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Today's Stories

January 5, 2009

Paul Craig Roberts
Will There be a Recovery?

January 2 - 4, 2009

Alexander Cockburn
Diary of 2008: an Incredible, Hope-Filled Year

Uri Avnery
Molten Lead in Gaza

Jonathan Cook
The Real Goal of the Gaza Assault

Paul Craig Roberts
Whatever Happened to Western Morality?

Brian Eno
Stealing Gaza: an Experiment in Provocation

Ralph Nader
America Must Stop Shirking Its Responsibility on Gaza

Omar Barghouti
UN Complicity in Israel's Massacre in Gaza

Graham Usher
Where Pakistan's Generals and the ISI Draw Their Lines

P. Sainath
The Economy is Worse Than It Appears

Belén Fernández
Pardon Our Dust: Israel's PR Campaign for Gaza

Deb Reich
Shiv'a in Gaza, December 2008

Gary Leupp
Defacing Mr. Jefferson's Wall: Preachers and the Inauguration

Michael Yates
Top Chef or Top Wage Thief? Tom Colicchio and the Economics of Restaurants

Joanne Mariner
How to Close Guantánamo

Seth Sandronsky
Funding the Israeli Military: the US Pipeline

Cynthia McKinney
We Lived to Tell the Story

Sonja Karkar
Israel's Dogs of War

Deepak Tripathi
Gaza in Perspective

Robert Fantina
Obama, Afghanistan and Israel

John Ross
The Year No One Can Remember

Norm Kent
The Heat on Duval Street: Why Head Shop Raids are Unfair and Unjust

Larry Portis
Syria and the Arab Barbie Doll--Before the Deluge

Richard Rhames
Is Conscience Dead?

Dee C. Lubell
We Come From the Sun: Zora Neale Hurston and Richard Wright

David Yearsley
A Gay German at the Courts of the Medici and Hanover, and of Course the BBC

Lorenzo Wolff
Joe Ely, the Fighting Rooster of Rock

Marc Catone
Looting Lennon's Legacy

Poets' Basement
Five Poems by Grzegorz Wróblewski

Website of the Weekend
Earth in High Rez

 

January 1, 2008

Jennifer Loewenstein
If Hamas Did Not Exist

Oren Ben-Dor
The Self-Defense of Suicide

Wajahat Ali
The U.S. Response to the Gaza Crisis: Unfair and Unbalanced

Saul Landau
In Cuba No One Man Could Steal $50 Billion From Other People

David Michael Green
What to Expect While We're Expecting

Website of the Day
Morbid Anatomy

December 31, 2008

Pam Martens
Wall Street's Collapse and the Ownership Society

Neve Gordon /
Jeff Halper

Where's the Academic Outrage Over the Bombing of a University in Gaza?

Ted Honderich
The First Casualty of Israel's War

Brian Cloughley
Five Little Girls on a Sofa: Gaza's One-Sided Images

Ron Jacobs
What is Hamas, Really?

Vijay Prashad
Hot Rod and His Sikh Warrior: Blago's Indian Connections

Franklin Lamb
Mr. Mubarak, Tear Down That Wall!

Mike Whitney
My Brilliant Career

David Macaray
What Really Killed the Auto Bailout

Richard Thieme
The Betrayal of the Commons

Mary Lynn Cramer
Who Wins What in Gaza?

Stephen Lendman
The Troubling Case of the Fort Dix Five

Worthy Group of the Day
Western Shoshone Defense Project

December 30, 2008

Paul Craig Roberts
May We No Longer Be Silent

Tariq Ali
The Gaza Ghetto and Western Cant

Robert Bryce
The $775,000-a-Year GI

Jonathan Cook
Electioneering with Bombs

Gary Leupp
The Fishbarrel War

Dave Lindorff
Tough Guys Don't Walk: Will Cheney Seek a Pardon?

Brian McKenna
Ted Downing and Troublemaker Anthropology

John Walsh
The End of the Green Party

Ramzy Baroud
Gaza and the World

Bob Sommer
The Education of David Frost

Worthy Activist of the Day
Support Marie Mason

 

December 29, 2008

Jennifer Loewenstein
Israel's Attempted Endgame in Gaza

Neve Gordon
What, Exactly, is Israel's Mission?

