Obama’s garrison state
Hmmm… while reading the following article, a useful phrase came to mind: ‘Plus ça change, plus c’est la même chose.’
The more things change, the more they stay the same. I hate to say it, but that pretty much sums up what Barack Obama means for me now. His ‘fix’ for the financial crisis was to retain all the same Wall Street criminals in positions of authority over public policy (while scolding them for the TV cameras from time to time), and then he fulfilled all the wishes of idealist democrats and cynical republicans by printing money like there was no tomorrow. Then there is his, ahem, ‘belt-tightening.’ I just came across this at the Huffington Post:
Jo Comerford, “A Titanic Budget in an Ocean of Icebergs: Will the USS Budget Go Down?” http://www.huffingtonpost.com/jo-comerford/a-titanic-budget-in-an-oc_b_480060.html
Of course any defense-related spending is off the table when it comes to the new fiscal reality! I mean, how could a military empire exist without it squandering most of its resources (and, since the U.S. uses a quarter of the world’s annual output of petroleum, the world’s resources) on its military? (Yes, the sarcasm here can be cut with a knife.) So, that is why I found this passage particularly infuriating:
With a price tag now approaching $330 million per plane and a total program cost of well over $65 billion, the C-17, produced by weapons-maker Boeing, has miraculously evaded every attempt to squash it. In fact, Congress even included $2.5 billion in the 2010 budget for ten C-17s that the Pentagon hadn’t requested.
Keep in mind that $2.5 billion is a lot of money, especially when cuts to domestic spending are threatened. It could, for instance, provide an estimated 141,681 children and adults with health care for one year and pay the salaries of 6,138 public safety officers, 4,649 music and art teachers, and 4,568 elementary school teachers for that same year. Having done that, it could still fund 22,610 scholarships for university students, provide 46,130 students the maximum Pell Grant of $5,550 for the college of their choice, allow for the building of 1,877 affordable housing units, and provide 382,879 homes with renewable electricity — again for that same year — and enough money would be left over to carve out 29,630 free Head Start places for kids. That’s for ten giant transport planes that the military isn’t even asking for.
Honestly!!
My worry is that under the current government in Canada (which has, on more than one occasion, expressed its admiration of war and war-mongerism), we too will start to mould ourselves on the Garrison State that Obama seems so intent on preseving in his country. The problem with Obama is that with all the cuts that will come to various other areas of the federal budget (and by extension, state budgets), those things that make the U.S. a great country will be wittled away… leaving nothing behind but a freedum-spouting, resource-destroying, war-mongering state. So much for ‘hope’ and ‘change.’
I certainly am not one that agrees with the endless accumulation of debt. In fact, I think that Western countries will have to undertake some quite drastic belt-tightening in the 21st century once we realize that our economies are little more than giant ponzi schemes. And this will mean that we are going to have to make some very difficult choices when it comes to what it is in the future that we fund with public money. And so, it is very dishearteneing that Obama is virtually powerless to steer the U.S. peacefully from its superpower/military-empire status. Instead, as its financial power declines, it is likely to morph into something even worse: a dying yet unpredictable and even more dangerous militarized state.
God help us all.
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Sorrowland, empire, and the Great Contraction
Oh my… I have not been very active on this blog as of late. It’s not for a lack of reading and/or thinking but more because what I have been reading and thinking about lately has been somewhat depressing and not something that one would want to share.
I just came across a most interesting website and wanted to share a very interesting article on another interesting article. The first is located at The Daily Bell: “Buffet’s Partner Says America Is Finished.” The second is the article penned by ‘Buffet’s Partner’: “Basically, It’s Over: A parable about how one nation came to financial ruin.” By Charles Munger (Slate.com). (By the way, I find The Daily Bell to be a very interesting website and plan to include this in my daily web-reading.)
Now, surely the titles of the two articles are using just a little hyperbole in order to grab attention, and I would also add that if the U.S. were indeed to unravel or is finished, it will take a lot of other countries in this globalized world with it (including Canada). In fact, the authors of the first make the interesting point that the U.S., as an empire, would in reality include the U.K. (I would add that it would also include Canada, since we are a major ally and trading partner). But even though the authors of the first article disagree somewhat with Munger (the author of the second), they are in reality only adding more nuance and detail.
Munger’s Slate article is a parable of a country that finds itself in dire economic straights similar to what the U.S. has been going through in the last few decades. Munger warns that the fictional country, if it continues down its fiscal path, would eventually turn into ‘Sorrowland.’ Of course, Munger’s partner, the famous Warren Buffet, penned a similar parable a while back warning of very similar things.
As I mentioned, the authors at the Daily Bell offer a more nuanced and detailed version and two paragraphs particularly caught my eye:
The problem with Munger’s point of view – from OUR point of view – is that is seems to leave out a lot of pertinent history. We would argue that the problems America faces go back a long ways. They have to do in fact with the creation of the Federal Reserve, the graduated income tax, the growth of the federal government, the empowerment of the executive branch, the loss of power of the states (which began after the Civil War) and the rise of America’s mighty military industrial complex which has supported the generation of nearly 1,000 military bases around the world.
America is truly an empire, though one can make the argument it is a bifurcated empire that includes Britain as well. One can also make an argument that an intergenerational power elite has worked patiently to hollow out what once was a republic with an eye toward creating a larger, international structure supported by America’s military might. It is this perspective that we find lacking in Munger’s parable.
