It seems finance capital wishes to turn America's federal government into one big rent extraction mechanism:
As hundreds of billions of taxpayer dollars flow into rickety U.S. banks, public outrage has followed revelations that executives planned to spend the money on Vegas getaways, $35,000 toilets, and fat bonuses.
Less attention has been paid to how these bailed-out banks are driving down tech workers' wages — and stoking anti-immigrant hostilities — while laying off tens of thousands of workers.
Banks that took public money sought about 4,200 visas for skilled workers from abroad in the 2008 fiscal year, according to an Associated Press investigation.
Reason number 1.25333: Toilet paper
We just have to have the good stuff, as AlterNet and the Guardian explain:
More than 98 percent of the toilet paper we use in the US is from virgin forests, the Guardian reports. Across the world, people are struggling to save our forests from deforestation, and instead of helping out, we're wiping are butts with our best defense against climate change.
Steven Walt leveled this very accusation against Richard Perle, the neoconservative policy wonk whose fingerprints dot the ill-fated Iraq invasion and occupation. Walt makes this case because Perle has recently taken to disavowing the role he and the other neoconservative intellectuals in the Bush administration played in the making of the Iraq effort. Walt's summary judgment: "Richard Perle is lying."
But Walt is just warming up!
What is disturbing about this case is is [sic] not that a former official is trying to falsify the record in such a brazen fashion; Perle is hardly the first policymaker to kick up dust about his record and he certainly won't be the last. The real cause for concern is that there are hardly any consequences for the critical role that Perle and the neoconservatives played for their pivotal role in causing one of the great foreign policy disasters in American history. If somebody can help engineer a foolish war and remain a respected Washington insider — as is the case with Perle — what harm is likely to befall them if they lie about it later? [emphasis added]
Not much harm, it seems, in Walt's estimation:
Let's face it: there is little or no accountability in Washington, where being wrong means never having to say you're sorry; indeed, you don't even have to admit responsibility for past mistakes, no matter how serious. It's just the American taxpayer who ends up footing the bill, along with the soldiers who fought and died for these blunders.
As Frank Rich and others have figured out, we are in trouble today because we have allowed a culture of corruption and dishonesty to permeate our institutions and pollute our public discourse. Until that changes — until our public institutions contain a lot more truth-tellers like Gene Kranz and fewer liars like Richard Perle — we are not going to know where we stand, where we are headed, or whom to trust.
Truth in politics is both an accomplishment and something inherently fragile, as Hannah Arendt might put it. Such truths refer to worldly facts that are both contingent and rarely obvious. Lying threatens these hard won truths merely by offering itself as an alternative account of the world that might be true and could become known as true by a significant number of individuals. Thus the claim that truth in politics is an achievement! And it is for these reasons that honest citizens of the country and the world cannot let individuals like Richard Perle alter the historical record so that it reflects their political needs. A cleaning of Washington's stables is needed now, not housing of a herd of well-fed jackasses.
Having described the current economic situation and the path that led the country to this crisis point, Paul Craig Roberts then stated the problem Americans now confront, doing so in especially blunt terms:
The bald fact is that the combination of ignorance, negligence, and ideology that permitted the crisis to happen still prevails and is blocking any remedy. Either the people in power in Washington and the financial community are total dimwits or they are manipulating an opportunity to redistribute wealth from taxpayers, equity owners and pension funds to the financial sector.
If Roberts has accurately characterized America's current plight, then it seems likely that its citizens will face and, hopefully, manage-well the fact that they and their descendents will be ruined because those holding decisive political and economic power are incompetent or viciously greedy.
Claims the Bush administration engaged in faulty accounting practices
While speaking about the country's current economic troubles and the efforts he has taken to address these troubles, Obama continued by asserting:
…I want to be very clear, if the message was not effectively delivered by the three previous speakers: We cannot, and will not, sustain deficits like these without end. Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation.
We are paying the price for these deficits right now. In 2008 alone, we paid $250 billion in interest on our debt — one in every 10 taxpayer dollars. That is more than three times what we spent on education that year; more than seven times what we spent on VA health care.
So if we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road as our interest payments rise, our obligations come due, confidence in our economy erodes, and our children and our grandchildren are unable to pursue their dreams because they're saddled with our debts.
