The Multi-decade Endgame of US Ascendancy

Change is on the way for the United States. Change is always around the corner, but it may be arriving faster than we think. Is it a new austerity? A new mindset? Something more humble and realistic, given the rapidly changing nature of our environment and our world? Or will there be a backlash against any kind of reordering of the American way of life?

Kevin Phillips looks at recent American history and sees parallels which should concern us all:

Premature fears have also dogged the United States. The decades after the 1968 election were marked by waves of a new national apprehension: that U.S. post-World War II global hegemony was in danger. The first, in 1968-72, involved a toxic mix of global trade and currency crises and the breakdown of the U.S. foreign policy consensus over Southeast Asia. Books emerged with titles such as "Retreat From Empire?" and "The End of the American Era." More national malaise followed Watergate and the fall of Saigon. Stage three came in the late 1980s, when a resurgent Japan seemed to be challenging U.S. preeminence in manufacturing and possibly even finance. In 1991, Democratic presidential aspirant Paul Tsongas observed that "the Cold War is over. . . . Germany and Japan won." Well, not quite.

In 2008, we can mark another perilous decade: the tech mania of 1997-2000, morphing into a bubble and market crash; the Sept. 11, 2001, terrorist attacks; imperial hubris and the Bush administration's bungled 2003 invasion of Iraq. These were followed by OPEC's abandoning its $22-$28 price range for oil, with the cost per barrel rising over five years to more than $100; the collapse of global respect for the United States over the Iraq war; the imploding U.S. housing market and debt bubble; and the almost 50 percent decline of the U.S. dollar against the euro since 2002. Small wonder a global financial crisis is in the air.

Here, then, is the unnerving possibility: that another, imminent global crisis could make the half-century between the 1970s and the 2020s the equivalent for the United States of what the half-century before 1950 was for Britain. This may well be the Big One: the multi-decade endgame of U.S. ascendancy. The chronology makes historical sense -- four decades of premature jitters segueing into unhappy reality.

The most chilling parallel with the failures of the old powers is the United States' unhealthy reliance on the financial sector as the engine of its growth. In the 18th century, the Dutch thought they could replace their declining industry and physical commerce with grand money-lending schemes to foreign nations and princes. But a series of crashes and bankruptcies in the 1760s and 1770s crippled Holland's economy. In the early 1900s, one apprehensive minister argued that Britain could not thrive as a "hoarder of invested securities" because "banking is not the creator of our prosperity but the creation of it." By the late 1940s, the debt loads of two world wars proved the point, and British global economic leadership became history.

Any change or reordering of the way Americans live would affect vast areas of the country that were designed entirely for car travel and have almost nothing in the way of a public transportation infrastructure. Paul Krugman compares Atlanta and Berlin--to cities virtually identical in size. Berlin has subways, trains and bike riding areas and Atlanta has cars and very little else. The reality of rising energy prices means that suburban Atlanta could be isolated or abandoned in favor of living in a more densely populated area, served by public transportation. Krugman says that change is going to be difficult:

Changing the geography of American metropolitan areas will be hard. For one thing, houses last a lot longer than cars. Long after today’s S.U.V.’s have become antique collectors’ items, millions of people will still be living in subdivisions built when gas was $1.50 or less a gallon.

Infrastructure is another problem. Public transit, in particular, faces a chicken-and-egg problem: it’s hard to justify transit systems unless there’s sufficient population density, yet it’s hard to persuade people to live in denser neighborhoods unless they come with the advantage of transit access.

And there are, as always in America, the issues of race and class. Despite the gentrification that has taken place in some inner cities, and the plunge in national crime rates to levels not seen in decades, it will be hard to shake the longstanding American association of higher-density living with poverty and personal danger.

Still, if we’re heading for a prolonged era of scarce, expensive oil, Americans will face increasingly strong incentives to start living like Europeans — maybe not today, and maybe not tomorrow, but soon, and for the rest of our lives.

One thing that will likely change is the notion of extreme commuting, or living so far away from work that it is next to impossible to see how the costs of transportation could be covered by any reasonable salary:

It is said that doctors, when they ask you how much you drink, will take the answer and double it. When a commuter says, “It’s an hour, door-to-door,” tack on twenty minutes.

Seven hours is extraordinary, but four hours, increasingly, is not. Roughly one out of every six American workers commutes more than forty-five minutes, each way. People travel between counties the way they used to travel between neighborhoods. The number of commuters who travel ninety minutes or more each way—known to the Census Bureau as “extreme commuters”—has reached 3.5 million, almost double the number in 1990. They’re the fastest-growing category, the vanguard in a land of stagnant wages, low interest rates, and ever-radiating sprawl. They’re the talk-radio listeners, billboard glimpsers, gas guzzlers, and swing voters, and they don’t—can’t—watch the evening news. Some take on long commutes by choice, and some out of necessity, although the difference between one and the other can be hard to discern. A commute is a distillation of a life’s main ingredients, a product of fundamental values and choices. And time is the vital currency: how much of it you spend—and how you spend it—reveals a great deal about how much you think it is worth.

