Empire on the Brink Republicans and "Free Market" Zealots Bring Disaster
to America
March 13, 2008
By PAUL CRAIG ROBERTS
http://www.counterpunch.org/
March 12. Crude oil for April delivery hit $110 per barrel. The US
dollar fell to a new low
against the Euro. It now takes $1.55 to purchase one Euro.
These new highs against the dollar are the ongoing story of the collapse
of the US dollar as
world reserve currency and corresponding collapse of American power.
Each new decision from the insane Bush regime pushes the dollar a little
further along to
oblivion. The same Fed announcement that boosted the stock market on March
11 sent the dollar
reeling and the price of oil up. The Fed’s announcement that it and other
central banks are
going to deal with the derivative crisis by monetizing $200 billion of the
troubled instruments
signaled more dollar inflation.
Of course, something needed to be done to forestall an implosion of the
financial system, but a
less costly alternative was at hand. The mark-to-market rule could have
been suspended in order
to halt the forced sale and write down of assets and to provide time in
which to sort out
derivative values, which are higher than the fire sale prices.
More pressure on the dollar resulted from the decision to award the
European company, Airbus, a
$40 billion contract that could reach $100 billion to build US Air Force
tankers. In simple
terms, that means another $40 to $100 billion added to the US trade
deficit, and a loss of $40
to $100 billion in US Gross Domestic Product and associated jobs.
Of course, the Bush regime had to award the contract to Europe as a payoff
for Europe’s sup****t
of the Bush regime’s wars of aggression in the Middle East. Europe is not
going to provide Bush
with diplomatic cover for his wars and NATO troops for his war in
Afghanistan without a payoff.
Here is the picture: The US economy, which has been kept alive by
enormous debt expansion that
has over-reached its limit, is falling into recession. The traditional
way out by expanding the
supply of money and credit is blocked by the impaired banking system, the
levels of consumer
debt, the collapsing value of the US dollar, and rising inflation.
The Bush regime is attempting to bypass the stalled credit expansion by
sending Americans $600
checks, money that will mainly be used to reduce existing credit card debt
and not to fund new
consumption.
The US is dependent on foreigners not only for energy but also for
manufactured goods and
advanced technology products. The US is dependent on foreigners to
finance our consumption of
$800 billion annually more than the US produces. The US is dependent on
foreigners to finance
its red ink wars, and the US government’s budget deficit is now expanding
as tax revenues
decline with the declining economy.
The bottom line: US power is enfeebled. US power depends on the
willingness of foreigners to
finance our wars and on the willingness of foreigners to continue to
ac***ulate depreciating
dollar assets.
The US cannot close its trade deficit. Oil prices are rising, and offshore
production of goods
and services for US markets results in a dollar-for-dollar increase in
im****ts, while reducing
the supply of domestic goods available for ex****t.
The US cannot close its budget deficit while it is squandering vast sums
on wars that serve no
US purpose, handing out $150 billion in red ink rebates, and falling into
recession.
US living standards, which have been stagnant for years, will plummet once
dollar decline forces
China off the dollar peg. So far prices of the Chinese-made goods on
Wal-Mart shelves have not
risen, because the Chinese currency, pegged to the dollar, falls in value
with the dollar. In a
word, tottering US living standards are being sup****ted by China’s
willingness to subsidize US
consumption by keeping its currency grossly undervalued.
The US is overextended economically and militarily, just as was Great
Britain with the fall of
France in the opening days of World War II. The British had the Americans
to bail them out.
After the chewing gum and bailing wire patch-ups are exhausted, who is
going to bail us out?
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan
administration. He was
Associate Editor of the Wall Street Journal editorial page and
Contributing Editor of National
Review. He is coauthor of The Tyranny of Good Intentions.He can be reached
at:
PaulCraigRoberts@[EMAIL PROTECTED]
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Finally, the campaigns of 1793 and 1794 set Clausewitz on the path of
recognizing war as a
political phenomenon. Wars, as everyone knew, were fought for a purpose
that was political,
or at least always had political consequences. Not as readily apparent
was the implication
that followed. If war was meant to achieve a political purpose, everything
that entered into
war — social and economic preparation, strategic planning, the conduct of
operations, the
use of violence on all levels — should be determined by this purpose, or
at least accord
with it. Even though soldiers had to acquire special expertise, and
function in what in some
respects was a separate world, it would be a denial of reality to allow
them to carry on
their bloody work undisturbed until an armistice brought their political
employer back into
the equation. Just as war and its institutions reflected their social
environment, so every
aspect of fighting should be suffused by its political impulse, whether
this impulse was
intense or moderate. The appropriate relation****p between politics and war
occupied
Clausewitz throughout his life, but even his earliest manuscripts and
letters show his
awareness of their interaction.
