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History

Until the 15th century the cultures of Europe and the area now occupied by the United States were entirely separate. Visits by English fishermen to Newfoundland and then Spanish expeditions to the Caribbean brought this separation to an end.

The United States is the result of the coming together of people from more different cultures than any other human society. It is the present world center of cultural innovation and supplies commercial culture in the form of film and television to all other parts of the world. The creative success of its people probably comes from the diversity of their original cultures. Although the various immigrants have adopted a common culture they usually still retain elements of their ancestors' cultures.

There are five main strands of history in the United States. These are:

  • the original inhabitants (Native Americans);
  • the Spanish discoverers;
  • the British settlers;
  • the Africans brought as slaves;
  • the other immigrants.
Of these strands the Anglo community usually receives most attention by historians, though in the long run the other strands, especially the Hispanic, may turn out to be at least as important. In recent years immigrants from many parts of Asia have joined the mixture. Nothing as powerful as this cultural synthesis has happened since the Roman Empire, when influences from Greece, Egypt, Persia and India combined to produce a synthetic culture.

Colonial period
In the 17th century, English colonies were planted on the east coast of North America. By the 1770s there were 13 from Vermont in the north to Georgia in the south (Maine was still part of Massachusetts). Each had a governor appointed by the government in London (or by a Proprietor) and a local assembly. As their population grew larger the colonists felt more confident in their abilities to govern themselves.

While the French still had colonies in North America the British colonists felt insecure and needed the defense assistance of the British Army and Navy. With the defeat of France in the Seven Years War they no longer felt the threat, and especially no longer wished to pay the British government for these services.

Revolution
The American revolution started as a tax revolt, with a refusal to pay taxes imposed by the London government (the Americans used the slogan of the English Civil War "No taxation without representation"). London wanted a payment to cover the cost of defense. Traditionally the first incident was the Boston Tea Party in 1775 when some colonists threw taxed British tea into the harbor. From this there grew a civil war between: on the one hand some of the colonists; and on the other the British army composed largely of German mercenaries, and the loyalist colonists (Tories). It has been said that naturally the English (that is the Americans) won.

The victorious colonists then organized their own government. It has been suggested that the form of the Federation, not known at the time in Europe, was copied from the Indian (Iroquois) tribes. Many of those colonists who had supported the British emigrated to Canada.

Already during the British period Africans were brought to America to work as slave labor. (Englishmen and Irish were also slaves, working both as convicts and as temporary slaves - indentured servants). These were concentrated in the southern colonies and worked on the aristocratic tobacco estates which were formed there. After independence many more were brought and were used especially to grow cotton which became an important industrial crop. The southern states thus followed the Spanish American pattern.

United States
The original 13 colonies formed the United States of America in 1789 and then admitted new territories until it has reached the present 50 states, stretching from the Atlantic Coast to the Pacific. Puerto Rico may eventually make 51. (Britain as England, Wales, Scotland and perhaps Ireland is surely unlikely to join unless an extremist government were to withdraw from the European Union).

Following independence new migrants entered the territory from every country in Europe. There are now large communities descended from immigrants from: Ireland, Germany, Poland, Italy, Scandinavia, Russia, Greece. These entered during the 19th century. In the 20th century there have been immigrants from Latin America and the Caribbean. Since the 1980s there have been many Asians from Vietnam, Cambodia, Korea and the Philippines. During the 19th century there were Chinese and Japanese. Chinese make up many of the immigrants at present - some illegal.

Civil War
The power of the originally weak federal government was strengthened after a civil war (1861-65) in which the mainly rural but aristocratic southern states claimed the right to secede in order to safeguard their power to keep black slaves. They formed a breakaway southern Confederacy. This right of secession was denied by President Lincoln supported by the northern, industrial, states. During the war slavery was abolished by the United States. The war greatly increased the size of the army and the military power of the central government.

The first governments of the federation were formed by the equivalent of English country gentlemen (such as George Washington). However, other classes came to dominate in later years - especially lawyers. Now, except for some exceptional candidates, only those with access to large sums of money can hope to stand for election and be elected.

Nevertheless, candidates from outside the founding WASP (White Anglo Saxon Protestant, that is British descendants) community have won the presidency and many other offices. In recent years many candidates of African descent have become elected officials. A few have now reached the presidential level - serious possible candidates - as shown by President Obama, son of a Kenyan student.

