by
Bill Bonner No one entered the temple yesterday and over-turned the tables of the moneychangers at Goldman, the Fed, or the ARMs dealers. The earth did not open and gobble up homeowners; nor did the Dow collapse, taking speculators and dreamers down with it. A booming voice from Heaven was not heard straightening things out. "Now look what you've done," it might have said to the Bush administration. Fire and brimstone did not rain down on the nation's Capitol...Wall Street...or even Hollywood, for that matter. No, it was business as usual. And business as usual is confused...uncertain...nuanced and ambiguous. Economists are beginning to take note of the housing slowdown, says Bloomberg. They now expect a "Slower US Growth Rate" for the year ahead...and maybe a rate cut, if things start to go bad in a major way. Not so, says Investors Business Daily. Falling energy prices and rising stock prices dim prospects for a rate cut. And who really knows? No one. It's all guesswork. And our guess is that Bloomberg will turn out to be more right than Investors Business Daily. The housing industry has underwritten consumer spending and GDP growth in the United States for the last five years. When the housing industry turns down...so do a lot of other things. Economists know this. They're betting along with Alan Greenspan and real estate agents that the correction in the housing market will take prices down less than two percent. We have watched the markets, the economy, and our fellow man long enough to know that anything is possible...but a decline of two percent seems like wishful thinking to us. So, we leave that...and turn our attention to the big, wide world...and the vast panorama of history. What are the serious challenges America faces? 'Terrorism!' comes the cry from the lumps. Terrorists are a nuisance, not a menace. We can't think of a single major power...let alone a single empire...that was undone by terrorism. But right now, the United States is spending a fortune on this nuisance. The total bill for the wars and occupations in Iraq and Afghanistan is expected to top $1 trillion. The whole business is no more than an invitation to squander money and lives in a campaign against nobody-who-really-counts...an invitation the Bush administration gladly accepted! So, we ask again what are the serious challenges faced by the U.S. Empire? Three stand out: 1) The empire is going broke 2) The empire is losing market share 3) The empire is running out of fuel The first is no secret at all. The federal government is on the hook for some $55 to $65 trillion in expenses, beyond what it can reasonably expect in revenues. There's nothing especially novel about this bankruptcy. Empires usually go broke...and then they collapse or are destroyed by enemies. Military power follows economic power, at least in the modern world. But why do thriving empires go bust? Why can't they make a profit in the empire business? Well, of course, at first they usually do. That's how they become great empires. Either by force of arms or force of commerce usually both they grow and expand. But there must be a flaw in the human character. Once it is set on course for expansion, it doesn't seem to know when to stop. More and more conquests lead to more and more battles...more territory to administer...and more military expenses. The United States now has more than 100 bases all over the world, and a military budget equal to that of all the rest of the world's nations combined. Meanwhile, institutions age and wither like old trees. Gradually, they are taken over by parasites, freeloaders, and hustlers. In military matters, the defense establishment shifts from actually defending the nation...to expanding the empire...and then to expanding itself. Contractors grow fat and rich. Politics and profits dictate which weapons are put into service, not military necessities. Even wars are chosen for reasons other than their actual military benefits. Politicians need enemies. The military/industrial complex, as Eisenhower called it, needs a raison d'κtre. The people themselves need to be scared and bullied into cooperating with the imperial agenda. In the homeland, the mob of voters clamors for more protection, more benefits, more privileges and more entertainment. Gradually, old virtues of independence and thrift are swept away. Everyone comes to rely on the imperial state not only for handouts, but for emotional gratification. People cheer it on as if it were a sports team. Did the empire crush resistance in Baghdad? Hooray! Did it suffer a setback in Kabul? Well, no joy in Mudville. George W. Bush is supposed to be a "conservative" president, but he has actually expanded social spending programs more than any president in history. Like everything else, the old "conservative" program has been corrupted by neo-conservative shills who serve the interests of the empire...along with their own interests, not those of the Old Republic. Now there is no longer any major organized opposition to government spending. As a result, the nation is going broke. But enough of this for one day...tomorrow, we take up the other major challenges America faces: losing market share...and running out of fuel. • We are getting to have a bad attitude towards people with handicaps. We didn't mind that they got the best seats on the subway...and the best parking places...but now they're carrying their victim status a little too far. "You need two bedrooms for handicapped people," our architect told us yesterday, referring to the conference center we are in the process of building in Normandy. "I know they told you one would be enough, but the law has changed. Now you need two." "This is ridiculous," we responded. "We're already putting in an elevator just for the handicapped. Everyone else has to walk through the front door. The whole thing is absurd. If someone came up in a wheelchair, we could certainly pick the thing up and help the poor guy in through the main door. We'd be delighted. But instead, we have to provide a special elevator and a special door at a cost of thousands of dollars. And we may never actually have someone who wants these things." "You don't understand, Monsieur," continued the architect. "The law insists that you be prepared for a handicapped person. Whether he actually ever shows up or not is another matter. And let us suppose you only get one person in a wheelchair every five years. You may think, how silly it is to invest 25,000 euros in a special elevator for the man when you could easily help him up the stairs...there are only three steps to the front door, by the way. But the law requires that this man have the ability to be as independent as possible. He shouldn't have to rely on you to help him up the stairs. He should have the same freedom of movement...at least insofar as his condition allows...as any other person." We were ready with our reply, however: "But this applies to only one category of handicapped person...someone in a wheelchair. There are all sorts of handicaps...and most of them you can't even see. What about the poor fellow who is blind? Is he supposed to be independent? That guy has to come up the stairs...someone has to take his arm, because he can't possibly have memorized how many steps there are...he's never been here before. And the guy with one arm...or no arms. How is he going to open the door...is he going to butt it with his head? No, we're going to open the door for him, as any decent person would. "Of course, we don't have any way of knowing who is really handicapped and who is not. A man who can't walk might still have his wits, his courage...and even the grace of God, for all we know. Compare that to a fellow whose mother beat him...or who, for a reason we never know, just is not happy with the world or himself. The poor fellow walks on two legs. He uses two hands and two arms. But inside, he's all broken up and mangled. That's the fellow who really needs our sympathy. That's the fellow who really needs an elevator in life. But we can't even see his defect...so nobody does anything for him.
October 13, 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 |
