The Mound of Sound

For the past seven years we’ve been playing a furious game of Whack-a-Mole with radical Islam. Even by conventional terms – tonnage of weapons dropped, etc. – this has been a major war.

What lies in the future may depend on who gets elected in the US in November. One guy looks pretty keen on keeping these wars ticking over and maybe adding one, perhaps even two, while stirring the embers of another Cold War to boot. The other guy – who knows? He doesn’t appear as bellicose but there are no guarantees.

We’re at the threshold of an era of multi-dimensional, global change. We’ve launched a massive expansion of Eastern economies, particularly the giant states of China and India.

There are a lot of problems looming that will eclipse Islamic fundamentalism. There’s anthropogenic global warming and all the associated climate change issues – droughts, floods, storms; species extinctions and migrations (ours too); desertification; freshwater exhaustion; land, air and water pollution; the spread of insects and diseases. Then in an increasingly busy world we’re going to have to tackle frictions over resources caused by the exhaustion of renewables and depletion of non-renewables. Add to that all the related problems associated with overpopulation and we’ve got a heaping plateful of existential challenges even without looking for wars to wage.

I don’t think we can afford wars any longer, at least not like we used to in the 20th Century. They suck up too many resources and deplete the energies we need to deal with everything else that’s knocking on our door at the moment. They’re an unacceptable distraction.

Take Islamist terrorism, for example. That’s “Islamist” as in radical Islam as in Wahabism. As the Muslim world goes, the Islamist movement is relatively small but we’ve done an awfully poor job at combating it.

Muslim kids go in the front door of these Madrassas and out the back door all fired up and ready for the Islamist training camps. Our approach has been to bomb’em into extinction once they’ve gone through this process. However to succeed in our approach, we have to wipe them out faster than they can come through the religious indoctrination level and we’re not even coming close on that score.

If the Islamist movement has a fundamental vulnerability it lies in its inability to sustain itself. It needs money and the active support of sympathizers, most of whom are not Islamists. We need to sort out what drives ordinary, rank and file Muslims, the “Arab Street,” to support these extremists.

I think there’s no end of reasons for the ongoing support of this extremism. A very powerful one is historical. The West has been powerfully meddling in Arab affairs for more than a century – shaping the place to suit our interests with little regard for theirs. We bundled together places like Pakistan and Iraq and Syria out of the spoils we picked up from the collapse of the Ottoman Empire following WWI. We even parcelled the Kurds out among at least six nations, sort of like sending the orphan kids off to live with various, distant relatives. In the process, we have persistently lied to and betrayed these people. We have persistently manipulated them to suit our purposes.

We’ve been astonishingly racist toward Arabs. We’ve treated them as though because they’re Arabs or Muslims or something they don’t need or aspire to the same things we insist upon – little things like human rights and democracy. Think I’m kidding? Look at the state of human rights and democratic movements in the West’s two closest Arab states – Egypt and Saudi Arabia. Do you think it’s just oversight that we constantly focus on the anti-democratic repression in Muslim states we don’t like – places like Iran and Syria – but seem not to mind when the oppressors are on our side?

Do you think the Arab people don’t see this? Do you think they don’t see that we support the status-quo that keeps them down, just so long as the tyrants are our pals?

We’ve contributed to a state of affairs in which radical Islam is the only vehicle of change remaining to so many of these Arab peoples. Okay, so we’ve done our bit to narrow their options down to one. Why are we surprised when they’re drawn to it?

The Islamists – whether you call them Hezbollah, al-Qaeda or any of the lesser groups – get a lot of their support because they stand defiant of the very order that oppresses these people. It’s more a “my enemy’s enemy” sort of thing than a genuine alliance of immersed interests. They know the Islamists aren’t working for democratic change but they’re also the only bunch that’s taking a swing at their common foes.

For a while we gave the Arab Street reason to believe we were coming to spread democracy through their region. Now that’s something we’ve promised them before and they’re painfully aware of our past betrayals but when they did get a chance to exercise democracy we rushed right in to shut it down.