During the 20th century the productive capacity of the United States and its military power caused it to become the world's leading military and economic Superpower, replacing the British Empire. During the first world war it was American military support which finished off the Germans and left America the leading financial power (all the other states were in debt to America). During the second world war US effort was decisive in the Pacific and western European fronts, and in assisting the Soviet Union.

From 1945 to 1989 American military power was apparently balanced by the power of the Soviet Union but by the late 1980s the latter was revealed as having been built on a weak economic base.

Like the British before them, the United States has been able to project military power in every part of the world.

Sole Superpower
Governments of the US now seem to feel they do not need to consider the needs of the whole planet and may be making decisions solely in the interest of the voters at home, and the businesses of the US. This suggests the desire to be a hegemonic Empire.

Is there a Decline?
How sound is the US economy?

From the election of Ronald Reagan in 1980 the United States revealed a considerable economic decline, which may still be in progress. The signs of these are:

  • 1) a large fiscal deficit which neither president nor congress seemed able to deal with until the Clinton administration (by making taxes equal to expenditure);
  • 2) a large trade deficit to Japan, China and other countries, and
  • 3) an unsound financial system. The fiscal deficit was funded by government borrowing mainly from Japanese banks, and later from China. It started with the attempt to increase military power (for the war in Vietnam) without paying for it in increased taxes.
This decline must have some effect on the United States' ability to exert political power in the world, as was seen by the Gulf crisis of 1990-91 when the government put a lot of effort into persuading other powers to pay for the cost of the military action. US taxes are lower than in most other industrial countries.

During the Clinton period the fiscal deficit ended and started showing a surplus. However, the deficit resumed under his successor.

The trade deficit has been financed by sales of assets, especially real estate and corporations to foreigners, mainly Japanese but also Europeans and Saudi Arabians. It is caused by United States corporations failing to innovate. As with British companies they have invested too little in research and development of new products. They have also failed to adopt the social innovations which allow Japanese industrial management to increase productivity and reduce costs. In addition the American (and British) financial systems appear to be less efficient at financing long term investment than Japanese and German banking and investment systems. Ingenuity appears to have been devoted to ways of creaming off the profits of industry by such means as "Junk Bonds" rather than to sound methods of investment in new business. A notable example was Enron, a multi-billion dollar corporation that was discovered, in January 2002, to have no real value at all due to dishonest business methods.

Along with economic decline goes social weakness. The predominant individualistic philosophy erodes social solidarity in families (very high divorce rates and numbers of malfunctioning families) and communities and encourages individualistic crimes (mugging) which have made many urban areas of the country unsafe.

Is the United States as a power certain to survive? In history nothing is permanent. If the management of a company is seen to add nothing of value to a business it is broken up into its constituent parts. The same can happen to a state, as with the Austro-Hungarian Empire in 1918. But modern communications make it more likely for the outer form of such a state to continue. Nevertheless, the same communications have changed the nature of political and financial power. Following the disappearance of the Soviet Union the US was the only remaining superpower. Will its social and economic weaknesses permit it to maintain the military power that confers status? The extreme Conservatives seem to want to reduce the Federal Government to the status of the European Commission. But their allies seem to wish the US to behave as an empire. That would be an expensive policy.

The events of 11 September 2001 showed that in the US, as in other countries, large conventional military forces can be outwitted by very small groups of terrorists.

Changes in rainfall could affect the United States' power and influence if food output is reduced so that the United States cannot feed the world and maintain a string of clients tied by food imports (such as Egypt).

No-one can foresee what the world political situation would be if the main economic decision making center of the United States were positioned where the goods are manufactured (China) rather than in the financial centers.

Even if the United States' predominance as an economic and political power is reduced, as relatively it is bound to (because Europe and the Pacific Rim countries are also increasing their share of the world production), American cultural influence seems unlikely to decline in the near future.

