by
Bill Bonner Nature abhors a vacuum... (although apparently not in Washington...where the empty heads proliferate without check.) Thus, when the centralized economic gulag called the Soviet Union collapsed under pressure from the mixed economies of the West, the United States stepped up to the plate as the world's only great empire – with legions garrisoned in every hot spot and proconsuls spouting off at every diplomatic watering hole. No sparrow could flap a tail-feather in any Third World hellhole without setting off sensors at the Pentagon, we have noted. But nature doesn't tolerate a monopoly for very long, either. The United States, with a monopoly on conventional military power, has stood up against nature...and against history. It cannot be long that she does so, unless history and nature are both to come to a complete stop. Instead, since there are no conventional powers outside to challenge her, her destruction is being wrought unconventionally, from within. You see, empire running is a serious trade. It can't be done on borrowed money, especially money borrowed from incipient rivals. Only, look at Britain at the beginning of the 20th century. As soon as it exhausted itself in World War I, the helping hand from across the Atlantic grew stronger and bolder. Eventually, Uncle Sam had snatched the imperial mantle from the shoulders of the Queen. No, an empire that can't turn an imperial profit had better get into another business. It can provide all the security, peace, and rule of law it wants, but if it means to stay in business, it had better not provide it at a loss. Mind you, imperial profits are not hard to show. Your common or garden empire could do it. Just impose a tax on vassals, or if in a hurry, simply steal what's needed. Thus did Augustus feed the mobs in Rome...after the defeat of Anthony and Cleopatra....after taxing grain from the Egyptians. But Americans have never really gotten the hang of empire. From the very beginning, their heads have been fogged up with earnest hallucinations of the Wilsonian species. They think they are making the world safe for democracy and capitalism...for adultery and market-rate lending. And the Pax Americana that U.S. troops have imposed on the world has been an expensive undertaking. It might have been worthwhile until the 1970s, but since then, neither U.S. business nor U.S. labor has been truly competitive. So, the more the military has opened the door to globalization, the more the economy has lost market share, as foreigners have rushed in. American working stiffs can no longer expect salary gains – not with three billion Asians salivating over a tenth as much. They may continue to believe in the American dream and in the federal hacks and financial hoodlums who rule them. But the only way they can improve their standard of living now is by working longer hours, taking on greater debt, and buying products made by their rivals overseas. The empire – as is the wont of empires – was bound to wend its way to the trashcan anyway. But George W. Bush, Alan Greenspan – and the whole host of movers and shakers, hustlers and dissemblers, the massed ranks of seraphim and cherubim on the banks of the Potomac and the Hudson – have all hastened along the moment of its undoing. And so, today, while other publications may carp and complain about the incompetence and stupidity of the president and his neo-con advisors, we do not join in, for we believe that the U.S. Empire needs to be taken down a notch and that our rulers have merely found a novel way to do it, turning a rag-tag bunch of terrorists into a world-beating brand...and the rest of the world into anti-Americans. Thus has the world's most expensive military force been squandered on a war that cannot be won...and the world's richest treasury been emptied on bread it doesn't bake...debt and dependence. At least Washington still provides homemade circuses. • We are now living in our new digs in Paris. We bought a very modest apartment in the city, for a very immodest sum of money. The whole transaction seems strange and incomprehensible to us. We hasten to add: it was not our idea, dear reader. We looked out our bedroom window this morning and realized that we were living in a tenement. We could smell what other families were having for breakfast, see what clothes they were putting on, and hear what mothers were saying to their children to get them ready for school. "What makes this place so pricey?" we wondered. The average house in Aspen, for comparison, still costs less than this apartment. But Aspen is special. This apartment is nothing special. It is the opposite of something special. It is something very common. A thousand times so, for there are literally thousands of others just like it in the 16th arrondissement alone. Why are people willing to spend so much money for them? Where do they get the money to spend? Have we become just another statistic of the worldwide housing bubble? • The Chicago Tribune shows us the company we may now be keeping: "David and Erin Kerpel of Deerfield are representative of the statistics...In July they bought a bigger house across the street from where they have lived for three years. "They expected a quick sale of their former residence because their next-door neighbor's nearly identical home sold easily a few months earlier. "But after a few showings they are still waiting for an offer. "'It's dead. The market is dead,' David Kerpel said recently. 'There are no buyers.'" The explanation, according to the Tribune, is the flood of homes for sale, with the Chicago area alone having more than 95,000 properties on the Multiple Listing Service of Northern Illinois – a 40 percent increase in a year. The realtors blame potential buyers for stalling for a better deal and predict a drop in price from two to five percent for a couple of quarters. But, they argue, a national downturn will be short-lived, probably no longer than a quarter, because the market must pick up once sellers begin to cut prices. According to the Chicago paper, the Kerpels are now offering a lease-to-buy to sweeten their offering and stubbornly plan to wait out the market. They, like others, blame the media for hyping the bubble and the bust. Meanwhile, David Lereah, an economist with the National Association of Realtors, points the finger at speculators who pushed up prices "higher than they should have been," to quote the Tribune piece. But now, Lereah and his co-mavens in the housing business are themselves objects of derision.
"David Lereah has lost credibility because of his irresponsible cheerleading."
"You know, I just read in the paper," said an English friend, "that there have been 11 terrorist incidents or attacks since the World Trade towers...and seven of them have been done by British citizens. If we wanted to make war on terror, maybe we should have attacked London rather than Baghdad." September 12, 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 |