After promising to cut the deficit in half by the end of his first term, Obama assigned the blame for the
We'll start by being honest with ourselves about the magnitude of our deficits. For too long, our budget process in Washington has been an exercise in deception — a series of accounting tricks to hide the extent of our spending and the shortfalls in our revenue and hope that the American people won't notice: budgeting certain expenditures for just one year, when we know we'll incur them every year for five or 10; budgeting zero dollars for the Iraq war — zero — for future years, even when we knew the war would continue; budgeting no money for natural disasters, as if we would ever go 12 months without a single flood, fire, hurricane or earthquake.
An excellent place to cut out wasteful spending: The national security and surveillance budget.
They do count as a part of Santelli's "losers"….
They are the latest addition to the reserve army of the un- and under-employed. As such, they must now fight with younger men and women to secure their place inside the active labor market, according to the Wall Street Journal.
Micro$oft wants it all back
According to reports, Microsoft claims to have "overcompensated" some of its former employees when it recently fired them. The money in question was part of a fired employee's severance pay. Microsoft has "instructed" those affected to return this money to the company.
Needless to say this blunder is just another public relations nightmare for a company that has so many of these in the past.
According to a report in the Guardian and the relevant Amnesty International news release, the human rights organization has called on the United States to suspend weapons shipments to Israel. Relying upon evidence gathered once the Gaza massacre concluded, Amnesty contends that these American-made weapons were used to commit war crimes during the fighting.
Frank Rich's latest points to the possible problem generated by a collective dependence on this defensive maneuver:
One of the most persistent cultural tics of the early 21st century is Americans' reluctance to absorb, let alone prepare for, bad news. We are plugged into more information sources than anyone could have imagined even 15 years ago. The cruel ambush of 9/11 supposedly "changed everything," slapping us back to reality. Yet we are constantly shocked, shocked by the foreseeable. Obama's toughest political problem may not be coping with the increasingly marginalized G.O.P. but with an America-in-denial that must hear warning signs repeatedly, for months and sometimes years, before believing the wolf is actually at the door.
Indeed, a contemporary reliance upon this kind of self-stupefaction dates back to the Reagan presidency, which combined a politics that masked system decline by occluding this decline with rhetorical flourishes composed of false hope and national triumph. It is a shame that Dutch Reagan is not alive and sentient so that he might bear witness to the world he promoted by his actions and words.
A recent Thomas Ferguson and Robert Johnson article advocated the adoption of a failing bank nationalization scheme akin to the one implemented by Sweden in 1992. They pointed out that this strategy would be the simplest and cheapest to implement. It also would stand a chance of succeeding, unlike the "throw vast sums of money at the problem" technique championed by the recently departed Paulson and Bush. A nationalization program is not flawless, however: Nationalization could provide the well-connected hedge fund or equity firm an opportunity to loot the public if the bank nationalization program fails to include adequate controls. Oversight and accountability were conspicuously absent from the TARP program. It would also help matters if the sun were allowed to shine on the workings of this national bank, especially since publicity was also lacking in Paulson's program.
Ferguson and Johnson conclude by noting that:
Temporary nationalization of banks is, indeed, the best way for the United States to avoid ending up with a "lost decade" like Japan in the 1990s. It gets the toxic waste out of the system, and not by robbing the public, making possible the resumption of economic growth. But without stringent safeguards on assets sales and vigorous anti-trust regulations, new rounds of financial pathology will become inevitable.
David Sirota's take on the Santelli meltdown
The rhetoric of American class conflict grows hotter by the day. Sirota's recent article directly addresses this conflict when it gives his take on Rick Santelli's now famous if not infamous CNBC-Chicago Mercantile Exchange piece and on Lansing, MI mayor Virg Bernero's response to — actually, his beat down of — a Fox News talking head.
While Santelli's "let them eat cake" moment may turn out to be another spectacle which merely diverts attention from the real problems now confronting the country, the event may gain greater significance than that. For instance, as Sirota rightly points out, the mass media in America routinely treat market populism as populism per se; it also deems grassroots populism as a kind of political irrationalism which expresses mass resentment, ignorance and fear. This bias becomes a problem when the difference between the market populist ideology and common lived experience of most Americans grows starker and more disturbing every day. Such has been the case since 2007 for many Americans. Many Americans may now reasonably wonder whether good, hard work and honest intentions matter for much. They may doubt that these "goods" count at all since the discrepancy between ideology and reality reflects the dissolution of the "American way of life" that has proceeded apace since 1968. Given the secular decline of the American economic system, I suspect that the Reaganite consensus founded on this social disintegration has now reached its limit point and appears for what it always was: A commitment to extend and secure the national and global powers of American finance capital. Santelli's belligerence, his crude manner and sub-rational thinking, may reflect the sense of entitlement embedded within the market fundamentalist ideology.