Joshua Frank
Obama and the "Special Relationship"

George Salzman /
Manuel Garcia, Jr.

The War Against Palestine: Exception From Humanity

Norman Solomon
A Hundred Eyes for an Eye

Ewa Jasiewicz
Gaza Today: "This is Just the Beginning"

Rob Larson
The Banks Laugh All the Way to the Bank

Kenneth Libby
Arne Duncan's Dark Years in Chicago

Robert Weissman
The 10 Worst Corporations of 2008

Elsa Johnson
High Noon at Black Mesa: Bush's Farewell Gift to Peabody Coal

Nicola Nasser
Resolution 1850: Bush's Parting Gift

Belén Fernández
Hanukkah Games

Worthy Group of the Day
Nuclear Information and Resource Service

December 26-28, 2008

Alexander Cockburn
The Medusa's Head

Dr Eyad Al Serraj
The Boming of Gaza: "An Earthquake on Top of Your Head"

Jeffrey St. Clair
Cancerous Air

Bradley Simpson
Obama's New Intel Chief, Dennis Blair, Ran Interference for Indonesia's Butchers

Ralph Nader
Government Without Laws

Gary Leupp
Obama and the Graveyard of Empires

Ellen Cantarow
Richard Falk, Israel and the NYT

Matt Landon
The Great Coal Ash Flood
: a Report From Swan Pond Road

David Macaray
SAG's Terrible Dilemma

Patrick Bond
End of Neoliberalism? Sorry, Not Yet

Norm Kent
Invoking Bigotry: Obama and Rick Warren

Brian T. Ketcham
Fuel Efficiency is Easy--Just Don't Let Detroit Tell You How to Do It

Rannie Amiri
War Clouds Over Gaza

Larry Portis
Changing the Ethnic Vocabulary

Richard Rhames
Welcome to Soup Kitchen America

Stephen Lendman
29 Red Flags: Early Suspicions About Bernard Madoff

James L. Secor
Unheralded Coup

Ramzy Baroud
Iraq, the Plot Thickens

Harold Pinter
Art, Truth and Politics: the Nobel Lecture

Cpt. Paul Watson
Tracking the Cetacean Death Star

Howard Lisnoff
Nixon's Cambodian Shock Treatment

Michael Dee
The Bill of Rights, Killed in Action by the War on Drugs

Steve Conn
Eight Predictions for 2009

Poets' Basement
Valentine, Kaung, Moser and Graham

Worthy Group of the Weekend
United Mountain Defense

December 25, 2008

Judy Gumbo Albert
What Were Those 1960s Terrorists Thinking, Anyway?

Rev. William E. Alberts
The Sole of Christmas

Hannah Mermelstein
Caution: Settlers Ahead

Worthy Group of the Day
Citizens' Coal Council

December 24, 2008

Bill Quigley
Five Bailout Lessons From Katrina

Saul Landau
Then and Now: Venezuela and Cuba, 1960-2008

Sam Smith
Evangelism and Politics

Brian Cloughley
Torture, Slaughter and Lies

John Ross
Where's al-Zaidi's Pulitzer?

Eric Walberg
Cold War Shivers

Norm Kent
What Will Obama Do About Marijuana?

Stephen Martin
Reasons for Cheerfulness

Worthy Group of the Day
Collateral Repair Project

December 23, 2008

Michael Hudson
The Ponzi Paradigm

Michael Yates
The Tombstone Economy

Chuck Spinney
The New York Times Flames Out in Defense Dogfight

Vijay Prashad
India's Reckless Road to Washington, Through Tel Aviv

Brian Horejsi
Interior Decorating: Obama, Salazar and the Future of America's Public Lands

David Macaray
Obama's Best Pick?

Neil Watkins /
Sarah Anderson
Ecuador's Conscientious Default

David Michael Green
Hey, Reagan Democrats! Now Do You Get It?

Worthy Group of the Day
Focus on the Corporation

December 22, 2008

Pam Martens
Madoff's Money Trail Leads to Washington

Gary Leupp
Base Alienation: Obama's Team of Rivals

Mike Whitney
Bail Out the Economy? More Pay is the Only Way

Karl Grossman
Lost in Space: NASA at 50

Niall Meehan
Conor Cruise O'Brien: Historian, Politician, Censor

Steve Conn
Where Would Larry Summers Dump the Guantanamo Mess?

