The Death of a Decade

I've read oceans of virtual ink on the conflict in the Levant, as if analyzing it in detail were the means of correcting the situation. But the war there is not a mis-configured text file on a Unix server, which will stop causing problems whenever it is found and fixed, but the flowering of deeper forces. The most simplistic way of putting it is that at $55/barrel, the Arab world can afford to wage one guerilla war against the US, and at $75/barrel, they can afford to wage two. The ur-reality is not Hezbullah, nor even the dynamics of Israeli-Arab relations, but the rattling loose of a good old fashioned dollar glut. The road to any solution in the Levant runs directly through the US Federal Reserve.

Instead it is important to recognize this moment for what it is: the death of a decade. It is not the end, but it is the beginning of the end. It is the Tet moment where elites told Bush, to his face, that he cannot go on as he has. That the battle might be won, but the war is lost.

In 1987, after the major markets slid by 25% around the world, GB Trudeau penned a cartoon with his character "Duke" crashed over furniture, clearly hung over, with the tagline "The 80's are over." But they were and they weren't. The world turned to grey faceless leaders who promised to hold on to the gains, illgotten and otherwise. The 1980's may have been fat years to the fat cats, and good enough to the college educated professional class, but what followed was a long second half of a decade that scraped and grunged to a conclusion. That moment is now coming soon, because on the next crisis point, instead of standing together, and even taking hits, to preserve the current policy regime, elites around the world will flee for the exits. The rout will be on.

"The beginning of the end" is really then, the moment where the decade has passed its pinnacle point, and people can look backwards and see that peak some distance behind them. It is this that sets up the debacle of a loss of confidence. Politics turns – sometimes towards the progressive, sometimes towards the conservative, but always from expansion of power, to reaction against what had been in power. We believe in decades in modern history because this point is so often near the latter third of a decade. The 1920's ended with the Crash of '29, and the 1930's ended, as Auden observed, with the invasion of Poland in 1939. It was the late 1950's recession that send America scurrying for a new direction, with more energy, as embodied by the elections of 1958. It was Tet and the gold crisis that ended the 1960's "Go-Go" years. It was the Iranian Revolution combined with the invasion of Afghanistan that ended the 1970's and plunged the world into cold dark contemplation of what collapse looked like.

The 1990's ended late, in April of 2000, which made their fall so swift – because the new decade began in earnest almost immediately after Bush took power, and was sealed in a number which has become a symbol: 9/11.

What is happening is the unraveling of elite confidence in Bushism – the order which Bush asserted in the days after 9/11, and the very nature of the project. To understand why the last month marks the pinnacle point of that project, it is important to turn to Marcus Aurelius and ask, as everyone's favorite cannibal did, "What is it in its nature? What purpose does it serve?" Because in Bush's world, all things are, indeed, teleological in their essence – that is, they are created for the end that they are supposed to serve, not from the origin from whence they came. Bush is not a product of his environment, he is the result of his own decisions. And so too is the decade without a name.

The Bush project is composed of three separate, but equally important parts, parts which go beyond some mechanistic economic explanation, or some psycho-analytical guesstimation of his motivation, and certainly beyond a cultural deconstruction – and instead must encompass all three. There is an economic, political and cultural dimension to the Bushite world, and seldom have all three been looked at together. To understand Bush one must understand What he has tried to do, How he has tried to do it, and Who he has asked to accomplish it. The failure of Bushism that is now becoming visible even to global elites, rests on the impossibility of doing the first by means of the second with the third as the instrument.

The first part is the simplest to see, and to some extent the hardest to explain. Bush promised to give financial elites a huge hit of money, and promised, more or less, that this would bankrupt the state that was capable of regulating them. Neo-gilded age economics would return, and he surrounded himself with advisors who were intended to ressurect that period. It is why I knew in 2001 that Bernanke would be made Federal Reserve Chair after Greenspan, his academic work is about how that world could have saved itself, and his answer was that it could have suspended the rules long enough to get over the temporary disequilibrium, and then there would have been no Great Depression, and therefore, no FDR, and therefore, no New Deal. This was done – massive revenue reductions created a growing federal deficit wave, and the promise of the bankrupting of Medicare and Social Security. Interest rates were dropped through the floor. Money at the top, became very easy to come by fairly quickly, as "the carry trade" – borrow short and lend long, became the escalator that dragged the wealthy out of the pit that a falling stock market was threatening to hurl them into.

