Today, let’s take a look at the “logic” of the American Empire and what you can expect in the year(s) ahead… regardless of whether a donkey or an elephant squats in the Oval Office come Jan. 20, 2013.
“Great empires, such as the Roman and British, were extractive,” the economist Paul Craig Roberts observed recently. “The empires succeeded, because the value of the resources and wealth extracted from conquered lands exceeded the value of conquest and governance.”
But unlike empires of the past, the American Empire has a perverse logic all its own.
“America’s wars are very expensive,” says Roberts, stating the obvious. “Bush and Obama have doubled the national debt, and the American people have no benefits from it. No riches, no bread and circuses flow to Americans from Washington’s wars.”
In the big Iraqi oil auction of 2009, for example, even as US military helicopters droned overhead, the Iraqi oil minister gave out zero contracts to American firms. Not one. And we spent at least $3 trillion on war — $2.9 trillion more than Team Bush’s original budget. So much for paying for war with “oil profits.”
Russia was actually the big winner here. So what gives? The American Empire has perverted the Roman mantra “Veni, vidi, vici” (I came, I saw, I conquered) into the odd imperial slogan: “We came, we saw… we borrowed!”
The results from this turn of phrase are less than desirable. Again Roberts: “Washington’s empire extracts resources from the American people for the benefit of the few powerful interest groups that rule America. The military-security complex, Wall Street, agribusiness and the Israel lobby use the government to extract resources from Americans to serve their profits and power. The US Constitution has been extracted in the interests of the Security State, and Americans’ incomes have been redirected to the pockets of the 1%.
“That is how the American Empire functions,” concludes Roberts. Instead of plundering foreign resources to finance itself, the American Empire is always looking to inflate the next financial bubble. Each of these serial bubbles has the effect of “extracting” wealth from the citizens — by drawing both savings and credit into overly inflated asset classes that then implode.
As the bubbles inflate, robust tax revenues flow to the federal government. As the bubbles implode, tax-payer dollars flow to the connected Wall Street elite. Thus, over time, savings pass from the wallets of citizens to the pockets of scoundrels in Washington and on Wall Street.
For confirmation of this assertion we need look no further than the top o’ the 1%, the Oracle of Omaha. Peter Schweizer of Reason reckoned in his March exposé on Warren Buffett that this folksy fellow “needed the TARP bailout more than most.”
Let’s run through the numbers. Berkshire Hathaway firms in total received $95 billion in TARP money. Berkshire, you’ll recall, held stock in Wells Fargo, Bank of America, Goldman Sachs and American Express. Not only did these companies receive TARP funds… they also dipped into the FDIC’s treasury to back their debt. Total bailout: $130 billion. TARP-enabled companies accounted for 30% of the Oracle’s publicly disclosed stock portfolio.
He’s definitely one of the top beneficiaries of the big bank bailout. And to sharpen the sting, he even got a better deal to help ailing Goldman Sachs than our own government. Buffett got a 10% preferred dividend while the Feds got all of 5%. He cleaned up with $500 million a year in dividends. Without the bailout, you can bet many of his stock holdings would have gone near-zero instead.
Contrast that with a blog post from Rosemarie Jackowski, a community activist at Dissident Voice. She’s describes her experiences working with the underclass in a small town in Vermont.
“In Bennington, there are three very distinct classes,” writes Jackowski. “First, there are the ‘fancy people.’ They are the ones who rule and control everything. They are on the boards — the hospital board, the library board, the select board, the school boards. They have the power — even the power over life and death. They, occasionally during a medical crisis in the hospital, make the decision to pull the plug or allow life to go on.”
Then there is the large group of ordinary citizens. Some are blue-collar workers. Most work hard. Love their families. And have had family in Vermont for generations. They acknowledge the class system in conversation often. They call it the ol’ boys network — cronyism.