Uri Avnery
Israeli Elections: Spot the Difference

Corey D. B. Walker
The Politics of Freedom

David Swanson
The Purloined Constitution

Worthy Group of the Day
Socialist Worker

December 19 - 21, 2008

Alexander Cockburn
An Ethnic Cleansing in America

Jeffrey St. Clair
Salazar and the Tragedy of the Common Ground

Paul Craig Roberts
Country Without Mercy

Patrick Cockburn
The Baathist "Coup Plot"

Felice Pace
Green Myopia: Obama's Appointments Reveal What's Wrong with the Environmental Movement

Diane Farsetta
The Pentagon's PR Slush Fund

George Ciccariello-Maher
By the Time I Get to Arizona: ICE Raids and Resistance in Flagstaff

Eric Bergoust
Extinct Lifestyles: Redefining Prosperity

Marjorie Cohn
Torture Without Regrets: Cheney's Unrepentent Confession

Stan Cox
Clothes and Commentaries That Don't Fit

Michael Donnelly
Clinton III: Continuity We Can Believe In

Robert Weissman
The Auto Bailout

Ralph Nader
Excluded Democracy: Scholastic and the Two Party System

Alan Farago
Shock and Awe Economics

Sam Smith
Not All Public Work is the Same

Timothy G. Hermach
What Happened on the Way to the Inauguration?

Seth Sandronsky
Who's Not Getting By and Why

Rannie Amiri
All Quiet on the Gazan Shore

David Yearsley
Bach as Jihadi

Martha Rosenberg
Wyeth's Pay-to-Play

Dave Lindorff
White House Lied About Iraqi Yellowcake Buy (But That's Not the Biggest Scandal)

Christopher Brauchli
Weekend at Bernie's: the Confinement of Mr. Madoff

Missy Beattie
President Meathead

Richard Rhames
Corporatizing the Kids

Stephen Martin
Full-Spectrum Dominance of the Big Lie

Paul Krassner
Milk and Twinkies

Lorenzo Wolff
Does Coldplay Give a Shit Anymore?

Poets' Basement
Kathwari, Halling and Payne

Worthy Group of the Weekend
Heartwood

December 18, 2008

Phillip Doe
The Man in the Hat: Salazar and the Status Quo

Ronnie Cummins
Vilsack: Another Shill for Monsanto

Jesse Sharkey
No School Left Unsold: Arne Duncan's Privatization Agenda

Saul Landau
Postcard from Venezuela

Peter Morici
What's Next for the Fed?

Dave Lindorff
Prosecuting Bush and Cheney for Torture

Panos Petrou
Days of Rage in Greece

Jeff Cohen /
Norman Solomon

The 2008 P.U.-litzer Prizes: the Stinkiest Media Performances of the Year

Worthy Group of the Day
Organic Consumer Alliance

December 17, 2008

Peter Lee
Pushing Pakistan Over the Edge

Conn Hallinan
Angels and Demons in Mumbai

Mike Whitney
Bernanke's Fatal Flaw

Jeff Halper
Obama and the Israel-Palestine Conflict

Alan Farago
The Audacity of Parkland

Peter Morici
The Big Hole

Norm Kent
Obama Lights Up

Col. Douglas MacGregor
The Price of Expediency

Margaret Kimberley
Blacks and Gay Rights

Ron Jacobs
The Myth of the Good Guy: Waiting on a President to Do the Right Thing

Worthy Group of the Day
Campaign to End the Death Penalty

December 16, 2008

Vicente Navarro
A Forgotten Genocide: the Case of Spain

Patrick Cockburn
Each Shoe was Worth a Thousand Words

Thomas Michael Power
Back to the Pump: an Economic and Environmental Dead End

Jason Hribal
Orangutans, Resistance and the Zoo: the Story of Ken Allen and Kumang

