by Paul Craig Roberts
One hundred years ago European civilization, as it had been known, was ending its life in the Great War, later renamed World War I. Millions of soldiers ordered by mindless generals into the hostile arms of barbed wire and machine gun fire had left the armies stalemated in trenches. A reasonable peace could have been reached, but US President Woodrow Wilson kept the carnage going by sending fresh American soldiers to try to turn the tide against Germany in favor of the English and French.
The fresh American machine gun and barbed wire fodder weakened the German position, and an armistice was agreed. The Germans were promised no territorial losses and no reparations if they laid down their arms, which they did only to be betrayed at Versailles. The injustice and stupidity of the Versailles Treaty produced the German hyperinflation, the collapse of the Weimar Republic, and the rise of Hitler.
Hitler’s demands that Germany be put back together from the pieces handed out to France, Belgium, Denmark, Lithuania, Czechoslovakia, and Poland, comprising 13 percent of Germany’s European territory and one-tenth of her population, and a repeat of French and British stupidity that had sired the Great War finished off the remnants of European civilization in World War II.
The United States benefitted greatly from this death. The economy of the United States was left untouched by both world wars, but economies elsewhere were destroyed. This left Washington and the New York banks the arbiters of the world economy. The US dollar replaced British sterling as the world reserve currency and became the foundation of US domination in the second half of the 20th century, a domination limited in its reach only by the Soviet Union.
The Soviet collapse in 1991 removed this constraint from Washington. The result was a burst of American arrogance and hubris that wiped away in over-reach the leadership power that had been handed to the United States. Since the Clinton regime, Washington’s wars have eroded American leadership and replaced stability in the Middle East and North Africa with chaos.
Washington moved in the wrong direction both in the economic and political arenas. In place of diplomacy, Washington used threats and coercion. “Do as you are told or we will bomb you into the stone age,” as Deputy Secretary of State Richard Armitage told President Musharraf of Pakistan. Not content to bully weak countries, Washington threatens powerful countries such as Russia, China, and Iran with economic sanctions and military actions. Consequently, much of the non-Western world is abandoning the US dollar as world currency, and a number of countries are organizing a payments system, World Bank, and IMF of their own. Some NATO members are rethinking their membership in an organization that Washington is herding into conflict with Russia.
China’s unexpectedly rapid rise to power owes much to the greed of American capitalism. Pushed by Wall Street and the lure of “performance bonuses,” US corporate executives brought a halt to rising US living standards by sending high productivity, high value-added jobs abroad where comparable work is paid less. With the jobs went the technology and business knowhow. American capability was given to China. Apple Computer, for example, has not only offshored the jobs but also outsourced its production. Apple does not own the Chinese factories that produce its products.
The savings in US labor costs became corporate profits, executive remuneration, and shareholder capital gains. One consequence was the worsening of the US income distribution and the concentration of income and wealth in few hands. A middle class democracy was transformed into an oligarchy. As former President Jimmy Carter recently said, the US is no longer a democracy; it is an oligarchy.
In exchange for short-term profits and in order to avoid Wall Street threats of takeovers, capitalists gave away the American economy. As manufacturing and tradeable professional skill jobs flowed out of America, real family incomes ceased to grow and declined. The US labor force participation rate fell even as economic recovery was proclaimed. Job gains were limited to lowly paid domestic services, such as retail clerks, waitresses, and bartenders, and part-time jobs replaced full-time jobs. Young people entering the work force find it increasingly difficult to establish an independent existence, with 50 percent of 25-year old Americans living at home with parents.
In an economy driven by consumer and investment spending, the absence of growth in real consumer income means an economy without economic growth. Led by Alan Greenspan, the Federal Reserve in the first years of the 21st century substituted a growth in consumer debt for the missing growth in consumer income in order to keep the economy moving. This could only be a short-term palliative, because the growth of consumer debt is limited by the growth of consumer income.
Another serious mistake was the repeal of financial regulation that had made capitalism functional. The New York Banks were behind this egregious error, and they used their bought-and-paid-for Texas US Senator, whom they rewarded with a 7-figure salary and bank vice chairmanship to open the floodgates to amazing debt leverage and financial fraud with the repeal of Glass-Steagall.
The repeal of Glass-Steagall destroyed the separation of commercial from investment banking. One result was the concentration of banking. Five mega-banks now dominate the American financial scene. Another result was the power that the mega-banks gained over the government of the United States. Today the US Treasury and the Federal Reserve serve only the interests of the mega-banks.
