

"The aide said that guys like me were 'in what we call the reality-based community,' which he defined as people who 'believe that solutions emerge from your judicious study of discernible reality.' …

"'That's not the way the world really works anymore,' he continued. 'We're an empire now, and when we act, we create our own reality. And while you're studying that reality – judiciously, as you will – we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors… and you, all of you, will be left to just study what we do.'"

While undoubtedly pandemic in Washington, this kind of thinking characterized not only the Bush administration, but was and is emblematic of the ruling elites in every Western country. The ancient Greeks had a word for it: hubris, which might be defined as a kind of overweening pride, one that impelled mere mortals to believe they could act like gods. It was considered the worst kind of sin. This mental attitude permeates modern culture, at least in the West, and while its roots are psychological, the first evidence of the crisis is manifest in the economy.

We have heard reference to "the bubble," and to the alleged "danger" of deflation, as the root of the problem. A radical contraction of economic activity, millions unemployed, corporate giants felled – suddenly, we are told, trillions of dollars have disappeared, overnight, like the mist that rises from the river at dawn. Where did it go? Whose pocket is it in? Or was it never really there in the first place?

For years we have gone into debt and printed money to cover the interest, while the principal goes unpaid. Increasingly a nation that makes nothing but pronouncements and complicated financial instruments too complex to be understood, the costs of empire have been borne by the long-suffering taxpayers while the benefits have been gobbled up by our one and only industry with any prospects for growth, and that is the military-industrial complex.

The United States is essentially an empire that has gone bankrupt. We are like some once very grand family fallen on hard times, who have had their house foreclosed and sit quietly waiting in the parlor, pretending that nothing unusual is happening, while the sheriff is on the way to throw us out on the street. Human beings are creatures of habit: they still continue to act in the old ways long after circumstances have changed. The other day, President Barack Obama announced the next major phase in the "war on terrorism" he inherited from George W. Bush: we're sending 17,000 more troops to Afghanistan, doubling the number of American troops in that country, and have begun to launch cross-border attacks in Pakistani territory. The war on terrorism is expanding even as the American economy continues to shrink. How will we pay for it?

Anyone who seriously believes that the U.S. will pull back, that it will give up its claim to the job of world policeman – or even reduce its international presence to any significant degree – is dreaming. Indeed, the current financial crisis may very well prove to be an incentive for an increased presence, and specifically an escalation of the so-called "war on terror."

To begin with, increased government spending is the essential core of our new president's philosophy: a nation that spent itself into penury is going on a shopping spree in order to "stimulate" the economy. Now there are only so many domestic boondoggles that can be found to absorb all these dollars, short of handing out bags of freshly printed bills to his supporters or throwing it out of an airplane. If we go overseas, however, there are plenty of fresh opportunities to throw money around like there's no tomorrow: look at that so-called embassy they're building in Iraq, which is bigger than the Vatican and contains an entire self-contained city, complete with movie theaters, shopping malls, and everything necessary to the happiness of a human being except bordellos. And of course this city masquerading as an "embassy" must be defended, it must not fall victim to America's enemies – and it will take many thousands of American soldiers to safeguard it. I have news for you: we aren't leaving Iraq any time soon, in spite of what our president may say.

Take this extravagant approach to "nation-building," as those social engineers in the Pentagon would put it, and apply it to every theater in our ever expanding "war on terrorism," which extends throughout the Middle East and cuts a wide swathe through Central Asia. So many bases to build! So many battles to fight! So much cash to bribe the locals with!

In Iraq, that's precisely what the U.S. military did: they went around with blocks of cash, hundred dollar bills stacked like bricks, and passed it out to their allies. That's what the so-called "Anbar Awakening" was all about: the Americans simply paid their adversaries to switch sides. That famous "surge" we keep hearing about was due almost entirely to this campaign of systematic bribery.

The hero of the Iraqi "surge," Gen. David Petraeus, was hailed by the Bush administration as a strategic genius and paraded before Congress as the final authority on all matters military. The Obama administration is following suit, openly adopting his vaunted "counterinsurgency" doctrine as the "smart" way to fight terrorism. They mean to apply his methods in Afghanistan. But this new military doctrine involves more than just good old fashioned bribery with cold cash. It also means that the Americans will embark on an ambitious plan of "nation-building," which, in the words of one advocate ensconced at the well-connected Center for a New American Security, means building roads, schools, clinics – in short, it means building the physical and social infrastructure of a nation, or, more accurately, a colony.

