Monday, December 20, 2010

The Health Of The State

Previously I reproduced essays by the Nominal Man, Dan Weintraub, and this the third one published at The Automatic Earth he lays out a scenario that I find both disturbing and highly likely. It postulates that our leaders agree with us when we express fear and pessimism about our future, but like us, they have no clue how to get out of this impossible dilemma. All they are doing is delaying the inevitable hoping against hope that something will come out of the clouds to save us. War most likely says Weintraub. Not so far fetched when you consider yesterday's discussion of the meaning of War.

"…Love is the answer and you know that for sure, Love is the flower you got to let it, you got to let it grow..."
John Lennon


"…War is the health of the State. It automatically sets in motion throughout society those irresistible forces for uniformity, for passionate cooperation with the Government in coercing into obedience the minority groups and individuals which lack the larger herd sense...

To most Americans of the classes which consider themselves significant the war [World War I] brought a sense of the sanctity of the State which, if they had had time to think about it, would have seemed a sudden and surprising alteration in their habits of thought.

In times of peace, we usually ignore the State in favor of partisan political controversies, or personal struggles for office, or the pursuit of party policies…With the shock of war, however, the State comes into its own again…

For the benefit of proud and haughty citizens, it is fortified with a list of the intolerable insults which have been hurled toward us by the other nations; for the benefit of the liberal and beneficent, it has a convincing set of moral purposes which our going to war will achieve; for the ambitious and aggressive classes, it can gently whisper of a bigger role in the destiny of the world…"
Randolph Bourne




In one of the many tragic ironies that define our fickle species, only war, deviously waged, has the ability to grant us a reprieve from our boundless greed, from our lawlessness and spiritual emptiness, from our gluttony and darkly comical self-delusion.

War is the sole industry that can effectively defy the self-aggrandizing forces of corporate off-shoring and the resultant impact of global wage arbitrage. War is the one enterprise that can, through the adroit fermentation of that loveliest of intoxicants (we call) "nationalism", dampen the destabilizing and tectonic forces of class struggle. War is the only industry capable of "employing" (distracting?) tens of millions of poor and disenfranchised and terminally indebted young American men and women away from the hopelessness that colors their futures. War, implies Mr. Scrooge, graciously decreases the surplus population.

War is indeed, as Randolph Bourne stated close to a century ago, the health of the state.

Conservative commentators in the United States are quick to chastise men like Paul Krugman for their unabashed and shameless support for additional trillions in government stimulus. These critics accuse the Krugmans of the world either of being wholly ignorant as to the implications of unbridled increases in the fiat money supply, or worse, of being in cahoots with the billionaire banking class and with its proxies on Capitol Hill.

In my opinion, these fury-fueled criticisms miss the mark. What Krugman fears most is austerity. He is concerned that moves toward austerity do not simply (and disproportionately) hurt society’s most vulnerable, but that such policies provide a fertile environment in which extremism and ultra-violence thrive. Krugman is thus willing to support "extend and pretend" fiscal policies in the present because he is afraid of the alternative.

In fact, I would characterize the Krugman position as a delaying tactic: kicking the fiscal can down the road for a while longer so as not to allow civil strife - the discontent that always accompanies increases in austerity along with its attendant human suffering (both real and perceived) - a foothold in the United States. Another, perhaps more cynical view, could be this: Better to watch the other nations of the world implode under the pressures of austerity than to let it happen here first.

And what of our oft-vilified Federal Reserve chairman? When confronted with the opinion that many people, both in the general public and in the field of economics, believe "QE2" to be a bad idea, Federal Reserve Chairman Ben Bernanke states, "...I know some people think that, but what they are doing is they’re looking at some of the risks and uncertainties with doing this policy action, but what I think they’re not doing is looking at the risk of not acting…".

It has been written time and time again - even by many conservative policy critics - that without the bailouts of 2008, the United States may very well have experienced a more immediate and steep systemic contraction than occurred that autumn. (It is true that these same critics argue that we must take our medicine sooner rather than later, and that the debt must be cleared before economic recovery can commence. I am simply pointing out that there are individuals on either side of the ideological spectrum who acknowledge that a removal of stimulus and a tightening of monetary policy will, at least in the short term, make things worse.)

Again, allow me to take a contrarian position to those who would argue that the Bernanke imperative illustrates the ignorance of those promoting loose monetary policies. I think that Chairman Bernanke understands all too well that his accommodating monetary policies will fail to fix the underlying and most fundamental and socially destructive of all economic ills-those of an ever-widening gap between rich and poor, and the absolute disaster caused by an ever-shrinking, formerly self-sustaining American middle class.

But here’s the deal: Like Paul Krugman, Ben Bernanke also believes - and this is why his voice cracks and his lips quiver when he speaks "confidently" of the Fed’s policies - that hedging against what would be pretty much instantaneous chaos here in America (if all support was withdrawn from the system, no matter how problematic such support is over the long term) through the infusion of trillions of fiat dollars into the economy is the only possible path to follow. (As for the growing austerity-driven crisis in Europe, we’ll just have to wait and see. I mean if war breaks out, it won’t be fought in our streets, right Mr. Chairman?)