Cultural Synthesis
The United States represents the latest example of a powerful culture derived from diverse origins. Some earlier examples have been: England (the coming of Anglo-Saxon immigrants to a Celtic land, backed up by invasions of Danes and Normans); Spain (the mingling of Romano-Celtic peoples, Germanic Visigoths, Arabs and Berbers with an Islamic culture); Persia (the mingling of Persians, Arabs, Turks and other groups in the early Islamic period. Like English, Farsi, a synthetic language, became an important cultural language); Swahili (the mingling of Bantu Africans, Arabs and Persians to produce another synthetic language, also like English). All these literary languages have a basis of one ancestral tongue overlain by an imported vocabulary from other languages.

The Americans have increased the power of English to become a global language, have synthesized new musical forms from European and African music, have developed film and other mass media to become world-wide cultural influences. American organizations for the economy (corporations) have become the model for all world-wide economic activity (Is this a good thing?). The electronic computer and its associated communications, largely developed in the US, have also transformed the availability of information and therefore the relations between peoples in the world.

There are serious social problems in the US, deriving from the increasing gap between rich and poor, caused mainly by the failure of social solidarity after the wealthier successfully campaigned to have their taxes reduced. Some have described the frequent riots and high murder rate as a low intensity civil war. Although the culture is a synthesis of many groups, lack of solidarity is causing at least some of the elements of a race war. The prevalence of the use of dangerous drugs also suggests a cultural imbalance or weakness (common to most of the western world).

The pooling of sovereignty which has occurred in Europe, because of the need for co-operation to solve modern problems, may also be needed in North America. If a world authority of some kind is needed, the people of the United States are likely to resist its introduction - though so would the Chinese and Japanese and many other groups.

Languages

English

Spanish

numerous European langs.

Amerindian langs.

 Howard Zinn - A People's History of the United States



A People's History of the United States: 1492 to Present (P.S.)


Edward Luce - Time to start thinking: America and the spectre of decline


Time To Start Thinking: America and the Spectre of Decline

Time to Start Thinking

Observer review

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Politics

A federation of 50 states. All government officials at federal, state and county level are elected by First Past the Post system. But most elections have a primary election first to choose the candidates. Thus the system in practice has some similarities with that of France - in practice there are usually two rounds.

In recent years the percentage of people actually voting has been declining and for most elections is less than 50% of registered voters. Registration is voluntary (in most democracies it is compulsory) and many, especially among the poor, don't register (about 80% register). There have been complaints that in some states government, controlled by the Republican Party, has been making it harder to register and vote. Government at all levels therefore tends to be more responsive to the wishes of the better off than to the needs of the poor. This may be the cause of low levels of social provision as compared with European countries of comparable GNP per capita.

There is believed to be a high level of corruption, especially by corporations and interest groups (such as the Israeli lobbies and the oil industry) giving contributions to candidates' election expenses. Elections are extremely expensive so that campaign funds are a major preoccupation of all politicians. Almost no free television or radio publicity is provided. All political advertising on television has to be paid for. The Israeli money is believed to influence government policy because opponents of aid to Israel, even in states with few Jewish voters, may find themselves defeated by money paid to their opponents' election campaigns. (But Banks, Pharmaceutical companies, the Oil Industry, religious groups and many other groups are all in there too.)

Trade unions are not permitted to pay directly to parties. Members of Congress seem to be more at the disposal of their campaign contributors than of their voters. Another form of corruption which leads to a distortion of federal government, is the attempt by congressmen and senators to secure federal expenditure in their own districts. This, Pork Barrel politics, puts them at the disposal of the executive. The president routinely buys votes of congressmen by promising military bases and factories. L.B.Johnson (1962-1970) was an expert at this.

Parties do not represent ideas such as socialism or conservatism because all are dependent on businessmen rather than the voters (though the rather weak Trade Unions have some influence on the Democratic Party).

However in recent years the Republican Party has been dominated by ideologues - believers in Big Business and allied with extreme religious groups.

Only a change in the electoral system might bring about a representation of different ideas. In some states, such as California, there is provision for referendums on government propositions. This makes California similar in some respects to Switzerland.

How far is the United States a democracy?

  • For: almost all public offices, including judges in some states, are filled by election. This means officials have to be responsive to the voters.
  • Against: there are not many voters. It seems clear that many people don't vote because they don't believe voting can make a difference. However, in 1992 54% of eligible voters voted, a rise of 2%. A remedy might be to adopt some European methods of voting by which different interest groups can gain representation.

