US (total) financial meltdown?
Today, I spent most of the day re-reading essays I have collected over the last year or so on the concept of the ‘military-industrial complex.’ I had a pile of articles that came from the 1960s and early 1970s which tended to focus more on the financial/economic aspects of the US military-state. Doing this also necessitated (to legitimately answer my questions but also to get in a little procrastination) googling various terms, writers, concepts.
Of all this web-searching, some themes started to emerge… which often pointed to the link between maintaining a military-industrial state (which could be thought of as ‘unproductive’ economically) and rising levels of debt, long-term currency devaluation… basically, the burden of costs associated with maintaining military/economy super-power status. Again and again, I kept coming across Nixon’s ending of the gold standard and the abandonment of the Bretton Woods system, mounting US debt, deficits, trade deficits, etc.
At any rate, here are two interesting articles among the many that emerged from these web searches:
The second, since it is so recent, is a little more alarming in that the author, who seems to be a credible financial analyst of the international scene, predicts there will soon be another major US financial/currency default. Here are some of the many interesting tidbits:
“The world, as a whole, is passing through an unprecedented and uncharted territory in terms of scale and scope of current financial crisis. Never before such large scale credit losses were recorded, and never before a sole super power was so indebted to the world. The implication of credit losses and potential default by USA is far reaching and affects almost all people in the world.” …
“The rising price of gold is an indication that quietly countries are shifting their reserve in gold. No one wants to create panic which will lead to massive sellout of US dollar leading to its depreciation to unacceptable levels. But the question is up to when this unnatural position can be maintained. In their self-interest, countries will opt out of US investment trying not to alarm others.” …
“If world musters courage to stand up against USA and come up with an alternative reserve and trade currency. The fate of USA as super economic and military power will be sealed and it will become another Great Britain or France-ex great power. It will rapidly close all military bases and withdraw to its soil to save money.”
Hmmm….
Will the U.S. ever get its defense spending under control?
In all this economic meltdown talk, I was not surprised that the U.S. defense spending budget (which sits at just over $500 Billion… at least, that is the base, publicly disclosed budget… active wars and ‘black’ or secret projects add hundreds of Billions more) rarely if ever came up. As I said, it’s not surprising since defense spending has been a sacred cow in the American imagination but it, and the U.S.’s status as superpower/empire puts a severe strain on the U.S. economy. So, the few times that I heard Obama mention the need to take defense spending more seriously and to try to clean up the cozy and costly relationship between the Pentagon and numerous defense contractors and members of Congress (what Dwight D. Eisenhower famously called the ‘military-industrial-[congressional] complex’), I didn’t think much would come of it. I still don’t but I did find this Alternet article very interesting: “Obama’s Serious about taking an Axe to Corruption and Waster at the Pentagon,” by Alexander Zaitchik.
Of course, there is a lot standing in the way of any reform since defense spending is the biggest barrel of pork one could imagine. And it is probably the biggest example of how the U.S. political system regularly “spreads the wealth” and mostly to a few corporations and military contractors.
For more on the military-industrial complex:
http://www.militaryindustrialcomplex.com/
Why We Fight, 2005 (dir. Eugene Jarecki)
Fabricating Niger evidence?
This is a very interesting story… I cannot comment on its veracity at all but it is very intriguing (and disturbing). It all makes me think that the Bush?Cheney era was one of the worst in U.S. history.
Famous mercenary corporation is rebranding… Blackwater will now be known as Xe.
Blackwater Logo... hmmm... black, red, white... whatever you think abou the company, this does seem to be a very strange colour combination for such a company.
If you have never heard of Blackwater U.S.A., it is a private military contractor or, more prosaically, a private mercenary army. It has become infamous for its high profile (and big-money) security contracts all over the world (they famously protected the controversial J. Paul Bremer while he was running Iraq after George W. Bush ‘liberated’ it. They are also infamous for killing civilians, enjoying immunity from prosecution while in Iraq, endangering U.S./coalition troops with their trigger-happiness, and then getting banned by the Iraqi government from operating in Iraq. (By the way, they now operate throughout many U.S. states and were on the ground in New Orleans after Hurricane Katrina, see Jeremy Scahill’s book which is very interesting and, I should say, frightening.) In the end, Blackwater was just the most high-profile security firms now operating all over the world.