The Palestinians elected Hamas because they saw Fatah as atrophied, hopelessly corrupt and willing to sell them out to Israel and the US. They saw in Hamas their only real hope for change. And how did we react? We pretended like they didn’t vote, as though they didn’t choose. We acted as though Fatah had won. We even channeled money and arms to Fatah to stage a coup to oust Hamas.

Lebanese elections ended with Hezbollah winning a number of seats. We were outraged, it was unacceptable!

But wait a minute. Weren’t many of Israel’s early leaders key figures in its own, nationalist terrorist movements? Some of them were butchers, real murderers. Did that stop us from dealing with them? No, of course not. Now you may not have that little inconsistency in the forefront of your mind but you can bet the farm that it’s always in the minds of the Arab Street.

We Westerners celebrate all the struggles our ancestors went through to create the democracies we supposedly cherish today. Why do we find those same aspirations so outrageous when they involve the Arab peoples? One reason is because we’ve been groomed to be blind to it. We’re told, again and again, that all the Muslim people want to do is conquer the world – our world, that is – for Islam, for the Prophet. We’re told they’re on a suicide mission from their God to wipe us out because they can’t stand our Western societies, our freedom, our very democracies. Okay, anyone believing that, line up on the right under the sign that reads “Morons.”

Those arguments deny these people their essential humanity. This thinking presents Arabs as less than human. No, no, they don’t want to raise families, send their kids to school, have a few nice things and live in peace. No, Johnny, only human beings want those things, not Arabs. Sure some of them live in concentration – er, “refugee” camps, but that’s because they’re okay with it.

If there is a Christian God, what must he think of his adherents who act this way?

But I digress. If we want to get Arab terrorism under control, we have to repair the Arab Street. We have to accept that the only real leadership they have – at the moment – is in the radical movement, just as the Israeli leadership was birthed.

Then, and here’s the hard part, we have to believe in democracy and place our faith in its power. Yes, Arab peoples may begin electing outfits like Hamas and Hezbollah and, yes, the early years of their democratic experiment are apt to be uneven, at times even turbulent, but we have to believe that democracy will defeat extremism because it removes the common bond between Islamist extremists and the Arab Street without which the fundamentalists wither and die.

It’s time to do some major arm twisting in Cairo and Riyadh. It’s time we threw our support behind democracy movements in Egypt and Saudi Arabia – economic and political support. If we can make change happen there, we really have the basis of spreading reform through the rest of the Middle East – by example, not by gunfire.

Or let’s just keep doing what’s worked out so wonderfully for us these past seven years. Bomb, bomb, bomb; bomb, bomb Iran.

America’s current fiscal meltdown lies squarely at the feet of a man most Americans revere, Ronald Reagan. It was Reagan along with his budget director David Stockman who spawned “supply side economics” and the “trickle-down theory” that were subsequently merged into “Reaganomics.”

Ronald Reagan was as powerful a president as America has known since FDR. He was seen as a fiscal reformer. In reality, however, he saddled his nation with voodoo economics. In 198o, when Reagan came to power, the US was the world’s largest creditor nation. In just a few years of Reaganomics, America became the world’s largest debtor nation.

To help you understand how this rot set in nearly three decades ago, I’ve linked to two articles from the Atlantic Monthly. The first, entitled “The Education of David Stockman” was published in December, 1981.

http://www.theatlantic.com/unbound/flashbks/classics/stockman.htm

The second, entitled “The Morning After,” appeared in the October, 1987 edition of the magazine:

http://www.theatlantic.com/unbound/flashbks/budget/afterf.htm

By the time The Morning After hit the news stands, the future undoing of America had already been mapped out. It’s really quite astonishing stuff.

