Monday, November 29, 2004

Brilliant Analysis

Stan Goff wrote an article about his encounter with a neocon at a campus debate. He includes the text of his 15-minute introducion (scroll down to the part in Italics) - which turns into a brilliant analysis of the changing econo-political basis of the US Empire since Nixon, and its problems. Among the issues covered:

  • We have a War for Oil, but the imperial cause is not the income from selling it, but to control a big slice of the production pie when demand outstrips production.
  • Such a move was likely even without the neocons. The Empire kind of has its own momentum, where one step follows the other whichever part of the elite is in power.
  • Increased competition from Marschall Plan-helped economies and the Vietnam War led to the exhaustion of the gold reserve.
  • Nixon's abadonment of the gold standard caused immediate harm to competing economies not only by making their exports more expensive, but also because the dollar-denominated oil price was raised: that is, to secure imports of a rising price, Europeans and Japanese had to increase their purchases of dollars.
  • The above circumstance means that oil ensured the dollar's stability - while for other countries' money, free exchange rates first enabled such collapses as Mexico 1982 and East Asia 1998.
  • The IMF loans system introduced in response to the Mexican crisis got developing nations into the IMF trap of never repayable loans that can be used to prescribe economic policy (neoliberalism, or as Goff likes to call it: debt-leverage imperialism).
  • The USA's main economic competitors are bound to the system by their fear of the devaluation of central bank holdings [plus losing an export market], should the dollar collapse - even tough the maintenance of the system dictates that money invested into US treasuries increases, that is these central bank holdings are lost money. (In practice, they are an imperial tax, not lending.)
  • The current system is bound to collapse, and if the dollar falls big, it will cause a private debt crisis for US consumers.
  • Iraq is about the new system that could replace the current system: leave the impression of military invicibility on gullible leaders and populations across the world with a theatrical power demonstration (against a weak enemy talked up), and controlling oil after Peak Oil. (Shades of Emmanuel Todt here.) But, the neocons seem to have blown it. A sign of the control slipping out of the Empire's hand is the leftward push in Southern America [see previous post].


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