Talking Points Memo carried an Associated Press story by Mike Baker that describes Blackwater Worldwide decision to re-brand to “Xe” (apparently pronounced’ zee’). So, going along with multi-national-corporation-groupthink, the best way to revive ones tarnished image or ‘brand’ is not to take responsibility for ones actions and change the way one does business but simply to re-brand and change the public’s perceptions of the company. Apparently, Blackwater wants to focus less on providing security and focus more on training.
The triumph of global capitalism…?
I have been fighting a very persistent cold these last few days and in addition to making sure I could deliver my courses and finish course-prep for a brand new class, I have been lying in bed reading some old issues of Harpers and The Atlantic. I came across this passage in the book review section from a June 2008 issue of the Atlantic that I am sure the author wishes s/he could take back given the economic collapse that began to be noticed in August, just a couple of months later:
First published in 1944, a year in which a planned economy was the norm in democracies as well as in collectivist states, Hayek’s denunciation of state control over the means of production was breathtakingly audacious. Yet his book… turned out to be perhaps the most important intellectual salvo in the battle that not only brought about the end of Communism but also eviscerated the elements of socialism that had transformed nominally capitalist economies into mixed ones. Through such influence and its ripple effects, this seminal text may well be said to have helped foster today’s triumphant global capitalism.
The short review is of a new edition of F.A. Hayek’s The Road to Serfdom. I have no idea who F.A. Hayek is but he seems to be one in the long line of free-marketeers which would include:
- Ronnie Reagan (didn’t he single-handedly crush Communism with the power of his rhetoric? At least, that’s what all the Republican historical revisionists have been saying lately)
- the recently disgraced Alan Greenspan (the former Chairman of the U.S. Federal Reserve who was known as the ‘oracle’ by all free-marketeers who have been following him these past twenty years)
- and every and all so-called capitalist who has been crying that the market needs to be free and unregulated but who is now (as usual) running to government with wheelbarrows asking the government to fill them with (future) taxpayer dollars.
The truth is, there has probably never been a true free-market, except on the level of local business and entrepreneurship. Even the U.S. is a bastion of government intervention and wealth-spreading, except the government intervention and wealth-spreading has been in favour of corporations and the uber-wealthy. I was a little amused when, during the U.S. Presidential election, Republicans (as they usually do), accused Obama of wanting to spread the wealth. I mean, what has Bush, Clinton, Bush, Reagan, Carter, Ford, Nixon, Johnson, Kennedy, Eisenhower, Truman, etc. been doing these past decades but spreading the wealth… and usually to the wealthiest of Americans and multi-national corporations? Today, with the costs of secret projects and Iraq and Afghanistan, the U.S. spends well over 1 trillion dollars a year on defense. And the majority of that spending goes directly to a handful of the biggest corporations and military contractors. Talk about wealth re-distribution. For a country that has severely crumbling infrastructure, cannot or will not ensure that its citizens receive a basic level of health care, where there is a surprising amount of poverty and the biggest income gap ever seen, and is facing an economic crisis that looks more and more like it is the beginning of the end of the American Empire… they are still living under the Cold War illusion that they represent a completely free market-driven economy.
Time cover story on Corporate Welfare.
But… back to the Atlantic review of Hayek’s book and the rather self-delusional statement about “today’s triumphant global capitalism.” Even though it should be obvious that without some sort of government intervention, we (and by we I mean most everyone in the world) would sooner or later (as some already are) be rioting in the streets and fighting over the meager resources, there are still too many who are clinging to their twentieth-century ideologies and who, when we do manage to climb out of this financial mess, will go right back to demanding that capitalism needs to be free, that capitalists do have the public good in mind and would never endanger the rest of us, and that government has no business in the back-room deal making of the uber rich (but, of course, the guaranteed loans, subsidies, and eventual bailouts still need to be in place). So let’s all say it one more time: LONG LIVE THE CORPORATE WELFARE STATE!!!
If you want to read a good article on the excesses of Wall Street from a former insider’s perspective, look at Michael Lewis’ “The End” at Portfolio.com.