The New Empire of Debt: The Rise and Fall of an Epic Financial Bubble (12 page)

But the old Republic existed only in their dreams and imaginations. No matter what they said, Rome was an empire.The senators crowned him Augustus, and forgot the old constitution.

“People do not easily change, but love their own ancient customs,” wrote Aristotle in his
Politics.
“And it is by small degrees only that one thing takes the place of another; so that the ancient laws will remain, while the power will be in the hands of those who have brought about a revolution in the state.”
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The revolution in Rome took centuries. In America, it took only 58 years (1913-1971). In both cases, most people hardly noticed. The changes were gradual and, generally, agreeable.

A republic, a monarchy, or even a dictatorship is a relatively modest undertaking. Its scope is limited, and controlled by leading citizens either through their influence on the autocrat or by shaping public opinion. An empire, on the other hand, steps onto the world stage and plays a role that is beyond the control of the citizens. Private life becomes auxiliary, moving to a supporting role while the grand public spectacle plays itself out. In the United States Constitution, it is expressly stated that the people are sovereign, not the government. Ultimately, what people want in their private lives is what is supposed to matter. But the idea passed away when the American Republic died and the empire was born. By 1960, John Kennedy was able to lecture voters to “ask not what the country can do for you; ask what you can do for your country.” Suddenly, the government that was created by, for, and of the people was way out in front of them. They found themselves servants to it, no longer its masters.

They could, of course, still write letters to the editor and still vote, but the force of these expressions had gone out of them. The form had barely changed, but the meaning of it had turned around, like a word that had come to mean the opposite of what it once signified.
Virtually,
for example, once meant “truly.” People would promise to be there “virtually” at noon. Over time, meaning follows practice;
virtually
slipped to mean not truly, almost, nearly, or sort of. So did the United States Congress come to be what it now is, something not-quite-what-it-was-meant-to-be.

Another important event of the revolution in American politics occurred on June 25, 1950. That is the day on which Harry Truman involved the United States in a war in Korea without authorization from Congress. The Constitution clearly states that the people’s representatives alone have the power to determine when the nation’s blood and treasure should be put at risk. But on that date, Truman sent U.S. troops to kill and die, without even informing Congress. Even though this happened while Congress was in session, members of the people’s assemblies found out about it from reading the newspapers. For a week, Congress had little idea of what was going on, until the commander-in-chief decided to tell them.

As you might expect, a few members of Congress were cheesed off. But the majority went along. Like the senate in Rome, they had eaten of the imperial fruit and liked the taste of it. American forces had to react quickly, they were told. It was a “new era” in warfare, they believed. There was no time for discussion. Meanwhile, the Korean War went on for another 37 months—you would think that they might have found time to talk about it.

What had happened was not that the rest of the world had changed so much, but that America had changed. Truman’s doctrine—that the United States would intervene anywhere in the world where it felt its interests were threatened—was not the doctrine of Monroe or Jefferson. It was an imperial doctrine. By then, the nation’s focus had shifted away from the private desires and opinions of citizens, as expressed through their elected representatives, to the world outside America’s borders. What the people thought no longer really counted for much. Public opinion was important, but it was merely part of the imperial burden—something to be carried around, manipulated, and managed. To that end, even in 1951, a huge propaganda apparatus was already set up—with confidential briefings, press leaks, public relations specialists, and enormous printing and publishing arms. Even then, the executive branch was spinning the news to appeal to the marginal voter.

They hardly had to bother. The average American reacted just as the average Roman had reacted.When the purple was hoisted, he stood up and saluted. It made him feel like a big shot. If Americans were bossing people around in Asia or the Middle East, it made him feel more important. His homeland team was winning all over the world. And if it did not always seem to be on the winning side, he knew he must support his troops and stand behind their commander-in-chief. No one wants to carp and criticize when soldiers take the field. It is unpatriotic. So, keep the soldiers in the field all the time!

While there is no precise DNA test that separates an empire from an ordinary country, there are certain telltale characteristics. A regular country has only its own territory. An empire has a “homeland” and various territorial interests beyond it. It may have subordinate states, protectorates, colonies, satellites, or other client states over whom it exercises a substantial authority. Sometimes it is not even mentioned; but the clients know that if they get out of line, the imperium will come down on them. Typically, the people in the homeland feel superior to the people in the periphery areas. As described, they develop reasons and explanations for their superiority, which are then used to justify further imperial expansion.

America took its first awkward steps toward empire at the end of the nineteenth century, with Theodore Roosevelt intervening in various diarrhea countries for forgettable reasons and with regrettable results. Later, in April 1917,Woodrow Wilson took off at a trot with the fat Rough Rider still breathing down his neck. He urged Congress to declare war on a distant country with which it had no real beef and in which it had no genuine interest.

Twenty-three years later, the United States was in another major war. Few would argue that World War II was a case of needless intervention, since the U.S. fleet was attacked at Pearl Harbor. Still, had America wanted to stay out of it, she could have done so. Pearl Harbor was attacked because the U.S. Navy posed a threat to Japanese imperial ambitions. If the United States had not displayed imperial ambitions of her own and had no satellite state in the Philippines, she would have presented no danger to the Japanese imperial forces. Nor was there any particular reason to go to war against Germany.Though allied to Japan, there was no question of Germany intervening in the Pacific War.

After World War II, America stepped up the pace, engaging in 111 military actions between 1945 and 2005.

Today, the U.S. military divides the world into four regional commands, each given initials—PAC, EUR, CENT, and SOUTH. Each region has its own commander-in-chief (CINC), who is like a proconsul of the Roman Empire. American military bases can be found in 120 different countries, with strike forces ready to light out for almost any place on the planet at a moment’s notice.

