Justin Raimondo’s Most Prescient Essay? – The Banksters and American Foreign Policy
I’m a longtime fan of Justin Raimondo. I’ve been following Antiwar.com since my internet access was good enough to get it – around 1997. By the beginning of this century, I realized that Raimondo is perhaps the most honest and inclusive user of HTML links embedded into the text of his articles there is. They always emphasize the subject at hand in meaningful ways that can make reading a 900-word essay by Justin take four hours. And you can learn a lot in the process.
At the time I discovered Raimondo, I was a Green Party of Alaska member. Justin is a solid, often doctrinaire, libertarian. Greens tend to be left libertarians. Back in the 90s and early 2000’s, some of his economic theses struck me as stuck in libertarian schtick. But many of his predictions from the early part of the last decade have struck home.
Like a lot of us firebaggers, Raimondo smells a rat in the deals going down during the debt ceiling crisis. He sees it as different from the many earlier showcase events involving raising the limit on borrowing:
Everyone agrees the United States is in a crisis of momentous importance: we’re approaching bankruptcy [.pdf], millions are out of work, and the emotional leitmotif of our culture can be summed up in one word: demoralization.
Is there a way out?
Well, yes and no. Yes – if the solution comes from below: no, if we’re depending on our “leaders” to pull us out of the abyss.
Let me explain.
Raimondo goes on to do just that. His prescient article quotes libertarian icon, economist Murray Rothbard, extensively. Before that, though, Raimondo gives his own description of the current dilemma:
Let’s recount a little history here: in the winter of 2008 the house of cards that is the American economy suddenly collapsed, and the Great Bubble of faux “prosperity” burst. A long orgy of malinvestment – spurred by bank credit expansion [.pdf] (i.e. the Federal Reserve printing gobs of “money”) – came to an ignominious end. The housing market, already weak, imploded. It was a massive market correction, one that had to be endured before it could be cured – but the big boys weren’t going to take their medicine.
In a free economy, the banks that invested trillions in risky mortgages and other fool’s gold would have taken the hit. Instead, however, what happened is that the American taxpayers took the hit, paid the bill, and cleaned up their mess – and were condemned to suffer record unemployment, massive foreclosures, and the kind of despair that kills the soul.
How did this happen? There are two versions of this little immorality tale, one coming from the “left” and the other from the “right” (the scare-quotes are there for a reason, which I’ll get to in a moment or two).
The “left” version goes something like this:
The evil capitalists, in league with their bought-and-paid for cronies in government, destroyed and looted the economy until there was nothing left to steal. Then, when their grasping hands had reached the very bottom of the treasure chest, they dialed 911 and the emergency team (otherwise known as the US Congress) came to their rescue, doling out trillions to the looters and leaving the rest of America to pay the bill.
The “right” version goes something like the following:
Politically connected Wall Streeters, in league with their bought-and-paid-for cronies in government, destroyed and looted the economy until there was nothing left to steal. Then, when their grasping hands had reached the very bottom of the treasure chest, they dialed BIG-GOV-HELP and the feds showed up with the cash.
The first thing one notices about these two analyses, taken side by side, is their similarity: yes, the “left” blames the free market, and the “right” blames Big Government, but when you get past the blame game their descriptions of what actually happened look like veritable twins. And as much as I agree with the “right” about their proposed solution – a radical cut in government spending – it is the “left” that has the most accurate analysis of who’s to blame.
It is, of course, the big banks – the recipients of bailout loot, the ones who profited (and continue to profit) from the economic catastrophe that has befallen us.
One of the fascinating things to me about Raimondo’s essay, is that he seems to be leading to an intersection of his ideas, Rothbard’s and those of Naomi Klein, a collision that should shock less people than it might:
You may have noticed, however, that these are not normal times: we’re in a crisis of epic proportions, not only an economic crisis but also a cultural meltdown in which our social institutions are collapsing, and with them longstanding social norms. In such times, ideological categories tend to break down, and we’ve seen this especially in the foreign policy realm, where both the “extreme” right and the “extreme” left arecalling for what the elites deride as “isolationism.” On the domestic front, too, the “right” and “left” views of what’s wrong with the country are remarkably alike, as demonstrated above. Conservatives and lefties may have different solutions, but they have, I would argue, a common enemy: the banksters.
This characterization of the banking industry as the moral equivalent of gangsters has its proponents on both sides of the political spectrum, and today that ideological convergence is all but complete, with only “centrists” and self-described pragmatists dissenting. What rightists and leftists have in common, in short, is a very powerful enemy – and that’s all a mass political movement needs to get going.
Raimondo’s most apt quote from Rothbard may be this one:
“The great turning point of American foreign policy came in the early 1890s, during the second Cleveland Administration. It was then that the U.S. turned sharply and permanently from a foreign policy of peace and non-intervention to an aggressive program of economic and political expansion abroad. At the heart of the new policy were America’s leading bankers, eager to use the country’s growing economic strength to subsidize and force-feed export markets and investment outlets that they would finance, as well as to guarantee Third World government bonds. The major focus of aggressive expansion in the 1890s was Latin America, and the principal Enemy to be dislodged was Great Britain, which had dominated foreign investments in that vast region.
“In a notable series of articles in 1894, Bankers’ Magazine set the agenda for the remainder of the decade. Its conclusion: if ‘we could wrest the South American markets from Germany and England and permanently hold them, this would be indeed a conquest worth perhaps a heavy sacrifice.’
“Long-time Morgan associate Richard Olney heeded the call, as Secretary of State from 1895 to 1897, setting the U.S. on the road to Empire. After leaving the State Department, he publicly summarized the policy he had pursued. The old isolationism heralded by George Washington’s Farewell Address is over, he thundered. The time has now arrived, Olney declared, when ‘it behooves us to accept the commanding position… among the Power of the earth.’ And, ‘the present crying need of our commercial interests,’ he added, ‘is more markets and larger markets’ for American products, especially in Latin America.’”
Raimondo, suggesting an alliance somewhat similar to ideas often proposed at articles here at firedoglake, concludes:
With America as the world policeman and the world banker – in alliance with our European satellites – the Washington elite can extend their rule over the entire earth. It’s true we won’t have much to show for it, here in America: with the dollar destroyed, we’ll lose our economic primacy, and be subsumed into what George Herbert Walker Bush called the “New World Order.” Burdened with defending the corporate profits of the big banks and exporters abroad, and also with bailing them out on the home front when their self-created bubbles burst, the American people will see a dramatic drop in their standard of living – our sacrifice to the gods of “internationalism.” That’s what they mean when they praise the new “globalized” economy.
All those dollars, shipped overseas, enrich the military-industrial complex and their friends, the exporters – and drain the very life blood out of the rest of us. Opposition to this policy ought to be the basis of a left-right alliance, a movement to bring America home and put America first.
In the long term, there is the basis for a more comprehensive alliance: the de-privileging of the banking sector, which cemented its rule with the establishment of the Federal Reserve. That, however, is a topic too complex to be adequately covered in a single column, and so I’ll just leave open the intriguing possibility.
“Left” and “right” mean nothing in the current context: the real division is between government-privileged plutocrats and the rest of us. What you have to ask yourself is this: which side are you on?
I’m on the side of sanity based upon long-term sustainability of the biosphere. Libertarians such as Raimondo tend to describe bottom-line environmentalism as some sort of a hoax. It isn’t, and plays a larger role in how and why the economy is going to shit so thoroughly than most seem to understand.
If you were unfamiliar with the writings of Justin Raimondo, or with the website, Antiwar.com, I hope you’re now tuned in. Support them, as you do firedoglake. There is a lot of common ground.