This monumental effort will unleash a veritable cornucopia of U.S. tax dollars and provide plentiful outlets for American exporters – the real purpose of all foreign aid. It will also absorb lots of idle manpower that would otherwise be committing crimes and causing all sorts of problems on the home front: the ranks of the unemployed will be significantly trimmed if, in the present circumstances, only we can entice our underclass into the military. Let them commit their crimes abroad – then, instead of putting them in jail, we can give them a medal.

The new leaders of the American government are convinced that government spending is the key to economic recovery, and that includes military spending. A longtime complaint we hear in America is that Americans don't seem to build real products, anymore: heavy machinery, cars, the big stuff. Yet the military sector is doing just fine, even as the rest of the economy wilts. The military-industrial complex is making record profits, and this indicates a growing trend in the international division of labor. If China is the global factory, South and Central America the agricultural hinterlands, and Europe the historical repository of the Western tradition, then America seems fated to become the world's military arsenal, a natural development of its role as the self-appointed global cop. Like the Romans, the Americans will keep the peace and provide a ready market for consumer goods produced by its colonies, protectorates, and allies, in exchange for pledges of loyalty to the imperial center and tribute passed under the table. The American writer Chalmers Johnson, in his trilogy on the nature and origins of imperialism or interventionism, paints a more detailed and updated picture of how the American version of this system works. Huddling under the American military umbrella, and an arrangement that allows protected colonial industries full access to American markets, our overseas provinces are nominally "independent," as in Roman times, yet allow the presence of American military bases on their territory. An American empire of bases spans the globe and gives the U.S. military the ability to strike anywhere with a fair amount of speed. The Bush doctrine of preemption wasn't just empty talk: America, as crippled by spasms of economic pain as she is, retains its status as the hyperpower, in purely military terms. The empire may have reached – and passed – its apogee, but there is no telling how long it will take for the whole massive edifice to come down.

The ruling elite is naturally consumed by a desire to avoid the complete economic collapse of their system, which is founded on fraud and coercion. Their reaction, so far, has been to pursue precisely those policies which led to the crisis in the first place: they have embarked on a spending spree, with the big banks getting the largest share of the loot, and the rest going to bread and circuses for the commoners. This, however, will lead inevitably to hyperinflation such as we saw in Weimar Germany, or as we see today in Zimbabwe. These are extreme examples, but is it necessary to remind you that we are living in extreme times?

In America, we are already seeing the rhetoric of war applied to the economic realm: we are fighting a "war on recession," our elected leaders tell us, and their media echo chamber repeats the phraseology, as anyone who opposes the "war on recession" and the economic policies of the current administration is deemed unpatriotic. Republican supporters of the Iraq war were constantly invoking a similar mantra during the heyday of the Bush years, when they accused the Democrats of wanting Bush to fail – with the more fanatic neocons labeling all antiwar voices as treasonous. Today a right-wing radio talk-show host is vilified as a traitor for wanting President Obama to fail as he moves to extend the power and reach of government in the economic realm. I can guarantee that this sort of intimidation will shortly make inroads in the international sphere. It will be suddenly discovered, if it hasn't already, that the real problem is global in scope and can only be solved by international economic regulators with the power of force behind them. The current crisis is bound to produce a crop of cranks and would-be visionaries with endless schemes for a global fix. We'll hear all kinds of non-threatening phrases like "global governance," "multilateral integration," and doubtless other harmless and even benevolent-sounding euphemisms for what amounts to a world government.

This is one way to solve the problem of a tottering U.S. hegemon, and that is to take the multilateral approach. Let the old imperialist powers of Europe team up with their avid American pupils and take on Afghanistan, Pakistan, and so on into the wilds of Central Asia. But how to finance this gigantic projection of imperial restoration and renewal? The answer is a world central bank, as advocated by John Maynard Keynes, the New Deal-era economist who is the inspiration behind the Obama administration's economic program. This would give the evolving world government a means to finance itself and its operations, including military operations: a world central bank with a single hand on the lever, to inflate at will. Countries with too much of a trade surplus, or a deficit, would be "disciplined" by the central authority.

