Pax Americana, Part 3: Political Stalemate
The 21st century started with the U.S.A. the predominant nation on the planet. Just about ten years ago it had out-competed the Sovyet Union in an epic arms race that had brought mankind to the brink of destruction. But now the SU was gone, the U.S. of A. were undefeated and there was no one to challenge the position as leader of the world. The economy was booming, the dotcoms and the internet were promising a new wealth and liberty. Everything was well in the Garden of Eden. Or not.
The incredible internet boom was just a bubble, created by the FED’s policy of loose money. And instead of biting into the sour apple and letting the economy slip into a recession, Greenspan opened the money valves. Easy money was the result, eroding the stability of the economy, though slowly but surely.
Meanwhile, newly elected (or was he?) president George W. Bush, after almost a year of doing nothing in office, was confronted with the terrible atrocity of 9/11. Whipping the USA into a frenzy he first started a war in Afghanistan and a year later one in Irak. None of which he did end.
Over the next eight years, the two wars proved to be more difficult to win than to start. Just ask the Russians or the Brits what they think about invading Afghanistan. The conflict, thought to be won quickly, proved to be a nagging sore. And Irak – quickly descending into civil war – was not a iota better. Over the next 9 years, the United States would spend about 1.1 Trillion Dollars.
In 2006 and 2007 it came apparent that something was amiss in the house of Bush. The first signs of the housing market bubble were popping up and the voices in the wilderness are finally getting some attention, at least. But not enough, it seems.
In 2008 it all comes down. The housing market crashes, banks go bankrupt. But instead of fixing the system – breaking up the big banks, fixing the monetary system and coming down onto the speculation economy – President George W. Bush gives the biggest banks a 700 Billion bailout. The big banks controlling the FED immediately used that money to buy their erstwhile competitors and to get even bigger. Attaboy!
Nowadays, autumn of 2010, the United States of America find themselves in what may be the most critical time since the War of Secession. The Pax Americana is over, and although the USA may try to hold on to military power, its economic strength is broken. The divide between rich and poor, the failing infrastructure, the crumbling social systems, the biased educational system and the staggering debts of the States and the State are making drastic policy chances an imperative. But exactly these changes have been blocked by partisanship and political opportunism. Healthcare reform was upheld for month, labour reform is not possible, neither is a meaningful reform of the banking system or the breakup of the big banks.
President Barrack Obama will have a hard time in the coming two years. He was the reform candidate two years ago and somehow got stuck with the blame for the economic trouble the USA find themselves in. Yesterdays midterm-elections proved that much. And with a republican dominated congress, making a meaningful reform and bringing the USA onto a new course will not get easier. The republicans are strongly opposed to any government spending, even in the infrastructure projects the USA needs so dearly. Even for schools or education or research. And with Obama a lame duck for the next two years, a republican presidency in 2012 seems almost a certainty.
This does not bode well for the United States of America. This nation is deeply divided and as long as its wealth is stuck in Wall-street’s casinos and not used to create real value and create real jobs, there is not much that can bring the USA back to their feet. High unemployment and a ever more fragile currency might result in hyper-inflation, opening the path for political extremists. And these people will flourish in the racially, economically and culturally divided USA.