Some political commentators think the American system, like the British system, is an example of an earlier stage of democracy fossilized and in need of further development.

Other electoral systems

Constitution
This first of the modern constitutions was devised by men who consciously thought about the ideas of political philosophers John Locke and Montesquieu. It is sometimes compared to Isaac Newton's view of the universe as a kind of machine: each part of the government was designed to check the other parts, mainly to prevent strong authoritarian rule of the kind they had fought against. Perhaps too, it was the culmination of the English Civil War, and a repudiation of the ideas of Thomas Hobbes.

The Executive is headed by a President, elected by an electoral college, which is itself elected by popular vote in each state and territory. This means that a president can be elected with a majority of electoral college votes but a minority of popular votes. Each state has a vote equal to the number of congressmen and senators. If 51% vote for a candidate, all the electoral votes go that way (except in certain states). There is a weakness of the system in that it is difficult to replace a president. Elections are held to an invariable four year cycle. If a president dies during office or resigns he is replaced by his vice president. But the vice presidential candidate is chosen before the election by the president and although he may be unsuitable people have to vote for both candidates as a block. (Gerald Ford was chosen by Richard Nixon - and confirmed by the Senate - after Spiro Agnew resigned on being found out not paying his taxes). No further election takes place to confirm him if he succeeds to the presidency.

Some historians suggest that it is a modification of the 18th century British monarchy. Thus it lacks the flexibility of a Parliamentary and Prime Ministerial system, as found in Canada and most former British countries, which evolved after American independence. Some critics indicate that the skills and qualities necessary to gain election are not those which produce effective leadership. The quality of presidents since the second world war has perhaps been declining. The very popular president Reagan (1981-1989) was a subject of jokes outside the US for his ignorance, corruption and laziness - even more so George W Bush, spectacularly incompetent and ignorant. As with the later Khalifs of Baghdad the actual power was exercised by subordinates not subject to public control.

The actual power of the President is limited by the Congress (House of Representatives and Senate).

The writers of the constitution intended to balance the two powers, mainly to prevent strong or dictatorial government. They succeeded, though presidents with strong leadership ability can make the system work well. Most presidents have been weak.

The House of Representatives is elected every two years; Senators serve for six years and a third of them stand for election every two years. Senators have been elected directly only since 1913. Before that they were elected by State assemblies.

Senate and House can be in conflict which leads to legislative paralysis.

Each state has its own government, a smaller version of the Federal government, with an elected Governor, balanced by an assembly and sometimes a State Senate. Some states have a Recall procedure, by which a governor can be made to resign after a Referendum. This was used in California in 2003.

Following the doctrines of Montesquieu, the French political philosopher, the writers of the constitution set up a Supreme Court as a third branch of government. In theory this was to be filled by the best lawyers who would judge the actions of government against the constitution. In practice the judges are political appointees and the court is a third assembly, similar to the British House of Lords - though there are only nine Justices. Like British Life Peers they are appointed for life and therefore have a certain freedom of action and don't always follow the dictates of their nominator - the late Chief Justice Earl Warren, appointed by Eisenhower is the most notable example. The Supreme Court Justices are nominated by the president but must be approved by the Senate. Occasionally the Senate refuses approval, especially if controlled by the other party.

Thomas Jefferson believed the constitution should be a provisional arrangement open to rewriting every generation or so. Instead it has become a sacred document. This may be wise as it is difficult to imagine a modern constituent assembly under the influence of the low standard of modern political language which could write a new one in understandable language - it might turn out like the Maastricht Treaty (which set up the European Union). But it may well be that the Constitution does not represent the modern realities of a nation more than ten times the size of the original.

At first the presidential electors and Senators were chosen by the state governments rather than by all the people. This may have made it possible for presidents of real ability to be elected - but in practice few of the early ones were outstanding, after the Founding Fathers: Washington, Jefferson and Adams.

The reason for the electoral college was originally the vast size of the country - bigger already in 1789 than any European state and the slow communications of the time. Possibly also there was the distrust the writers of the Constitution had for democracy. They envisaged a government composed of country gentlemen, as in Britain. Could the Electoral College be abolished? Those against abolition argue that the EC allows more influence to small states in presidential elections, but results like that of 2000 cause criticism.

