Humans Seem Hell Bent on Committing Mass Suicide -- But There's Still Hope
So you are saying that America—and all of humanity—faces challenges that have no precedent. Is there any great power that has ever corrected itself when faced with such problems?
Not really. America has clearly begun its decline and fall as a global power, and for the same reasons as the Roman, French and British empires before it. Civilizations rise by working hard, saving, investing at home while exploiting weaker economies abroad, producing surpluses that finance a rising standard of living. At some point, however, they find themselves consuming more than they produce and choose to maintain consumption by borrowing, which eventually becomes unsustainable.
The final stage is marked by economic collapse due to debts that cannot be repaid, accompanied by military overextension abroad, a focus on entertainment and spectacles at home, a selfish "What’s in it for me?" attitude among its elites and a decline in basic indicators of societal health. Despite America being the world’s richest and most militarily powerful nation, for example, it in 2006 ranked 25th in life expectancy and 34th in infant mortality. And a 2003 story rated the United States 24th educationally out of 29 nations.
Just how serious is America’s current economic condition?
America’s household-debt-to-disposable-income ratio rose from less than 40 percent in 1952 to 133 percent in 2007, and bank indebtedness rose from the equivalent of 21 percent of GDP in 1980 to 116 percent in 2007. The Federal Reserve reports that total outstanding credit-card debt reached a record $951 billion in 2008, is rising dramatically, and the personal savings rate has dropped from 9 percent in the 1990s to 0.6 percent in 2007—though it has recently begun to rise somewhat. Its deficit is 12.3 percent of gross domestic product, the highest level since 1945, and will likely grow as more money is needed to stave off financial collapse and politicians whittle back tax increases or spending cuts. By late 2008, 37 percent of all manufactured goods sold in America were imported, nearly four times the level in 1978. Manufacturing employment has hit a 60-year low.
I take it these problems have affected the rest of the world?
The World Bank has predicted that the global economy will shrink in 2009 for the first time in more than half a century and that the decline in global trade would be the biggest since the 1930s. Private money invested in so-called emerging countries is likely to fall from $928 billion in 2007 to $165 billion this year. In Europe, manufacturing has already suffered its biggest decline since the Second World War.
Earth’s TV news mentioned a stimulus package. Will this work?
No one knows. After allowing its manufacturing base to deteriorate in the 1980s, America grew through an "Internet bubble" in the 1990s and "housing bubble" in the 2000s, i.e., growth produced by borrowing for, and foreign investment in, unsustainable economic activity. The stimulus package amounts to a "deficit bubble," i.e., borrowing trillions from future generations in an attempt to jump-start the economy.
It is hard to believe this stimulus won’t produce some sort of a short-term growth "bump." But the question is what will come afterwards.
What do you mean?
Nobody has yet explained how this borrowed capital will be used to build new high-growth, high-income and job-creating economic sectors capable of restoring U.S. economic strength from the bottom up. American manufacturing workers earning upwards of $25,000 a year cannot compete against Chinese workers earning $2,750 and Vietnamese workers earning $1,680 a year in today’s globalized economy. Were America to have hopes of reviving its economy beyond the stimulus it would need now to be urgently convening joint industry-government-academic panels to develop industries of the future—in renewable energy, robotics, telecommunication, health care and so forth—in which it could have a competitive advantage.
As a nation, the United States should, for example, be mobilizing to compete with China, which has recently announced plans to lead the world in producing electric cars.
It is not doing so?
No. If American leaders continue to borrow trillions from the future and yet cannot create strong U.S. job-creating economic sectors at home, especially ones that address the biospheric crisis, these gigantic debts will impoverish Americans for decades to come.
But this means America’s present economic leaders are conducting the greatest economic gamble in world history, with little evidence that it will succeed!
Precisely. Humans, understandably, make decisions about the future based on their previous experience of life. Paul Volcker, perhaps America’s most respected financial expert, said on February 20, 2009, that "I don’t remember any time, maybe even the Great Depression, when things went down quite so fast. It’s broken down in the face of almost all expectation and prediction."
But although the past may have no relevance to the present situation, policy- and opinion makers confidently propose solutions based upon it.
