Bush's second term may see a crisis of the dollar, now heavily reliant on reserve-asset stockpiling by China and Japan, which own a huge proportion of our debt paper. In effect, those countries are sending us cheap goods in return for expensive paper, working hard for no current material reward. Will they continue this odd behavior for four more years, even if tensions erupt over Korea or Taiwan? Or will China, especially, diversify into euros, or perhaps into commodities, aggravating global inflation? Will the neglected states of Latin America, increasingly alienated from the United States, set off a banking crisis with debt defaults? We'll see. The dangers are real, and we are totally unprepared.
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But talk about blind American faith - what if Kerry wins in 2004? Won't
the bricks fall on the Democrats' heads? What then for the reassertion
of "democracy and common sense"? Such a comforting fairytale is a
current left-liberal version of the psychosis of denial that has
virtually all of America in its grip.
In fact the analogy with the Progressive Era doesn't hold at all - except in reverse. Not only was America then the world's mightiest producer, rather than the obese "consumer of last resort" - its present designation in the world market, apparently - that it is today, with a withering manufacturing base, but American capitalism found a very easy way out in the First World War, where only itself and Japan emerged as "winners", and Wall Street moved to the center of the worlds' capital markets as chief creditor. Ironically then, as a big lender of capital to Tokyo, thereby directly fuelling the operations of Japanese imperialism in the 1920's. Not so today, as Tokyo fuels American imperialism - the shoe is very much on the other foot!
So it won't matter too much which party runs the show this time, because the show itself is rapidly (in historical time) coming to a close. It is only a question of the exit: Stage Left or Stage Right?
Either way, don't expect a status quo "happy ending". Right, America always must have its happy ending...
----------------------------------------------- The cozy plutocracy of McKinley and his successors--Taft, Harding, Coolidge, Hoover--could not stand before the needs of the modern world. It can't be brought back now. Bush's effort to do so will bring misery for many, perhaps for many years. But the final outcome is not in doubt. Bush's second term, if it comes, will fail, and America will thereafter change course; democracy and common sense will assert themselves in the end.