The real government?
Does the constitutional government represent the real government? A disquieting example suggests that some decisions can be made in opposition to the legal government. During the 1980s Congress passed a law to prevent the President, Reagan at the time, from assisting the "Contra" guerrillas in Nicaragua. By law no public money was to be spent on weapons for them. But it was revealed that several of the staff of the National Security Council had been assisting the Contras with money derived from the sale of arms to Iran (also against the law). It is strongly suspected, though not proved in court, that the President, Vice President and head of the CIA knew about these activities and indeed ordered them. The Vice President became President in 1989. The head of the CIA seems to have carried the secret to the grave. At the time few commentators thought that President Reagan knew much about what was going on; he was a ceremonial rather than active president.

Hoover Period
It can also happen that unelected officials, such as the late J. Edgar Hoover, can exert great power over a part of the system similar to that of dictators in 1930s Europe. Hoover exerted the arbitrary power of a secret police chief through blackmail and illegal methods. He created many of the aspects of totalitarianism - fear of unconformity, arbitrary arrest, limitations of free speech - that Americans were criticizing in the Soviet Union. Although this never became as complete as in the Communist states many people were prevented from earning a living because of their alleged political views.

Recent revelations suggest that Hoover himself was influenced by the Mafia, and did not use the evidence he had on the organized crime syndicates, and even denied their existence because of the damaging information their leaders had against him.

Weak Presidents
It often happens that when the holders of an office become incompetent, as the Khalifs of Baghdad did after Haroun al Rashid, another official comes to hold the real power. In Baghdad it was the Chief Wazir, and later the commander of the armies, the Sultan. During the time of president Reagan it is not clear who had the real power. If there were a series of such presidents either a Prime Minister would emerge or the government would become incompetent and the state might break up. This is an argument either for electing competent presidents, or for setting up a formal Prime Minister to act as Head of Government. As it is, the post of Prime Minister may already be evolving in the position of Chief of Staff. This officer supervises the President's private office. As he has no existence in the constitution he has only an informal status. He does not have to be approved by the Senate. When, as after the 1994 congressional elections, President and Congress are of different parties, the Speaker of the House and the Senate Majority leader have important power to prevent the President passing legislation. In the recent George W Bush regime (2000-2008) the Vice President Richard Cheney was believed to conduct the day to day government while the president conducted ceremonial duties.

Campaign Funds
A further influence on elected officials is the need to raise money for elections. Presumably they are influenced by the corporations and wealthy individuals who provide this money. Foreign interests may also be influential here.

1992 Election
The 1992 election had three main candidates for the presidency, Bill Clinton, George H.W.Bush and H. Ross Perot. The last was an independent who spent large sums of his personal fortune, probably out of dislike of Bush to prevent him winning. Many other minor candidates also ran, including Socialists, Cultists and unserious candidates. Bush was a WASP (White Anglo Saxon Protestant) aristocrat, descendant of the original British ruling group; Clinton, educated in the same milieu (and also at Oxford, England) but from a poorer family. The change of party did not necessarily represent an ideological change, though Clinton was less inclined to give tax concessions to the wealthy, as the Reagan-Bush team are accused of doing for the previous 12 years. Roosevelt practiced Keynesian economics and contrasted with the do-nothing policies of his predecessor, Herbert Hoover, whom many compare with the recent (2006) Bush regime. Following the 1994 elections Clinton was paralyzed by the need to cohabit with the other party. As in Britain there is a question of whether any policies of government can reverse the decline represented by the fiscal and trade deficits. At present it seems that Conservatives (Republicans and Tories) are sceptical that government can be effective. Democrat and Labor parties tend to believe government action can be effective, if allied to interventionist economic policies. Can even an American government be effective in a major world economic change whereby industry is migrating to southeast Asia and China? That is, can even the US government exercise sovereignty?

What is the significance of the Armed "Militia" and other neo-fascist groups?
Are they a sign of the economic decline felt by working class Americans?

The result of the 2000 presidential elections was disputed, caused by the ambiguity of the voting process in the state of Florida. The candidate with the largest popular vote in the country as a whole - Al Gore - did not receive a majority of the votes in the Electoral College and the "winner" was in fact appointed by a single casting vote in the Supreme Court when that court ordered counting in Florida to stop - though subsequent examination of the votes there showed that Gore had won by a small margin. The 2004 election has also been disputed though the apparent result gave both the popular vote and the electoral vote to the incumbent G W Bush. There have been questions about the honesty of the electronic voting machines used - especially in Ohio - with claims that the result could be altered by software experts, without leaving an audit trail. This suggests that the real winner of that election was John Kerry.