If this characterization of the situation is accurate, then the issue of the day becomes: Which one among America's many possible futures will the country select, a future which includes American militarism and Wall Street-led globalization or a future which respects the ecological limits imposed upon humanity as well as the dignity that necessarily inheres within the world's diverse assortment of human ways of life?
Glen Greenwald's latest reflects upon the Santelli outburst by comparing it to a noteworthy forerunner, namely, the resentment-laden, tribalist militia movement which opposed Bill Clinton's presidency, "fought" the culture wars and brought about the Contract with America Congressional class of 1994. Greenwald continues by considering the civil war mongering that has begun to take hold of the rightwing dead-enders who seemingly cannot accept that the world will never again mirror their vainglorious imaginings. It is in cases like this where one can see the paranoid political style generate fearsome dangers for everyone involved, especially since this hard core has access to the mass media. Greenwald then rightly asks: "…I wonder what would happen if MSNBC broadcast a similar discussion of leftists plotting and planning the imminent, violent Socialist Revolution against the U.S. Government."
Since the conclusion of World War II politics in the South Asian subcontinent has displayed as much good sense as one would expect to find in the Middle East at any moment during the same era. And the United States was not an innocent party in the making of this sad history. Its meddling in the Indo-Pak conflict, its shameful betrayal of East Pakistan and the role it played in the genesis and course of the Afghan Civil War were just some of its most notable failures, mistakes which still haunt America, the subcontinent and the world.
Just recently the world was given additional evidence that this history casts a long shadow and that the United States has failed to learn from it:
With two missile strikes over the past week, the Obama administration has expanded the covert war run by the Central Intelligence Agency inside Pakistan, attacking a militant network seeking to topple the Pakistani government.
The strikes are another' sign that President Obama is continuing, and in some cases extending, Bush administration policy in using American spy agencies against terrorism suspects in Pakistan, as he had promised to do during his presidential campaign.
While the Obama administration has yet to clarify its intentions with regards to Pakistan's crisis and to its recent military actions, although it is safe to say that the United States wishes the Pakistani state to survive this latest crisis, it is equally clear that America's post-1945 interventions into the area have done nothing to foster a regional commitment to generating peaceful and diplomatic solutions to its conflicts. In fact, the United States has augmented the regional inclination to disintegrate.
And 9.11, lest Americans forget, was just one instance of the "blowback" produced by this meddling.
MSNBC, source of the report, also claims that: "Federal water managers said Friday that they plan to cut off water, at least temporarily, to thousands of California farms as a result of the deepening drought gripping the state." MSNBC continues:
Dwindling supplies would have to be routed to cities to ensure residents, hospitals and fire crews have enough to meet minimum health and safety needs, said Don Glaser, the federal reclamation bureau's Mid-Pacific Region director.
The water shortages are so severe most cities will have to start mandatory ration programs by summertime, and residents will be asked to reduce their usage by 20 percent, Snow said.
With the many links I failed to note over the past week
Christopher Ketcham believes the economic crisis will cleanse the land of kitsch, crap and the pimps who market the stuff. This is his silver lining and he considers it a praiseworthy endgame to America's binge-driven consumer culture.
A grim assessment can be found in Michael Hudson's latest essay:
The financial "wealth creation" game is over. Economies emerged from World War II relatively free of debt, but the 60-year global run-up has run its course. Finance capitalism is in a state of collapse, and marginal palliatives cannot revive it. The U.S. economy cannot "inflate its way out of debt," because this would collapse the dollar and end its dreams of global empire by forcing foreign countries to go their own way. There is too little manufacturing to make the economy more "competitive," given its high housing costs, transportation, debt and tax overhead. A quarter to a third of U.S. real estate has fallen into negative equity, so no banks will lend to them. The economy has hit a debt wall and is falling into negative equity, where it may remain for as far as the eye can see until there is a debt write-down.