I must be a member of the ruling elite to adopt such a seemingly apologetic tone toward men like Bernanke and Krugman.

But I am not. I am a nominal man living in a real world. In the real world, austerity and poverty hasten the arrival of civil strife. In the real world, real hunger and real suffering leads inevitably to the rise of radical and violent political and social movements.

And while it is certainly true that the American middle class is being summarily destroyed by the fraud perpetrated by the Wall Street moguls and by the complicity of the Constitution Avenue oligarchy, and while it is also true that financial hopelessness is on the rapid ascent throughout the land, our descent into the realm of Banana Republicanism (as opposed to Constitutional Republicanism) is neither precipitous nor volcanic. It is, at present, a slow burn.

And while I wholly and entirely agree with those who argue that three-plus decades of fraud and profligacy and lawlessness in the financial sector and in Washington have brought us to the edge of the abyss, I also believe that, at least for the past two years, we have the Federal Reserve and the Congress to "thank" for keeping us from falling off of a cliff.

Do not misunderstand me. While it may appear as if I am making a grotesque gesture of apparent gratitude to the very men whose policies and avarice have ruined the future for so many, please hear me out as I clarify my complete argument.

A question: Why would intelligent men and women, regardless of moral considerations, promote fiscal policies that many now agree can only buy them, at best, a few years of financial respite? Is it because they just want to grab as much of the metaphorical pie as is possible before the next leg down?

Is it because they truly believe that the "Pax Americana", arguably in force since 1918, can be sustained via the creation of trillions of new irredeemable dollars? Is it because they simply don’t understand how credit and debt function when all trust in the system evaporates? The answer, you see, lies within Randolph Bourne’s prescient words of a century past.

I am a nominal man with a pretty good understanding of how things work in the real world. In the real world, war comes, one way or the other. War always comes. And in the real world, governments pursue war not because it is the righteous or just thing to do, but because more often than not they view it as the only viable thing left to do.

Of course governments will always attempt to create and nurture an ethos of righteousness and justice surrounding the wars they wage, and it is far easier to convince the citizens of the nation that "civilizing" wars and wars of foreign liberation (Take up the White Man’s Burden?) are the most righteous causes of all. (Far easier to convince the people of that than to convince them to fire upon their own, in the streets) And so with nowhere seemingly left to turn, governments pursue wars of aggression, of impetus, and of pre-emption, rather than waiting for the collapse of their own state into civil war.

I am a nominal man living this real American tragedy. I live moment to moment, paycheck to paycheck. I have sold my car and many of my possessions so that I can feed myself and my children. I have purchased with the last of my dollars a small piece of land in rural America. There I will erect a humble 250 square foot cabin. I will grow vegetables to barter at the local marketplace. I will recede from that which I simply can no longer afford nor sustain.

And while I must admit to often feeling a great rage and despair at what has become of my world, and while I want to blame the masters of greed - the Bernankes and the Blankfeins and the Buffets - for the destruction of this world, I am also compelled to consider that Krugman and Bernanke are pursuing policies whose aim is to keep civil strife from destroying, in the near term, the very fabric of American society.

War will come. Perhaps men like Bernanke and Krugman are simply trying to let it arrive first in a foreign land.

I cannot offer any ethical defense for the actions of my country. I more often than not find such actions overwhelmingly reprehensible and amoral. But I must wonder: Why do conservative thinkers attack men like Ben Bernanke and Paul Krugman for promoting monetary policies aimed at keeping America free of civil unrest (and by logical extension delaying an American crisis while Europe begins to burn in the fires of austerity), when these same ideologues more often than not support military solutions abroad to many of our policy dilemmas?

It strikes me that the solutions offered by the Federal Reserve-policies of quantitative easing and of corporate bailouts and "printed" monies for food stamps and unemployment insurance and Medicaid, etc.-that these policies are poorly disguised attempts to let the rest of the world devolve into global austerity-driven conflict, while America uses the extra time bought by such policies to eventually pursue "righteous and just" wars; wars fought on foreign soil, to clean up the mess and to once again come to the rescue and to make the world a better and safer place for humanity.

Perhaps pursuing policies aimed at "extending and pretending" is in fact better than the alternative. Perhaps continuing on the clearly unsustainable, and I would argue eventually disastrous, path of debt monetization in order to extend unemployment benefits to those without jobs and in order to provide food stamp subsidies to those without any other way to feed their children and in order to fund health care benefits for our nation’s elderly and infirmed; perhaps that is the better choice-at least for the near term, and at least, in the eyes and hearts of our political leaders, as a way to prepare the nation for the inevitability of the great wars to come.

For individuals who view themselves as citizens of the world first, and of nations second, these policies are repugnant. But governments never view themselves as such, save only to profit through the mendacious efforts of such institutions as the World Bank and IMF.

War is the health of the state, but only if the war is fought somewhere else, correct? The policies currently pursued by our Congress, by our President, and by extension by the U.S. Federal Reserve, are policies aimed at keeping the peace at home just long enough so as to let other lands face the fury of a citizenry betrayed.

I am a nominal man living in the real world, and in this real world in which I toil and about which I mourn, love may be the answer for me and for my wife and children, but war remains the health of the state.

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