The last president George W Bush was the son of a previous president. Does that mean the United States is a concealed Monarchy, being ruled by a Dynasty?

In the elections for Congress in 2006 the Democratic Party supporters gained a majority in both houses, thus potentially paralyzing the President's ability to pursue his policies.

As G.W.Bush seemed completely incompetent it is widely believed that the real power was exercised by his Vice President Richard Cheney.

In November 2008 Barack Hussein Obama was elected president by a large majority of votes with a program of "change". He took office in January 2009. In 2010 he lost control of the House of Representatives, suggesting a period of government paralysis.

Timothy Garton Ash on bad government.

Is the 1789 constitution still suitable for modern conditions? Would a Canadian system work better, and represent people more effectively? How could a new constitution be developed? 18th century Poland collapsed because of an inadequate constitution that made it impossible for the elected king to achieve anything, because every "nobleman" had a veto. The debt crisis of 2011 suggests something similar is developing in the US.

Does the current political system represent the needs of ordinary people? Currently there is an apparently large and influential group of rightwing irrational people (Tea Party), who on closer inspection are funded by billionaires desirous mainly of not being required to pay tax. This is uncomfortably reminiscent of the situation in 1930s Germany where an apparently populist party came to power, actually funded by big business. The Tea Party people seem to be calling for less welfare, contrary to their own interests. Especially they seem to be against public Healthcare, found in almost every other modern western country. Its absence makes having a job essential, and being subservient to the employer, because health care is mostly funded by the employers. This would seem to be a reversion to serfdom as found in the feudal period.

Ron Suskind - Confidence men

Confidence Men: Wall Street, Washington, and the Education of a President
Why did President Obama fail to carry out his mandate on being elected? This book has thrown light on the behavior of his advisors.
Review New York Review of books
Laurence Lessig - Republic Lost



E J Dionne - Our Divided Political heart


Our Divided Political Heart: The Battle for the American Idea in an Age of Discontent

Ibn Khaldun observed that "Group Feeling" was the strength of a state. Is the United States losing this sense of Solidarity?

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Economics

Still, just, the world's leading economy, it is too large and complex to summarize here.

Consult the Financial Press.

However, there is the question of what is the real nature of the US economy, as its manufacturing (and jobs) migrate to low wage areas of the world (also poorly regulated areas, for safety and environmental damage), leaving behind unemployment and ruined cities (such as Detroit). Also its chronic trade and fiscal deficits are paid for by borrowing from foreigners.

The US is claimed by many to be a Capitalist society, but its real nature was revealed during the 2008 financial collapse (still going on in 2011) to be a Finance economy, only casually linked to manufacturing and devoted, like the British East India Company, to accumulating finance, often dishonestly. The antidote for this de-industrialisation would be cooperatively owned businesses which would not send the results of economic activities to the banking system

Can it remain permanently a consuming society without manufacturing its own needs? What would be its real relation with the mainly Chinese manufacturing base, and its creditors (the people and institutions which have lent the money by buying government bonds)? What would happen if the oil producers switch to euros to determine the price of oil (and the resulting debts have to be held in euros)?

Apparently the US military are planning a Long War against Islamic forces. This could reduce the US to an impoverished debtor nation with the end of its current hegemony.

The crash of 2007 will surely affect the whole economy. Will it be as bad as 1929? During 2007 it was revealed that many of the largest banks had lent money for housing to people who could not possibly repay. Apparently they believed the price of houses would continue to rise sufficient to repay the loans - the classic mistake of financial bubbles observed as far back as the Tulip Bubble of the 17th century and the South Sea Bubble. The banks lost so much money that they had to sell themselves to such investors as Middle Eastern oil states, Singapore and the Chinese. Is this an Ibn Khaldun moment, when the control of a society passes to outsiders? Running a current account trading deficit for decades inevitably means being owned by the creditors.

