By Tom Kando
Here is a disturbing film on You Tube, "The Inevitable Collapse of the Dollar". It starts with a parable: 6 or 7 people are stranded on an island. They are all Asian, except for one American. So they divide up the chores - one Asian is in charge of fishing, another one hunting, another one gathers firewood, etc. The American's job is to eat.
Haha. Funny and mean, but true? Well, true enough to disturb me, but false enough to disturb me even more:
The parable is a preface to the film's main point, namely that America's economic conduct is unsustainable, and that the collapse of the dollar and economic ruin are imminent, because of the well-known reasons that we have been over-consuming, over-borrowing , and under-producing for decades.
I have been writing about this for years. I was warning against our trade deficit during the 1990s. And I remind you: this problem is distinct from the government deficit, upon which Republicans focus blindly and maliciously, telling us that it is government spending which is at the root of our problem. That is a falsehood. The real problem is that American society as a whole - you and me - have been overspending, buying too many goods and borrowing too much money from China and buying too much oil from Saudi Arabia.
But ultimately, the film is false.
1. First of all, things move slowly, at the macro level. The Titanic couldn't turn away from the iceberg in an hour. The US economy may be in decline and there may be a permanent economic realignment in the world, but these things happen in historical time, not personal time. If there is a collapse of the dollar, it is a slow process. It happens during the 20th and 21st centuries, not all of a sudden on March 17, 2018.
In a way, the dollar is not going to collapse. It has been collapsing for half a century: When I was a teenager, the dollar was worth 4 times more than European money - the Deutsche Mark, the Dutch Guilder, the Swiss Franc, the French Franc, etc. Today, it is worth 65% of Europe's currency, the Euro, and less than the Swiss Franc. And we're still doing okay, aren't we?
It may well be that in 20 years from now the the dollar will be worth 25% of the Euro. But this is not collapse, it is gradual readjustment.
2. The film was made in 2007. Four years later, the dollar is not significantly weaker.
3. There are those who say that a lower dollar helps us by making our exports cheaper. I'm not sure I agree with this line of reasoning, but it's there.
4. America's trade imbalance with the rest of the world is a problem, but it is not insurmountable. Already, the world recession has forced Americans to tighten their belt. Furthermore, our trade shortfall has been shrinking.
We export $1.3 trillion worth of goods and services annually. That is the third highest amount of any country - behind China and Germany. Is this how a lazy and unproductive parasite behaves? Our only problem is: we import even more: nearly $2 trillion.
But as I said, America's trade imbalance has been improving: In April 2011, our trade deficit narrowed to less than $44 billion. (see: List_of_countries_by_imports)
5. Many other countries also have trade deficits. And many have larger government deficits than we do. For example, Japan's government deficit is over 200% of its GDP.
6. But what I find most cynical in this Dutch film is the insinuation that America is the world's parasite. In fact the work ethic is stronger in the US than it is practically anywhere else, with the exception of some parts of Asia. It is certainly stronger than in Europe, where people go ballistic when they are asked to work 40 hours a week. Nothing is more important to an American than his job. He works as much for the love of work as for money. When he retires, he volunteers for no pay.
7. Are the Americans the parasitic eaters on that fictitious island, or the Europeans? The only reason that Europeans were able to get a free ride in their BMWs for the past 60 years was because America has shed so much blood and treasure as the world's policeman.
In general, the Dutch, the Germans and many others live cushier lives than most Americans. The US's vast pockets of poverty - the ghettoes and central cities of the rust belt, rural Appalachia, Indian reservations - have few equals in Western Europe.
Of course there are parasites in America - a plutocracy which has stolen an ever larger share of the country's wealth. But these thieves should not be confused with the hard-working and struggling American people. The American people are no more the parasites on that island than are the Western Europeans. If anything, it is the opposite.
So is the dollar collapsing? Granted, it has weakened a great deal over the years. But America's economic woes are not irreversible, nor are they worse than those of the rest of the Western World. leave comment here
15 comments:
I am mystified by your assertion that the US has made such enormous sacirifices for Europe. What sacirifices are you referring to? The 100.000 or so US soldiers that got killed in the years 1942-1945? Surely you could not be referring to the Marshall plan, since that was primarily a scheme to help US business establish a strnaglehold on Europa and impose US ways of doing business. These are so destructive that the entire environment is being turned into a toxic wasteland. Moreover everuthing the nazis stood for is now standard US policy. So what are you referring to?