The neoconservatives also have their own version of "global governance," but theirs is a markedly more ideological – and militaristic – version, although both American liberals and conservatives have signed on to the proposal made by presidential candidate John McCain that America and its allies should form a "League of Democracies." Admission to this League would be open to Georgia, a country where it is dangerous to criticize the president, but not Belarus, where it is also dangerous to criticize the president. It would amount to an American version of the Warsaw Pact.

Barring that somewhat grandiose flight of fancy, however, we are left with NATO, Obama's chosen instrument of multilateral military action. While most of the action is likely to take place, initially, in Afghanistan and Pakistan, the entire ring of former Soviet states bordering the battlefield will take on new strategic significance as the central arena in America's endless war on terrorism shifts eastward.

This means an all-out confrontation with Russia, and the groundwork has already been laid for that. You'll note that the Obama administration, while critical of their Republican predecessors on the Iraq question, are following in the path of Bush when it comes to the Russian question. It was Vice President Dick Cheney, you'll recall, who first took out after Vladimir Putin, after the neoconservative guru and "dark prince" Richard Perle demanded that Russia be thrown out of the G-8 for the "crime" of opposing the neocon agenda in the Middle East. Under Bush, a provocative missile shield was begun with American aid in Poland and the Czech Republic. With NATO troops stationed practically at the gates of Moscow, and NATO's massed armies protected by a missile shield, Putin is staring down a gun barrel. Vice President Joe Biden came to Munich a couple of months ago to let the Russians know that we aren't dropping our gun, but we may be willing to deal. Yet Putin is unlikely to cooperate in isolating Iran, abandoning Syria, and allowing Georgia to invade its neighbors and kill UN-sanctioned Russian peacekeepers at will. The price of dropping that gun to his head is that he must forget about forging an independent foreign policy in a multi-polar world, because that is what represents a real threat to the imperial restoration project undertaken by the present American administration.

NATO is their chosen instrument, and the history of this alliance underscores a libertarian insight, which is that no government program ever ends, once it's started – it merely develops a new rationale and a new title. Or sometimes the old title suffices, as in the case of NATO. Here is an institution that was founded in the fear of a Communist invasion, led by the Soviet Union, with Stalin at its head. Yet Stalin, as any student of Marxist history knows, was an advocate of "socialism in one country." The advocates of a world revolution, led by the Red Army, were followers of the founder of that army, Leon Trotsky. Trotsky, as we know, lost out to Stalin and was exiled and then assassinated by Stalinist agents.

By the way, many of Trotsky's most influential and prominent followers, in the United States, wound up as the most vehement anti-Communists, even more so than the conservatives, whom they soon joined with to fight the Cold War. They supported the creation of NATO, advocated a policy of what they called "rollback," and went on to become known as the neoconservatives, the architects of our present troubles, in many respects.

In any case, Stalin's Russia was no real threat to Europe, simply because the Soviet system was not economically viable. As early as 1920, the Austrian economist Ludwig von Mises had predicted the inevitable collapse of Soviet socialism, and the intervening 70 years or so, in terms of the history of ideas, is but the blink of an eye. What power our enemies wielded was yielded to them by the West. The Warsaw Pact countries overrun by the Red Army in the wake of World War II were virtually handed over to Stalin by Roosevelt at Yalta, yet the Russians had neither the capacity nor the desire to occupy the rest. They let Yugoslavia out of their grasp, and it wasn't long before the rest followed. The early uprisings in Poland, Hungary, and elsewhere were premonitions of what was to come.

The implosion of the Communist empire in 1989 ended whatever rationale NATO may once have had, and yet still, like the immortal vampire, the beast lives on! Always alert for fresh rationales for military action, the War Party made an example out of Serbia, asserting its right to bring "order" to the post-Soviet "chaos." On some pretext or other, which invariably turns out to be either completely made up or greatly exaggerated, the War Party intervenes on an "emergency" basis, as in the case of the alleged genocide in the former Yugoslavia. A crusade is launched, in the name of "humanitarianism," and off the fighter planes go to bomb some of the oldest cities in Europe, including such targets as television stations and other civilian targets.

This was the first phase of the confrontation with Russia, undertaken by Bill Clinton and bound to be pursued by President Obama. The same crowd that launched a war against a European nation that had never attacked the U.S. or posed a credible threat to our security, is now back in power in Washington, and they have a visceral hatred of Russia that Obama did not bother to hide during the presidential campaign. During the presidential debates, he competed with Hillary Clinton to see who could be more anti-Russian. Now with Hillary at his side as his secretary of state, and an even more pious and self-righteous tone than Bill Clinton could ever muster, the drive to take NATO into the very heart of the former Soviet empire is continuing apace.