In 2008 it became clear that reliance on imported oil was a fundamental weakness of the economy. As prices rose, possibly a sign of the arrival of peak oil, the whole economy threatens to go into deep recession, or indeed Depression. The main symptom of this is the collapse of the housing market and the huge amount of "negative equity" - people unable to repay what they owe while the value of their house has plunged.

By September 2008 this resulted in the failure of several large investment banks and the socialization of the mortgages they had issued (the government took over the main insurer AIG). Is this the beginning of the reversal of the policy of "deregulation" introduced by the Reagan government? Is it indeed the end of the US as the world's Hyperpower? At root much of the money being used to nationalize the banks is from China and the Oil producers. Surely, the lenders will demand some say over how the money is used. As an example they may be unhappy about financing the wars the Bush regime started, and the financing of Israel.

Although the recent downgrading of the US credit rating indicates a possible default on debts in the future, the government does not tackle the gross imbalance between tax take and spending. Nobody is willing apparently to reduce military expenditure which is the main cause of the fiscal deficit. Clearly in reality the government cannot afford the wars and worldwide military base system. It seems to be impossible to raise taxes on the wealthy which would help to stop the rise in the fiscal debt.

Canadian view of the US economy

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How bad is the US economy? For example, is it as bankrupt as Max Keiser thinks? Does it face really fundamental problems that cannot be repaired with the existing institutions? Ordinary Americans need lots of jobs. Are the financial institutions likely to provide them?

Perhaps the best cure would be businesses owned by the people who work in them, by-passing the parasitical financial institutions ("Wall Street"). The model to follow then would be the various types of Cooperatives. There are already a number of successful cooperative businesses within the United States, just as there are in other countries. For example in Britain there is the John Lewis Partnership which is much less damaging to society than certain large low paying supermarket chains (my lawyer requires me to say) and the profits go to the employee-owners. In Spain there is the Mondragon group, a large business that includes retail and manufacturing businesses.

Max Keiser thinks the major banks are bankrupt because of their dubiously legal practices. Why not have mutually owned local banks that don't do business with Wall Street? The British cooperative movement emerged from the Methodist Church, which passed on moral standards to the Trade Unions, Building Societies and Cooperatives. New cooperative businesses need to relearn these morals, which the big banks seem to have abandoned.

Jeff Madrick - Age of Greed
The triumph of finance and the decline of America



Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present

Review New York Review of books

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Green/Ecology

The world's largest user and importer of energy and most other raw materials. Also the largest producer of waste products including, Carbon dioxide (warming gas), sulfur dioxide and nitrogen oxides (acid rain) and radioactive substances. The US produces about 23% of the world's Carbon Dioxide but has only 5% of the world's population.

Energy is cheaper than in most other countries because it is taxed at a very low rate which means there are few incentives to use it sparingly. But also in some states such as California, the US has some of the world's most advanced renewable energy programs, including wind power and co-generation of electricity and heat from gas. The US is also a pioneer in many cities of recycling of waste products. The problems are bad but there is great awareness among people, other than politicians and big business, of the need to change.

But there are large financial interests, such as the oil companies and logging companies, who resist change with advertising campaigns during elections.

At international conferences the US government has consistently opposed world policies which would reduce outputs of polluting gases in the general world environment, and even locally towards Canada.

This is mainly from the prevailing Free Market dogma - a belief that it is wrong to plan ahead or for government to affect economics. However, many have noted that the first President Bush made his money from oil and that he was always sympathetic to the oil industry which contributed to his campaign funds. In order to influence the world to produce a program to combat the ecological crisis it is necessary that the United States change its policy.

Some hoped that the Clinton-Gore administration (from January 1993-Jan 2001) might have changed some of these policies. Gore wrote an influential book on the need for environmental policies. By February 1994 there were few policy changes of substance and from November 1994 the Republican-dominated Congress was trying to reverse environmental policies in the interest of big business - who paid their campaign expenses. The appointment of the recent Republican president reversed almost all environmental policies, and the US has continued to increase its output of warming gases. Bush professed not to believe Climate Change is occurring - in the face of the scientific evidence. The political consequences of this may be serious as other countries try to reduce their output of gases.