Farzana Versey
Straw Warriors and the Pantomime of Patriotism

Wajahat Ali /
Ahmed Rashid

Indian Muslims: Defining Their Loyalty

Mats Svensson
The Order to Destroy has been Given

Paul Fitzgerald /
Elizabeth Gould

Mumbai Terror's Afghan Roots

David Macaray
Workplace Violence and Termination Etiquette

Howard Lisnoff
Left Control of Academia? The Case of William Felkner

Worthy Group of the Day
AWR: the Last, Best Hope for Saving the Big Wild

December 15, 2008

Andy Worthington
Hit Me Baby One More Time: a History of Music Torture in War on Terror

Franklin Lamb
Why Hezbollah Stiffed Carter

Karl Grossman
Dr. Chu's Nuclear Prescription

Brian Cloughley
Land of the Free (To Torture and Imprison Without Trial)

Mary Lynn Cramer
Stiglitz's Foolishly Flawed Morality

Steve Early
From Nicky Pockets to Blago: Why Pay-to-Play is Bad for Labor

Thomas Christie
Pentagon Train Wreck Awaits Obama

Ken Paff
Remembering Ron Carey: a Great Labor Leader

Niranjan Ramakrishnan
What is India to Do?

Dave Lindorff
A Hero of Our Time: Muntadar al-Zaidi

Alan Farago
The Artless Dodger

Worthy Group of the Day
Davis-Putter Scholarship Fund

December 12 / 14, 2008

Alexander Cockburn
Hail to Chicago, Beacon of American Values

Michael Hudson /
Jeffrey Sommers

The End of the Washington Consensus

David Price
The Leaky Ship of Human Terrain Systems

Jeffrey St. Clair
Nukes Up the Hudson

Frank Barat
An Israeli in Gaza: an Interview with Jeff Halper

John Ross
Writing a Thesis in Blood

Binoy Kampmark
Humanitarian Imperialism: Obama and the Genocide Task Force

David Macaray
Killing the Auto Bailout: a Dagger to the Heart of Organized Labor

Ralph Nader
Antidotes to Plunder: a Holiday Reading List

Eamonn Fingleton
Whatever Happened to Iris Chang?

Lawrence Velvel
Why Blagojevich Might Be Acquitted

Behzad Yaghmaian
The Housing Crisis: a Timebomb China Can't Defuse

Sam Husseini
Putting the Pro in Protest

Tom Barry
Incentives to Detain: How Immigrants Drive Prison Profits

Howard Lisnoff
Why I Went to Jail

Laura Carlsen
Mexico's Immigration Problem

Raj Patel
The WTO and Other Fairy Tales

Ron Jacobs
The Manufacturing of History

Paul Watson
Risky Business Down Under

David Yearsley
They Also Serve Who Only Pull or Tread

Lorenzo Wolff
So You Want Be a Rock 'n' Roll Star...

Kim Nicolini
Finally, a Vampire Movie You Can Sink Your Teeth Into

Susie Day
Proposition 1984: the Problem with Heterosexuals

Poets' Basement
Gibbons, Lerch and Crete

Worthy Group of the Weekend
Energy Justice

December 11, 2008

Patrick Cockburn
Total Defeat for U.S. in Iraq

P. Sainath
After Mumbai

Vicken Cheterian
The Zarqawi Generation

Ray McGovern
Will Obama Buy Torture-Lite?

Dedrick Muhammad
Post-Racial Racism at the Post: the Undying Obsession with Black Family Values

Lee Sustar
Victory at Republic

Peter Morici
The Big Drag

Ayesha Ijaz Khan
Must They Hate Us So?

George Wuerthner
Another Subsidy to Big Timber?

Christopher Brauchli
Mr. Berg's Strange Obsession

Worthy Group of the Day
Animal Balance

December 10, 2008

Ismael Hossein-Zadeh
Whose Interests Will Shape Obama's Change?

Mary Lynn Cramer
The Multi-Trillion Dollar Question

Manuel Garcia, Jr.
Nuclear Weapons Obsolescence

Joshua Frank
Breaking the Stranglehold on Middle East News Coverage

Jack Ely
Stop Sobbing About Free Music Downloads: a Message to the Music Industry from the Lead Singer of the Kingsmen

Steve Conn
An Obama Public Works Program?