Even on its face one can see why global elites would accept this project, because even if it went badly, they would be the winners of it while it lasted. Against the backdrop of the 2000-2002 stock market crash, a no strings attached bail out of the very people that had blown the dot com bubble was going to be almost irresistible. The rich went along, because nothing looks as good during a crash, as free money.

This floundered because of what Krugman point out was the prospect of "The Great Unravelling". Super powers can suspend the laws of economic gravity for a moment, but not indefinitely. Flooding the world with dollars and keeping them there has a well known result, a good old-fashioned dollar glut. At first this didn't seem so bad, because there had previously been a dollar drought, engineered primarily by Robert Rubin under Bill Clinton. A dollar drought imposes discipline – on the US, on its core partners, and on developing nations that cannot sell resources for enough to grow. It imposes austerity, and the painful clarity that that creates. It is also a perpetual juggling process, as a world close to the edge of insolvency, has perpetual financial crisis points that must be bailed out with a little bit of that soothing liquid of currency. Dollar gluts make life easier for many, many, many kinds of ruler and are far easier to manage in the short run.

But once they are running long enough, there are well known effects: resource nationalism, rising autonomy of the peripheral states, socialism in Latin America, Islamic militancy becomes a more open force. When people are parched for money, they dance to the tune that comes from Washington DC. When they are fat with it, they begin to want to call their own shots. And many of them are with live rounds.

Thus Bush promised that the second part of his dollar gusher would be the United States using aggressive military force – let us not try and find circumlocutions like "preventative" – to nip any place where the dollar glut was threatening to rattle loose. The Cowboy Diplomacy which Time just declared an end to, was credible in the face of 9/11, but it found its expression in the invasion of Iraq.

Iraq was invaded not because Saddam had WMD, but because he did not. It was to be an example to all of the states who wished to acquire them. In the days of dollar drought, the US could buy the atomic aspirations, or at least rent their manifestations. In the days of dollar glut, this would be untenable. The second part of the product that Bush sold was that an aggressive America could restrain the centripetal forces that a dollar glut would unleash. Despite academic and financial misgivings about his policies, 9/11 and Saddam seemed to argue the other direction: everyone knew that even if he had nothing, Saddam would reacquire WMD ambitions as soon as he had the money to do so. And with oil marching upwards in price, everyone who thought about it knew that day would come.

This second part, the How of Bushism, is objectionable on its face on moral grounds, and is questionable on pragmatic grounds. Pumping trillions of dollars of excess liquidity cannot be corralled by force. It has accelerated the moving of manufacturing to China – the easier dollars are to get, the easier it is for China to build infrastructure and buy oil to drive a combustion economy. No military solution will deal with this, except having ever larger defense budgets to employ the Americans who would otherwise be out of work. But this is a downward spiral – the more people employed in what Adam Smith pointed out in 1776 was "non-productive labor" the worse the situation would be. The problem of East Germany – that more and more people were hired to spy on the fewer and fewer doing real work, has taken hold in the US. If you want a computer company start up today, figure out a way to invade the privacy of millions of Americans, and sell it to the government.

But the militarized state does not terrorize global elites. In fact, if the US wants to be the designated patsy of the world trading system, it has advantages for those that trade with us – whether rapidly emerging nations like China, or established developed nations like Germany. If the US is busy making bombs, then others will get to make our consumer goods.

Thus, the central banks of the world were willing to go along, both because a fear of what happened if the US market crashed, and a belief that when recovery came to the US, that the US would import more from other nations. As long as the US bought enough, then somewhat higher energy prices were tolerable, particulary since Iraq was promised to be fully online, and producing crude at un-undercutable prices.

This much elites saw – a big gamble with other people' s money, and an assurance that the kind of vicious collapse which would topple them, personally, from power, would be contained. However, there is a third point, and it is both the clearest and the most obscure.

It is the clearest to the people reading this piece because most of you aren't elites. It is the who of the Bushite system. The elites imagined that they would be the same kind of people who ran Nixon, Reagan and Bush I – strong jawed ex-military men combined with sleazebag greasy arrogant used car salesmen. Not the nicest group of people, but reliable in their habits and results. And in any event there would be room for number crunchers, thinkers and technocrats, because such people always, it was assumed, have to implement the details and plot out the curves.