The US of course will be affected by the changes already occurring and foreseeable. Sea level rise will flood several major cities as well as much of Florida. The increased frequency of major hurricanes may make it uneconomic to settle the Gulf Coastal areas, including New Orleans (partially destroyed in 2005 by hurricane Katrina). Other effects may well be a drying up of the major corn (maize) and wheat producing areas.

The Bush government's efforts to encourage alcohol production from grain may lead to food deficit in the world as a whole and thus cause famines.

The Obama government has not yet (June 2010) revealed its policy on climate change and in any case may not be able to persuade Congress to pass any legislation. By December 2011 he still has no effective policy and many of the candidates for the Republican nomination apparently donŐt believe climate change is occurring.

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Human Rights

The United States pioneered civil rights in its reaction to the British system applied to them before the revolution. However, the constitutional rights of Americans to Free Speech and lack of censorship are often under threat by private groups who fear the actual exercise of this right. The 1950s period of Senator Joe McCarthy's anti-communist campaign paradoxically produced the same totalitarian atmosphere as in actual dictatorships. (There were in fact hardly any communists in the country - estimated 43,000 out of 150 million - and their influence was negligible. Arthur Miller, the playwright, compared it in his play The Crucible to the witch hysteria in 17th century Salem, New England).

Political Correctness language campaigns may be currently having a related effect on academic freedom and free speech. Free speech actually means others having the right to use language and express views the hearer doesn't agree with. The same freedom of speech allows those who disagree to express their opposition in words.

Free Press?
Another restraint on free speech is the fact that few newspapers have local competitors and that advertisers in the press and on television have an overwhelming influence. The non-commercial channels have a very small place in the media - (Public Broadcast System is much smaller than the BBC, and probably less independent). The concentration of power in the media has the effect of limiting the acceptable topics of discussion.

Historically the rights in the constitution were denied to slaves and then to their free black descendants. It is now the poor in general who find it difficult to assert rights.

There is a large and prosperous body of lawyers and a busy court system. Does the system produce justice? The high numbers of people in prison (1.5 million = 426 per 100,000) is comparable to Britain's. There is frequent use of the death penalty on a scale greater than in any other industrialized country - including juveniles, the mentally retarded and the insane. Police brutality is frequently reported and may be a sign of a society under great strain. Widespread ownership and use of guns creates a climate of insecurity. Does it amount to a low level civil war of the poor against the better off? Is there perhaps a relation between low taxes and a high rate of crime?

Since the events in New York and Washington on 11 September 2001 (the destruction of two large office buildings and part of the Pentagon by a terrorist group) there have been disquieting changes in policies, as some suspects have been held without charge or access to lawyers, and there have been calls by government officials for surveillance of internet and other electronic communications. These seem to be contrary to various clauses of the Constitution and make the observer think the constitution is not as effective a defense of human rights as people thought.

Some of the detainees at the Guantanamo prison camps have now (November 2003) been granted the right to petition the Supreme Court which may rule that they are covered by the US legal system. (However, in December 2005 this right was removed by a resolution in Congress.)

The so-called PATRIOT Act removes many rights that had previously seemed to be guaranteed by the Constitution.

The US reputation for civil rights has been damaged by reports (and pictures) of torture in Iraqi prisons in Baghdad administered by the US military, and in a network of prisons and holding camps all over the world administered by the CIA, with transfer by extraordinary rendition. The people who run these camps, probably authorized by such people as the former Defense Secretary Donald Rumsfeld, appear to have no respect for human rights, claiming necessity in the "War against Terror".

The policy of teaching torture techniques in the School of the Americas to the military and police of Latin America indicates that the human rights of non-Americans have not been considered important for at least the past 60 years.

Amnesty International says 2010 executions were 46.

Climate effects

All regions of the US are going to be affected by climate change. The Gulf coast is likely to become uninhabitable - or at least uninsurable - as hurricanes increase in intensity from the rise in temperature of the Caribbean. There is a danger the grain growing areas may become more arid, with implications for the whole planet as US food exports decline - something likely in 2012.

Rise in sea level would affect several coastal cities including New York, Washington, Boston, San Francisco.

There is also the danger of more frequent flooding in some areas.

Much of the South West is likely to become uninhabitable as the whole region becomes more arid, a similar process to the northward move of the Sahara into southern Europe and the southerly movement of the Australian deserts into the inhabited areas.

Last revised22/07/12


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