With a kickoff by Uncle Warren Buffett a few days ago, the Obama administration has unveiled yet another war for the Government to fight. Stranger than could be imagined, this administration is somehow channeling its non-hero, one G W Bush. This latest war is in addition to the escalation of the Afghanistan-theater war, which of course was begun by Mr. Bush in 2001 but which was left to meander along in favor of beginning and then semi-concluding the Iraq War.
What is our new war, which joins the War on Drugs and the War on Terror (the War that dare not speak its name but which is basically the justification for escalating war in Afghan-land)?
Actually, we're not quite sure, which- to let the cat out of the bag- is part of the problem, but it has something to do with the economy. As the Chair of the Council of Economic Advisers, Dr. Christina Romer, said today on Meet the Press:
I think he's (Mr. Buffett) absolutely right, it is an economic war. We have inherited a crisis like none since we've--since we had the Great Depression. So absolutely, it is something we need to deal with. I think we are. We haven't won yet. We have staged a wonderful battle.
A wonderful battle? What did I miss? What battle was waged? Where? When? Against whom or what? And whenever and wherever this battle was waged, what about it on G-d's green earth was wonderful?
I thought that war is Hell.
I don't know about you, but I am weary of war. I think back to my birth year of 1950, in the shadow of WW II, by far the bloodiest war ever. The Cold War had just begun. The hot Korean War was raging (which technically has never ended). A decade after the Korean armistice, the alleged peace candidate (LBJ) defeated the alleged dangerous candidate (Barry Goldwater) and immediately escalated another land war in Asia. LBJ also began a War on Poverty. These two wars plus the Great Society nearly ruined the finances of this country. After financial disaster ensued, the credit of the U.S. was so bad that it was forced to borrow at double digit interest rates, some of which was no longer in U.S. currency; around 1980 IBM was able to borrow money at a lower rate than the U.S. Government.
Following the humiliation in the sands of Iran with Desert One crashing during the hostage crisis, the Cold War ramped up, to be followed after victory there with multiple smaller military actions and wars while Bush I and then Bill Clinton were President: the Gulf War, Panama, Somalia, Haiti, two in the former Yugoslavia, Iraq again (bombing only).
Then, under Bush II, there was the War on Terror, involving two land wars in Asia (Iraq is in Asia) as well as threats of two more (North Korea, Iran). Somehow, I realize that during my entire life, my country has continuously either been engaged in, recovering from or preparing for land war in Asia. 58 years worth. Plus the nine years prior to 1950. We're looking at 67 years of Asian-theater war, with no plan in sight for an end to it.
Plus the never-ending War on Drugs for half my life.
All these wars have required lots and lots of deficit spending: great for the Merchants of Debt and, except for the War on Poverty, also great for the Merchants of Death. What these wars were not great for was the living standards of the American people. Not to mention the damage to the American psyche.
Wars are horrible for the economy (human toll aside). One of the greatest fallacies extant is that World War II qua a Big War was that it cured the Great Depression. Nothing could be further from the truth. Had the Second World War ended inconclusively, that would have been bad for the economy; had it been lost, it would have ruined the economy. People's living standards were severely depressed during the war; inflation was high; and when the soldiers returned home, a major economic downturn ensued, as they had nothing to do.
What was good for the U.S. economy about World War II was that the U.S. won it unequivocally, had an undamaged homeland, and thus dominated the world economically till this day. Winning wars can ultimately be good for the economy, but only if they are sweeping enough.
Now, Barack Obama wants to print or borrow more money to finance expanded war in Afghan-land, while maintaining 50,000 troops in Iraq indefinitely. How is this different from anything the supposed warmonger Bush would have done? And at least Bush did not have this economic crisis going on while ramping up military action, so at the time it appeared we could afford all the warring.
Not content with relatively minor military action, Obama is channeling LBJ in declaring a domestic war and also justifying vast deficit spending to wage this "war". To date, though, this War is the first War since the "War of 1812" in American history with no name.
What is Obama's ultimate solution to our crisis?
Unbelievably, it is the Bush solution that Obama's party was once supposedly horrified about: the American consumer needs to borrow and spend, according to the new President.
I am not making this up. Dr. Romer again on MTP:
MR. GREGORY: Final point here. What is the responsible thing for consumers to do at the height of this global crisis?
DR. ROMER: That, that's an excellent question. I think we know that consumers have lost a lot of wealth and that normally what you'd say is they should be saving more. I think the truth is consumers have also not done a lot of spending for the last 14 months. So what I would predict and I think would be a perfectly reasonable thing is you go out and you buy that car that you've been thinking about for 14 months and you do some of the spending. And then over the long haul I'm hoping we'll come back to probably a higher savings rate, because we know we were at kind of a historic low before this all happened. (Emphasis added)
You couldn't make this up, you really couldn't. Even John McCain criticized the Bush guns and butter policy both before and after 9/11 and the Afghan War. The Dems were harsh about the President not calling for sacrifice in wartime and instead urging Americans to respond to the 9/11 attacks by . . . going shopping.