Georgia, Ukraine, and Azerbaijan are actively seeking NATO membership, and it is only the reluctance of some of the Europeans that prevents each country in Europe, in addition to the U.S., from being embroiled in the endless ethnic disputes roiling a very troubled part of the world. President Obama has expressed support for extending NATO's tentacles into the Caucasus, and our present policy doesn't look all that much different than the expansionism of the Bush years.

There can be no doubt that the U.S. has been engaged in a long-term project to encircle the former Soviet Union and make inroads where opportunity presents itself – or can be created. That's what the so-called color revolutions were all about. Funded and supported politically by U.S. government agencies, and given plenty of cover in the international media, these supposedly "spontaneous" rebellions that installed pro-U.S. governments from in Georgia, Ukraine, and elsewhere, were and are a direct threat aimed at Moscow, with the ultimate color revolution meant to take place in Russia itself. "Soft power" is a phrase we should expect to hear a lot more of in the age of Obama: it's much more comforting and pacific-sounding than "regime change" or just plain old "war," yet it is a war executed sometimes with violence but most often by other means. The U.S. has an entire government agency, the National Endowment for Democracy, which employs "soft power" as an ancillary to our ongoing military efforts throughout the world. Expect this aspect of our interventionist foreign policy to pick up speed in the coming years.

This soft power, however, has its hard counterpart in the growing size and scope of the U.S. military machine. America's so-called defense budget is currently larger than all the military budgets of all the other nations on earth combined – and still President Obama has said he means to increase it! It is never enough, not if you're the hyperpower. There is no security at the top of the world. Our uneasiness and fear arises from the very fact of our supremacy – and our certain knowledge that it cannot last forever.

The fear that the end is upon us, that the entire economic structure of the West could come tumbling down, has our ruling elites in a panic. And yet even as the banks fail, people are thrown out of work, and the economic gears stop turning, still the machinery of empire will continue, albeit somewhat less efficiently than before. That's because our rulers are held captive by their own mindset – they are still living in the heyday of their power and cannot reconcile themselves to the fact that an era is coming to an end. They are determined to hold on to the insignia of power, even if their ramshackle empire is a bit frayed around the edges. They are still living inside the bubble of fake prosperity and breathing air permeated by their own hubris. Like drug addicts who cannot and will not kick their habit, the leaders of the American government, my government, are too far gone to ever change. Their very idea of themselves is imbued with a sense of entitlement and aristocratic noblesse oblige. They feel that they are doing us all a very great favor by consenting to rule over us and determine the fate of entire peoples, indeed of the entire globe.

There are those of us, in America and elsewhere, who would rather they didn't do us this favor, and would prefer that, instead of favoring us with their schemes to save the world, they would retire to private life and tend to their own gardens, rather than meddling in everybody else's.

That, however, is not likely to happen, unless these people are forcibly retired, and a movement is growing, in my country and yours, to make this a real possibility. A huge antiwar movement greeted the Bush administration's war on Iraq, and eventually – give it time – a similar movement will develop and come out into the streets around Obama's continuation of that same war in Afghanistan and beyond.

I am hopeful about this, and, although no one can predict when and how it will take shape, I have confidence – faith, if you will – in the essential goodness of humanity, which will always come forward, in some form, to oppose cruelty and injustice. However, today I want to concentrate on the counter-movement to this positive trend, in part because its form can easily be foreseen, and also because it poses an immediate threat on account of the crisis of empire, that is, the economic crisis.

Times of economic turmoil always produce demagogues, of the Right and the Left, and some who defy all political categories. Europe has already seen what hyperinflation can do to a nation's politics: the history of Weimar Germany tells us all we need to know about the horrific possibilities. An impoverished people who have once known prosperity is prey to all sorts of demonic explanations for its plight: there are plenty of scapegoats, hate-objects whose existence is pointed to as the source of our plight. When people feel buffeted about like feathers in the wind, helpless to control their fate, that's when they turn to leaders, to mass movements, to anything to which they can surrender their individual will and find glory – however phony – in something greater than themselves. This is invariably the state, the race, or some other collective construction, such as the proletariat, or the common people – choose your poison. In any case, these movements are authoritarian, by their very nature, and very often outwardly aggressive. War is the essence of their foreign policy, very often, because it is necessary for the governing party to direct the anger and frustration of the people outward, rather than inward, at themselves.

