End of an era
The failure of the bailout bill has set off all the usual recriminations, though as of this writing the market is regaining some of the ground it lost yesterday. The bill that went down to defeat yesterday was certainly rife with problems: as economist Nouriel Roubini (one of the few who saw the financial tsunami coming) points out, it lacked numerous safeguards and put far more of the public’s money at risk than is prudent. Nonetheless it seems virtually certain that some kind of bill will pass shortly.
But the underlying damage has already been done. Future historians are likely to mark 2000 as the apogee of the American Empire; the decline since then has been as swift as it was unnecessary. Wed to their belief in American exceptionalism, the country’s leaders ran up huge debts to support wars that (as enemies like Bin Laden anticipated) undermined the state’s finances. And the people showed even greater myopia, spending like there was no tomorrow even as they lapsed into endless blue state/red state culture strife. The world economy has depended for way too long on the ability of the U.S. consumer to place him/herself in ever greater debt. We’ve now reached the limits of that ability, and we’ve got a long way to fall. We may or may not be heading for a second great depression, but we are certainly heading for a multipolar world (at first financially, but ultimately politically). And the transition to it will be anything but pretty.
Tags: economy
October 1st, 2008 at 10:06 am
I cannot agree with what you’ve written any more. We’ve been on the decline for quite a while, our financial model has all but broken. The need for adaptability in a world which is passing us by is greater now than ever, but I have little hope that we can accomplish this as a country. We’re far too entrenched in the worldly comforts afforded to us by the now waning prosperity.
I’m afraid that we’ve driven our gas guzzling SUVs into the sunset of our nation, sipping the lattees of contentment and the McBurgers of obesity all the while. Perhaps the part of the population which prefers pinstriped button down dress shirts and perfectly hydrophobic hair will learn a new industry other than mortgage brokering or real estate sales, though I doubt it. Such “skills” are devoid of value in the long term. The type of person who is attracted to this lifestyle is typically incapable of adaptability, though this generality is not without exception.
October 1st, 2008 at 12:21 pm
man, after I read that first sentence, I thought I was gonna get a lecture about how the sun never sets on the Pax Americana . . . thanks for going in a more sensible direction.
That said: I don’t think “worldly comforts” per se are the problem, but I do think that the confusion of wants with needs (as a friend put it the other day) is definitely related to all of this. But I still maintain that Paul Kennedy’s declaration of the decline of America was premature; several years after the cold war, America was (relatively speaking) more powerful than at any point in her history since 1945.
October 1st, 2008 at 12:42 pm
No, I can’t say that worldly comforts are necessarily a bad thing either, but I do believe that the manner by which we cling to them is a direct symptom/indicator of our general blissful ignorance with regards to our reality.
A few years back, Johann Galtung gave a speech which floored me. In short, he said that the marker for our decline will be the our stock market peaking. The reason for the decline will be the disparity between production and finance economy. So, when the dollar surges financially but the productive economy is sluggish, there is a backlash. He predicted our 2001 economic slump back in ’99 and again predicted the current failure back in 2004.
In the end, we are simply riders on the roller coaster. Our machine, to make an analogy, has reached critical velocity and is beginning to break up. There will be many social and political “casualties” as a result, but from the ashes there may rise a new general sensibility by which we emerge stronger and better educated, though there is another more likely alternative result which is far darker and more bleak.
Perhaps I’m being a fatalist with regards to our future, but the truth is, I’m world weary and feel like I’ve seen this over and over again. I get gut feelings and they typically are validated.
October 4th, 2008 at 2:03 pm
I’d never heard anything by Galtung–very interesting stuff indeed.
another really good book btw is Niall Ferguson’s Colossus. Ferguson comes at all this from a neo-imperalist perspective, but it’s no less interesting for all that.