Instead, Bush wanted to change not merely the state, but lo stato as well. And the state, in this sense, is a work of art. It is the creation of a culture which can produce the kinds of people who must run it. Without the halo of people who actually convert the dictums of the powerful, in the actualities of power, there is no state. Someone must break down plans into steps, and lubricate the apparatus of power with logistics. Guns must be procured, schedules drawn up, and orders given.

And this is why there has been, from America's technocrats, meritocrats and ground level intellectuals, such a ferocious and visceral hatred of George Bush and his ism – because Bush intended, deliberately, to replace the meritocratic technocracy – the very class whose rise defines the rise of the West – with true believing fanatics, who believe that ideology is definitive, while reality is frequently inaccurate. It manifested in obvious ways – such as the NASA appointee who edited releases to conform to Creationism. It showed up in the Air Force Academy, where fanatics have driven others out of the hierarchy. It showed up, most importantly, in Iraq, where biblicalist functionaries would rewrite wholesale technical reports to conform with the revealed world of an entire counter universe of counter-fact which has been created to fill the empty minds of the fundamentalist wing of American society.

There has been, in otherwords, the creation of a whole parallel world, filled with parallels to science, popular culture and scholarship. In no small part it has been funded by the loose dollars created by 37 years of reactionary government – give crazy rich people money, and they will start funding other crazy people to create a tapestry that conforms to their tastes of the world. The Medici's state built cathedrals and funded the resurrection of the West, along with the beginnings of what we now call "physics", but the work of art of the Bushite state is Left Behind and "Intelligent Design" and biblical literal reading of the history of the Fertile Crescent.

Consider, if you will, that the first veto of Bush's tenure – after having gone longer than any modern President in wielding the veto pen – is of money for stem cell research.

This cultural priority translated into a certain kind of person filling the roles of power – the Who were told How they were to do What.

This change is most obvious by the falling away of the children of Nixon and Reagan. Wesley Clark, as with many other things, was ahead of the curve. A life long Republican leaning military man, he found that the way of being which he had spent a lifetime cultivating was no longer welcome. He fought with the Clinton Administration, but he was a non-person to the Bush administration. And so, he left, taking the cultivated life of discipline which he had followed since his teenage years with him. But there were other defections – libertarian types such as Jude Wanninski, even neo-cons such as Fukuyama, one of the most reliable of purveyors of sloptimism for the right wing world view. The right wing is revolting against Bushism, because Bush has replaced the "old" new right of military technocrats, entrepreneurial anti-regulators and on the make crypto-racists, who found in the hatred of the liberal state and its "looseness" a common ground – with another creature entirely, one who is a creature of the military hand out, and whose world view is constructed, not out of "team play" but of obeisance to a higher truth which they have completely internalized.

It is why former Reagan Navy Secretary James Webb is the Democratic nominee in the Virginia Senate race. It is also why "Holy Joe" Lieberman was willing to embrace Bush, because he found himself more at home among other true believers, than among his own party.

This triumvirate has, as noted, political, economic and cultural ramifications. A culture of cement headed fanatics is no the same as a culture of hard headed businessmen, let alone pointy headed academics. Its shape is different. It is able to function in an environment of suspended rules, because the "rules" mean nothing to them. The cognitive dissonance that people who believe what they observe and intuit does not touch them. They, unlike Wiley Coyote, never look down. They do not see the world, because they do not believe in it. If told to fix the numbers, they feel no guilt or shame, they do not need blue ribbon commissions for cover, they simply turn up the heat and simmer the books a bit longer.

Such people have a home in corrupt businesses, because a corrupt business is, in fact, a kind of a cult. I observed this in the ones I consulted for in the 1990's, they were populated by true believers at a lower level, who could, even as they individually were handing pieces of data which pointed out that the whole could not work, believed that there was something wrong with them, and they covered it up to hide their own shame. The same thing happened in Great Leap Forward in China – everyone fixed the statistics, because everyone thought it was only their sector was falling behind.

That the fanatics are not able to do what was claimed for them is the key rupture of the Bushite moment. It is not visible as such to those from the position of elite who are now abandoning Bush, it is merely the pragmatic observation that the dollar glut is loose on the world, and that the US must either contain its spending, or it will be contained by rising rates around the world, which will continue to hammer the US dollar. The Canadian Dollar, long discounted 40% at toll booths in New York State, is now worth 88 cents. It has slid dramatically against the Euro, and even more so against that real benchmark of the world economy – oil.