Mr. Obama's "recovery" plan, based on infrastructure spending, will make real estate fortunes for well-situated properties along the new public transport routes, but there is no sign of cities levying a windfall property tax to save their finances. Their mayors would rather keep the cities broke than to tax real estate and finance. The aim is to re-inflate property markets to enable owners to pay the banks, not to help the public sector break even. So state and local pension plans will remain underfunded while more corporate pension plans go broke.
Mike Whitney argues that:
Eastern Europe is about to blow. If it does, it could take much of the EU with it. It's an emergency situation but there are no easy solutions.
Peter Phillips argues that the Obama administration has not abandoned the neoconservativism of the recent past; it has only softened or 'humanized' this strategic focus so that a fragmented world might accept it as legitimate. Yet, continuing to rely upon this strategy would spell misfortune for more than the non-Americans killed, maimed or jailed by the American security and war apparatus. In fact, militarism has already thoroughly corrupted America's national politics, according to Phillips. The developmental path that would lead the country away from this political impasse begins with an active and self-sustaining anti-war movement.
Chris Hedges warns that the economic crisis, not the "terrorist threat" abroad, might bring down America's democratic republic. The penultimate situation: The economic crisis motivates Americans to take to the streets in defense of their interests and the federal government responds to this "provocation" by declaring martial law, thus abolishing the democratic-popular threat to the security apparatus and the economic sectors that depend on this apparatus.
Tom Englehardt wonders if the current economic crisis will endure until that time when it can meld with the pending ecological catastrophe.
Benjamin Netanyahu will attempt to form the next Israeli government, according to the New York Times. If Netanyahu is successful, the new government will sit on the far right and will not likely include the moderate Kadima party or its leader Tzipi Livni who are expected to join the opposition.
And Rick Santelli's now infamous rant:
On the path to its Tuesday restructuring plan deadline, GM will consider the bankruptcy option, according to reports (see this).
Naturally, a GM bankruptcy filing would be a catastrophe for the company's union members since its union contracts would not likely survive the bankruptcy process.
The concluding votes took place on Friday and divided neatly according to party membership, according to the New York Times. Obama will likely sign the bill this coming Monday. The bill will cost $787B.
It need not be emphasized that this event is a major political victory for the President.
Currently, Congressional leaders are meeting with the White House to finalize a compromise bill that can become law late this week, according to the New York Times report.
Besides the usual reasons, Robert Reich gives the following as an explanation for their opposition:
Republicans don't want their fingerprints on the stimulus bill or the next bank bailout because they plan to make the midterm election of 2010 a national referendum on Barack Obama's handling of the economy. They know that by then the economy will still appear sufficiently weak that they can dub the entire Obama effort a failure — even if the economy would have been far worse without it, even if the economy is beginning to turn around. They'll say "he wanted more government spending, and we said no, but we didn't have the votes. Elect us and we'll turn the economy around by cutting taxes and getting government out of the private sector."
The model Congressional Republicans wish to follow here: The 1994 midterm election campaign which brought about the so-called Contract with America Congress.
Briefly put, then, Reich is suggesting the Republican Party has chosen to put its future conquest of political power before acting today for the sake of resolving the economic crisis, a crisis, by the way, which Republican market fundamentalist thinking and practice brought about! How patriotic!
According to the New York Times report:
Warning that a failure to act "could turn a crisis into a catastrophe," Mr. Obama used his presidential platform — a prime-time news conference, the first of his presidency, in the grand setting of the White House East Room — to address head on the concerns about his approach, which has by and large failed to win the Republican support he sought.
"The plan is not perfect," Mr. Obama said in an eight-minute speech before taking reporters' questions. "No plan is. I can't tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis."
The Senate will have the final vote on the bill today.
Frank Rich of the New York Times believes such a movement is now gestating. While mostly addressing Obama's recent Cabinet nominee debacles, Rich had this to say:
The tsunami of populist rage coursing through America is bigger than Daschle's overdue tax bill, bigger than John Thain's trash can, bigger than any bailed-out C.E.O.'s bonus. It's even bigger than the Obama phenomenon itself. It could maim the president's best-laid plans and what remains of our economy if he doesn't get in front of the mounting public anger.