The third group consists of those who are in need. Those on the bottom of the economic pile. A poor mother of two disabled children, for example, talked about the oppressive avalanche of redundant paperwork required to get any tiny benefit. The social services system is designed by nameless, faceless, unelected bureaucrats. It is set up to assure maximum job security to the workers in the system. To a struggling family, it often feels like an attack of the “paper churners.” Being poor is a full-time job.
In her post, Ms. Jackowski provides a list of 35 ways poverty robs you of your dignity. Here are just a few:
Poverty means living with shame.
Poverty means working three jobs, and still not “making it.”
Poverty means that you go to work when you are sick. Worse than that, you send your children to school when they are sick.
Sometimes poverty means that you skip meals so that your children can eat.
Poverty means that your housing is never secure…
Poverty means following all of the rules, then graduating with oppressive student debt so that the president of UVM can be paid $447,000 per year.
Tragically, more and more “ordinary citizens” are faced with the challenge of joining this third group of government dependents. Case in point: “In the most recent Census,” writes our managing editor Samantha Buker in The Little Book of the Shrinking Dollar (a book we co-authored for the Wiley Little Book Series), “48% of America qualifies as ‘low income.’ There are more Americans living under extreme poverty than have ever been recorded.
“Since 2009, we’ve added another 4 million souls to the category of low income to below the poverty line. That’s 146 million people in America who aren’t consuming much aside from ever-increasing applications for food stamps.”
In November 2008, food stamp applicants topped 30 million for the first time in history. Today, we’re still posting “record highs,” having added over 16 million more names to the food stamp list.
Does this sound like a nation of financially healthy citizens, able to contribute to the national coffers? Au contraire. Sounds like another case in which our Empire will hand out more than it’s taking in.
Addison Wigginfor The Daily Reckoning
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He's the creator and editorial director of Agora Financial's daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar, and Why it's Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
“Washington’s empire extracts resources from the American people for the benefit of the few powerful interest groups that rule America…..
That pretty well sums up the situation here in the land of the free & home of the brave.
Once you understand it, it’s sick to watch. It’s hard to convince anyone how long these oligarchies have been white anting the countries foundations and how dangerous they have become.
I think they are the despised old money of the previous empire. It would work that way.
They may be despised, but they are very difficult to get rid of. Here in Wisconsin we are having a recall election for Scott Walker. He is outspending his opponent 25 to 1. Sometimes you get 7 different pro-Walker commercials in a row (each from a different interest group).
With enough advertising behind you, any politician can convince enough people that up is down, down is up, freedom is slavery, and 20% unemployment is actually an improvement over 4%.
The economic problems are caused mostly by the use of interest and usury. Interest is just another way to steal money from the public. All economies will eventually fail because of the corrupted banking system which uses interest.
What needs to be done with the banking system is to flush the interest and start over.
“’Great empires, such as the Roman and British, were extractive,’ the economist Paul Craig Roberts observed recently.”
from Greece And Germany Play Chicken
“Perhaps even more worryingly, German data released Thursday showed signs of a slowdown in an economy that until now had been a bright spot for the Continent.”
… because there’s nothing left to extract.
and face it, infestors. this is how you live. by fiat profit. by getting out more than you put in. by finding someone else to work for you and pay your bills and your taxes. by finding one more sucker, the last sucker, to pay it all. this is how it all ends, with the ultimate sucker saying “I can’t pay” and the penultimate sucker turning around and saying “that means I can’t pay” and the antepenultimate sucker turning around and saying “that means I can’t pay” until finally you’re surrounded by all these debtors saying to YOU, “we can’t pay”.
“Washington’s empire extracts resources from the American people for the benefit of the few powerful interest groups that rule America.”
“What needs to be done with the banking system is to flush the interest and start over.”
To paraphrase the Memorial Day hoopla here in the states: ‘All gave some, and some gave all’.
The quack policy that was good for stock owners in North America turned out even better for those in Japan.
From under which fetid igneous formation did these IRS slugs slither?
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In places like Mongolia or Myanmar, for example, you find today’s Dakota Territory.