Lee Sustar
Republic Workers Target Bank of America

Glen Ford
The Die is Cast

Stephen Lendman
The Persecution of Syed Fahad Hashmi

Nadia Hijab
The Face of America

Dave Lindorff
We All Need a Union

Website of the Day
This One's For You, Senator Dodd

December 9, 2008

Mike Whitney
Card Check

Fawzia Afzal-Khan
Us vs. Them

Ghada Karmi
The UN Resolution That Time Forgot

Dave Lindorff
A Car Dealer Explains Why the Bailout is a Raw Deal

Steve Breyman
Notes on a Green Economy: Managing Stuff in the 21st Century

Lee Sustar /
Nicole Colson

Raising the Stakes at Republic

Rev. William E. Alberts
God of Our Fathers

Martha Rosenberg
Bill Richardson: Secretary of Bloodsports

Sam Husseini
How Holbrooke Lied His Way Into a War

David Macaray
The UAW in Peril

Website of the Day
This Toxic Life

December 8, 2008

Steve Early
Is Obama Backing Off a Crucial Pledge to Labor?

Michael Hudson
Obama's Favoritism: Wall Street, Not the Auto Industry

Patrick Cockburn
Talking to a Lashkar Militant

Diane Farsetta
An Officer and a Conflicted Man: McCaffery, the Pentagon and Fleishman-Hillard

Paul Craig Roberts
Chapters in Imperial Hypocrisy

Daniel Gross
The Chicago Sit-Down Strike

Saul Landau
To Bail or Not to Bail?

Harvey Wasserman
Why John Bryson is Unfit for Energy Secretary

Mike Ferner
The New Generation of "Non-Lethal" Weapons

Norman Solomon
The Silent Winter of Escalation

David Michael Green
The Other Foot

Website of the Day
The Remains of Detroit

 

December 5 / 7, 2008

Alexander Cockburn
Honeymoans From the Left

Brian Cloughley
Shambles in Afghanistan

Paul Craig Roberts
Muslim Revolution: How Washington Arrogance Helped Drive the Mumbai Attacks

Liaquat Ali Khan
Mumbai and the Kashmir Tinderbox

Farzana Versey
Mumbai's Charge of the Lightweight Brigade

Peter Lee
Pakistan Nears the Breaking Point

Peter Morici
Slouching Toward a Depression?

Ralph Nader /
Toby Heaps

Junk Cap-and-Trade

Yinon Cohen /
Neve Gordon
Obama Could End the Israeli-Palestinian Conflict: Will He Meet the Challenge?

Wajahat Ali
Perverse Justice: the Holy Land Foundation Convictions

Johnny Barber
Aswad's Story: Illegal Detention and the Declaration of Human Rights

Alan Farago
Fallout from the Pass-Through Economy

Jeremy Scahill
Obama Doesn't Plan to End Occupation of Iraq

Mike Whitney
Powergrab in Ottawa

Ranjit Hoskote
Jahiliyya Versus Jihad

Carl Finamore
Thank God I'm an Atheist! (Or Boy is Bill O'Reilly in for a Big Surprise)

Marjorie Cohn
Obama and Women's Rights

Norm Kent
Tommy Chong, the Unanticipated Warrior

Missy Beattie
What Lies Ahead

Binoy Kampmark
Committing Suicide On-Line: the Briggs Case

David Macaray
The Best and the Brightest Redux: Too Many Brains, Not Enough Humility

Nancy Stohlman
Relational Activism

Ron Jacobs
Irreverent Politics Then and Now

David Yearsley
Thematics From the Golden Past

Lorenzo Wolff
Troubled Songs of Home and War

Poets' Basement
Orloski: The Door Opener

Website of the Weekend
In Prison My Whole Life

December 4, 2008

Ece Temelkuran
Inside the Ergenekon Case

Ralph Nader
Turning Crisis into Opportunity: Who Will Seize the Moment?

Harry Browne
The Bush-Obama National Security Strategy

Eamonn Fingleton
The American Car Industry: a Riposte to the Knockers

Conn Hallinan
The Syria Attack

Mike Whitney
Fiasco in Somalia: Another CIA Cock-Up

Stewart J. Lawrence
Obama and Latinos: Richardson, Alone, is Not Enough

Paul Fitzgerald /
Elizabeth Gould

Message to Obama: Stop Killing Afghanis

Karyn Strickler
Show Us the Green, Before We Show You the Money

Jennifer Matsui
Obama-Cola: the Great National Temperance Beverage

Website of the Day
"He Ain't Got Laid in a Month of Sundays..."