With respect to the President and his administration, it has surely become evident this past week that Obama's pressing political problems cannot be confined to the "bad apples" which surface from time to time. Rather, each mini-problem — or scandal — also points to a growing and public discourse about the country, one that expresses the belief that "our way of life" might cease to exist sometime soon.
A fear of this sort can be quite potent, as one would expect, especially when it is reinforced by evidence and collective agreement. In this instance it expresses the evidence-supported sense that the existential survival of the American people cannot be taken for granted and the sense that the future is known in some way (Americans expect to be worse off than they were in the recent past) but also uncertain in its particulars (will I and mine survive). When considered as such, this fear can and eventually may produce a significant political problem for any sitting federal government since it can, when prevalent and active, undermine the motivations individuals and groups need to respect and use if they are to participate as committed members of this society. In short, a legitimation crisis awaits America as just one of its possible futures originating in the developmental path now before the country. This kind of crisis reflects the existential threat of the moment.
Although this particular fear may seem fantastic with respect to a wealthy and powerful country like the United States, it has been just this kind of crisis that has recently troubled countries such as Iceland and Latvia, Greece and South Korea, as Naomi Kline points out. The United States need not be immune to an eruption of popular protest. Nor should it be considered safe from a disastrous instance of social disintegration. It has known both traumas before this moment. And together they might generate the kind of system collapse last seen when the Soviet Union imploded.
In any case, I would guess that the presence of popular contention would be the sort of events that could "maim" the Obama administration, as Rich puts it.
Yet, and to conclude, is "maim" the right word to use here? I ask because I wonder whether the Obama administration actually deserves the strong popular support he has had so far given his reluctance to tackle the real problems which vex the country. Given the Obama administration's centrist and co-habitationalist tendencies, we may surely wonder what America's "people" might do once the crisis deepens and both parties appear complicit in origin and course? What the present moment requires is a new social contract, one that includes a more equitable and rational distribution of the country's wealth and risks. This would be change in which many Americans can place their trust. But is this the path that Obama and his administration plan to take?
Nicholas von Hoffman wants justice done. Millions — surely — want justice done. Accordingly, von Hoffman advocates that an international tribunal try the war criminals in the Bush administration and that a US court expropriate the wealth of — if not also administer prison terms to — the Wall Street grifters who brought the economy to its current state.
This would be a start.
Krugman's critique focuses on the miserable fate of the Obama stimulus and those responsible for this possibility. A few highlights:
What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?
A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.
All in all, the centrists' insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.
But how did this happen? I blame President Obama's belief that he can transcend the partisan divide — a belief that warped his economic strategy.
After all, many people expected Mr. Obama to come out with a really strong stimulus plan, reflecting both the economy's dire straits and his own electoral mandate.
Instead, however, he offered a plan that was clearly both too small and too heavily reliant on tax cuts. Why? Because he wanted the plan to have broad bipartisan support, and believed that it would. Not long ago administration strategists were talking about getting 80 or more votes in the Senate.
George Bush blundered, in part, because his administration was made up of fools who ruthlessly pursued their 'golden' policies and refused to heed wise counsel. Obama now blunders because he wishes the fools remaining in power would bring their kind of foolishness to his consensus! Who, I must ask, is more foolish: Obama and his people or the GOP dead-enders? I would say the greater fool is he who makes common cause with his enemies….
The OECD depicts the global depression
OECD composite leading indicators (CLIs) for December 2008 continue to point to a weakening outlook for all the major seven economies. The CLIs in most OECD countries have fallen to levels that were last seen during the oil shocks of the 1970s. The outlook has significantly deteriorated in the major non-OECD member economies who are now also facing strong slowdowns.
So the popular perception is right. The super wealthy today are better off than royalty of old. And it's not due to indoor plumbing, either.
Enough senate Republicans joined with the Senate Democrats in support of the stimulus bill that a Senate vote on the bill may occur this weekend. Perhaps the aisle-crossers found the courage they needed to break with the Hooverite faction of their Party in the morning's Bureau of Labor Statistic employment report and President Obama's subsequent scolding of the obstructionists in the Senate.
The "Great American Jobs Machine" — Kaput….
The Bureau of Labor Statistics' latest employment situation report informs its readers that:
Nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from 7.2 to 7.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment has declined by 3.6 million since the start of the recession in December 2007; about one-half of this decline occurred in the past 3 months. In January, job losses were large and widespread across nearly all major industry sectors.
