October 25, 2007

American Theocracy

As if "Takeover" wasn't discouraging enough, I've been reading Kevin Phillips's book American Theocracy.

He's organized it into three parts.

Part one is about oil and the battle for control over this diminishing resource. Most politically aware people recognize this issue.

Part two is about the willing absorption of the religious right by the Republican party. Apart from some historical perspective, most people are equally aware of this issue.

Part three is the part that gets little attention in the public eye, because it becomes mind-numbing so quickly. It's about economics, debt, and the collapse of empires when they move from making and exporting goods to shuffling financial assets around. Many people who live in parts of the country where manufacturing was once the source of good jobs and is no longer are aware of this. Many of the rest of us, however, are apparently not. It's for the rest of us that this section is written, and it's scary. He indicts both parties, but particularly the Republicans, and particularly those Republicans who've been in charge for the past six-plus years. During that time America's national debt has ballooned, the financial industry (FIRE, he calls it; an acronym for finance, insurance and real estate) has become the largest sector of our Gross Domestic Product, and consumer debt has put the average citizen in thrall to lenders to a greater extent than ever in American history. Meanwhile, our government has lied about our fiscal situation, reduced tax rates for the people who can most afford to pay, and has fought battles to reduce taxes on financial asset income (dividends and capital gains) while watching as its citizens unlucky enough not to have those items have begun to carry larger and larger debt through credit card and home-equity loans. Then, when some of those citizens have found themselves unable to keep up with their payments, our government has changed bankruptcy laws to protect the income its friends in the financial sector feel they should earn.

It's not a pretty picture, and as Phillips lays it out, it's going to take a long time to recover, if we can. He doesn't think we'll be able to, and he cites as examples Spain in the 17th century, the Dutch in the 18th, and the British in the 20th.

Posted by Linkmeister at October 25, 2007 12:01 AM | TrackBack

So, that's what it feels like to live thru a collapsing civilization, when the collapse is slow enough that you don't notice it. What's that about a frog letting itself be boiled alive if the water's temperature increases slowly enough?

Posted by: Serge at October 25, 2007 04:09 AM

Exactly right, although surprisingly Phillips doesn't use that analogy anywhere I noticed.

It's an extraordinarily readable book, too; he's got a knack for writing about economics in ways that don't fog.

Posted by: Linkmeister at October 25, 2007 07:52 AM