***Obligatory economic optimism is the psychological epidemic of our time. It harbors within itself the seeds of its own destruction. When policies are shaped by irrationally optimistic expectations, the results are usually disastrous. The U.S. federal budget has long been shaped by fantastically optimistic assumptions, and so has the gamut of U.S. policies - including foreign and military policy - since the mid-1990s. America's obligatory market optimism has produced a kind of mass psychosis that leaves some of us worried. Consider recent U.S. moves: like favored nation trading status for China, massive nuclear arms reductions for Russia, the cancellation of the Navy's ABM program, the inclusion of terrorist states in the coalition against terrorism, a shortage of cruise missiles, a nuclear stockpile of questionable potency after a decade without testing.
We supposedly won the Cold War by living better than the Russians. The key to staying on top is therefore to grow fatter and richer than before. All solutions reduce to the dollar sign ($). Remember that old slogan, "It's the economy, stupid!" All our troubles, save this one trouble, will supposedly take care of themselves. As long as the economy is growing, we can buy our way out of any difficulty. The economy is therefore expected to recover. It absolutely must recover. Imagine (if conditions worsen) desperate members of the commercial class offering up prayers, virgins or their first-born in exchange for a booming economy. Humanity has tried many superstitions. What if, in this instance, the decisive superstition were the dollar itself? No longer backed by gold, the dollar is now backed by carrier battle groups and nuclear missiles. Only if America remains globally dominant will the dollar continue its charmed career. (One might call this an "enforced superstition.") Therefore, those who would break the dollar must first break America's strategic leadership.
Think about this for a moment. The dollar survived 9-11. But would that have been possible without the global reach of the U.S. military? Those who say, "It's the economy, stupid!" might have to think a second time. Perhaps they will end up acknowledging, "It's war, stupid!"***
financialsense.com |
