Commentary By Ron Beasley
History tells us that all empires and would be empires fail. If you look closely that same history shows that those empire didn't fail militarily but economically - empires are not economically viable.
David Sanger of the New York Times has an amazing grasp of the obvious but apparently no knowledge of history: Deficits May Alter U.S. Politics and Global Power. Sorry David, no surprise here - go back and read your history books.
Now there is little agreement on how to address the growing budget deficit but most Democrats and Republicans seem to agree that cutting the "defense" budget is not an option. A victory for Osama bin Laden and a victory for the military industrial complex. The losers - the American people. The United States is showing all the historical signs of a failing empire.
What neither the Democrats or Republicans will admit is that we are in a budget death spiral because of increasing military spending and decreasing taxes. Empires always die and always as a result of economics.
There are corporate interests who are interested in the profits of empire and those who are interested in the power of empire. Both are responsible for the inevitable decline of the American empire.
Related YouTube video: 7-minute excerpt of an Oct., 2007 talk by Paul Krugman on Income Inequality and the Middle Class.
ReplyDeleteNo government can balance their budget when the poor live hand to mouth, the working class and the middle class are mired in debt, and corporations and the wealthy can buy tax breaks and/or hide their money from the tax man in off-shore accounts.
Great catches, Ron, Kat (and Krugman).
ReplyDeleteSummers' question "How long can the world�s biggest borrower remain the world�s biggest power?" rings in the air with no answer... except the one you describe.
Keynes may not have been absolutely wrong but he was at least tragically misapplied. He lived at a time when "borrowing" was related to a quaint concept now relegated to loan sharks: collateral. (Let's hear it for car-title loans, pawn shops and payroll check-cashing scams!) Today's financial wizards are more akin to table bosses in Reno than old-fashioned community bankers as they seek profits from "odds" instead of actual business profits. That's why the term "REAL economy" came into common usage, to differentiate actual profits from paper profits.
The most prestigious academic types in business school when I finished college in the late Sixties were an exalted little segment in graduate classes majoring in Actuarial Science. They were referred to in hushed tones of admiration and envy because everyone knew, even at that early time, that actuaries had a bright future. History majors like me could only look forward to slogging along at some middling income, but those who learned risk management were more important than surgeons.
Krugman nailed it when he pointed out that "last year the highest-paid hedge fund manager in the United States made an amount equal to the salaries of all eighty-thousand New York City school teachers for the next three years."
It is tempting to confuse cause and effect. Income inequality is not the cause of the problem but the effect. Just as an arrow shot into the air will fall to earth we know not where, so too will empires fall, financial as well as political, when they attempt to operate outside the rules of what ordinary folk call "common sense."
Indeed, it is economics that bring down empires and ours will be no different. In this case, the military and economics go together since the former costs as much as it does and brings so little return to the majority of people.
ReplyDeleteAnd we live in perverse times where the DoD can't even stop acquiring the few things that it doesn't want.
I think that we've already crossed the threshold of decline/collapse but it is not yet undeniable. These things always take time and rarely can the precise moment be seen in the present tense. But to my mind, the writing's been on the wall since the Soviet collapse and our response to it: the wrong response.
I talk about this with my family alot. I think it will take a collapse of the American Empire in order for the people to finally wake up to the fact that the politicians in DC are not our friends nor do they represent the people or the best interests of America.
ReplyDeleteOr maybe the people won't wake up?
They work against it. I wonder if this will cause the extinction of the democrat and republican parties? I can only hope!