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Leading a reader to water

I wrote a post earlier today on kleptocracy and the one-party system of government that I thought was pretty explicit.  But, judging from the comments, particularly at Naked capitalism, apparently I have to spell it out – tell readers what and how to think.  I’m not willing to do that.

I can tell you I lean heavily in favor of something. I can tell you what I want our policymakers to do. I can present my view. That doesn’t mean I’m right. I am presenting an argument. I am presenting my view of how things were and how they will or should be.  And I would very much like to hear yours.

The argument I presented in the post was this:

the system Taibbi lucidly breaks down for us is one of privatized gains and socialized losses. Incumbent politicians and policymakers retain power by looking the other way and allowing special interests an unfair profit advantage. Usually, this goes to excess. Irrational exuberance takes over and losses ensue – losses which are not borne by the economic actors but taxpayers. That is how it always happens, but in this case it happened on a grander scale. And both Democrats and Republicans were complicit.

If you want me to jump up and down on one foot telling you how hopping mad I am about this cronyism and why we should boycott future elections or withdraw our money from too-big-to-fail institutions, you’ll be disappointed. I am not willing to do that either.

The fact is the United States is an empire and it has been for over 60 years. Once upon a time, this benefitted American citizens. One reason we instituted the Marshall Plan. But those days are over. Now, we have a fleet of multinational companies in defense, healthcare, financial services, oil and gas – you name it – and they are all clamoring for the government’s services in breaking in to foreign markets.  I’ve been there. I’ve seen it in action. I know how the system works. If you don’t think this is an empire then why do we have a military budget which is as large as the rest of the world combined?

The question I asked in the last article was:

what can be done?  Can we really spot this kind of ‘irrational exuberance” when it permeates the entirety of the social fabric? Barring another Great Depression, I don’t think any one President or one party is going to be the agent of change – Barack Obama has demonstrated this quite effectively.

The fact is empires rise and they fall.  Right now, the U.S. is falling. We are the world’s largest debtor nation – we owe more money to foreigners than anyone in the history of the world.  We have a debt to GDP which has tripled since the Marshall Plan days of the early 1950s.  It doesn’t take a genius to figure out this spells trouble.  And, no manner of bailouts, stimulus packages, and jobs summits is going to change this.

Now, my hope, my wish is that people in Washington would wake up and come to their senses and stop trying to prop up an economic system which needs serious re-adjustments. But, that’s not going to happen. You can boycott elections all you want; but do you really think this is going to make an enormous difference? You can boycott Bank of America all you want; they are still too big to fail.

Now, I will continue to write as if it could happen; I do have hope. But I’d be lying to you if I told you Michael Panzner’s Financial Armageddon view of things wasn’t how I saw the likely end game. I hope that is obvious from my recent posts. The vested interests in the status quo are too great.  Substantive reforms are not going to happen until we get a Great Depression style collapse and it is forced into being through civil action. It is certainly in no one’s interest in Washington or on Wall Street to reform the system. It works just fine for them.

We are seriously kidding ourselves if we think a group of people in power politically and economically are going to go into the good night for the benefit of the country. And, apparently Americans are too enamored of the bread and circus features presented to them as mental anesthesia to demand the changes necessary.

But, life goes on. Empires decline in importance but its citizens still can remain wealthy. The country still can be vibrant. Look at Spain, or Britain or the Netherlands.  Yes, we are going to have to suffer for the excesses of imperial overstretch but it is not a death sentence. The U.S. will still be a powerful, wealthy, and important country – just less so.

Source

Kleptocracy definition – Wikipedia

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

9 Comments

  1. Anonymous says:

    Mr Harrison,
    When your wrote of our decline it seemed to echo Kevin Phillip’s writings on the subject, particularly in American Theocracy.
    There is a sort of apocalyptic optimism in your post, and this may be the best we can hope for.
    As always, I enjoy your thoughts.

  2. Publius says:

    Evidently there are those who feel the American Empire is in some way “American.” The Empire is not American. The Empire is global. It is built by transnational capitalism for transnational capitalism. The United States is simply the doddering old Monarch everyone is waiting to see die. The United States will be replaced by something like the G-12. Crony Capitalism is not a one country affair.

  3. Matt Stiles says:

    I’d have to agree largely with the above. I don’t think America will fall. I don’t think its citizens will be reduced to poverty and starvation as many think when they speak of “Armageddon.”

    However, if “the decline” is dragged on for decades, it becomes conceivable. Our wealth is determined largely by our supply of productive capital goods and human capital. They are only destroyed with time. All the debt in the world could disappear tomorrow and we’d be no worse off than today.

    My biggest frustration lies in that the truth about how our system works, who it benefits and why it is not being changed – is not partisan. I don’t need to channel my inner libertarianism to make it coherent. I don’t need to pin blame on any person or political party. Yet nearly everyone who tries to explain it feels the need to take sides prior to their opinion gaining any traction.

    If it is not the “official” opinion of some party, with an equal opposing side, then it is not newsworthy – it doesn’t engender an emotional reaction sufficient to become news. It is merely a statement of facts.

    The existing paradigm could be torn down and replaced with something functional without violence or mass plight. It only requires people to abandon their emotional attachments and focus on the overarching, unpartisan issues that quite often are the root cause of the smaller, more emotional issues we often quibble about.