The ease with which this link — always acknowledged in the abstract —
can be forgotten in
specific cases, and Clausewitz’s insistence that it must never be
overlooked, are
illustrated by his polite rejection toward the end of his life of a
strategic problem set by
the chief of the Prussian General Staff, in which every military detail of
the opposing
sides was spelled out, but no mention made of their political purpose. To
a friend who had
sent him the problem for comment, Clausewitz replied that it was not
possible to draft a
sensible plan of operations without indicating the political condition of
the states
involved, and their relation****p to each other: ‘War is not an independent
phenomenon, but
the continuation of politics by different means. Consequently, the main
lines of every major
strategic plan are largely political in nature, and their political
character increases the
more the plan applies to the entire campaign and to the whole state. A war
plan results
directly from the political conditions of the two warring states, as well
as from their
relations to third powers. A plan of campaign results from the war plan,
and frequently - if
there is only one theater of operations - may even be identical with it.
But the political
element even enters the separate components of a campaign; rarely will it
be without
influence on such major episodes of warfare as a battle, etc. According to
this point of
view, there can be no question of a purely military evaluation of a great
strategic issue,
nor of a purely military scheme to solve it.’
Everyman’s Library, 1993 ISBN: 0679420436 On war /by Clausewitz, Carl
von, 1780-1831.
Knopf, 1993. From the introduction by Peter Paret, Pg7
_____________________________________________________________________
The U-2 is a jet-powered reconnaissance aircraft specially designed to fly
at high altitudes
(i.e., above 70,000 ft [21 km]). It was used during the late 1950s to
overfly the Soviet
Union, China, the Middle East, and Cuba; flights over the Soviet Union,
the primary mission
for which the plane was designed, ended in 1960 when a U-2 flown by CIA
pilot Gary Powers
was shot down over the Soviet Union. This event was a major political
embarrassment for the U.S.
http://www.espionageinfo.com/Te-Uk/U-2-Spy-Plane.html
Soviet Prime Minister Khrushchev's reaction to the overflights which
were discovered
just before a summit conference in Paris with President Eisenhower: "It
was as though the
Americans had deliberately tried to place a time bomb under the meeting" .
. ."How could
they count on us to give them a helping hand if we allowed ourselves to be
spat upon without
so much as a murmur of protest?" The only solution was to demand a formal
public apology
from Eisenhower and a guarantee that no more overflights would take place
. . .
But the apology Khrushchev was looking for would not come. Despite
having trespassed
on the Soviet Union for the past four years with scores of flights by both
U-2's and heavy
bombers, the old general still could not say the words, it was just not in
him. . . A time
bomb had exploded, prematurely ending the summit conference. . .
Back in Wa****ngton, the mood was glum. The Senate Foreign Relations
Committee was
leaning toward holding a closed door investigation into the U-2 incident .
. . In public,
Eisenhower maintained a brave face. He "heartily approved" of the
congressional probe and
would 'of course fully cooperate,' he quickly told anyone who asked. But
in private he was
very troubled. For weeks he had tried to head off the investigation. His
major concern was
that his own personal involvement in the overflights would surface,
especially the May Day
disaster. Equally, he was very worried that details of the dangerous
bomber overflights
would leak out. The massed overflight may in fact, have been one of the
most dangerous
actions ever approved by a president.
pg. 51-55 ~Body of Secrets; Anatomy of the Ultra Secret National Security
Agency
James Bamford
----------------------------------------------------------------------
"Let me give you a word of the philosophy of reform. The whole history of
the progress of
human liberty shows that all concessions yet made to her august claims,
have been born of
earnest struggle. The conflict has been exciting, agitating,
all-absorbing, and for the time
being, putting all other tumults to silence. It must do this or it does
nothing. If there is
no struggle there is no progress. Those who profess to favor freedom and
yet depreciate
agitation, are men who want crops without plowing up the ground, they want
rain without
thunder and lightening. They want the ocean without the awful roar of its
many waters."
"This struggle may be a moral one, or it may be a physical one, and it may
be both moral and
physical, but it must be a struggle. Power concedes nothing without a
demand. It never did
and it never will. Find out just what any people will quietly submit to
and you have found
out the exact measure of injustice and wrong which will be imposed upon
them, and these will
continue till they are resisted with either words or blows, or with both.
The limits of
tyrants are prescribed by the endurance of those whom they oppress. In the
light of these
ideas, Negroes will be hunted at the North, and held and flogged at the
South so long as
they submit to those devilish outrages, and make no resistance, either
moral or physical.
Men may not get all they pay for in this world; but they must certainly
pay for all they
get. If we ever get free from the oppressions and wrongs heaped upon us,
we must pay for
their removal. We must do this by labor, by suffering, by sacrifice, and
if needs be, by our
lives and the lives of others."
http://www.buildingequality.us/Quotes/Frederick_Douglass.htm
Frederick Douglass, 1857
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http://www.politicsusaweb.com/
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