Sorry for the regrettable typos in my earlier comment. By the way I suggest you read the superb blog by Jean Philippe Immarigeon, 'americanparano': quite sobering for those suffering from 'americanolatry'.
My reaction to Hans’ contempt for the U.S. reminds me of the Michael Caine line in the movie “Goldmember” : “There are two kinds of people I can't stand – those who are intolerant of other cultures and…the Dutch.”
Some posts bring out more negativity. That's unavoidable, and acceptable, up to a point.
I largely disagree with Vogel, whose facts are also questionable. America lost closer to half a million men in World War Two, not 100,000. While this is proportionally less than the death rates of most other belligerent states, it was nevertheless a huge sacrifice, especially for a country which was largely peaceful, isolationist, and far less responsible for the war than were either Europe or Japan.
Was the Marshall Plan selfish? Perhaps motivated by enlightened self-interest. But it is America which helped the world back on its feet. If you insist on calling this imperialism, it’s altruistic imperialism, not selfishness. To deny this is a gross distortion of history.
Nazi policies in the US today? To equate the rightward drift and the Tea Party with the Nazis is gross hyperbole. The current “fascistoid” tendencies in the US (if you want to call them that) are arguably about as strong as the ones in Europe (Geert Wilders, Marine Le Pen, etc.). But it is absurd to claim that either Europe or America are now in any way comparable to Hitler’s Germany or Mussolini’s Italy.
I suffer neither from Americanparano or Americanolatry, but there are extremists on both sides who do.
Finally, anonymous’s reply to Vogel: It’s best not to stereotype an entire nationality on the basis of one of its member.
But since we are at it, I will venture a stereotype of the Dutch: All in all, a valiant, highly civilized and gifted society which has achieved far more throughout history than would be expected from such a relatively small nation. All cultures possess certain aggravating features (Except the French - joke), but on balance, the Dutch are a superb people and a superb civilization.
According to Norman Davies' survey of WW II, over 90% of the man hours spent in fighting in Europe in 1939-1945 was used up on the Eastern front, that is by Germans and Soviet soldiers, basically. Only a couple of percentage points was used up by the US, British, Poles, French, Italians, Romanians, Finns, Belgians and what have you. On the basis of sheer numbers it is safe to say that Europe was 'liberated' from the nazis by the Red Army.
The US spent most of its energy fighting the war against Japan. That was an imperialist war, whose origins are definitely not the ones usually presented to the US public.
The US people was indeed pacifist and did not want a war, certainly not in Europe. Roosevelt did want war, and so did Churchill, who turned down at least half a dozen German peace offers.
I object strongly to the woefully lopsided view of WWII and the US role during and after it, because it does not take into account loads of solid and relevant archival evidence and hard data.
There is no such thing as an altruistic imperialism. Imperialism, yes. Altruism can be found in this world, but definitely not in international politics. It is sheer self-delusion on the part of the US to brand its style of domination as altruist. Who in his right mind would call the killing of civilians (albeit 'by accident' or as 'collateral damage') in Iraq, Afghanistan, Libya, Yemen or God knows where else 'altruist?'
Self-interest, greed, lust for power, those are the building blocks of imperialism. The US is no different than other nations in history trying to extend their influence and build an empire. It is not a shining city upon a hill. There never was such a thing nor is there likely to ever be one.
Here we go again:
someone getting carried away.
I publish a piece mildly sympathetic to America, and pretty soon we are discussing the totality of 20th century world history.
Vogel puts words in my mouth. Did I even mention Iraq, Afghanistan, Yemen, etc? Did I say that bombing Libya (largely a European affair) was altruistic? Did I say that the US is a shining city on the hill?
I wrote that the film/parable depicting the American as the world’s parasite is a cheap shot, and I reminded people that the Europeans are eating quite well, too, thank you.
But how can I take Vogel seriously? The allies should have accepted Hitler’s peace overtures? Stalin was a liberator? I wonder if 6 million Jews and 140 million Hungarians-Poles-Czechs,etc. would agree.