After leaving Reagan’s White House, David Stockman retreated to his family’s dairy farm in Michigan. He subsequently entered the business world. As Wikipedia notes, the past few years haven’t been pleasant for David Stockman and the next 30-years look even worse:

On March 26, 2007, federal prosecutors in Manhattan indicted Stockman in “a scheme … to defraud [Collins & Aikman]’s investors, banks and creditors by manipulating C&A’s reported revenues and earnings.” At the same time, the Securities and Exchange Commission brought civil charges against Stockman related to actions he took while CEO of Collins & Aikman.[3] Stockman faces up to 30 years in prison.

First things first. The United States of America is broke. The government relies on hundreds of billions of dollars worth of foreign loans to prop up its national Ponzi scheme. It runs its foreign wars on borrowed foreign money. It finances its tax cuts for the very rich on borrowed foreign money. It finances its monthly balance of trade deficits on borrowed foreign money.

The last ten days has seen that same US government shove over a hundred billion dollars into propping up its astonishingly unregulated financial sector to prevent strategic collapses. The takeover of Fannie Mae and Freddie Mac, the nationalization of AIG. Yesterday it announced $50-billion in loan guarantees for troubled money market funds. And now, the jewel in the crown – SEVEN HUNDRED BILLION DOLLARS or to you arithmetic types 700,000,000,000 dollars, all of it borrowed, to buy bad mortgages.

This floats the US national debt ceiling to $11.3 TRILLION dollars. (That’s $11,300,000,000,000.00) Now that’s some serious, serious money even at ridiculously low interest rates.

So, just how does the government get another 0.7-trillion bucks? Why the old-fashioned way, of course. It pledges the good credit (or what’s left of it) of the American taxpayer. That’d be the working class and middle class wage earners and their children and their grandchildren. Some day all this will be transcribed into American family tree charts. Neat, eh? “Yes, it was in great-great-great-grandad Fred’s time that you kids were sold down the river.”

Before they’re done they’ll be looking at close to a trillion dollars siphoned out of working class wallets to make good the recklessness of the country’s financial sector.

Talk about running on empty! But here’s the 800-pound gorilla in the room – inflation. Can the American government pump all this additional borrowed money into the economy without triggering a wave of inflation? If inflation does set in, how does the US government meet its interest obligations?

Foreign lenders took a hit over the last two years with the devaluation of the greenback. As the US dollar tanked against all other currencies, their loans – and the interest they received – dropped in value substantially. Despite that these lenders held on to their belief that America was the safest place to invest their surplus cash. What remains to be seen is will they swallow another hit if these trillion dollar bailouts spark a wave of inflation?

Is America so far into these foreign lenders that they no longer have any choice but to keep propping up the US economy no matter how recklessly it’s managed, no matter how inflationary the bailouts? I think we’re going to see the answer to that question over the next twelve to eighteen months.
We could just be witnessing the decline and fall of the American Empire.

By the way, if you’re still unclear as to how the Reagan Revolution came crashing down, check out this item from The Globe & Mail. It’s all pretty much there:

Is John McCain the riverboat gambler of the 2008 US presidential elections?

He took a gambler’s gut instinct roll on his choice of running-mate, Sarah Palin.

The credit crisis now gripping the US appears to have come as a surprise, even to the rich and powerful. Now you have to ask yourself why and just what does that mean?

If you want to understand what’s happening and where America, our economic Big Brother, is heading, a good place to begin is by reading Kevin Phillips book, “American Theocracy.” I really believe that Phillips lays out how America got where it is today and what lies in store for the United States – and the rest of us – over the next two decades.

Kevin Phillips IS NOT a liberal. He’s a Republican, through and through. He’s an insider, a former Republican strategist. He’s been a political and economic commentator for thirty years. He’s written several books including, “The Emerging Republican Majority”, “Staying on Top” and “American Dynasty.” Kevin Phillips is about as red, white and blue as they come. He’s not going to contaminate your pristine mind with any socialist dogma. All he’s going to do is point out the truth that he knows today’s Republicans simply don’t want to hear.