Conservatives, for example, simply ignore the fact that the private sector has collapsed and continue to support the very "pro-market" policies that created the present crisis. Meanwhile, liberals look fondly back to policies that worked in the Depression of the 1930s, forgetting that America was then a young, isolationist power with a small military and enormous industrial potential. Today it is an aging "late capitalist" global power with a failed banking sector, weak economic base, and is wasting enormous resources waging wars it cannot win and maintaining a global network of military bases it no longer needs.
Who are the people responsible for these economic gambles?
Lawrence Summers makes economic policy, and Treasury Secretary Tim Geithner, his disciple, implements it. But Summers is now violating his previous intellectual position of opposing large government deficits and is trying to convince foreign governments to buy U.S. debt after spending years encouraging them not to do so. The N.Y. Times reported on April 19, 2008, that "Mr. Summers has been sharply critical of current American fiscal policy and the way that Asia sustains borrowing by the United States by continuing to purchase government debt. During a visit to Mumbai in March last year, Mr. Summers warned the Reserve Bank of India of the United States’ ‘unsustainable and dangerous’ current-account deficit."
While serving at the Treasury Department in the 1990s, Summers fought efforts to regulate risky hedge funds and pushed to eliminate the Glass-Steagall Act separating commercial and investment banking, key steps in America’s banking collapse.
You can’t be serious! Why would America put a man who had so harmed the economy in charge of rescuing it?
Summers symbolizes a core American problem: It has few economic, financial or business leaders capable of saving it. Its financial leaders destroyed both their own companies and the American economy. Virtually all its economists failed to predict the collapse of the economy, their minimal responsibility, and even today spurn the advice of the few who did—such as Nouriel Roubini’s call for nationalizing its banks.
But you say that President Obama, the single most powerful human being on Earth, understands this. Can he not turn things around?
Obama is clearly the most gifted leader America has elected in the postwar era. And to his credit, Obama has already proposed investing more in renewable energy than any previous president. But his hands are largely tied. When Franklin Roosevelt took office in March 1933, an economic depression had dragged on for 30 months, unemployment was near 25 percent and the public was desperate for change. Obama took office only a few months after the latest economic collapse became evident, and the public is not yet ready to make the major changes that are clearly needed.
But I read that Obama was elected on a platform of "change."
Although 83 percent of the public wanted a "change" from the previous president’s policies, they are not yet ready to change by undertaking the painful shifts necessary to save their nation and planet. It is encouraging that Americans voted for a future-oriented political leader. But there is no evidence yet that they are ready to secure their future.
OK, here’s another thing I don’t understand. Why is America waging wars abroad if it sees its top priority as restoring its economy at home?
America finds itself in the same position as many other declining empires in their final years: economically weakened at home by self-interested elites and overextended abroad, bogged down in wars it cannot win but is unable to abandon.
The major geopolitical event of the past decade has been the rise in power of violently anti-American forces in the Middle East, largely due to the previous U.S. president’s launching and then bungling two wars. He invaded, occupied and then handed over Iraq to members of the Shiite tribe allied with the anti-U.S. Iran, immeasurably strengthening and emboldening it. He then murdered and tortured innumerable innocent civilians in Iraq, spawning a new generation of anti-American fanatics. After throwing out the anti-American Taliban in Afghanistan, he abandoned it. The Taliban regrouped and now control 70 percent of Afghanistan and, more ominously, a growing area within neighboring nuclear-armed Pakistan.
Can’t Obama reverse the foolish policies of his predecessor?
Obama wisely opposed the Iraq war but has unwisely committed to winning in Afghanistan—an unachievable goal under present conditions. Neighboring Pakistan, a highly populated, nuclear-armed, failed state, is by far Obama’s biggest foreign-policy problem. The United States has pushed its enemies east from Afghanistan into Pakistan, where they are gaining power and territory, and destabilizing the government. He is likely to be sucked further and further into the quicksand of Mideast violence, wasting even more funds desperately needed to rebuild the U.S. economy.
There must be a deeper reason why human beings can so blindly continue marching toward their death and the death of their planet.
Existential psychology and evolutionary theory explain much of human behavior. Human beings are born with a drive to live but suffer great emotional pain when learning between the ages of 3 and 8 that they will one day die. They cope with this pain by denying it, and over time denial becomes a way of life. Today, individuals deny not only their individual deaths but the end of their species. Many evolutionary theorists believe that formerly adaptive evolutionary behaviors have become maladaptive so suddenly that humans may not be able to change in time to survive. [more]
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