December 3, 2008

Andrew Cockburn
What's Wrong with the U.S. Military

Sheldon Rampton
Mormon Homophobia: Up Close and Personal

Robert Weissman
Nationalize GM

Yifat Susskind
From Mumbai to Washington

William Blum
The Obama Bummer: Vote First, Ask Questions Later

Alan Singer
The Ghost of the Defunct Economist

David Macaray
Trampled Under Foot at Wal-Mart

Martha Rosenberg
Born With a Statin Deficiency? Line Forms to the Left!

Mats Svensson
The Crimes Have No Period of Limitations

Website of the Day
Why Bill Richardson's Nomination Should be Opposed

December 2, 2008

Jeremy Scahill
Obama's Kettle of Hawks

Paul Craig Roberts
The New Arms Race

Ayesha Ijaz Khan
The Mumbai Terror Attacks: Is Pakistan to Blame?

Sarah Anderson /
John Cavanagh

Skewed Priorities: How the Bailout Dwarfs Spending on Other Global Crises

William Blum
The Mythology of the War on Terrorism

John Ross
Mexico's Drug War Goes Down in Flames

Dave Lindorff
A Tale of Two Terror Attacks

Nicola Nasser
A Peace Process That Makes Peace Impossible

Steve Conn
Operation Redskin Removal

Robert Bryce
Coal Hard Facts

Website of the Day
Country, Funk, Soul

December 1, 2008

Patrick Cockburn
From Baghdad to Mumbai, by Way of Pakistan

Damien Millet /
Eric Toussaint

Obama's Economic Team: Records of Failure

Vijay Prashad
The Fires in South Asia

Deepak Tripathi
Obama's Foreign Crises

Joshua Frank
Madam Secretary Clinton and the Middle East

P. Sainath
The Unlikely Martyrdom of Free Market Jihad

Alan Farago
The Right's War on Regulators

Binoy Kampmark
Sydney's Ball and Chain

Chris Genovali
Silent Fall

David Michael Green
Hope You Die Before You Get Old

Stephen Martin
The Chinese are Coming, the Chinese are Coming!

Website of the Day
Robert Rubin: Coward, Liar or Both?

November 28-30, 2008

Alexander Cockburn
In Time of Trouble

Mike Whitney
The Obama "Dream Team": Rubin Clones and Other Fakers

Ted Honderich
What is the Meaning of Obama's Election?

Tom Kerr
Preserving Filthy Lucre (Or Becoming My Dad)

Mike Ely
The Conquest of New England

David Yearsley
Hymns of the Conquest

Deepak Tripathi
Uproar in Police-State Britain

Sonja Karkar
Gaza's Death Throes

Ramzy Baroud
Salvation in a News Broadcast

Robert Weitzel
Israel's Settlement on Capitol Hill

Robert Roth
Can We Create a Movement for Change?

Carlos Fierro
Obama and the End of Racism?

David Macaray
How to Kill a Union

David Rosen
A New Sexual Agenda

James Cockcroft
Indigenous People Rising

Stan Cox
The Most Disappointing Gift

Steve Conn
Talking Turkey About College Basketball

Stephen Martin
The Electromagnetic Pulse and Economic Warfare

Richard Rhames
Busty Bimbettes, Bombs and Brand Obama

Kim Nicolini
Women as Products and Cannibalistic Achievers

Lorenzo Wolff
A Battle Cry for the Confused and Vulnerable

Poets' Basement
Woods, Harrison and Corseri

 

 

 

 

January 5, 2009

Somber Thoughts for the New Year

Will There be a Recovery?

By PAUL CRAIG ROBERTS

Economists will scoff at the question in the title. But that’s because they are trying to fit the present into the past.

In the past recoveries were routine, because recessions were temporary restraints resulting from the Federal Reserve putting the brakes on an overheating economy. By restraining the supply of money and credit, the Fed caused inventory buildup, layoffs, and a halt to price rises and union wage demands. With the economy cooled by unemployment, the Fed would take off the brakes. Interest rates would decline, money would flow, consumer demand would rise and workers would be called back to the factories.