The complete title of this book is “American Theocracy, The Peril and Politics of Radical Religion, Oil, And Borrowed Money In The 21st Century.” It was written, I believe, in 2005 which actually makes it a lot more interesting today than it was just three years ago.

Here are just a few gems from Chapter 9 entitled “Debt – History’s Unlearned Lesson.”

Because the past repeats only in general resemblance, there is always something different, something new. This truth, together with the usual effects of the passage of time, makes it easy for later generations to dismiss any awkward precedents – and so it has been with the demobilization of manufacturing and embrace of debt in the contemporary United States.

…conductors of the orchestra of American hubris wave star-spangled batons and the chorus resounds: Washington rules, the world manufactures for the United States, and our current-account deficit reflects nothing more than global anxiety to invest in U.S. prosperity. Who knows, the Treasury may even be planning a statue of an American consumer supporting the world on his back.

However, if pride goeth before a fall, cocksureness about the manageability of U.S. public and private indebtedness may as well, given threats that range from debt crises to currency humiliation. Crippling indebtedness is like the ghost of leading world economic powers past, a familiar Shakespearean villain come to stalk the current hegemon.

…None of these hegemons [Holland, Spain and Britain] started with well-developed finance. They began with simpler vocations. Castile, the heart of Spain, was a culture of high-plateau wool growers and skilled soldiers who had spent centuries reconquering the Iberian peninsula from Muslim emirs before conquistadores found gold and silver in Central and South America. The Dutch, as we have seen, had a unique talent for vocations having to do with ships, seas and winds. The English pioneered coal development and superseded the Dutch as masters of the seas. But after several generations of success in soldiering, seafaring, or manufacturing, these peoples, in their respective heydays, were drawn farther in the direction of globalism, financial services and capital management.

…Excluding the unusual case of Spain, the leading economic powers have followed an evolutionary progression: first, agriculture, fishing and the like, next commerce and industry, and finally finance. Several historians have elaborated this point. Brooks Adams contended that ‘as societies consolidate, they pass through a profound intellectual change. Energy ceases to vent through the imagination and takes the form of capital.’

In 1908, …Winston Churchill, then president of the British Board of Trade, vented a similar historical interpretation in finding ‘the seed of imperial ruin and national decay’ in ‘the unnatural gap between the rich and the poor’ and ‘the swift increase of vulgar jobless luxury.’

…The word “rentier” – meaning a person living off unearned income – comes from the French, as do so many other words connected with money and plunder: financier, profiteer, buccaneer. Over the last four centuries, however, it was first Spain, then Holland and Great Britain, and now the United States that created the most notable rentier cultures. Each ultimately became vulnerable as a result.

…Because intermittent high debt ratios were so central to the evolution of each of the leading world economic powers, each became comfortable – too comfortable – with debt as a long-standing experience, practice, and tactic. Particular overconfidence was instilled by memories of how often previous debt problems had been surmounted, even at extreme levels (100 to 200 percent) of GDP or GNP.

…Understandable as this cockiness might be, history teaches a crucial distinction: nations could martial the necessary debt-defying high-wire walks and comebacks during their youth and early middle age, when their industries, exports, capitalizations, and animal spirits were vital and expansive, but they became less resilient in later years. During these periods, as their societies polarized and their arteries clogged with rentier and debt buildups, wars and financial crises stopped being manageable. Of course, clarity about this develops only in retrospect. However, even though war-related debt seems to have been part of each fatal endgame, the past leading world economic powers seem to have made another error en route. They did not pay enough attention to establishing or maintaining a vital manufacturing sector, thereby keeping a better international balance and a broader internal income distribution than financialization allowed.”

Any of this sounding familiar?

American Theocracy is a “must read” if you want to understand the current economic crisis in the United States and the long-term consequences we all may be facing. It’s a well-written book, well documented and full of clear logic and history.

Get a copy. Have a read.