Extreme nationalism is historically the given a great impetus by economic hard times, and the greater the crisis the more unreasoning and violent the movement becomes. Economic protectionism is always a feature of these eras, and there is another fuse waiting to be lit, because if goods don't cross borders, then armies soon will. Trading partners don't make war on each other: the moment trade barriers go up, the prospects for armed conflict rise.

In times of economic stress, the authority and power of the central state tends to expand, and this provides the War Party with the perfect war-making instrument. As Randolph Bourne, the great American liberal opponent of World War I put it: "War is the health of the state." War provides the framework and mindset that cedes all authority to the state and gives it free reign over the destiny of individuals. A command economy is organized along military lines, and anyone who disobeys orders – or, worse, questions the mission – is a traitor, to be cast out. As governments accrue more power to themselves, they seek out ways to expand and complete their control – and war is the perfect pretext, the ideal atmosphere in which to enforce this type of mindless conformity.

Now I have been saying two things: (1) that the American empire has reached the end of its tether, and (2) that its rulers continue to act as if nothing untoward is happening. We are barreling forward, on the power of sheer momentum, along the same path set for us since the end of the Second World War. Having reached the pinnacle of power, we are still the hyperpower, albeit a bankrupt one – that is, America is a power that can yet do a lot of damage in the world. We may be going down, but we're sure to take more than a few of you along with us. And that likelihood I regret very much.

George Soros, the financier and would-be philosopher, has written a book entitled The Bubble of American Supremacy, which I must confess to not having read, but certainly the title describes what is going on these days. The "bubble" of American prosperity, and, indeed, of the West, has been founded on debt, and a lot of assumptions that turned out to be flat-out wrong. The economic consequences of the bubble's sudden deflation are all around us, and yet that is only the most visible and obvious damage. The real damage has been done by the mindset – and the culture – that flourished in the heyday of the bubble, when the boast of that U.S. government official who claimed to be creating a new reality seem almost credible, at least to the more deluded among our ruling elite. In America, we succumbed to the myth of history as a straight-line progression upward, out of the darkness and into the light – led, of course, by our very own government. Everyone was getting richer – as long as the Federal Reserve kept priming the pump – and soon the whole world would be in their grasp

The end of the American empire has been proclaimed many times, yet it has always defied the prophets of doom. The Marxists divined our doom in the mysteries of the dialectic, the Malthusians saw our demise in the calculations of the demographers, the born-again Christians who take the Bible literally have insisted and continue to claim that the end of the world itself is foreordained by the Holy Word of God, that the final battle of good against evil is nigh on a plain called Armageddon.

The Marxists, while exulting in the economic tsunami now engulfing Wall Street, have so far failed to explain how and why their own system, when it was tried, preceded the American capitalist model in death. Their mono-causal schema – which points to the supposed inner contradictions of the market economy as the cause of its ultimate undoing – also fails to explain why the socialist economies of the European Union are suffering even more dramatically. As an accurate guide to the future of the U.S., and its position as the so-called hyperpower, Marx is about as useful as Malthus, i.e., not at all.

As for the Christians, I'll leave it to the theologians to argue over that. I'll just note that they, like the Marxists, the Malthusians, and the neo-Malthusian global warming alarmists, see our doom written in the stars. For these sorts of people, the clock is always ticking: the countdown to death is always ringing in their ears. One feels sorry for such people, to a certain extent: they are clearly projecting the knowledge of their own impending death on the universe at large. They walk around in a state of perpetual fear mixed with glee, as the darker the outlook the more their forebodings of doom are confirmed. Surely they must be cheered by the sight of the world economy imploding, even as they, like the rest of us, suffer the consequences.

These prophets of doom, most of them cranks and ideological axe-grinders, have been writing America's obituary for years. This time, however, there is a difference – because this time the crisis is real. It is not yet too late to draw back from the abyss and chart a more moderate course, something less dramatic than a crash landing. I don't want to go on much more, however, and perhaps we can leave the question of alternative policies to the discussion.

Source: http://antiwar.com/justin/?articleid=14442

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