Fish gotta swim. Birds gotta fly. And late, degenerate empires gotta get out of the way.
Here, we focus on money. And we see that the primary trend seems to have reversed. What was up is now down. Left is right. The Fed was playing fast and loose for the last three decades; now it is sitting up straight and tightening its tie. And those who made money in lighter-than-air ‘securities’ in the 2009–20 boom are now losing money as they come down with a thud.
The latest headline from Bloomberg: ‘Super-Prime Real Estate in New York and Florida Has Hit a Wall’.
But this market correction is only one of a catastrophic ‘cluster’ of trends that we looked at yesterday:
- The continued exploitation of the middle class by the elite, which is why the correction will not be allowed to complete its work.
- The decline of the American Empire, beginning about 1999 and continuing.
- Abandoning the ideas that made the US so successful. Free trade, free enterprise, free speech, equal protection under the law — who believes in these principles anymore? Not the deciders.
- A fanatical, unquestioning fear of global warming and a belief that the Earth’s climate can be and must be controlled.
- The unchallenged political power of what Eisenhower called the ‘military, industrial complex’.
Let’s start from the bottom and work our way up.
Insecurity complex
The military is supposed to provide security, so that ordinary people can go about their lives without worrying about a foreign invasion. Subordinate to civilian control, in the US, the gold-braided general is supposed to be kept like a guard dog — on a leash, held firmly by people in civies.
But over time, the ‘military, industrial, surveillance, think tank complex’ has become just what Dwight Eisenhower warned that it would become — unstoppable…unanswerable…and unpalatable. This year’s appropriations bring US military spending to more than is spent by China, the UK, Russia, India, France, Germany, Saudi Arabia, France, and South Korea — combined. With the money, the armed wing of the Deep State, the richest single enterprise in the world, has bought control of the press, the universities, the administration, and Congress itself. It pays an army of lobbyists and a phalanx of scholars to explain and persuade…to twist arms and bend public opinion — always in favour of more and more military spending.
The war industry keeps the public’s attention fixed on one conflict after another. Vietnam, Nicaragua, Kuwait, Bosnia, Iraq, Afghanistan, Syria…and now the Ukraine…to be followed by a showdown with China.
But what was the point of any of these wars?
US offense industry
Communism failed because a centrally controlled economy is inherently weak; in Vietnam, the Pentagon got 58,000 American soldiers killed for nothing. In Nicaragua, Danny Ortega, one of the original Sandinistas, still rules. In Iraq, there are more terrorists than ever before now that there’s no Saddam Hussein to keep them in check. In Afghanistan, the Taliban — a designated ‘terrorist’ group — runs the country. And is Russia really a threat to Europe? Will she invade Germany? France? Do you watch the news? Putin has his hands full just getting control of a Russian-speaking area on his southeastern flank, where the local people actually begged him to come in.
The US ‘defence’ industry has long since given up any pretence to be defending the US. Since the Second World War, all its undertakings have been ‘wars of choice’…offensive operations in which it meddled in the affairs of sovereign foreign nations. And yes, language evolves along with the purpose to which it is put. The new chairman of the House Armed Services Committee, Republican Mike Rogers, no longer speaks of proud citizen soldiers defending the Republic. Now they are more accurately ‘warfighters’ who can ‘deter and, if necessary defeat, any adversary anywhere in the world’.
Why taxpayers would want to support ‘warfighters’ has never been explained. And who do they fight? Do we have adversaries in Ouagadougou? How about in Mogadishu or Reykjavik? Only if we want to have them. And the only plausible reason for wanting to have them is to justify shifting wealth from the public to the war industry.
In practice, the grift has been easy. Put some money on the table — a campaign contribution, support to a favourite think tank, a contract, a sinecure — and deciders are easily convinced. As for the public, it needs no convincing; it hardly has time to think through the particulars. Instead, as soon as the game begins, it puts on the home-team jersey.
Long range imbeciles
It’s the theory that poses a problem — at least to those few who bother to think about it. The US is, after all, protected by two vast oceans. It is almost impossible for an adversary to get anywhere close to Long Beach, CA, or Ocean City, MD. And even the fastest long-range missiles take time to reach their destinations, during which they are vulnerable to ‘interdiction’. In the context of an US$860 billion budget, defensive missiles cost a pittance.
It’s the short-range missiles that pose a more immediate threat. That’s why President Kennedy insisted that the Soviets remove their missiles from Cuba. And that is why Mr Putin is so keen to keep NATO away from the Donbas. Alas, in disregarding the Kremlin’s desire for the same security that it finds indispensable for itself, the US commits an error typical of late-stage empires…a failure of reciprocity. It has gotten too big for its britches.
But there are limits to everything. Great armies rise. And then — under the weight of their own booty, bureaucracy, and brass — they fall. Already, the Pentagon’s target-rich environment is in the US House of Representatives, not in enemy territory. In the nation’s capital, it can toss a grenade at random and take out nothing but its own supporters. Real enemies might not be so easy.
Meanwhile, the more time and stuff the ‘military, industrial complex’ squanders, the less is left over to fuel economic growth.
Productivity is falling in the US at the fastest rate in four decades. Growth rates have fallen since the 1950s, and now are nearly negative. Savings are the precious ‘secret sauce’ of a real economy. But the savings rate is at a 17-year low. And instead of using money carefully and wisely, billions of dollars go to the shysters of Kyiv, Ukraine, as well as those in McLean, Virginia.
Fearing the death of its empire, the US commits suicide.
Regards,
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Bill Bonner,
For The Daily Reckoning Australia