In the United States savers have had no interest on their savings in eight years. Those who saved for their retirement in order to make paltry Social Security benefits liveable have had to draw down their capital, leaving less inheritance for hard-pressed sons, grandsons, daughters and granddaughters.
Washington’s financial policy is forcing families to gradually extinguish themselves. This is “freedom and democracy “ America today.
Among the capitalist themselves and their shills among the libertarian ideologues, who are correct about the abuse of government power but less concerned with the abuse of private power, the capitalist greed that is destroying families and the economy is regarded as the road to progress. By distrusting government regulators of private misbehavior, libertarians provided the cover for the repeal of the financial regulation that made American capitalism functional. Today dysfunctional capitalism rules, thanks to greed and libertarian ideology.
With the demise of the American middle class, which becomes more obvious each day as another ladder of upward mobility is dismantled, the United States becomes a bipolar country consisting of the rich and the poor. The most obvious conclusion is that the failure of American political leadership means instability, leading to a conflict between the haves—the one percent—and the dispossessed—the 99 percent.
The failure of leadership in the United States is not limited to the political arena but is across the board. The time horizon operating in American institutions is very short term. Just as US manufacturers have harmed US demand for their products by moving abroad American jobs and the consumer income associated with the jobs, university administrations are destroying universities. As much as 75 percent of university budgets is devoted to administration. There is a proliferation of provosts, assistant provosts, deans, assistant deans, and czars for every designated infraction of political correctness.
Tenure-track jobs, the bedrock of academic freedom, are disappearing as university administrators turn to adjuncts to teach courses for a few thousand dollars. The decline in tenure-track jobs heralds a decline in enrollments in Ph.D. programs. University enrollments overall are likely to decline. The university experience is eroding at the same time that the financial return to a university education is eroding. Increasingly students graduate into an employment environment that does not produce sufficient income to service their student loans or to form independent households.
Increasingly university research is funded by the Defense Department and by commercial interests and serves those interests. Universities are losing their role as sources of societal critics and reformers. Truth itself is becoming commercialized.
The banking system, which formerly financed business, is increasingly focused on converting as much of the economy as possible into leveraged debt instruments. Even consumer spending is reduced with high credit card interest rate charges. Indebtedness is rising faster than the real production in the economy.
Historically, capitalism was justified on the grounds that it guaranteed the efficient use of society’s resources. Profits were a sign that resources were being used to maximize social welfare, and losses were a sign of inefficient resource use, which was corrected by the firm going out of business. This is no longer the case when the economic policy of a country serves to protect financial institutions that are “too big to fail” and when profits reflect the relocation abroad of US GDP as a result of jobs offshoring. Clearly, American capitalism no longer serves society, and the worsening distribution of income and wealth prove it.
None of these serious problems will be addressed by the presidential candidates, and no party’s platform will consist of a rescue plan for America. Unbridled greed, short-term in nature, will continue to drive America into the ground.
Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts’ latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West, How America Was Lost, and The Neoconservative Threat to World Order.
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Good to know that PCR is distancing himself from the ‘libertarian’ fringe. I might start reading him regularly again.
NATO North American Territorial Occupation, only one real member and a whole bunch of occupied vassal states.
Fake money backed by nothing lent on a fractional reserve basis is not capitalism. It is FRAUD.
