Thursday, June 18, 2009

Chicken Littles

Truthdig has an opinion piece by Chris Hedges that defies description. The headlines reads, "The American Empire is Bankrupt." OK, I'm thinking that this should be interesting, and it was, but for all the wrong reasons. I simply could not believe the level of hyperbole Hedges employs. Here's a taste:

There are meetings being held Monday and Tuesday in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.”

It is the first formal step by our major trading partners to replace the dollar as the world’s reserve currency. If they succeed, the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds. The United States will begin to resemble the Weimar Republic or Zimbabwe. Obama, endowed by many with the qualities of a savior, will suddenly look pitiful, inept and weak. And the rage that has kindled a handful of shootings and hate crimes in the past few weeks will engulf vast segments of a disenfranchised and bewildered working and middle class. The people of this class will demand vengeance, radical change, order and moral renewal, which an array of proto-fascists, from the Christian right to the goons who disseminate hate talk on Fox News, will assure the country they will impose.

But wait! There's more:
There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless. Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacles, sex, gratuitous violence, fear and tawdry junk politics. America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism from secure compounds. Those who resist will be silenced, many by force. We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite.
In 1994, the Northridge earthquake set off a rash of opinions from so-called experts in geology that the "ring of fire" would show a huge increase in seismological events such that the west coast of the United States would fall into the Pacific, making Denver a beachfront community. This is the level of hyperbole to which I equate the Hedges piece.

A few years back when I worked for Indymac Bank, my fellow Loan Officers and I witnessed a huge spike in the cost of basic construction materials like lumber and copper, which was pricing not a few customers out of the home-building business. The reason for this was because of a massive construction boom going on in China. I predicted then that China would, within 20 years, become the dominant economic superpower in the world. I still think I'm right, and the massive amount of US debt that China carries on our behalf is certainly one of the things that causes me to believe that.

Still, what so many on the left fail to realize is just how interdependent we have all become. China knows that in order for it to achieve its goals it must gradually separate the yuan from the dollar and let the yuan become as widely traded as western currencies, which is currently is not.
But anyone with even a remedial understanding of world economics knows that this interdependence means that if the collapse of the US economy, as described by Hedges, were ever to occur, it would mean the collapse of everyone else's economies as well. So that means that the whole world would start to resemble Zimbabwe, wouldn't it? This is why I think Hedges' piece is essentially bullshit.

Further, China's repressive society will always hold it back. A country with a government that so limits the economic opportunity of its citizens will ever be able to compete in the global free market. China's people must first become free to do whatever they want. Some resemblance to the US and European financial models must emerge in China before they will be able to be the world's economic leader. I don't see this happening soon.

This is the point where I say, "I want your comments" on this. Where do you think the truth lies in Hedges' piece?

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