Terminal America: Hollowing Out the Empire

“This sucker could go down!”—George W. Bush, September 2008

Like millions of latter-day Rip Van Winkles, many Americans today are waking from a thirty-year hiatus from reality to find that while they were dozing, somebody repossessed the house and furniture, sold the kids into slavery, slaughtered and skinned the pets, and dug a huge cesspool where the garden used to be. Whoa! It has been an unpleasant awakening, to be sure …

Unfortunately, following a long American tradition, the blame is being laid on all the wrong people in all the wrong places. In fact, this misplaced blame, and its counterpart in misplaced loyalties, might serve to define our present political moment, epitomized on the Right by what is called the “Tea Party,” and on the Left by a magical faith in “The Obama.”  Again following long tradition, this “partisan” divide is really just a distraction — a magician’s mis-direction — because neither the “Tea Party” leadership nor “The Obama” really depart much from a long-standing script that calls for total takeover of the State by major corporations. And so the Right-Left Republican-Democrat debate is more like professional wrestling — a lot of silly costumes and huffing and puffing: sound and fury signifying nothing.

In this way, the American public’s ignorance, compounded by the 24/7 corporate disinformation campaign known as “the media,” has served to render the so-called “national conversation” as incoherent as barroom babble at 2 A.M. It’s time to  sober up.

1. A Little History

Future historians will, no doubt, point fingers at Bush the Younger as the president who decisively thrust the United States into political, moral, and economic bankruptcy — and his reputation deserves nothing less. But the real start of our devolution into a Third World kleptocracy was the 1980 election of Ronald Reagan, who, ironically, is up for canonization as an American Saint this year, the centennial of his birth. If there were any justice in this world, Reagan would instead be burned in effigy on the White House lawn, while the presidential mansion is bulldozed in the background, in a gala event broadcast live worldwide. Then, perhaps, the process of national recovery might begin.

Reagan’s pernicious significance is three-fold. First, it was the Reagan administration that institutionalized widespread high-level looting, achieving unprecedented levels of criminality in the Pentagon’s “Star Wars” program, in James Watts’ Department of the Interior, and in CIA drug-running.  Second, “Reaganomics” — overflowing the cups of the rich in the hopes of a “trickle-down” effect — was prelude to full-blown casino capitalism and, hence, the current meltdown — remember Michael Milken, “junk” bonds, the Savings & Loan scandal? Third, and perhaps most importantly, it was our veteran Hollywood cowboy who began the shift from “reality-based” to “faith-based” politics, herding the U.S. populace into a hallucination called “Morning in America.”  In reality, of course, it was more like “Sleepytime in America,” or better, “Narcosis in America” — a massively concerted propaganda effort by the corporate oligarchy to drive a wedge between the voter/taxpayer’s mind and (1) the laws of cause and effect, (2) the laws of nature, and (3) the elementary rules of logic — effected by a complete buy-off of the media.

With taxpayer/consumers rendered stuporous by nonstop TV and credit card shopping, the predators and parasites could then begin their giant fleecing operation…

2. Capitalism Eats Its Own Children

“Hollowing out” is a phrase sometimes applied to economies suffering from the “offshoring” and “outsourcing” of industry and jobs, but it also serves well to describe the sort of looting and pillaging that comes to characterize what happens when an empire climaxes and begins to decline.  I recently came across the term used this way in an essay by Ernest Callenbach, author of the environmentalist classic Ecotopia, and much of what I was seeing in the news came suddenly into focus as part of a larger pattern. Callenbach writes:

Some empires, like the Roman or the American, arise from democratic, republican, even libertarian beginnings. Originally, the vigorous government of a proud people defends those people and seeks to make their country strong internally. It supports domestic industries, independent farmers, education, health care and public health, community development, city beautification. Yet gradually, and inevitably, these populist values will be forgotten. A full-blown empire that seeks to dominate the world can only do so at the expense of its own people. It comes to spend its treasure on armaments, on costly displays of pomp and power, on secret police and surveillance. In addition, great sums of public money are siphoned off to the rich and well-connected. In its values, an empire slowly turns toward dominator attitudes and ideologies. It comes to value the power of the state more than the welfare of its citizens. It develops a belligerent foreign policy — relying not on diplomatic or economic leverage but on weapons technology which can supposedly sweep enemies away and maintain hegemony.