I apologize to all the fans of PCRoberts I just can’t help myself, you see, every time I get an opportunity to get after PCRoberts I cannot help myself, I take it. Thanks, for this opportunity. Since I think the presidency of Reagan was the worst since Wilson and LBJ- (admittedly, every presidency since Reagan has been worse than was Reagan’s, this is because, Reagan’s presidency opened the Pandora’s box of the financial world. i.e., no regulation) -and, because PCRoberts was right in there with Reagan, a part of the plan, well, he certainly should carry some of the blame for the condition America is in today. PCRoberts sure as heck has no business running around the Internet acting like he is a friend when we can know he was and probably still is an enemy to the people of America, a friend to the rich people for whom he served when Reagan was the president. Having been a part of the unleashing of Wall Street and the Rich Bankers in America, away from the regulations that kept them from devouring our economy as they are doing today. PCRoberts while in the service of the great traitor Reagan destroyed America’s financial hope for the future. By doing this PCRoberts and Ronald Reagan created conditions that have allowed the worst enemies of America to have their way with America, in every way and every day. A part of this is murder, the killing of millions of people since the era of Reagan and PCRoberts. How some of these people sleep at night is beyond me, let alone, preaching on the Internet, telling people stories and leading them even farther from the truth. The truth is: The Rothschild Empire is intending to destroy America and Russia, so that Israel, in the near future can be the world’s only superpower. The process is on going and certainly was a part of the policy put forward by the Reagan administration of which PCRoberts was a big time player. You cannot disassociate a disease from its victims no matter how much time has passed or what lies are told. Americans are victims of the disease that was the Reagan presidency…
When I read ‘The Germans were promised no territorial losses and no reparations if they laid down their arms, which they did only to be betrayed at Versailles.’ in the article above, I wondered if that was actually correct – so I began some on-line research to establish what the exact terms of the 1918 armistice agreement were. Dr. Roberts is absolutely right. It seems the Germans were betrayed by the Versailles process. I understood that John Maynard Keynes had objected to the terms of the imposed 1919 Versailles Treaty but never previously fully understood why. Now I do. Indeed, the more one reads about the events surrounding the First World War, the more it seems to have been a war waged largely for the benefit of the global zionist movement. As the war unfolded, arch-zionist supporters like Balfour, Churchill, Lloyd George and others gradually gained positions of greater power and influence. Asquith – the Prime Minister who took Britain into the war in 1914 – was ditched and replaced by Lloyd George. Why? Was it to ensure the war continued so that the Ottoman Empire would be defeated and the way opened for zionists to colonise Palestine?
You may like to read this article by Mark Burdman that’s been doing the rounds of the Internet for years. The idea of a Jewish homeland in Palestine had been floated amongst Britain’s political elite for a long time before World War I.
This ran parallel with the rise of British Israelism (the belief that the English were one of the Ten Lost Tribes of Israel).
Thank you for the two links, which I have spent much of today reading.
My understanding is that the idea of a jewish homeland was being floated in England during Tudor times.
There were disguised jews living in England too, as there were large numbers living elsewhere across Europe. Even now, I believe many jews do not register themselves officially in order to ensure that no one realises just how numerous they actually are. The most recent UK census clearly under-states their actual numbers. Why?
The return of jews officially to England is linked to Cromwell and Charles II in the 1650s, which clearly pre-dates Disraeli by around 200 years. It probably also explains how he came to be living there around 200 years later.
I think the article on the rise of British Israelism has to be treated with some caution. I am old enough to recall listening to Herbert W. Armstrong on the radio and I used to read his Worldwide Church of God publication called (from memory) “The World Tomorrow” [?]. His UK headquarters were located at St Albans, which is quite close to where I now live. I have tried searching locally to see if there is any remnant of his operation but I can find none. From memory, he lived for quite a long time – well into his 90s as I recall – but I think he lost his desire for life after his prediction that the 10-member European Union was the 10-headed monster of the biblical end days was frustrated when Britain, Ireland and Denmark joined in 1973, thus increasing the membership to 13 and making it seem that the return of the christian messiah – yet again – was not to be seen. His son – who I think was called Garner Ted Armstrong – tried to continue the cult after his father’s death but was unsuccessful in projecting the same charismatic personality his father had had.
Nevertheless, the overall thrust of a centuries-long (at least) move by jews and their supporters to control the world does not seem quite so fanciful when reading much of what has actually really happened in history.
I have recently been studying on-line information available on the work of UNSCOP (the United Nations Special Committee on Palestine) which ended up recommending in 1948 that 55 per cent of British Mandate Palestine should be given to jewish migrants, who owned less than 7 per cent of the land and constituted only one-third of the then population. I am sure I am not alone in wondering who the members of the committee were and by what process they arrived at their final recommendations? It has been a most interesting exploration so far.
The article “What is British-Israelism and is it biblical?” concludes ‘British Israelism (and other forms of Israelism) should be rejected because it does not have a solid basis biblically or historically.’
I am old enough to remember listening to radio broadcasts by Herbert W. Armstrong and recall reading UK editions of his publication “The World Tomorrow”. He was absolutely convinced that the European Common Market was the 12-headed “beast” prophesied in John’s Revelation, which foreshadowed the “End of Days”. Not long after Britain and 2 other countries joined he died – presumably because he was so disappointed his prophecy had not been fulfilled.