Resistance to any kind of change or rethinking of how to commute, how to improve our lives, and how to deal with new economic realities can best be explained by looking at the hysterical headlines from websites, such as the Drudge Report:



This headline, in underlined RED text while everything else is in regular black text, is designed to appeal to readers who might be offended that a Presidential candidate would suggest that Americans need to change their thinking about certain things. It is not designed to appeal to anyone who might agree with Obama, hence, the prominent position on the page (upper left, first story), the highlighting of the red text, and the out-of-context quote:

Pitching his message to Oregon's environmentally-conscious voters, Obama called on the United States to "lead by example" on global warming, and develop new technologies at home which could be exported to developing countries.

"We can't drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times ... and then just expect that other countries are going to say OK," Obama said.

"That's not leadership. That's not going to happen," he added.

There may be new change and some form of austerity forced on Americans, but it won't happen quietly.

Get Ready for the Meltdown

An economy is like a mating ritual. The parties dance around each other and perform rituals. Instead of confidence, we have fear right now. Fear and Desperation are setting in because we have so many issues that aren't being addressed--and a tax rebate is exactly the wrong thing to do when we're watching everything start to come undone. Desperation is so sexy--ask any college girl and she'll tell you that a nervous, shaking, visibly horny young man who can't make up his mind and can't stop fidgeting with his keys always looks better than the guy who doesn't wear a watch and listens intently whenever someone speaks.

This is desperation, in an economy:

Federal Reserve makes emergency rate cut
Key U.S. interest rate slashed by three-quarters of percentage point

WASHINGTON - The Federal Reserve, confronted with increased fears of a recession, cut a key interest rate by three-quarters of a percentage point on Tuesday in an emergency move.

U.S. stock futures seesawed Tuesday after the Federal Reserve, responding to a growing financial market crisis, slashed interest rates 0.75 percentage point.

Dow Jones industrial futures, down more than 500 points before the Fed move, were fluctuating violently an hour before the start of trading.

The Interest rate cut comes as a panicked, desperate reaction to this bit of reality:

In Asia, Japan's Nikkei stock average closed down 5.65 percent — its biggest percentage drop in nearly a decade. Hong Kong's Hang Seng index lost 8.65 percent a day after showing its biggest losses since the Sept. 11, 2001, terrorist attacks.

In afternoon trading, Britain's FTSE 100 fell 0.69 percent, Germany's DAX index lost 2.55 percent and, France's CAC-40 fell 1.39 percent.

But don't worry, kids--Sean Hannity has it all squared away:

[Alan] COLMES: That doesn’t seem to be helping the economy very much…because things aren’t going so well.

[Sean] HANNITY: It is, Alan. The economy is phenomenal. Where have you been living?

Do you think a good many of our fellow Americans don't have the slightest clue as to what's going on because they've been going to Hannity and Fox News for their information? Think there's any kind of "cause and effect" here?

UPDATE I - KRUGMAN:

I still keep reading articles asserting that the last two recessions were brief and shallow. Formally, that’s true. But both were followed by prolonged “jobless recoveries” that felt like continuing recessions. Below is the employment-population ratio since 1989, with shading showing the official recessions. In both cases the employment slump went on for a long time after the recession was supposedly over.
There’s every reason to think that the same thing will happen this time. There’s a huge overhang of excess housing inventory; it will probably take several years before housing prices fall to realistic levels; and it’s not at all clear what will fill the gap left by weak housing and consumer spending.
There’s still the question of how deep the slump will be. I can see the case for arguing that it will be nasty. The 1990-91 recession was brought on by a credit crunch, the 2001 recession by overinvestment; this time we’ve got both. I guess we’ll see. In any case, whatever happens will probably last quite a while.

UPDATE II - JIM KUNSTLER:

The United States is so broke, its people at every level from the Federal Reserve on down don't know whether to shit or go blind. The homeowners cringing in the media rooms of their 5000-square-foot personal family resorts don't know how long they can stay put microwaving pepperoni hot pockets with the default clock ticking. The mortgage "servicers" don't know how they will persuade interested parties like, say, the Illinois State Cafeteria Workers' Pension Fund (holder of X-amount of mortgage-backed securities underwritten by, say, Merrill Lynch or Deutsche Bank) to foreclose on properties scattered everywhere from from Key West to Bainbridge Island -- or if there is actually any mechanism known to man that would make it possible to "work out" the sliced-and-diced collateral. The millions of maxed-out credit card holders and the issuers of their plastic are stuck together paddling a leaky tub in a sea of troubles every bit as wide, deep, and polluted as the one the mortgage junkies and their enablers are sinking in. The developers of malls, office parks, and power centers are weeping into their filing cabinets as the harsh daylight of insolvency stops the orgy of "consumption" and the retail tenants pack up their unsellable goodies for the liquidators, and the rent checks stop arriving in the mail, and the notes on this mall and that mall enter the eerie realm of "non-performance." And, of course, there are the genius wonder boyz and Wall Street playerz whose algorithms and turpitudes underwrote the script of this horror show -- for all I know they'll end up laughing into sugary skull drinks on a beach in the Cayman Islands, or doing Chinese fire drills in federal prison (or simply ass-fucked on the granite countertops of their Tribecca aeries by mobs of angry, repossessed, swindled former American dreamers pouring into Manhattan from the tract house dormitories of New Jersey and Long Island).