There is also a vast army of functionaries, intermediaries, consultants, advisors, scientists, engineers, contractors, and busybodies spread all over the globe. Trained in American universities, on the payroll of either the American government or oft-linked U.S. companies, these people provide a class of administrators to keep the imperial money and papers moving.

The work of these people was revealed in a marvelous book by John Perkins called
Confessions of an Economic Hit Man.
A supervisor explained to him:

There were two primary objectives of my work, First I was to justify huge international loans that would funnel money back to MAIN [the consulting firm for whom he labored] and other U.S. companies (such as Bechtel, Halliburton, Stone & Webster, and Brown & Root) through massive engineering and construction projects. Second, I would work to bankrupt the countries that received those loans (after they had paid MAIN and other U.S. contractors, of course) so that they would be forever beholden to their creditors and so they would present easy targets when we needed favors, including military bases, UN votes, or access to oil and other natural resources.

“Who can doubt that there is an American empire?” wrote Arthur Schlesinger Jr. “an informal empire, not colonial in polity, but still richly equipped with imperial paraphernalia: troops, ships, planes, bases, proconsuls, local collaborators, all spread around the luckless planet.”
¹⁶

America had mixed and confusing sentiments about empire from the get-go. Its founders were schooled in the history of Rome and determined to avoid what they saw as her mistakes. But at the same time, they couldn’t help but lust for the grandeur of it. They longed for the imperial purple, perhaps, from the very beginning.

William Drayton, chief justice of the highest court in South Carolina, wrote in 1776:

Empires have their zenith—and their declension and dissolution....The British period is from the year 1758, when they victoriously pursued their Enemies into every Quarter of the Globe....The Almighty . . . has made the choice of the present generation to erect the American Empire . . . and thus has suddenly arisen in the World, a new Empire, styled the United States of America. An Empire that as soon as started into Existence, attracts the attention of the Rest of the Universe; and bids fair by the blessing of God, to be the most glorious of any upon Record.
¹⁷

John Quincy Adams, however, cautioned that while “she might become the dictatress of the world: she would be no longer ruler of her own spirit.”
¹⁸
More than two centuries later, her spirit has run wild. She has soldiers garrisoned all over the world. She has interests in places few Americans have ever heard of and fewer still care about.There is no corner or dead-end street in the world that is not somehow patrolled by U.S. forces. At the end of this year, America is scheduled to spend more in a single year on defense than all the rest of the world combined.

Already, readers must be asking themselves questions: The United States is the world’s only superpower; since the capitulation of the Soviet Union, she has no enemies capable of inflicting serious damage; what is she defending herself against? But that is just the point.The imperial spirit has gotten the best of her. She no longer plays a role that she can understand and control. Now, she is an imperial power; she must read from the script that has been thrust in her hands. She must provide security for the entire world. She must provide the public good of law and order. Someone has to do it. Who else could, but America? It is her turn to wear the purple, whether she wants to do so or not. Thus, did she become dictatress of the world; but no longer ruler of her own spirit—or her own finances.

We stop a moment to reflect. The urge to empire is as irresistible as a free lunch.The male of the species cannot pass up a chance to strut around feeling superior. Scarlet tunics and ostrich feathers have gone out of style, but the men who wore them are the same as those who sacked Rome with Alaric, laid waste to Albi with the Duke de Montfort, and entered Baghdad with the Third Army.The uniforms change, but men are the same grasping, vaunting, humbugging dudes they always have been.

There is nothing quite so amusing as watching another man make a fool of himself. That is what makes history so entertaining. And what makes the history of empires particularly entertaining is watching the great emperors: the Napoleons, Alexanders, Caesars, Attilas, and Adolphs—with all their pretensions and sordid butchers—put on the red tunics and burnished helmets, mount their white chargers, and ride right into a stone wall.

While leaders make fools of themselves, the mass man is tanned by the reflected glory of empire. His chin grows stronger as he admires the stalwart troops. His chest swells with every victory. He grows so tall he almost hits his head at the top of doorjambs.We literary economists, on the other hand, can barely suppress a laugh. It is obvious that the poor man has become delusional; but no one appreciates our saying so. Still, we also feel superior, for we cannot help but notice what numskulls they are.

Evolutionary biologists reduce the whole impulse to empire to nothing more than genes and math. After a man has enough to eat, his genes—and by command, his thoughts and emotions—want nothing more than to spread his seed as widely as possible. Genes are only interested in replication, according to the hypothesis. All the trappings of wealth and power—including the urge to lord it over others—are merely proxies and substitutes for sexual attractiveness. A great ruler conquers a city much for the same reason a middle-aged lawyer buys an expensive sports car, a peacock spreads his tail feathers, or a moral philosopher writes a popular book. It indicates to females that he has good genes. The entertainment comes in when the great ruler is defeated and hung from a meat hook, when the peacock is taken by a fox, and when the red sports car gets the boot. (The prospect of finding this book on the remainder table is not entertaining!)

President Wilson got America’s self-deception off to a running start early in the twentieth century: “I believe that God planted in us visions of liberty,” he said, seeking the Democratic nomination in 1912, “that we are chosen and prominently chosen to show the way to the nations of the world how they shall walk in the path of liberty.”

So worthy was the mission that there seemed no need to figure out how to pay for it. If God had set us on the trail of Empire, He could jolly well figure out how to pay for it. Neither then, nor now, have Americans bothered to understand how the business of empire works.They think they are doing the world a favor. That deception alone would not be so grave, but they totally miss the point: Nearly every imperial power has claimed to act for the good of others, but they all found a way to make it pay.When it stops paying, they are out of business.