Today, only a very few people still follow his teachings and ideas so that the very idea of British- or Anglo-Israelism is now a more-or-less dead relic, especially in Britain.
The English-language-speaking world has shrunk incredibly even while its language use has grown exponentially.
These quaint and antiquated ideas only worked in an era where the concept of British imperialism made sense.
It no longer makes sense any more so it being cited in support of western zionism simply makes no sense either.
What has replaced it is a global cabal – many of whom are dedicated zionists – committed towards maintaining the illegal zionist state as an influencer on world affairs all designed to maximise returns for the rich, powerful and wealthy.
Everything else is just conspiray theory and distraction.
Our present world economic system is designed to enrich the already rich and impoverish the already poor.
hey people I like roberts and beieve what he writes except ne never ever blames the real problems goings on on who is behind it…others like stephen lendman do.
now cocncerning WWI and WWII if you go to a web site ..councilforthenationalinterest.org/ and do some reading under the special relationship you will see exactly that the zionists were trying to get the ottoman empire destroyed so the jews could get palestine, when they didint get wht they wanted after wwi..wwii started and jews rounded up…hitler wasnt dumb he new what jews were up to..amercians are kept in the dark and have been for 100 yrs of zionists controlling media and government
This is pretty much how things roll in the UK too though Scots like me are trying our best to kick against the pricks. It’s becoming more like how we were told the DDR was by the day though…
Of course, the proper way for Europe to handle the WW1 would have been to let Germans annihilate Slavs.
They tried that in WWII and it’s not entirely clear they’ve given up on that project since.
Interesting that a former US Treasury official who served under Ronald Reagan effectively states that the capitalist system must rely on a publicly funded and publicly maintained economic foundation (in the form of public infrastructure that support business; and in government institutions that establish laws, regulate activities and punish infractions) in order to function properly.
“Some NATO members are rethinking their membership in an organization that Washington is herding into conflict with Russia.”
All Obama has to do is call them and threaten to reveal the dirt his wiretaps have dug up, and they, like Merkel has done repeatedly, will come meekly to heel.
“Historically, capitalism was justified on the grounds that it guaranteed the efficient use of society’s resources. Profits were a sign that resources were being used to maximize social welfare, and losses were a sign of inefficient resource use, which was corrected by the firm going out of business. ”
This is of course not true. Capitalism has always been about profit above all else, and the destruction of small businesses, no matter how efficient, by big concerns, no matter how inefficient, which are “too big to fail” and owe far too much money to be allowed to fail. Capitalism has always been about exploiting the working class to the maximum. It wasn’t capitalism which graciously allowed labour unions to exist; it was the workers who fought, literally, for that privilege.
You might want to repeat that first part to the president of Poland… 😉
That is exactly the case. Capitalism is all about profit. Are was. What we have now is capitalism-in-transition, transitioning into full-blown corporatism, or the complete capture of the state apparatus by commercial interests.
What I found funny was this:
“Profits were a sign that resources were being used to maximize social welfare [.…]”
No, that is certainly is not the case and never was. Profits are merely a sign that resources are being used in a way that maximises further the profit that is already being generated; it is a system of profit for the sake of profit. Nothing more, nothing less. Capitalists – the owners of private capital – are not philanthropists but businessmen and businessmen are in the business of making only one thing… more money. So he was wrong there. Dead wrong.
While I largely agree with John Roberts’ comments, I think they do not go far enough.
Cash and profits are arguably only means to an end. That end is power.
What ever system is deployed – feudalism, mercantilism, capitalism, socialism, whatever – they all exist to serve the power-hunger of a social elite, for whom enough is never enough.
The power elite are power-junkies. Like extreme sports enthusiasts, they find their adrenalin highs becoming ever harder to achieve and so they have to take ever-greater risks in order to gain ever-higher cash returns and ever-greater emotional highs to sustain them.
I often draw people’s attention to a cartoon character in The Beatles cartoon film Yellow Submarine.
The character is called a vacuum or sucking monster which eventually sucks up everything – including itself – because it is incapable of acting in any other way.
So, too, are capitalists incapable of acting in any other way.
They – by themselves – will never stop consuming our entire world for their own selfish benefit.
If they are to be stopped, we – the remaining 99.9 per cent – will have to stop them consuming all of our world.
That is my honestly-held opinion.
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