One can pay back the loan of gold, but one dies forever in debt to those who are kind.
~ Malayan Proverb
Throughout history Americans have been very good at many things; we have without a doubt established ourselves as one for the history books. In one area, though, we lag — badly. While we had the great industrial base, immense wealth, and utter stupidity necessary to create a world-straddling empire, we were never very good at it.
Even step one to being an empire — conquer to take — is beyond us. Instead of forcing tribute from the conquered, in the late 20th and early 21st century America conquered to give tribute. Once you became a protectorate, your country’s ruling class could be assured of living fat and happy on the American taxpayer, with a bevy of vicious CIA thugs available to murder whomever displeased thrown in as a bonus.
The world is expensive enough just to conquer, let alone subsidize. Pax Americana was never a sustainable system, we run the Jim Morrison of empires, and not a thought is ever wasted for any consequences past the immediate.
Now apparently we are broke, so much so that Obama is making the rounds of our creditors, bowing humbly and holding out his official presidential begging bowl. This is how the American empire wheezes to an end; Caesar issues forth on distasteful fund-raising expeditions, arriving in a 71-car-long caravan of such unseemly profligate waste that would make a Turkish sultan blush.
We didn’t elect a statesman; we’ve elected a bond salesman. Obama, tasked by his handlers to keep the pig troughs full, is walking a loose tightrope in high wind. From one side blows union demands for taxpayer loot, all the promises Obama made in sleazy backroom deals are due for payment. From the other side blow the beloved voters, who demand that all the vague promises made into a microphone be made solid, and without any overt taxation to pay for it.
And lastly from the last side (and in these days most important) are the people who we hope will continue to pay for it all, the foreigners who demand that the paper dollars they are paid back in are of the same value as the paper dollars they lent out in the first place. So sit back, enjoy, and watch Obama’s much-touted youthful visage wilt under the power he craved, a power which now presents him with an impossible task. He can’t please everyone.
Already the factions are forming, union boss Richard Trumka, AFL-CIO president, demands (unionists always demand) that the government (which is how he refers to the taxpayer) must spend up to $3 trillion to "create jobs," mainly in AFL-CIO ranks. "Where’s there’s obstruction," he darkly warns, "we’ll expose it and push through it."
Unfortunately for Mr. Trumka and the unions of noble bricklayers, plumbers, steamfitters, and so on, there is an obstruction, namely China. Once they no longer trust the ability of the American taxpayer to honestly pay back all this money they’re lending they will simply stay away from US government bond auctions.
Some argue that they would never do such a thing, that we owe them so much they wouldn’t dare stop lending us money, else how would we repay them? People who argue that angle harbor a fervent hope that the Chinese don’t come to their senses before we do, basically.
While the pessimist in me has little doubt this will all end badly, it was fun to watch Obama mouthing banalities about human rights and what not — as American diplomatic protocol demands — while all the while Chinese big wigs nodded their heads politely. Many news commentators have been pointing out that Obama’s leverage on this matter is limited by the fact that China is now America’s biggest creditor.
That is true, and we can also throw in the fact that America circa 2009, with her public displays of torture, extraordinary rendition, and pre-emptive attacks on other nations, has about as much moral leverage on the subject of human rights as a street whore does on the subject of chastity. But he farced his way through nicely.
Obama even took some time to give advice on how to keep not just America’s economy humming, but China’s as well. It involves lots of planning, and he knows just the guys to do it, as he is sure the Chinese leaders do, too. But there’s a problem with the currency, he intoned to his hosts, specifically yours.
He put on his free market cap and explained, patiently and clearly using that tone which so enraptures Americans and Germans, that the Chinese need to stop artificially lowering their currency versus America’s. This is funny because the Chinese, sitting on a pile of one trillion or so US dollars, are worried about the exact same thing regarding America’s currency.
The Chinese politely took all this browbeating, maybe wondering why Obama wants them to allow their currency to appreciate versus the dollar. After all, keeping their currency artificially cheap is the very monetary policy that creates the flood of US dollars into their banks, which in turn allows them to continue to buy the flood of trillions in US Treasury debt, a flood which Obama desperately wishes for them to buy.
And they think the Oriental mind is inscrutable?, they must wonder.
If they picked up a newspaper as Obama was spirited away in his 71-car caravan (how many would a President Al Gore demand?), they would read Obama’s personal pit bull, name of Rahm Emanuel, predict "that even as the administration grapples with deficit reduction, Obama would succeed in winning Congressional passage of key elements of what the president has called his ‘new foundation’ for the country."
The foundation he refers to will cost $3 trillion minimum, if the AFL-CIO has its way. And that’s not even starting on socialized medicine.
From reaching the highest of highs, our empire can’t even go out with a bang, like Japan in an atomic flash, or suffer wonderfully inspiring disasters on our funeral march, like Britain at Islawanda or Dunkirk. Instead, we gussy up our guy in regal splendor and turn him into a better-dressed version of the bums who beg for change on my subway.
Having thoroughly bankrupted the working class, America’s politicians have taken the show on the road, hoping to convince non-American fools to continue to dump money down their insatiable maws.
They are like the She-Wolf in Dante’s Inferno, "a starved horror ravening and wasted beyond all belief, a rack for avarice, gaunt and craving." They are such that my son, whose main concern is watching Transformers 45,238 times a week, is, at the tender age of five, already hundreds of thousands of dollars in debt.
In late 1925, while the German state and her many municipalities had gone on an incredibly irresponsible borrowing spree, representatives of the German Reichsbank wired a cable to all the New York banks — they pleaded that while loans to German businesses were necessary and to be encouraged to please stop lending money to the German politicians. Dr. Schacht, the head of the German Reichsbank, personally appeared in front of the New York banking community at the same time, urging that there should be no more state and municipal loans to Germany.
So taking a page from such a fine example, I ask all my foreign friends, particularly all of China, to have pity on my five-year-old son. Next time Obama pays a visit, feed him, be polite, and send him on his way empty-handed.
I beg you: please stop lending our government money.
C.J. Maloney [send him mail] lives and works in New York City. He blogs for Liberty & Power on the History News Network website. His first book (on Arthurdale, West Virginia during the New Deal) is to be released by John Wiley and Sons in February 2011.