Stop The Spirit of Zossen 2.0

Many have predicted that Obama’s fiscal recklessness squandered finite, borrowed time and money. Sprinkled across hollow facades. Under this appraisal, Obama deficits, woefully inadequate stimulus, etc. -collectively they shot one of — if not the last — chits of U.S. financial ‘supremacy’ meme inertia. The financial world is all too clear about American pointless profligacy. Exploding debt service is a fact. *And* finally China, Japan, Germany and the rest of our creditors are saying no more. You (Obama/U.S.) are cut off. The Chinese have been surprisingly blunt having seen their traditional indirect warnings disappear in a cloud of Rahm’s vulgarities and the Summers et al. black hole of multi decade incompetence. All that debt and almost no actual investment in generating wealth creating hard currency exports.

Doomsayers hit an agitated creative peak last Fall. We still have pollyannas. Green jobs will save entire states like Michgan. We are told that we will see new job growth. In the real world, green tech is already beyond our grasp. Americans at best will assemble products designed and created overseas. The pay can be a dollar above minimum wage. How small the American dream has become. We’ve yet to see a serious non-ideological depiction of a sustainable U.S. situation beyond the short term.

The ‘Things aren’t so bad’ crowd have one systemic reality in their favor. Financial decision-makers in Frankfurt, Riyadh, Beijing, Tokyo, etc. are conservative and loathe to rock the boat. Even now. Better many think to discipline an irresponsible and clueless U.S. one knows than for Beijing and Tokyo etc. have the onus for building a new architecture while not shooting their own dollar holdings in the process. The problem, however, is that the U.S. economy is moribund, the dollar finished as a reserve currency. So the ‘pretend we can cajole’ game has a short life span.

In their private councils the question is on the table. How to let the U.S. sink in deserved ruin without pulling everyone with them? It’s like the Chinese finger traps with two fingers and they tighten more if one seeks extrication.

We have reached a new era in which our creditors are increasingly condescending in public, making explicit threats or revoking the U.S. allowance. One might think there are some silver linings. Surely creditor denial, for example, spells the death knell for Neocon enthusiasms to kill other people via others such as the hoodwinked American military. A strand of thinking, however, suggests that small chump change might be provided so that Americans will die in far off places rather than say Chinese combat troops, etc. Round eye canon fodder. Irony abounds. We didn’t shove opium on them. They didn’t either. Just electronic gimcrack. And Riyadh might find it convenient to leverage our poverty in return for dying stopping the Persians (and keeping Mayo going and American call girls at the ready).

There is going to be transition period. 2008 taught us that smart money wants order and predictability. But beyond that, we note most of the pessimists/ realists for all their self adorned iconoclasm largely envision tomorrow today, only more so around the edges. None we have seen (if you have, please pass along) imagine what it would look and feel say for the IMF to take control of the U.S. political economy like it did as agent of American imperial capital in so cases. Or even more.

Not in lurid Glenn Beck verbal spatter. But on straight factual walk thorough.

Unthinkable, right? Here’s some more. The Stiftung Library has mint original manufactured currency imposed on Japan by SCAP (Supreme Command Allied Powers (our Shogun, Douglas MacArthur)). The cases are not analogous directly. Military obliteration, Robert Strange McNamara and Curtis LeMay planning the mass murder for wooden Tokyo in low level incendiary bombing raids. The devastation – like Bomber Harris’ war crime against Dresden – was orders of magnitude beyond the 2 atomic weapons. SCAP tried to run Japan as an American fiefdom. The Japanese proved cannier in the end. They all but outfoxed and co-opted the serenely unaware Americans. Korea then changed everything anyway. Still, we made the Japanese use our cool currencies at the snap of our fingers.

Given the difference between catastrophic military defeat and slo-mo fiscal suicide, it’s unlikely we we will get that other silver lining of watching a servile Sean Hannity licking the shoes of the Deputy Assistant Manager for Bounced American Cheques. We nonetheless defeated ourselves pissing away trillions on Bedazzlers, Snuggies and McMansions while chasing empty, vain consumption.

We do think it useful to anticipate the likely scenarios. But even more so the unexpected ones. The draconian possibilities hinted at above may never come to pass. Why not try and minimize the surprise? History, of course, is made by the unexpected event every day. The Stiftung’s Library has many examples of SCAP imposed currency. We make no direct analogous claim – but is it so fantastical to ask ‘What if?’ Surely there’s a suitable color and graphic for when we sign the papers handed by the solvent nations. Perhaps in Sarah Palin’s peppy red color scheme?

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