Moreover, the report is far more disturbing because, as EconoSpeak observes:
The civilian labor force participation rate was 65.7% as of December 2008 and had been as high as 66.4% as of December 2006, which means the rise in the unemployment rate actually understates the fall in the employment-population ratio, which fell from 61% as of December 2008 to 60.5% last month. The employment-population ratio had been 63.4% as of December 2006. While some of us were unimpressed with the employment-population ratio being only 63.4% given that this ratio was at or above 64% for much of Clinton's second term in office, I'd be incredibly happy if we could see the employment-population ratio approach this level in the next couple of years. Of course, this is not likely to happen unless Congress pass a stimulus bill over the objections of the Herbert Hoover faction.
It has become evident since last summer that the economic crisis of the moment is not just an American disease. It is, rather, systemic in nature and global in scope. There is, therefore, more than enough pain to go around. Naomi Kline's recent article pointed to the many protests that have menaced governments around the world. The object of the protesters' ire: The market fundamentalist policies now in favor among the world's political elite. Unlike the majority of Americans, who refuse to employ most forms of political action, the citizens of other countries are attempting to impose their collective will on their states. They are motivated to do so by the fact that their governments still turn to an economic orthodoxy discredited by the crisis the orthodoxy is meant to resolve. It appears the protesters fail to see a future worth having in this policy choice. Kline concludes by addressing this very point:
The pattern is clear: governments that respond to a crisis created by free-market ideology with an acceleration of that same discredited agenda will not survive to tell the tale. As Italy's students have taken to shouting in the streets: "We won't pay for your crisis!"
The GOP struggles to restore indentured servitude and chattel slavery
Trapper John of Daily KOS describes the scene:
Tim Geithner has been confirmed as Treasury Secretary, despite his failure to pay taxes on substantial income while employed by the IMF. Tom Daschle probably would have been confirmed at HHS had he not withdrawn from the process — Senate Democrats and most Senate Republicans appeared ready to overlook both his serious tax delinquencies and his financial ties to the health care industry. Eric Holder was easily confirmed as Attorney General, despite a lot of chest-thumping from Senate Republicans over his role in the Marc Rich pardon.
But Hilda Solis — the California Congresswoman appointed by President Obama to head the Labor Department — remains in limbo, unable to get a committee referral vote until today, and likely doomed to remain in a holding pattern for some time thereafter due to the imminent threat of a GOP "hold" on a full confirmation vote.
What did Solis do to earn this opposition to her nomination? What monstrous crime or scandal was she involved in that furnishes Republican Senators with the moral authority to delay her from attending to the serious work at the Department of Labor? Could it be misogyny, or bias against Latinas, or against lowly House members?
Well, there's no crime or scandal. And there's no evidence that Solis is being discriminated against on the basis of her sex or ethnicity (though there's little doubt that she'd be confirmed by now if she were a member of the United States Senate Racquet and Social Club rather than the House). No, the Senate Republicans have a simple reason for trying to torpedo Solis's nomination: the nominee for Secretary of Labor favors labor law reform supported by a majority of Americans — the Employee Free Choice Act.
Washington's 'Project Bankruptcy'
My headlines seek to express Chalmers Johnson's recent judgment about the Pentagon. He wrote:
Given our economic crisis, the estimated trillion dollars we spend each year on the military and its weaponry is simply unsustainable. Even if present fiscal constraints no longer existed, we would still have misspent too much of our tax revenues on too few, overly expensive, overly complex weapons systems that leave us ill-prepared to defend the country in a real military emergency. We face a double crisis at the Pentagon: we can no longer afford the pretense of being the Earth's sole superpower, and we cannot afford to perpetuate a system in which the military-industrial complex makes its fortune off inferior, poorly designed weapons.
It is hard to imagine any sector of the American economy more driven by ideology, delusion, and propaganda than the armed services. Many people believe that our military is the largest, best equipped, and most invincible among the world's armed forces. None of these things is true, but our military is, without a doubt, the most expensive to maintain.
As the world has witnessed since the onset of the Wall Street-driven economic crisis, "what can't continue won't continue." Pax Americana will not prove to be an exception to this general rule. Americans can expect "our" Boys and Girls to return home — if they can afford the plane fare — in the near future.