Well, it is the summer rerun season

[Cross-posted from Watching Those We Chose]

“Wait for September” is the new mantra. It pleadingly falls from the lips of every supporter of continuing the occupation of Iraq; from the fervent true-believers to the craven, profit-driven enablers. “Wait for September. Wait for General Petraeus’ report.” issues forth from many a fetid maw.

Call me cynical, but I know what his report is going to say. What did John McCain say the other day? “I’ve seen this movie before.”?

Well, I have read the Op-Ed before. Six weeks before the 2004 elections, in the Washington Post, to be exact.

I see tangible progress. Iraqi security elements are being rebuilt from the ground up.

The institutions that oversee them are being reestablished from the top down. And Iraqi leaders are stepping forward, leading their country and their security forces courageously in the face of an enemy that has shown a willingness to do anything to disrupt the establishment of the new Iraq.

In recent months, I have observed thousands of Iraqis in training and then watched as they have conducted numerous operations. Although there have been reverses -- not to mention horrific terrorist attacks -- there has been progress in the effort to enable Iraqis to shoulder more of the load for their own security, something they are keen to do. The future undoubtedly will be full of difficulties, especially in places such as Fallujah. We must expect setbacks and recognize that not every soldier or policeman we help train will be equal to the challenges ahead.

Hell, he will even re-predict that "the next 60 days will be crucial." That groundwork was laid a couple of days ago when they floated the "November before we see real results" trial balloon. Just like he did before. On May 17th the Politico reported that he was saying then that there would be "nothing Definitive" by September.

Within the next 60 days, six more regular army and six additional Intervention Force battalions will become operational. Nine more regular army battalions will complete training in January, in time to help with security missions during the Iraqi elections at the end of that month.

And he will appeal for patience in September 2007 just like he did in September 2004.

There will be more tough times, frustration and disappointment along the way. It is likely that insurgent attacks will escalate as Iraq's elections approach. Iraq's security forces are, however, developing steadily and they are in the fight. Momentum has gathered in recent months. With strong Iraqi leaders out front and with continued coalition -- and now NATO -- support, this trend will continue. It will not be easy, but few worthwhile things are.

Paul Krugman and I are in total agreement this morning:

I don’t know why the op-ed article that General Petraeus published in The Washington Post on Sept. 26, 2004, hasn’t gotten more attention. After all, it puts to rest any notion that the general stands above politics: I don’t think it’s standard practice for serving military officers to publish opinion pieces that are strikingly helpful to an incumbent, six weeks before a national election.

In the article, General Petraeus told us that “Iraqi leaders are stepping forward, leading their country and their security forces courageously.” And those security forces were doing just fine: their leaders “are displaying courage and resilience” and “momentum has gathered in recent months.”

In other words, General Petraeus, without saying anything falsifiable, conveyed the totally misleading impression, highly convenient for his political masters, that victory was just around the corner. And the best guess has to be that he’ll do the same thing three years later.

You know, at this point I think we need to stop blaming Mr. Bush for the mess we’re in. He is what he always was, and everyone except a hard core of equally delusional loyalists knows it.

Yet Mr. Bush keeps doing damage because many people who understand how his folly is endangering the nation’s security still refuse, out of political caution and careerism, to do anything about it.

Now I am not going to come right out and call the General a Loyal Bushie, but there is certainly a case that could be made if one were to assert that position. I have heard some grumbling that Petraeus got the billet and the fourth star because “he can be counted on.” That he will do the presidents bidding and allow him to run out the clock while ~30 Americans in his command are sacrificed to that end every single week. That is 2100 more between now and the end of this presidents term. An affable Westmoreland is no less a craven prick than the original.

And this infuriates me. The oath Petraeus took as an officer of the United States Army was to the Constitution of this nation, not to a president, not to a political party, not to a king; not to any man. The Constitution. The Social Contract itself. He also has an obligation to the soldiers who serve in his command. Should he abdicate either for political reasons; that, in my eyes, is tantamount to treason.

It is time to demand an end to this folly, this failed presidency, this threat to the American experiment. The remedy is in the Constitution. It is impeachment. And it is necessary. Not just because I don’t like this guy and want to begrudge him power; but because I do not want any American president to ever have the powers that this one has claimed. The only way to undo the damage, and stop the war, is to impeach this bastard already.