WEALTH AND MONEY PART XV: AN EMPIRE IN DECLINE
There is a life cycle to empire – a historical evolution in the birth, maintenance, and loss of world preeminence. Conceived brutally through conquest, or peacefully as in the transfer of power from Great Britain to America after the first and second world wars, the birth of a new empire is always led by the relocation of major centers of knowledge in science, technology and engineering. This is so because the long term outcome of leadership in these fields is a genuine increase in human wealth — in the ability to sustain ever more humans with an ever rising standard of living. To be certain the wealth has often been inequitably distributed, but in this scenario an empire, a society, is “earning its living.”
But empires do end. They pass their zenith when their financial industry – manipulating money to make money rather than developing true life sustaining wealth – becomes the dominant sector of their economy. At this point a society, or more accurately the ruling class of that society, becomes parasitic. It lives by extracting rent, by feeding off of the productive capability of its own people and the people of other nations. Historically irreversible, this Rubicon was crossed in America in the1990s.
“Skeptics invoked a warning that went against the tide: this faith in finance was not new, but old – and it had played wayward pied piper to prior leading world economic powers. On the edge of decline the Spanish had gloried in their New World gold and silver; the Dutch, in their investment income and lending to princes and czarinas; and the British in their banks, brokers, and global financial network. In none of these situations, however, could financial services succeed in upholding the national preeminence that had earlier been built by explorers, conquistadores, maritime skills, innovative science and engineering, the first rail-roads, electric dynamos, and great iron and steel works. Invariably, power and greatness passed on to new explorers, innovators, and industrialists.” – – Kevin Phillips, “Bad Money”
The most obvious manifestation of financial parasitism being imposed on American citizens is austerity. In the midst of great physical wealth, infrastructure is crumbling, social services have been cut, and all things public are being privatized. Deregulation of the financial industry and tax cuts for the wealthy and corporations have methodically transferred vast sums of the claim to wealth, money, to the richest members of the society. This concentrated money is increasingly being used in financial manipulation to further drain the productive economy. “Leveraged buyouts” destroy healthy companies, “exotic financial instruments” trap pensions, school systems, cities and states in unrepayable debt, corrupt Wall Street banks have been bailed out by the public and their CEO’s received multimillion dollar bonuses for destroying the lives of working citizens. Government has become a subsidiary of the ruling class.
Financial parasitism on a global level is perhaps less obvious but similar methodology is used. When a billionaire Wall Street hedge fund manager using high speed computers buys a million shares of XYZ International Corporation stock for $1.03/share, sells them a millisecond later when the price has fluctuated to $1.06/share and pockets $30,000 (a process he repeats many times a day), the world sees a loss of productive capacity. When Goldman Sachs makes deceptive, predatory loans to Greece which eventually contribute to debt default and the privatization of its most treasured public assets, a foreign nation has become a host. When JP Morgan, Morgan Stanley and Goldman Sachs are among the world’s largest speculators in agricultural commodities pricing on the Chicago Board of Trade, children around the planet starve to death. When Wall Street Vulture Funds such as Aurelius Capital Management and NML Capital, founded by the richest of Americans, prey on the indebtedness of the poorest nations in Latin America and Africa, the world is aware of the plunder. When Bank of America, JP Morgan, Western Union, Citigroup, Wachovia, and other U.S. banks claim ignorance of the billions of dollars in drug cartel money they have laundered, the parasite has lost all control and America is leaving the stage.
“It is a fact that speculators get rich when rising cereal prices lead to poverty and hunger for millions of families.” – – Global Agriculture
“The DRC [Democratic Republic of the Congo]is being forced to siphon these desperately needed resources from initiatives like health care, education, combating HIV/AIDS, and access to clean water to its impoverished citizens to pay off wealthy corporations such as [Vulture Fund] FG Hemisphere” – –Melinda St. Louis, deputy director of the Jubilee USA Network
The United States is hardly alone in its exploitation of other nations. Financial and banking systems are global and greed knows no boundaries. But at the present moment in time America is the world’s empire. It is the face of domination.
We as average American citizens think of ourselves as good and caring people. Indeed, like all of Earth’s “average” people, we are. But the world sees our ruling class. It sees our financial power structure and its global reach. The world sees the economic manipulation in Latin America by Wall Street banks that leads to economic collapse, the installation of brutal dictators, and the plunder of resources. The world sees the preemptive wars in the Middle East that have nothing to do with “spreading democracy” and everything to do with strategic economic control. It sees the overthrow of elected leaders and the destabilization of legitimate governments that leads to growing terrorism. The world lives with the poverty caused by our banking cartel. It watches as its people suffer and die from U.S. financial predation.
Part XVI will discuss: The Death Throes of Empire