America's shadow government partially exposed
Articles recently published by ProPublica and TheRawStory give the world brief reports about these largely unknown and once wholly secret memos. They were authored by members of the first Bush administration. Although they remain unpublished still, what is known is that they contain the administration's reasons and conclusions regarding surveillance, executive power and prisoner treatment. Currently, President Obama has the decisive authority to make these secret documents available to the public. The new President has yet to make a public decision about these documents, however.
It was only a matter of time before the crying game appeared
The New York Times reports that
…there is a lot of wincing [among Wall Streeters] about the [financial] profession's catastrophic loss of cultural cachet. Wall Street has become a target of populist rage, raw material for talk-show tirades, the occasional street protest and a lot of punch lines.
'Shit happens' even to the chosen few strong enough to push the world over the ledge. Of course, the culpable can manage the situation somewhat by relying upon denial:
Financiers tell their not-for-attribution account of the mortgage crisis like this: Americans undersaved and overspent for decades, relying on rising property values to bankroll their lifestyles. But nobody on Wall Street forced United States homeowners to take out loans on houses they couldn't afford, or refinance mortgages to spend money on cars they shouldn't have bought.
The esoteric securities underneath the current mess are, to the people who invented and marketed them, analogous to pharmaceutical drugs. Used correctly, they can enhance your life. Abused, they are lethal.
First, while it may be true that the banksters and their kin never forced common Americans to undersave, overspend and take out loans they could not afford, as the Times article tells its readers, it is equally true that no one forced the banksters to loan money to individuals and families that could not repay these debts. Why did they do this? What motivated them to take make these dubious loans? Where, for that matter, was the system-wide commitment to due diligence when these loan-making practices were common?
Likewise, no one forced the banksters to securitize these dangerous loans, to trust the judgments made by the credit ratings agencies or to rely upon the politically compromised regulatory agencies which supervised the financial sector. In the end, not only are the banksters responsible for their deeds, it is evident they adopted these practices because of the incentives they faced and the goals they pursued. The opportunities for profit-taking sat before them and the banksters did not pass over these chances to make money. Finally, it is worth mentioning that the banksters as a whole and economic sector they occupy had the wherewithal and the motives to identify the systemic risks that were conspicuous features of these loan-making and loan-manipulation practices. Yet they refused to heed the warnings entailed by this available knowledge. Why? I ask because their refusal, when considered in hindsight, appears to be a form of collective insanity. The answer is obvious: They refused to take sufficient care because they wanted more than anything else to take massive profits and incomes from their activities.
In their superficial rationalizations the banksters stand tall with the pimps and drug pushers of the world, groups with whom they share a sense of ethical integrity and justice. Tony Soprano, for instance, would merely call the loan-takers "degenerate gamblers" or "stupid-greedy-fucks." The banksters, we have learned, snidely point to their myopia and naïveté. Both the gangsters and banksters feel superior to their victims and both wish to profit off of human frailty and myopia. I believe they receive the recognition they have earned.
But not every bankster is afflicted by the moral idiocy depicted above. Some do see the problem which arises when one denies the obvious and refuses to accept the responsibility entailed by one's humanity:
"People say 'Well, the Fed is to blame because there was all this loose money,'" said Luis E. Rinaldini, a former partner at the investment banking firm Lazard Frères, now at the merchant bank Groton Partners. "But guys who run banks are paid to be cautious when there's loose money around."
"I mean, if you had a bus driver who went 100 miles an hour on an icy road, you'd think he was crazy," he adds. "But if his boss said, 'It's our policy to drive faster as the roads get icier,' you wouldn't be surprised if the boss ended up in jail."
Will many of the blameworthy banksters spend their days in jail? Most likely will not.
Second, one might wonder if those banksters prone to bouts of self-pity also suffer from a loss of memory? It seems that they do since the relatively autonomous finance capital which first emerged in the 1970s undoubtedly fomented these recent systemic crises: The Latin American debt crisis of the late 1970s and early 1980s; the Savings and Loan crisis of the late 1980s; the 1987 Black Monday Stock Market Crash; and the Long-Term Capital Management crisis of the late 1990s. Each event foreshadowed the disaster we now confront. Each was dangerous. So, given the magnitude of the current crisis and the role Wall Street had in generating the crisis, outsiders like myself cannot help but to wonder what the banksters learned from the earlier crises? Anything? Or, did they fixate on the well-founded belief that Washington would eventually throw a golden lifeline to the reckless but well-placed financial capitalists?