Sorrowland/Empire. I would agree that that is what we are seeing struggle at the moment and it is not just the U.S. or the U.K. Most large powerful countries (and not just ‘Western’ countries) are looking like shadows of their formal selves (and not just before this recent financial crisis hit). Most of the powerful counties on the planet have been living off of a financial system that produces little more than monopoly money. Carmen M. Reinhart, Kenneth Rogoff call the current situation, the Great Contraction (I just finished their very interesting book a couple of days ago). But one aspect that I think is missing from all the above analyses is that the 20th century was basically the century of cheap energy (for those countries who controlled it) and that the 21st century will be marked by increasingly scarce and expensive energy. More succinctly, I think that the analyses of all the authors listed above are furthered by something that they don’t acknowledge: peak oil or the end of the era of cheap energy.
The easiest way for me to visualize this is that the early 1970s were a turning point for the U.S. It reached peak production in terms of domestic oil production (the backbone of its economic and military strength for almost a century) while it continued and expanded its efforts in the Cold War and military and economic expansion. It is not surprising that real purchasing power for U.S. citizens has been stagnant over that time but that the rise of the financial industry (think Nixon fully abandoning gold and the Bretton Woods agreements) and the rise of credit both exploded. So, while the petroleum that fueled the U.S. economy and empire began to gradually decline, it was propped up (for a time at least) with monoply money created by the federal reserve (and then multiplied by banks and other financial institutions) and giving it out freely to everyone in the form of credit (cards).
So, it should not be surprising that the ‘house of (credit) cards’ and the ludicrous belief that home values would magically grow forever would come down. It should not be surprising that it is financial firms (frauds and thieves, more accurately) like Goldman Sachs are the only ones making money these days… too bad it’s just monopoly money.
Sorrowland indeed. We will soon realize than Sorrowland is not just a country but the entire globe.
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2010: The year we realized that the modern economy is nothing but a giant Ponzi Scheme
I really need to start posting more uplifting items… but, as usual, I spent my lunch hour reading some of the news and financial sites I frequent and finally had confirmed what I have been suspecting for some time: that the modern economy is nothing more than a giant ponzi scheme. Of course, I am not the first one to come to this realization but even today I am really surprised at the level of negativity by those who would appear to know what is what when it comes to fianances and economics (and, of course, who are willing to discuss it).
It might be that modern economies are nothing more than the creation of a financial elite or cartel (and the politicians who empower them) which would include the U.S. Federal Reserve but it goes well beyond the U.S. and the 20th Century. I suspect that the true underlying cause was petro-wealth (cheap, petroleum-based energy) which was plentiful for most of the 20th Century. The bounty allowed developed nations like the U.S., Japan, Britain, Canada… to build a modern, growth-based economy where much of what was promised to citizens would actually be realized in the future. Promises and expectations blossomed.
Today, we are entering an era that will be characterized by expensive, hard-to-access and hard-to-refine energy. However, the promises and expectations are absolutely dependent upon vast quantities of cheap (20th Century) energy. And so, quite simply, something has to give. Unfortunately, it will most likely be our modern, consumption-based, cheap-energy-dependent, and put-off-until-the future economies.
And what will this mean? In some ways, I am sure it will affect your average citizen and his or her current lifestyle. But here is where I am less doom-and-gloom. While it will no doubt affect you and me (assuming you and I are both ‘average’ citizens of a developed country), I am sure it is going to affect the elites much more than anyone else. It will also affect governments (who are or who represent the elites) who tax away wealth and squander it (think of all the wars fought over the course of the 20th Century) or hand it over to those same elites (think of all the financial bubbles, printing of money, and corporate welfare/bailouts). For them, the Ponzi Scheme will no doubt end soon… and let’s hope it is a rather gradual and peaceful transition.
At any rate, these are some of the lunch-hour (or so) readings that influenced this post:
What Does Japan’s Implosion Mean For the Rest of Us? by John Rubino on January 26, 2010
Bernanke’s Doom Loop by Gary North
Banking on the State, Piergiorgio Alessandri & Andrew G Haldane, Bank of England, November 2009
On the end of the era of cheap energy, see:
Aleklett, Kjell, Mikael Hook, Kristofer Jakobsson, Michael Lardelli, Simon Snowdon, Bengt Soderbergh. “The Peak of the Oil Age: Analyzing the World Oil Production Reference Scenario in World Energy Outlook 2008.” Energy Policy, vol. 38, no. 3 (March, 2010): 1398-1414. http://www.tsl.uu.se/uhdsg/Publications/PeakOilAge.pdf
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A warfare state? Really?
I hope you note the sarcasm in the title… it’s not really directed at any single person in particular but is motivated more by frustration. I just came across Tom Engelhardt’s essay at AlterNet where he makes the case that the U.S. is a military- or warfare-state:
“While You are Minding Your Own Business, The U.S. is Constantly Making War Around the Globe” by Tom Engelhardt, Tomdispatch.com / Alternet
As much as it might seem that most of us are going along, living peaceful lives, there’s another kind of America that operates on the same soil — a warfare state.
The article is excellent but my frustration comes from the necessity of him having to write such an article in the first place. As a person who has spent years studying propaganda, media and politics, this is certainly not new to me and even though I understand that for the average U.S. citizen, Canadian, etc. it all might come as a surprise, it really shouldn’t be so surprising. But, I guess that is the reality of living under (or beside) a military suoperpower. I teach a course on media, war, and propaganda which focuses primarily on the twentieth century and the U.S. Many students are genuinely surprised at the extent of the U.S. military empire, and these are well-educated and informed young adults. Of course, and Engelhardt points this out in his essay, there is little reflection of the military state in U.S. (or even Canadian) media. Of course, that is to be expected within a military empire: there is usually a lot of denial of empire or it is downplayed by carefully referring to it only by using euphemism.
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