Read the above again and weep. Barack Obama believes that the "responsible thing" for Americans to do is to replay the past few years and buy what they can't afford. In his memoir, "Dreams From My Father,"are these dreams about owning a new car? On credit? Is this why the youth of America rallied to his cause?
Now, in the eeriest sort of replay, we're again sending troops to Afghanistan and a new war has been announced; no sacrifice from Americans is asked except to increase their debt load to enjoy some material benefit. Let's call it the Bushbama or Obush policy. Identical. And how close to zero is the chance that the Bushbama/Obush policy will really turn fiscally responsible one vague day in the future?
Throughout history, governments, especially ones trying to maintain troops in foreign venues, have fallen or at least gone bankrupt pushing deficit spending to the max. Think it can't happen here? If you disagree, please think again. It can happen anywhere.
Let's get back to basics in this country. Here are some basic principles.
First, land wars in Asia don't work. Stop them. And bring the troops home: Korea for the Koreans and Japan for the Japanese. Every empire has eventually fallen throughout history. Why should this greatest and suavest empire in history be any different? Note that the Chinese have had no wars for decades. They are just building out their country and building their financial strength. Smart. America did that a hundred years ago. When will the changing of the guard occur? Perhaps sooner than the "experts" think, perhaps not, but on this trajectory, I say sooner rather than later.
Next, opposition parties should mean what they say when they are in the minority. They shouldn't say whatever it takes to gain power and then do what they criticized. Guns and butter brought us to this crisis. Much more of the same will ruin us.
Third, we must have a definition of what this new economic "war" is. Is it another Great Society-type War on Poverty? Is it a war against an amorphous thing called a recession, and if so, how do you go to war against an economic trend? Who or what do you aim at?
Is Obama going to war against Americans who don't buy that new car that they are dreaming of but can't afford? Is he against the finance company that doesn't want to lend this car-dreamer money if the dreamer is a bad credit risk? Is the President going to war against that small businessman who can get by without expanding and doesn't want to take the financial and operational risk of borrowing to expand during an economic crisis?
If the Fed is not going to monetize the deficit, then isn't the vast increase in Government spending to finance this unnamed and undefined economic war simply going to suck up most of the world's savings and thus crowd out the non-Federal use of those same savings? Why is U. S. Government spending better than other spending?
In other words, it is the belief here that people are acting rationally and it is the Government that as usual has lost its mind, perhaps crazy with the fear that the Debt Society could morph into a Savings Society and thus deprive the financial community of the riches generated by keeping the populace chronically on the edge financially, always staying in debt and paying once-illegally high finance charges under the conveniently-repealed usury laws, while on the other hand paying savers nothing or next to nothing to store their money in the banks under government guarantee.
The Obama Presidency is thus already transformational in an unexpected way. By continuing the Bush policies of continual war in Asia; massive deficit spending to "combat" another recession; unbelievably massive direct wealth transfers to large complex financial institutions; no call for sacrifice but instead more tax cuts and cash giveaways to citizens in the name of anti-recession policy; and now the announcement of a new War, it is now clear that nothing has changed in the economic or financial sphere. America is effectively a one-party state except for issues peripheral to the maintenance of Establishment/state power, such as Federal policy on embryos or fetuses or exactly how the banksters at AIG get compensated (higher salaries in the future but decreased bonuses).
George Orwell prophesied the current situation in '1984': wars without end on the periphery of empire, such wars always being used to justify whatever diminished standard of living the Establishment wanted to impose on the workers. (And occasionally a domestic "War" as well in the U.S. version of Oceania.) Plus all sorts of peripheral matters in the news to distract the public from what's going on, a la the diverting headlines about executive compensation when the real news is the greatest transfer of wealth from taxpayers to private corporations in the history of the world.
PETITION TO PRESIDENT OBAMA
In order to avoid becoming another nearly-bankrupt but larger version of California, America's government must stop spending more and more money it simply doesn't have. Money really doesn't grow on trees. Invoking Wars year after year should no longer justify grossly irresponsible government finances. Stop the fiscal madness. Preserve the AAA financial rating of the United States Government. If you are brave enough to just sit back and take care of Federal finances in a prudent manner, the economy will over time right itself on its own schedule according the needs of the people and their companies. Promise!
End the Culture of Debt.
Promote a Culture of Saving (get back to where we once belonged).
Stop insulting our intelligence by telling us to save the economy by buying stuff we can't afford.
Stop the wars.
Copyright (C) Long Lake LLC 2009
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