Monday, September 22, 2008

The American Empire:

The American Empire:
Too Big to Fail

Who gets bailed out – and who doesn't

In reading about the federal bailout of all those financial wheeler-dealer outfits that are supposedly "too big to fail," the layman may be forgiven for failing to comprehend the intricacies of the arcane financial instruments currently backfiring on their whiz-kid inventors. Such exotic creatures as "credit default swaps" may elude the understanding of the hoi polloi, but one thing the man in the street does know: he'll never be "too big to fail," of that he can be sure.

He's just not the Bear-Stearns type, and Congress would never shell out a penny before he loses his savings and his home, which – due to the propaganda of Panglossian economics, whereby houses stopped being homes and became investments – amount to pretty much the same thing. The paper-pushers of Wall Street made untold trillions out of a policy that was doomed to fail [.pdf] in advance, and whose critics have long predicted would end in precisely the manner our tale of economic woe is unfolding.

The policy of bank credit expansion, which enriches the already wealthy at the expense of the rest of us, has a fatal allure. It induces an initial euphoria, the false promise of permanent prosperity. This Panglossian view is the perfect economic system for an emerging empire, especially one with such inflated pretensions as ours. It is the economics of hubris – the same grandiosity that let us imagine we could implant "democracy" in the arid soil of Iraq and make the desert bloom.

After the fall of the Soviet Union, the U.S. bestrode the earth like a colossus, America's stock was rising, and the pride that goeth before a fall imbued our leaders with the illusion that they couldn't fail. The American empire, they thought, is too big to fail. It's the end of history – and the rest will just be a mopping-up operation, that will be well worth the costs.

The failed policies that led to our current economic predicament – the whole system of central banking and fiat currency – are precisely those policies that benefited those who are now demanding to be bailed out. They may have bankrupted the country, but you can be damned sure they aren't going down with the rest of us, no sirree!

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