Third, who actually abused the esoteric securities which are known to be the major proximate cause of the current crisis? The hapless and now ruined spendthrifts who took on debt they could not afford and did not completely understand? Or, perhaps, did the abuse issue from the overcompensated, overindulged and overvalued finance capitalists who allegedly knew what they were doing? I would lay the majority of the blame on those individuals and institutions with the means and the motives to prudently manage the risks given along with the use of these financial tools. To be sure, the federal government also shares in this blame, especially for enabling Wall Street to drag the world into this crisis. After all, with power comes responsibility. And most of the relevant powers responsible for the crisis can be located in Washington, DC and on Wall Street.
Bluntly put: These powers broke the economy, they own the subsequent crisis.
Paul Craig Roberts claims that:
The discouraging fact [about the political situation in America today] is that even when faced with crisis in the economy and in foreign policy, the American political system is incapable of producing any leadership. Here we are in the worst economic crisis in a lifetime, perhaps in our history, and on the brink of war in Pakistan and Iran while escalating the war in Afghanistan, and all we get is a government made up of the very people who have brought us to these crises.
If America's leadership deficit is of such a degree that the country cannot identify a way out of the mess it has made of things, collectively commit to taking that path it has identified, then rationally following through on these choices, why should it expect to lead the rest of the world in any way at all? It should not, according to Roberts:
The era of American leadership has passed. America's shyster financial system has brought economic crisis to the world. America's wars of aggression are seen as serving no purpose except the enrichment of the military industries associated with Dick Cheney. The world is looking elsewhere for leadership.
Ironic as it may seem to Americans who derive pride from the related beliefs that the United States and Ronald Reagan won the Cold War and that America is a singular, indispensible, world-historical achievement, they may soon witness the world turn to Vladimir Putin for leadership, as Roberts suggests. But, it is worth mentioning here that Putin's 'victory' would not signal the advent of a global Russian hegemony. Rather, it would probably signal the appearance of the kind of world leadership possible at a moment when the world lacks a global hegemon and, in fact, cannot have such a beast given the dangers it would pose. This turn need not be essentially troublesome. In fact, a worldwide commitment to regional and world-system cooperation may be the best feasible future in which reasonable human beings can place their hopes.
The daily bleeding of thousands of jobs will soon turn our economic crisis into a political crisis. The street protests, strikes and riots that have rattled France, Turkey, Greece, Ukraine, Russia, Latvia, Lithuania, Bulgaria and Iceland will descend on us. It is only a matter of time. And not much time. When things start to go sour, when Barack Obama is exposed as a mortal waving a sword at a tidal wave, the United States could plunge into a long period of precarious social instability.
At no period in American history has our democracy been in such peril or has the possibility of totalitarianism been as real. Our way of life is over. Our profligate consumption is finished. Our children will never have the standard of living we had. And poverty and despair will sweep across the landscape like a plague. This is the bleak future. There is nothing President Obama can do to stop it. It has been decades in the making. It cannot be undone with a trillion or two trillion dollars in bailout money. Our empire is dying. Our economy has collapsed.
Hedges then ruminates with Sheldon Wolin about the crisis now coming into being. One telling highlight:
Wolin lamented that the corporate state has successfully blocked any real debate about alternative forms of power. Corporations determine who gets heard and who does not, he said. And those who critique corporate power are given no place in the national dialogue.
"In the 1930s there were all kinds of alternative understandings, from socialism to more extensive governmental involvement," he said. "There was a range of different approaches. But what I am struck by now is the narrow range within which palliatives are being modeled. We are supposed to work with the financial system. So the people who helped create this system are put in charge of the solution. There has to be some major effort to think outside the box."
"The puzzle to me is the lack of social unrest," Wolin said when I asked why we have not yet seen rioting or protests. He said he worried that popular protests will be dismissed and ignored by the corporate media. This, he said, is what happened when tens of thousands protested the war in Iraq. This will permit the state to ruthlessly suppress local protests, as happened during the Democratic and Republic conventions. Anti-war protests in the 1960s gained momentum from their ability to spread across the country, he noted. This, he said, may not happen this time. "The ways they can isolate protests and prevent it from [becoming] a contagion are formidable," he said.