Wednesday, December 17, 2014

5 Years On, The Flow History

When I began this blog, my second post was an outline of how I understood the civilizational competition I saw in the world around me. In the intervening half decade, the world has begun to move decisively on. The PRC has changed the most, Russia and India are increasingly dynamic and even Iran appears to be evolving beneath it's conservative-ism. In my analysis then, these competing systems were all hobbled to varying extents by internal corruption that prevented them from economically empowering their citizens. This domestic social policy failure robbed them of the power to compete with an American system where a residue of the New Deal still promised, if reinforced, to sustain the economic freedom that drove the productive growth of the US centered system.

In 2009 we in the US were in the depths of a financial crisis and had just elected a decisive majority of Democrats to resolve it: it looked for all the world like a replay of the Roosevelt election of 1932. The optimism was euphoric, to the extent that even the Nobel Committee bit on its "hope" rather than the unfolding reality of no "change" when it gave our new President a Nobel Peace Prize. I closed that essay with this, to my eyes at least, accurate statement: "The last thirty years, with the enfranchisement of cash by the Supreme Court in Buckley v Valeo, our system has converged to a dangerous extent with these competing systems. While I can vote, I can not get my representatives attention. I have a formal political power that has been robbed of substance by money. In the Peoples Republic of China, what the Party wants the Party gets. In the United States, the Republic of Cash, what money wants money gets." 

Money indeed got what money wanted. With control of both houses of Congress and the Presidency, had the Democrats really wanted to reform our financial system, all of the tools were in hand and the industry so profoundly disgraced any serious reform proposed would have had massive popular
support. Likewise for our abuses in the War on Terror. That the President and his party choose not to use those tools to reform either speaks for itself. Not only are all of the bad actors and practices from the Bush era financial and war system still in place, but all the abuses of law and power implemented by that administration have now been institutionalized. With each passing week Congress or the Courts decriminalize more and more of the illegal actions taken by our last two or three administrations and the corporate entities that funded them. Even as our competitors have begun to address their handicaps, we have succumbed to our own profound corruption and foreclosed any future based on our existing system.

As all the established forces in our system do all within their copious power to preserve what simply can not continue to function too much longer, China and Russia are exhibiting a creativity that looks more like that for which we were once known. Our attempted resource grab in Ukraine pressed Russia into re-annexing Crimea, historically a part of Russia, carved off and attached to Ukraine by Stalin when both were core parts of the Soviet Empire. The degree of Russian integration with Crimea and eastern Ukraine left Russia no choice other than to simply surrender to US and EU territorial and commercial demands or annex. I'm no fan of Putin, but given the position we placed him in he has acquitted himself considerably better than we have. Financial sanctions and what is probably a coordinated response with Saudi Arabia in the oil price collapse have cut Russia off from the Western system, forcing it into closer alliance with the incipient Eastern one.

It remains to be seen how all of this will play out. I expect Putin to use this opportunity to eliminate the last of the Atlanticists in the Medvedev camp currently running Russia's banking system. The development under Putin of security technologies reliant on certain forms of high tech may have opened his eyes to the importance of empowering his people. The form of State Capitalism over which he has been governing is the result of the Neo-Liberal reforms we exported there in the 90s that so devastated Russian society as to create the opening by which he and his network of former KGB came to power. Once in power they were happy to leave the mechanics of Neo-Liberalism in place so long as economic power remained comfortably subordinated. Our sanctions have now laid bare the snares of our empire. As Rothschild said in 1791, "Allow me to issue and control a nation’s currency and I care not who makes its laws":this has been the basis of American imperial expansion since the Neo-Liberal inversion began at the end of the Nixon administration and dollar clearing of international transactions subordinates whoever engages in them to the Fed.

Russia is now looking East with deals in the last month with Turkey and China supplanting European ones short circuited by American policy. China has played its hand equally well in this span, using this forced shift to shore up its own energy security and to bolster a long term land based trade ambition that moots American maritime dominance. This Chinese vision goes so far as to hold open new and deeper integration with a Europe that is due to exhaust its affections for the US as our policies increase their destabilizing, impoverishing and murderous effects. So far, sanctions have had the intended impact of crippling the Russian financial system. We will see if Putin has the economic chops to sever the Neo-Liberal links that bind his sovereignty to the dollar system. If he does, the space out side of the US system will have been significantly expanded.

What happens in that space remains up in the air. China's handling of Occupy Hong Kong was much more "democratic" and bore much closer resemblance to "the rule of law" than the American crack down on Occupy Wall Street. The decline of China's growth rate has been mirrored by a high profile crackdown on corruption within the Communist Party. The decline was inevitable, the crackdown was not, but this latter is the thing essential to looking after the good of the larger Chinese population. So China and Russia appear in the last five years to have made real strides in distributing the good of their respective systems toward the goal of raising the living standards and productivity of their populations. This at precisely the moment when our system chose to drive down its labor participation rates and decrease both the security and economic activity of the large majority of western populations.

Even as our competitors begin to look at policies that weaken our power, we have unilaterally weakened ourselves by abandoning any semblance of Constitutional government when it comes to the crimes and misdemeanors of the powerful. Beyond this, we have actually allowed powerful malefactors to use the levers of state to reward themselves for calameties they have caused. The protests across the country against police brutality are the domestic expression of the worlds' revulsion of our empire of war and expropriation. The shameful official inaction in the face of the Senate Torture Report has definitively ended any moral pretense of "American exceptionalism" anywhere outside our borders, even most places within them. Our credibility as moral agents is so tarnished that those who deal with us now deal in simple real politic and nothing more: our promises and pretensions fool no one but ourselves, and less and less that.

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