BY Stan Goff

Part 2

-From Part 1

The United States of America is an imperial core in deep crisis.

…data…

World population, 1939: 2,296,000,000
Total population of all WWII “battle” countries, 1939: 1,961,071,000
Total deaths attributable to WWII, 1945: 72,155,800
Civilian deaths from WWII (by selected country): China - 15.8 million+; Germany - 1.8 million + (not counting Jews, Roma, et al); India - 1.5 million+; Vietnam (French Indo-China) - 1 million+; Japan - 580,000; Poland - 1.9 million; United States - 11,200; Union of Soviet Socialist Republics (USSR) - 26.5 million

Per capita US consumption today: More than 4 liters a day

Rate of natural creation of topsoil worldwide: 20 million tons a year
Rate of worldwide topsoil loss each year now: 100 million tons
Principle social phenomenon responsible for topsoil loss: urbanization

Top net oil exporting nation, 2007: Russia
Second largest net oil exporting nation, 2007: Saudi Arabia
Largest net oil importing nation: United States
Second largest net oil importing nation: China

By dint of the United States’ size, its financial dominance, and its ability to project military might – especially nuclear weapons anywhere in the world – every other nation in the world finds itself obliged to relate its policies and strategies to the United States as a primary matter. This is not a recipe for universal love.

This condition of core dominance is both dynamic and inertial. It changes; but the changes are driven as much by inertia as by intent. In fact, most of the intent employed by power brokers is driven by reaction to uncontrolled tendencies within the system, and the unpredictable trajectories of those tendencies.

Crisis: 1. A crucial or decisive point or situation; a turning point. 2. An unstable condition, as in political, social, or economic affairs, involving an impending abrupt or decisive change.

The United States economy is seen by conventional economists as a “growth” economy.

“Growth” is a euphemism for expansion of monetary value in the overall economy, based on expanded production. Further down, we will look at the unintended consequences of this economic model that assumes unlimited capacity for expansion without accounting for the limits placed on that growth in a materially finite world.

But for now, the important point to make is that “growth” in the US economy is no longer predicated on expanded production. It is based on “a de facto depreciation of money.”

The steady decline in the net purchasing power of the dollar worldwide results in an increase of asset prices. Economists, the Federal Reserve Chair leading them by their noses, look at these rising prices (with no net increase in asset production that keeps up with the profligate printing of new dollars) and call the increased ledger numbers “growth.”

The surplus dollars that result from this printing press frenzy create what some call a “liquidity bubble,” which means financial gamblers are socking these spare dollars into hot-money investments (like the dot-com bubble then, or the deflating housing bubble now), which creates speculative stampedes, further driving up the prices of stocks (not material assets like band-aids or cameras or potatoes).

So, from 1996 to 2000, while gross domestic product (GDP) rose around 25%, the Dow Jones Industrial Average (DJIA) shot up at triple that rate. According to Henry CK Liu, this meant that the dollar had been effectively de-valued by almost 58%.

Most people see money as an axiomatic constant; but nothing could be further from the truth. A dollar today does not necessarily buy the same value tomorrow. The dollar has maintained its primacy as the international currency ever since the mid-70s not through the strength of corresponding production in the United States, but through the threat of default on a massive and ever-growing debt that reside as reserve currency hedges in central banks around the world, and the threat of a collapsed US consumer economy that soaks up exports from the rest of the world. This has been called “dollar hegemony.”

What this amounts to in a nutshell is that the strength of the US economy, such as it is, is the last act in a series of crisis-management directives developed ever since the end of the Vietnam occupation. It is not the strength of the industrialist lording over his army of workers and a nation allowed to skim the bennies. It is the strength of a cornered bank robber who has taken hostages.

