by
Bill Bonner
Every great public spectacle begins with a lie, develops into a farce, and often ends up a tragedy. We read the newspapers and wonder where the war in Iraq stands in the sequence. Certainly, the lies are behind it. The Bush administration told the lies it needed to tell to get the war underway. Now, no more lies are needed. But, does that mean we are in the farce stage? Or have we already moved to tragedy? "When you open up the strategy for victory, there is nothing inside," said Representative John Murtha, Democrat from the great state of Pennsylvania. Murtha has seen this show before, in Vietnam. That, too, had to work its way through the three stages. The lies: that Americans should care what kind of misgovernment the Vietnamese had...and that if they "went communist," the whole of Southeast Asia would fall "like dominoes." Then came the farce – in which hundreds of thousands of American boys were "sent to do the fighting that Asian boys should do," in Lyndon Johnson's words...sent off with an empty strategy and no real knowledge of whom they were fighting or what they were fighting for, other than slogans as empty as a George Bush speech. And finally, came the tragedy, not so much the American retreat, which was still in the bloody farce stage, but the victory of the reds, who were every bit as asinine and murderous as their enemies made them out to be. But finally, when Vietnam did "go communist," the whole of Southeast Asia yawned. Nobody cared. The Vietcong had won. And the whole country suffered its victory, like a war wound, for the rest of the century. There were no real winners in Vietnam. The president says he has a Plan for Victory in Iraq, but there will be no winners there either. Who will be the biggest loser? We cannot know. It is not given to man to know his fate. All we can do is to try to peek around the corner. The world was a much different place in 1966 than it is in 2006. Forty years ago, the United States was the world's undisputed economic power, and still a growing power with a positive trade balance, a net creditor to the rest of the world, and a dollar still convertible into gold, albeit indirectly. Americans still paid off their mortgages. Credit cards were still in the future...along with reality TV and "neg am" mortgages. The generation in command still remembered the lessons of the Great Depression, and World Ware II. They made mistakes – big ones – but they still expected to pay their bills and balance their budgets. What's more, their largest potential competitors – Russia, China, India – still hobbled themselves with Marxist claptrap that kept them out of world markets for much of the 20th century. In other words, America could still afford to make grandiose mistakes. The United States is, of course, an imperial power. It is also the world's largest debtor. Its role in the world is to maintain order. But it can only do so by borrowing money from its former and future enemies! And now, the empire wastes its military resources in a fight that can do it no good, and squanders its borrowed money trying to secure a part of the imperial periphery that can do it no harm; Russia is building up piles of dollars by exporting energy. China is building up mountains of dollars by exporting consumer-manufactured goods. India is coming on strong, too, by offering English-language information processing to the rest of the world. At some time in the future, these lenders will surely want more for their money than 5%. Already, we read in last week's paper that China's key advisors are urging the government to take its dollars and buy oil and gold. At some point, they might want to suggest changes in the trade relationship, or changes in the décor of the White House...or changes in the U.S. Constitution itself. Who knows? The dollar is, after all, a currency of no fixed value. Both lenders and borrowers are aware that it floats on the wind like odor from a public dump. And when the lenders decide the time is right, they will make a flap. Then, the borrower will find he or she is on the wrong side of the breeze. Osama bin Laden wasn't born yesterday. He, too, knows which way the wind blows. His publicly stated strategy is to bleed the empire dry – forcing it to spend $100,000 for every 50 cents his terrorists lay out. It is simple enough to understand the math, but who would have thought that the empire would be stupid enough to fall into the trap? A "war on terror" is in many ways the perfect war for a bankrupt empire. Perfect for its enemies, too. It allows the homeland team to marshal resources it does not have for a war it cannot lose. Terrorists can only irritate the great empire; they cannot bring it down. No, the empire will have to bring itself down. And for that, we don't need terrorists. We have Congress and the White House. • "A young man was going to get married," began Peter Mullen's sermon yesterday. "He did not go to church regularly, and he was too young to know about the big changes that have taken place in the Anglican Church since the 1970s. So, when the vicar asked him whether he would prefer the new service or the old service, he merely answered that he would like the new service, thinking it must be an improvement over the old one. "But on the way to the wedding, he had a flat tire. And while he was pulled over to the side of the road changing his tire, it began to rain hard. A real downpour. And pretty soon, his pants were getting soaked, so he rolled up the cuffs to his knees, finished the job and raced along to the church, forgetting to let his pants back down. "Now, he was late to his own wedding...and his poor bride was already at the altar, weeping because she thought she had been deserted. And so, he ran up the aisle and took his place beside her. "'Young man,' said the vicar, 'pull your pants down.' "Whereupon the man replied, 'Well, if you don't mind, I think we'd prefer the old-fashioned service.'" • "Why do you want to tell readers about the sermon?" asked Jules, 18, who sat through it. "A lot of people have a lot of ideas about God. They all think they are right. Why don't you include a Hindu...or a Rosicrucian?" "We are not preaching religion, Jules," we responded. "But we think the financial world works just like the rest of the world. As you sow, so do you reap. You get what you've got coming. We try to show how those principles work in the world of money. Mr. Mullen tries to show how they work in the rest of life." Jules is recently returned from his first year in college, full of confidence in his own brain. He went on to say, "But they don't work. You say yourself that a lot of what you get from investments is a matter of luck. And you know that moral principles don't really work in the real world either. People don't get what they've got coming. If they did get what they had coming, little children wouldn't be getting shot down in the streets of Baghdad, would they? I mean, the little children didn't do anything to deserve death, did they?"
"Sounds like you're saying that it most often comes out the way you expect," said Jules.
June 7, 2006 Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis. Copyright © 2006 Bill Bonner |