In those days when workers borrowed to spend, they were borrowing against rising real wages from rising productivity. In economic downturns, few workers actually lost their jobs. They were laid off from their jobs for temporary periods. Workers seldom lost their homes or cars, thanks to union funds and unemployment benefits.

Today the situation is different. In the 21st century real wages have not risen. Workers have spent more by accepting deteriorating household balance sheets. They have maxed out their credit cards and spent the equity in their homes. Imitators of the US government, American consumers borrow to pay their bills.

The expansion of household debt relative to income created the illusion that the economy was sound. But the consumer economy was as much of a credit-based bubble as the real estate bubble and the financial sector bubble. The economy has lost its real basis.

Today it is difficult to stimulate consumer demand by lowering interest rates. Consumers are too heavily in debt to borrow any more. Financial institutions are too impaired to want to lend to anyone except those who don’t need to borrow. As the Keynesian macroeconomists used to say, “you can lead a horse to water, but you can’t make him drink.”

And there’s another problem. Much of what American consumers purchase today is made offshore. Stimulating consumer demand in America puts factories back to work, but those factories are located elsewhere in the world.

How does an economy consume more than it produces? Previously, this question applied only to poor third world countries. These countries would consume by the grace of World Bank loans. From time to time they would pay for their consumption by being put through an IMF restructuring program that would curtail their consumption to make them repay their loans by forced saving.

The United States has so far avoided such humiliation, because its currency is the world money. The US has been able to borrow endlessly, because it can pay its debts in its own currency.

This ability might be coming to an end. The US has been using up the bulk of the world’s supply of saving for years in order to finance its consumption. Considering the outlook for the US economy and dollar, the productive nations of the world and those with oil have more dollars and dollar-denominated assets than they want. The US, with its collapsing economy, its bailouts of financial institutions, and its wars, is facing the largest government budget deficit in its history, both in absolute amount and as a percentage of national income. The easy monetary policy, which the Fed hopes will arrest deflation, threatens inflation and further deterioration in the dollar. Foreigners simply do not want to lend more large sums to a country that, from all appearances, has no way to close its trade and budget deficits. They certainly do not want to lend when the interest rate offered is close to zero and the reserve currency status of the dollar is in doubt.

Economists and the policy-makers they advise are thinking in the past, a time when low interest rates stimulated consumer and investment demand, thus lifting the economy. Today the low interest rates threaten the dollar, discourage foreigners from lending more to the US, and deprive Americans of interest income necessary to their ability to pay their bills.

In the second half of the 20th century, American economic supremacy was a gift of World War II, which destroyed the productive capacity of the rest of the developed world. American economic supremacy also owes much to communism in Russia and China and to socialism in India, which rendered these large countries economically impotent. The United States did not have to compete for its economic hegemony. It simply inherited it from the choices made by the rest of the world.

The situation is different today. Unlike the US, other countries are free of the hubris of being the “indispensable nation.” They know how hard it is to be successful and do not treat success as their birthright. They do not give away their economy for nebulous foreign policy goals or for short-term profits. They look ahead 20, 30 years while America’s CEOs look to the next quarter’s profits.

The United States is walking on quicksand. It is dependent on foreigners for the funding to conduct the day-to-day operations of its government. Its economy is a hollow shell reduced to dependence on a financial sector that is discredited worldwide. America’s government believes that its foreign wars of aggression are more important than any domestic needs, including the health care of its population.

Now that its supply route to feed its war of aggression in Afghanistan is threatened, the American government has the delusion that it will be able to supply its army in Afghanistan through thousands of miles of Eastern Europe, Russia, and Central Asia. Only a government totally oblivious to reality would imagine that Russia’s Putin, whose nose is rubbed in excrement every day by the US government, will permit America to transit Russian territory to resupply US imperial legions in Afghanistan.

What we are witnessing is a once great power engaging in fantasy to disguise from itself that it is a failed state.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com



 

 

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How the Press Led
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Grand Theft Pentagon
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The Occupation
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Humanitarian Imperialism
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CITY BEAUTIFUL
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