The Financial Crisis: Will It Lead to America's Decline?

His argument in a nutshell:
1. Financial collapse caused by complexity
2. American power is a highly complex system
Ergo, 3. We should fear a similar collapse of American power

Sigh. The "egregious, ubiquitous hustler-historian and neo-imperialist"* strikes again.

*http://www.vanityfair.com/online/wol...historian.html

As one speaker said it is who ever wants it most.

The US just like powers throughout history begin to feel that they have the "right" through perceived cultural superiority to stay ahead. This is usually the beginning of the end.

The speakers have one thing wrong though. The collapse will not be some post-apocalyptic type world. What will happen is only that development of new things will stop. It will be like a snapshot in time. As an example everybody will not be going out every year to buy or lease a new car but keep their existing car running. 10 years down the line all you see on the roads are 10 year old cars instead of the newest designed built models that year. While in China they are driving hover cars ;-)

As for the Middle East the collapse of US dominance might eventually bring some peace to the region or at least enough breathing space to get organized. After that they will deal with Israel who will then help them to deal with Europe and the US!

Cant wait...

If one looks at the burden of empire on a spiritual level, Americans might just be better off with the loss of being the dominant empire. Certainly, as Ferguson points out, physical hardships will increase. Especially for those that haven't felt it yet. Is it possible to suggest here that material supersuccess is not the penultimate goalpost?

Niall dismisses Noam Chomsky rather casually, but Noam has said many of the things that Niall is saying well before Niall could have even thought them. Yes, Noam has focused very heavily on the moral aspects of American corporate imperialism, but he is similarly concerned with the well-being and persistence of America. He's heavily stressed that budgets need to be redirected to restructure institutions like healthcare, education, and overall infrastructure. He has similarly stressed that jobs need to stay in America, rather than move elsewhere for corporate benefit. For Noam, the prosperity of the general public leads to the prosperity and persistence of the system of the whole, as opposed to the trickle-down economics of today, which sap the entire system of its capacity to function and grow with the global economy. Once cannot disagree with this.

On the subject of Noam's moral critique of American imperialism, Noam has said nothing that lacks rigor or relevance. Niall suggests that Noam desires the collapse of America, but that's almost slanderous paraphrasing of Noam's actual published ideas. Noam does not want a collapse of America, indeed, he loves America. However, one cannot argue in favor of global economic oppression, which is quite often the functional end of projected American power. The word that is popular now is "stability," given that Communism and the Soviet empire are no longer viable bogey monsters. The fact of the matter is projected American power, in the sense that Niall is endorsing, has two vastly negative effects.

For starters, in the long run, projected military power works to destabilize one area in the process of stabilizing another by requiring enormous resources which often come by oppression, and destroying our reputation around the world. If the fate of military economic empires is to collapse catastrophically, then perhaps we ought to transition away from being an empire, and gently distribute the responsibility of global watchdog before we collapse and the entire world is destabilized anyways, nullifying Niall's argument and attack on Chomsky.

Secondly, the defense budget required to maintain this kind of standing army, which is by the way another sign of declining empire, is enormous and cripples America's ability to remain financially supple and to support long-term development domestically. For example, our educational system is horribly horribly broken, inequitable, ineffective, wrong-headed, and needs a massive overhaul, along with changes in societal institutions. We have enormous human capital, most of which is limited by inherent class inequalities. I have worked with so many brilliant young students who are economically disadvantaged. Sometimes they are minorities, sometimes not. Significant moral discussions aside, the upshot is that we are hugely limiting ourselves by allowing to remain an economic policy that stratifies society and limits our crop of intellects to a very narrow segment of society. This undermines the very innovation that is crucial to our survival, not just as a nation. We will leave aside discussions of consumerism and maladaptive culture that also horribly undermine innovation.

It should be said that we are attached to this idea of economic growth, which is actually ridiculous. We live on a planet and in a universe with finite matter, and thus finite resources. Our economies are connected in various ways to real physical matter, and if matter is finite, neither being created nor destroyed, then how can economies insist on growth as a long-term plan for the survival of nations and of the species generally? It's ludicrous, defies physics. The nations of the world need to come to a consensus on this reality, and develop from there. By some miracle we've made it this far in our development, but we need to look further and design the global system to be robust far into that future, beyond 100 years, or 200 years, but a thousand. We've seen so many civilizations and empires collapse over millenia, I think we know enough to ignore the greed of a few and plan our system accordingly. The consequences are moving beyond the collapse of a mere nation to the collapse of the planet. It is time to set aside bedtime stories like nation-states and economic growth, and to start acting in accordance with reality.