The United States is in hock up to its eyeballs; and it is financing its day-to-day domestic stability on an ever-extending ledge of household debt. In 1975, average US household debt was 62% of disposable income. By 2005, that number had jumped to an unsustainable 127%. The sharpest and most recent rise has been since 1995 — an indicator of how much more important consumer spending, fueled by increasing debt, has become for the general US economy to limp across increasingly formidable recessionary obstacles. The latest peak in this debt burden has occurred among the middle quintile (40-60%) in terms of per capita income… in them middle of the so-called “middle class.” The two primary sources of these debts are mortgages and credit cards. Among the poorest quintile, and increasing fraction of this debt is from predatory lending schemes that work best during the very worst household financial emergencies — a quasi-criminal form of predation that in any decent society would be punished with firing squads. Not surprisingly, the top 10% have the lowest debt burden as percent of disposable income (less than 10%).

I will argue further down that the leftist notion of class struggle — previously seen as a contest at “the point of production” — needs to be shifted from the shop floor (now more likely, the cubicle) to a direct struggle for land and popular sovereignty over our communities.

The reason this consumer-debt has become the principle engine of recent economic stability in the United States is that the so-called market fundamentals of economic “health” (which means profit margins are comfortable and growing, while populations remain calm) are not in evidence. Whereas post WWII power (in the economic sense) derived from ownership of “productive” property, both the inevitable and the unpredictable perturbations in this system — from “resource” scarcity, international relations, and social upheavals — have rendered these “fundamentals” obsolete. We are now in a world system where US power internationally is supported on two legs: monetary hegemony and military power.

These are aspects, however, of a deeper cycle of reality wherein we see the centralized consolidation of control, the homogenization of culture and ideology, and the destruction of social and biospheric complexity. It is this trend, one that tends always to increase the division of labor socially — and with it the generalized dependence on centralized institutions and “experts” — and that concentrates critical infrastructure within this social paradigm, that is the very basis of our newfound “insecurity.” We have all acknowledged that the bin Laden phenomenon — which is merely a symptom of the deeper problem — constitutes a threat to our security. There are “centers” of power, like the World Trade Center and the Pentagon, that make “good targets,” because the impacts of attacks on this critical infrastructure are so far-reaching. There really is a threat to our security from “terrorism,” and it will continue so long as those aforementioned provocations continue. But few understand the deeper systemic threat to our security that can be located somewhere in all this talk of money and the difference between industrial and finance capital, and even more profoundly in what we are collectively doing to the biosphere that is the very basis of our existence. It is the preservation of power within that system that makes the “provocations” leading to terrorism both necessary and inescapable.

To understand this system, it is essential to see the system without the public relations window dressing and to see it from the point of view of the richest one percent. They are, by the way, getting richer.

In 1999, the poorest fifth of the US population received less than 4% of the total income. The second poorest fifth received 9%. The middle fifth received 15%. The second richest fifth received 23%. The richest fifth received 49%.

By the time Jimmy Carter’s administration fell in the wake of the Iranian Revolution, the richest one percent of the US population held 13% of our wealth. By the time George W. Bush stole the 2000 election, they owned more than 40%. This abrupt three-fold increase coincides with the development of a new “Washington Consensus” sometimes called neoliberalism.

David Harvey has made two key points about neoliberalism: (1) It is class warfare from above (and the data above bears this out), and (2) it has created a sharp contradiction between the territorial logic of power and the financial logic of power. It is this disarticulation between the “logics” of power — one where the State as a principle political actor is literally outlined by a territorial line of jurisdiction — that has put the State at a disadvantage against non-state actors (like bin Laden) in the realm of military action. The general vulnerability of the State in the face of non-state military actors can now be seen in concentrated form in Iraq, where the summary destruction of the state placed the occupying military power in a position — fighting non-state actors who were not constrained by territorial logics, nor by dependence on critical infrastructure — where military “victory” can neither be described nor attained short of genocide.

I have stated that US power is at bottom monetary and military. I will now extend that claim. The domestic political stability of the United States depends absolutely on the continuation of that power; and both aspects are now in “an unstable condition, as in political, social, or economic affairs, involving an impending abrupt or decisive change.” In short, a crisis.

End of Part 2

Part 3

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Posted by stan in Analysis