All Americans have exploited the rest of the world and the American financial-political elite has exploited all other Americans. We are now “all in this together” suffering the impact of the Reagan Financial Revolution in Irresponsibility and Deregulation which formed the natural foundation for the Neo-Con conspiracy to replace the Cold War with American Empire.
Beyond all discussion of economics still lies the global political system, which can be distinguished from the global economic system but not separated from it. Financial exploitation and political exploitation are two sides of the same coin; the financial games of Wall Street, legalized by their Washington buddies under both Clinton and Bush, are the other side of the coin of the militarization of foreign policy. No reform of the financial system, no replacement of the financial system is likely to work unless the policies of “preventive war” and “security through strength” are replaced with policies designed to enhance the social, economic, political, legal, and military security for the poor people of the world.
The intimate relationship between financial and political exploitation is often overlooked, but not because it is secret. Rather, people think in "boxes," and these mental boxes are unfortunately more figments of their (lack of) imagination than useful models of reality. Imagining and trying to resolve financial problems and political problems separately is wishful thinking, like dieting without exercising. The key differentiating concept in evaluating international behavior is "exploitation." That is, the primary question to ask concerning a given act is not whether it concerns finance or politics but whether or not it is primarily exploitative.
Whether the current recession will provoke us all into biting the bullet or trap us in another era of rightwing dictatorship like that provoked by the Great Depression is the challenge we face. While "muddling through" is theoretically a third possibility, it seems unlikely for two highly complex sets of reasons:
- the severity and broad base (failed financial system, collapsing house mortgage system, rapidly spreading unemployment; in the U.S. and everywhere else) of the recession;
- the severity, durability (seven years after 9/11 nothing has been resolved), and broad base (Iraq, Afghanistan, Pakistan, Somalia, Palestine, Lebanon, Iran, with India, Bangladesh, the Philippines, and Indonesia waiting off-stage) of the Western confrontation with activist Islam.
Biting that bullet would entail emphasizing the bailing out of poor people worldwide at the expense of the current emphasis on bailing out the very individuals and institutions on Wall Street who caused the global recession in the first place. Biting that bullet would probably also entail a degree of income redistribution that would noticeably reduce the living standards of middle class America, a group that has been benefiting from unfair terms of trade (nicely known as "globalization") with poor countries and from Chinese loans rather than living off its real productivity.
Why would Americans agree to such a sacrifice? Most Americans still (just barely) have relatives who recall sacrifices of the Great Depression/World War II era. Make no mistake about it: this is one single unified period: the GD caused WWII. Imagine Hitler with nukes. Do you really want to live through such an era? If you are not convinced, ask someone who did. If Americans understood the dangers, self-interest alone would more than suffice to convince them to accept sacrificing a measure of luxury in order to avoid the threat of a return to another era of war against rightwing totalitarianism.
Before lightly dismissing the threat and asserting with crossed fingers that the world has learned its lesson, consider how close this threat really is. The severe attacks on Constitutional protections and the separation of powers in the U.S. Federal Government after 9/11 were a canary in the mine of global democracy. The warping of Islam into a extremist creed bragging of cruelty to women and the beheading of men is another warning. Rising signs of fascism in other religious movements (e.g., Zionism in Israel as represented not only by current politics but also by popular attitudes in the military and the Jewish "madrassa" system of religious schools and Hindu-firsters in India) constitute further warnings. The radicalization of Islamic nationalism (e.g., Pashtun, Palestine, Somali, Iranian, Iraqi), albeit a predictable response to the military attack upon it and lack of good options for peaceful participation in politics, is yet another warning. Democracy's spread in the 1990s is under real threat from global dictatorial tendencies today.
Obama does seem to have made some progress. Whether he is leading or following, the fact is that condemnation of the behavior of Wall St. is now widespread; public recognition of the irresponsibility of the elite is the first step toward reform. Israel's scandalous level of control over U.S. foreign policy has also, in the last year, become widely recognized and condemned. Third, Obama has promised a military withdrawal from Iraq, albeit in suspiciously caveated terms. Fourth, compromise with the Taliban is now as well an issue under intense scrutiny in the U.S. Fifth, the G8 was transformed into the much more representative G20.
Nevertheless, the signs of stonewalling by the Washington-Wall Street elite predominate. Condemnation of Wall St. has not led to government assertion of control (witness the failure to treat financial CEOs the way GM's CEO was treated). Despite the new recognition of the Israeli lobby's influence, Obama has not found the strength to resist it. The Iraqi withdrawal, even on paper is not clearcut, and in any case seems more a transfer of scarce resources to Afghanistan than a rejection of a militarist foreign policy. Consideration of compromise with the Taliban notwithstanding, the Obama Administration still appears not to understand the difference between the global al Qua'ida jihad against the West and the Pashtun nationalist movement that is increasingly under Taliban leadership because no one else is bothering to address Pashtun concerns. Finally, the non-reaction by decisionmakers to the Stiglitz report to the U.N. on how to overcome the recession combined with the failure of the London G20 fully to recognize the terms of that report suggests that the U.S. elite remains unwilling to face up to global financial realities.
Indeed, the long distance the U.S. elite still needs to travel in order to reach reality becomes clear only when it is realized that, despite being the new standard for measuring the performance of mere politicians on the economy, the Stiglitz report with its focus on economics is nevertheless far too narrow to provide the road to success. Stiglitz may, possibly, have provided the way forward for the financial side of the coin (though his efforts to defend the core of the current global financial system would be dismissed as unrealistic by many thinkers), but Stiglitz has simply ignored the other...the political...side of the coin.
Control of global politics from Washington does not fit with democratic decisionmaking in the financial realm. A political foreign policy based on the determination to control global oil supplies does not fit with a financial foreign policy based on income redistribution to provide a safety net for the world's poor. If the global economic system is to be transformed from short-sighted and selfish into long-range and focused on the common interest, then the global political system will also have to be similarly transformed. Needed change, whether replacing or just reforming the system, will require concomitant change of the rules of governance for the global political system as well.