Whereas 19^th and early 20^th century capitalist magnates like Andrew Carnegie and Henry Ford once encouraged huge investments in the community infrastructure that supported their industries, today we see the reverse happening—a wholesale disinvestment in the U.S., often with government collusion. Fact is, there just isn’t enough profit potential in America anymore — workers expect too much in the way of pay and benefits, and with the advent of computerized production and a global communications net, why would capitalists keep the factories here? As Callenbach explains:

a peculiarity of the American empire’s hollowing out is that many major American corporations, from Boeing to General Motors, outsource manufacturing to low-wage countries. The effect of their zeal to obtain products at the lowest possible cost is that much of the American industrial base now exists in China, Thailand, and Indonesia.

This fundamentally non-national corporate agenda sets the pattern for the hollowing out process. The resources of American society are increasingly diverted to the rich. America is dividing into two nations — the very rich and the poor: what we recognize as the Latin American pattern. The ratio between the earnings of executives and the earnings of workers becomes shockingly large, especially if compared with European or Japanese patterns. The rich live in segregated and gated enclaves, and shop in exclusive stores. The poor live in deteriorating neighborhoods. Their streets are potholed, their garbage is not reliably collected, and the police act like an occupying army.

As to the former modestly prosperous American working middle-class, it is being crushed. During the Great Depression and after World War II, strong unions gained working Americans a greater share of the national pie. A huge proportion of ordinary people were able to buy small houses and cars and send their children to college. In the US today, however, the values that supported fairer distribution of income have weakened. We observe a concerted corporate campaign to destroy unions and reduce wages, and also benefits such as pensions and health insurance. This is excused by crying about international competition from low-wage nations — a competition which we have exacerbated by establishing the World Trade Organization. Because even a modest life-style can no longer be supported on one person’s wages, both parents must work. Sometimes they need several low-paid jobs. The result is a dissolution of family ties and neglectful or abusive upbringing of children.

The impoverishing of large masses of trained and experienced working people entails vast indirect social costs, in addition to lost productivity, but these costs are borne by the general public’s taxes if they are met at all. The food-stamp program, for instance, which subsidizes food for the very poor, is being reduced. This sends people to “soup kitchens” or to seeking scraps in garbage bins. Many members of the middle class are falling into poverty: forty percent of the families who go bankrupt in the US do so because of catastrophic financial medical problems. These people will now seek care at underfunded public charity hospitals or clinics. They may end up homeless, depressing the quality of urban life. They will die younger — depriving their families of their support and depriving society of their productivity.

3. Race to the Bottom

Consider President Obama’s recent choice of General Electric CEO Jeffrey Immelt to head his new Council on Jobs and Competitiveness (LOL!).  For much of the last century, G.E. was the epitome of U.S. industry and inventiveness, an image that most Americans probably still believe is true. But the fact is that G.E. has been disinvesting in this country for more than two decades. As Dave Lindorff reports:

Immelt heads a company that has for years topped the list of transnational corporations as ranked by the size of their foreign asset holdings. More significantly, GE is a company that for years has also received more of its revenues and its profits from abroad than from its US operations, that has far more of its 304,000 employees overseas than in the US, and that has more assets abroad than at “home,” where its headquarters offices are located. According to the latest figures compiled by the United Nations, in 2008, GE reported $798 billion in assets, of which 53% were abroad. The same report showed GE’s 2008 sales were $183 billion, or which $97 billion or 53%, were foreign. The company reported having 323,000 employees, of whom 171,000, or 53% were overseas.

What this means is that in very real terms, GE is not an American company. It is a foreign company that happens to be headquartered in the US, and that happens to have a chairman/CEO who was born in the US, and holds a US passport.

The U.S. capitalist class has now gone worldwide, and with absolutely no loyalty to the American working class that enriched them, capitalists will continue to shift investment to the low-wage regions of the planet, a strategy that promises to sustain profits into the next century. In the meantime, the global “War on Terror” will come home to the U.S. as a means to shut down protest as that working class finds itself driven deeper and deeper into penury…

[Stay tuned for Part Two. To read Callenbach’s full essay go here.]