The rattling apart of the Bushite fantasy – that the entire intellectual "reality based" state could be replaced by a "faith based" state – is of no small consequence. This is because Bush has not merely presided over the longest period of undivided government in 40 years, but he has also populated the government, down to low levels, with people who will believe that 2+2=5 if one can find a biblical verse that can be construed to mandate it. The US government is becoming increasingly dysfunctional, because it is populated with political appointees who will not believe a weather map, or an intelligence report, if either conflicts with their preconceived notion of how events "must" play out.

The reason that period of weeks is the end of the willingness to give Bush a pass on his policies began, not in Israel, but as I pointed out some time ago, with the IMF and the G-8. The assertion that the US is creating trade imbalances by its monetary policy is akin to a revolt.

Over a year ago it was obvious that the US and Europe were on a collision course in monetary policy. What tipped the balance was that Asian countries adopted an easy stance, hoping that continued rebound in the US would allow them to export more to the US, so long as the Yuan could be forced up to ease pressures on their economies. The result is that the inflationary pressure that the Fed supplied has been seen in oil prices – where $70/barrel is beginning to seem like a floor, not a ceiling. This oil money has filtered its way through various hands. The religious rich of America want Darwin wiped off the bookshelves, the religious rich of Saudi Arabia want Israel erased from the map. The dollar glut has funded both of them.

That the fanatic, who is so good at saluting and invading a country, illegally and deluded that its leader planned 9/11, cannot balance the competing ruptures of a world system where too many dollars are now causing the same level of financial instability that too few did before – should not be surprising. And it is not surprising. Every day through my email box I receive a stream of jokes, cartoons and rants about the Chimperial presidency, and the primate of America. These jokes are dismissed as some unhealthy obsession with a leader of opposing political philosophy. But instead they are the result of an irreconcileable war of ideas. Is the state to be run by those whose mandate is to face the facts and decide on actions? Or to be run by those who decide on actions and then deface the facts?

There is a great deal of this decade left to run, and it will increasingly be from a situation of desperation, protecting the downside, and to the sound of the scraping fingernails of those who, having had trillions of Bush Bucks dumped on their heads, try to hold on to them as the buying power of those notes evaporate. The combination of dollar glut, aggressive militarism, and theocratic state – and in a profound way not merely of using religious demagoguery as many Presidents have, but in the sense of a state where theocrats have replaced technocrats, meritocrats and bureaucrats – has now been shown to be incapable of keeping the peace.

That it would come to this was known to Sharon. He knew that Iraq bought him time to impose a unilateral bantustanization on the Palestinians, that they would accept it because he had money flowing in, and they did not. But he also knew that there were limits to the imposition – and that time was running out. This is why he broke with Likud. He was replaced by people who thought that they can buy more time with bombs and blood. Bush has told them they have a week to do their worst – devastating a Lebanon which a few months ago was celebrating a "Cedar Revolution" and the withdrawal of the Syrians – and a polity which was only forming.

But rather than analyze the culpability of the micro actors, it is important to realize that Israel's time under its fanatics is the problem of the US, writ small. And that there is coming a genuine revolution, one, not merely of policy, but of the actors of policy. The threat that the blogsphere makes is that it is the small visible top of a great iceberg – an iceberg populated by a different kind of person, one whose faith is not in Numbers, or even numbers, but in the network itself, and the ability of the network to adapt, create nodes of activity, forge connections of economic, political and intimate dimensions and to run the world.

This is the important revolution – from a system where a particular body of texts is deconstructed into maxims which are then repeated endlessly, and from the body of people exposed to them, the ones who are best indoctrinated are given the task of sledge hammering the world into the box that the book as they read it creates – to a system where a web is woven around the world – and not merely the changing of committee chairmen in the House of Representatives – that is in the offing. This was the important lesson of the yearly Kos – the people on the internet are now the people of the internet, and they are capable, far more capable, than the system which is now imposed on the nation. As the tide turns against Bush and his isms, it will be the growing belief that the internet can not only run our software, but be the basis for running our body politic, which is the real, and deeper revolution of the sphere.