Normally I write for The European Tribune and cross post the odd diary here if I think it might be of interest to some Booman readers.  This is my first attempt to write a specifically Booman diary for an American audience from a European perspective.  I do so neither as an economist nor as an expert on the US political system, but I hope to bring some historical perspective to a discussion which appears to be very close to the bone for many Americans right now – and especially to those on the relatively far Right and Left of the current US political spectrum.

My first point is this:  We live in a time of revolutionary change.  The collapse of Communism and the Globalization of Capitalism has resulted in firstly, a dramatic increase in US economic, military and political power, and more recently in a resurgence of China, Russia, Europe, India and many parts of what we used to call the third world. Many other major powers are no longer taking their marching orders from Washington or New York.  McCain is living in a dream world if he thinks that many of the leaders of these emerging powers will be overly concerned whether he/POTUS deigns to speak to them or not.

Secondly the deregulation of market systems which, in part, led to the Globalisation of Capitalism, has resulted in an unprecedented transfer of wealth from the poor to the rich in the USA, because it has enabled Global capital to treat American workers increasingly in the same way that they have always treated workers in the third world.  The growth in efficiency of production systems means there will always be more workers than there is productive work to do, and thus by the laws of free market supply and demand – the price of labour goes down, and down – until it goes down so low that labour is no longer able to sustain itself – and poverty, homelessness, illness, broken families and political destabilisation results.
Over the last 30 years – despite huge growth in GNP, virtually all the incremental wealth that has been generated in the US has gone to the top 0.1% of the population – mainly those helping to run the Global economy.  And I say Global – not American – economy advisedly, because big money has no national loyalties – in flows where the further growth potential lies, usually in “third world” markets, and this process is then wrapped in an American flag as part of the Branding exercise to make the other 99.9% of Americans think that this is all being done for their benefit.

The consequence of this enormous transfer of incremental wealth from the poor to the rich is that virtually all growth in living standards in the past 30 years for the 99.9% has been funded by debt, and by increasingly unsustainable levels of debt at that – so much so that it has masked the enormity of what has really being going on:  US capital has gone Global, and the USA itself has increasingly only remain solvent because of huge inflows of cash from the rest of the world in the form of both public and private debt – a debt which has been increasingly secured against hugely over-priced assets.  

The consequence of this whole pyramid selling or Ponzi scheme falling apart is that the rest of the world will cease to puts its money into Dollars, or at least charge exorbitant interest rates for doing so, and the US$ will lose its status as the world reserve currency.  The money and jobs which have already left the USA aren’t coming back, and thus we have the Wall Street bail-out – where already impoverished and over-indebted US taxpayers are expected to bail-out the global bankers and neo-conservative market deregulators who brought you to this wonderful state of affairs.

And don’t for a moment think that this bail-out will be the last.  The Globalisation of US capital is an ongoing process and whilst the real money heads abroad, US taxpayers will be expected to make up the losses at home.  Every time a crisis occurs the same extortionate demands will be made:  bail us out or the real economy, real jobs, YOUR homes and livelihoods will suffer.  And there will be an element of truth in this:  the short term consequences of “market failure” are almost always catastrophic.  The last time this occurred you had the Great Depression, and we had Fascism and World War.

It is no accident that McCain and the neo-cons are searching around for an adversary who can give them a Casus Belli and allow them to blame the whole process on some great Satan abroad.  McCain’s chief Foreign Policy Adviser, Randy Scheunemann, even acted as chief US adviser to the President of Georgia, Mikheil Saakashvili, when he rained cluster bombs on the innocent civilians of South Ossetia – in the hope of provoking a Russian response which could be characterized as the Evil Empire rising again.

Because unless this whole enterprise can be wrapped in an American Flag, and all dissenting voices charaterised as unpatriotic, the reality becomes all too obvious:  The US is being systematically looted by its own ruling elite – and don’t make the mistake of thinking that this ruling elite are the politicians in Washington – they are but the foot soldiers largely doing the bidding of those who own America, own the big businesses, the media, the “think tanks”, the banks, and an increasingly privatised military.

This looting of America has now become so obvious that even the dimmest of the foot soldiers are beginning to realise what they are doing, and are becoming fearful of an increasingly angry electorate looking for an alternate leadership.  Many arch conservative politicians – the social conservatives and small town businessmen – have little in common with international capital, and are ready to break ranks.  They’re just looking for a leader to articulate their concerns, and remarkably, McPain could be their guy.  Who better to find a foreign enemy to re-unite the nation?  Who better to stick up for the small guy against the complexities of global finance that no one can understand?  Do not underestimate McPains apparent stupidity – they could represent the popular anger and inchoate confusion at what is going on perfectly.

The big question is whether McPain will break ranks with the big business paymasters who run the GOP operation.  My guess is that he may be sufficiently desperate – and unstable – to do just that.  What better way to differentiate himself from the unpopular Bush regime – and much of the Democratic establishment which has almost as much in common with Global Capital as the Republican elite have?

So where does that leave Barak Obama, the Candidate of ChangeTM  He has a very difficult choice to make.  He can build a coalition with Global Capital by supporting this bail-out plan and hope that this does not lose him the vote of the Left in his own party.  He was never going to get many of the social conservative and small town extreme Republican vote in any case.  In other words, he can do what candidates often do – move to the centre and hope he doesn’t lose his base in the process.  It is probably too late for McPain to play the populist card and oppose the bail-out – it would only reinforce existing concerns about his stability, and he might find many prominent Republicans (goaded by their Global Capital masters) endorsing Obama instead.

The real question is: what does Obama do next – on the presumption that he is elected?  Does he too become co-opted by the Global capitalists who control the media, the lobbyists, the banks and much of the real economy?  Is he diverted into finding some external enemy who can be used to disguise the looting of America that is really going on?  Will the Military Industrial complex Cheney so successfully reinforced – force his hand as well?  Kennedy was famously bounced into the Bay of Pigs fiasco by totally fabricated intelligence and had to be killed when he threatened to change course on Vietnam.

We will know early on in his Presidency whether the Change he promises is real or superficial.  If he moves to enact radical electoral reforms, breaks up monopoly control of the media, refuses to be goaded into war, places “draconian controls” on the movement of Global Capital and enacts fundamental FDR type social programs to reverse the impoverishment of 99.9% of the American people there may be some chance.  

However he will have to be a truly radical President in the FDR mold if he is to accomplish any of this.  Any signs of Clintonian triangulation and you can be sure that no real change of power has occurred.  The looting of America will continue – but it will have a far pretty face.  People will congratulate themselves for having elected a Black President and putting a formal and successful end to the Civil Rights movement of the 60’s.  Perhaps the racial struggles of past decades will be replaced by a class struggle in the future, but at the moment there is only one class struggling, and that is the global ruling elite who are seeking to hold onto the power and the wealth they have looted from America.

Perhaps when white and black people stop struggling with each other they will see their real enemies lurking in their Global business empires more clearly and make common cause together.  Perhaps that is the future that Obama best exemplifies, but no one should underestimate the task – and the very rel physical risks – he faces.

Good luck America.  I wish you all the best in the challenges which lie ahead and hope you create a more just and prosperous future.  And I hope you don’t rain war on the rest of us.  We are your friends if you could only recognise us.