With Emperor George Bush entering his second term, what is the state of his empire? What are his policies likely to be? What can the rest of the world expect from US imperialism? From the United States, STEVE PALMER reports.
‘Freedom’ – for capital
When, in his inauguration speech, Bush spoke of bringing freedom to the world, he means freedom for capital to exploit the world, freedom for US imperialism to oppress nations and peoples, freedom for the US military machine to impose US policy anywhere that refuses to pay obeisance to the Empire. Bush has no intention of supporting political freedom in the United States, never mind in the puppet regimes in Pakistan, Uzbekhistan, Saudi Arabia or anywhere else. He is putting in place a team that will repress at home and aggress abroad.
The brutal empire
Attorney General Ashcroft oozed the instincts of a tyrant from every pore, but even he is surpassed by his replacement. Alberto Gonzalez, Bush’s lawyer when Governor of Texas, ensured that death-row inmates’ appeals to the Governor were automatically turned into execution warrants, making Texas execution capital of the US. In the White House he was the principal legal architect attempting to legalise torture. Gonzalez is the man to lead and justify the forthcoming assault on civil liberties.
Although the advances in civil rights in the US have only been the fruit of struggle, it is the US Supreme Court which, for the last 50 years, has been the main battleground for the advance and defence of civil rights. However, eight of the nine justices are now over 65, with several likely to die or retire soon. Bush will appoint extreme right-wingers, opponents of civil rights and abortion. They will be the ideal complement to Gonzalez.
The new Secretary of State is Condoleezza Rice. If all you have is a hammer, everything looks like a nail; Rice is a case-hardened cold-war warrior who sees any challenge to US imperialism as a threat to be hammered.
The brittle empire
But, behind the Emperor’s bluster, the United States is in crisis. Despite talk of recovery, profits fell in the third quarter of 2004; capacity utilisation and employment have not yet regained their 2000 level, wages increase slower than inflation, the number of jobless workers grows. Stock market indicators point to share prices being over-valued while house prices are inflated by as much as 35% – sure signs of a speculative bubble waiting to burst.
This crisis has masqueraded as a feeble recovery only because of debt-financed expansion of consumer and government spending. Total debt is now 300% of national income compared to 160% in 1980. An orgy of mortgage-refinancing has enabled consumers to borrow massively: mortgage debt has grown fourfold since 1995. Consumer debt now stands at an historical high of 54% of consumer income.
Projected government spending on the Iraq war until the end of 2005 is $300bn. Its budget deficit was $412bn. This has been financed by foreign lenders and has covered a $650bn international current account deficit. Yet 80% of these security purchases have been by central banks, which hold 70% of their assets in US dollars. The People’s Bank of China recently announced it had increased its dollar exposure last year by $207bn – one third of the current account deficit.
Although the US administration ignores the consequences, its creditors do not. This massive foreign borrowing has led to a decline in the dollar exchange rate, devaluing dollar reserves. A recent survey showed 70% of Central Banks reserve managers had increased their exposure to the Euro. In the last three years OPEC members have cut the proportion of their dollar deposits from 75% to 61.5%. Thailand is considering reducing its dollar reserves from 80% to 50%. More ominously, although central banks increased their reserves by 66% over the last four years, they expect this to slow to around 20% in the next four. Put simply, this means that the rest of the world is unwilling and unable to continue to prop up US capitalism. There is no way that the US can fill the gap with exports, since it has already exported its manufacturing industry. If it cannot borrow, the only alternative is a massive deflation of the US economy. This spectacular crisis will puncture the stock and housing bubbles and drive up unemployment and poverty. The ripples of this crisis will be a tsunami across the world.
The military
The prospects for the Empire, then, are deepening crisis, destruction of political liberty and more military attacks. Yet, despite supposedly having the world’s most powerful military machine, Bush has pushed it to its limits, to a point where senior officers are concerned it will be a broken force in the near future. The entire US army is bogged down in Iraq – it is either there, on its way there, or on its way back for a brief break. Up to 5,000 US soldiers are thought to be absent without leave. Retired soldiers over 50 are being called up; reservists, who legally can be deployed no longer than a year, are having their terms extended by another year. Relatives hold bake-sales to buy adequate flak jackets and armour for their vehicles! This is not a force which can dominate the world.
Despite its bragging and brutality, Bush’s empire is brittle. Its crisis is bringing forth increasing fightbacks abroad and at home. Emperor Bush’s rule is going to be very shaky.
FRFI 183 February / March 2005