Vogel gets an A- for pretty good English, but a D for content.
And speaking of Nazis and imperialism, let's not forget the 7,000 Dutch who joined the Waffen SS in WWII, or the accusations of attrocities commited by the Dutch in Indonesia during the revolutionary war of 1946-1949.
@Tom
No, I did not really put words in your mouth. I was struck by this passage in your post: 'The only reason that Europeans were able to get a free ride in their BMWs for the past 60 years was because America has shed so much blood and treasure as the world's policeman.'
In my view, this assertion reflects the standard deviation in US opinion where Europe and the US's rôle in world affairs is concerned.
By using terms like 'policeman' and by suggesting the US liberated Europe, you are reinforcing an inaccurate version of history that does not take into account what really happened.
The unpleasant fact is that the USSR ('Stalin') was the true liberator of Europe, but of course it is a fact hard to sell. After all, here we have one evil dictator defeating another evil dictator, right? Thus the made up story of democracy defeating dictatorship.
And, please, do not introduce the 6 million disappeared Jews. Although the number is official and is protected by law in many places, that does not mean it is an accurate one.
As for the 140 million Eastern Europeans, many of them now wish the wall had not come down, because the blessings of neoliberal capitalism have turned out to be dubious to say the least.
By the way, many thanks for my grade!
Hans:
I saw your website, and some of your writing. What can I say? Your credentials seem impressive enough. History prof and all that.
In addition to your Holocaust and World War Two revisionism, you also write on your blog that the US is not part of the West, because in America, unlike in Europe, one is considered guilty from the moment one is accused. Your examples are Dominique Strauss-Kahn and Guantanamo:
This, too, is very wrong. While there is plenty of miscarriage of justice in America, the bedrock PRINCIPLE of being innocent until proven guilty is embedded in the US Constitution and the Bill of Rights, more than anywhere else. Miscarriage of justice occurs everywhere, including Europe. If America is not part of the West, I don’t know which country is. No society is perfect. I have never claimed that the US tops the world in human rights and civil rights, but by any empirical standard, it remains one of the 10 or 20 “best” countries in that regard, i.e. solidly entrenched in the Western World.
Look: I believe certain things. For example, that the Earth is a sphere; that Darwinian evolution theory is right, and creationism is wrong; that there is man-made climate change going on; that men have walked on the moon, etc.
Similarly, I believe that about 6 million Jews were exterminated by the Nazis; that World War Two was won by the allies, and that the American contribution was as significant as that of the Russians, who lost many more people, but who would have lost the war without American military support, etc.
I can’t prove all these things. But in my view, many of the things you believe in (E.g. Holocaust Revisionism, World War Two revisionism, pandemic American injustice) are in the same category as belief in creationism, or that the Moon landings were a hoax.
But I feel that I am re-inventing the wheel, arguing the obvious. There is no point in this debate. In my view, you have lost your way.
@Tom
I believe in intellectually honest, sincere archival research. Even a cursory look at original documents will give one an understanding of history that is at odds with any official version.
I refuse to take at face value what we are told, compelled or supposed to believe. If you would share this basic attitude, you would understand what I write.
To flatly categorize another point of view as 'revisionist' does not, I believe, reflect a true academic attitude.
Dear Hans,
I didn't mean to use the word "revisionist" in a disparaging way. I am sure that "revisions" are often called for in history, namely whenever new evidence is uncovered. So I am not opposed to "revisions" and "revisionism" PER SE.
I have all sorts of other problems with your views, but let's just not rehash things again.
I do want to thank you for remaining civil and coherent throughout our exchange, something which I can't say about all our commentators.
As I look at the conditions in the U.S., I would not rule out a collapse of the dollar that is much greater than what you project. Is there a reason the U.S. dollar could not collapse like the Russian ruble did in 1991 going from over $4 per ruble to over 400 rubles per dollar, and then the creation of a new ruble? I see many of the same factors at work; lack of budget control, ballooning welfare payments, a nomenklatura in control of policy, etc.
As to Americans as parasites, I believe the answer is still no to a majority of Americans being parasites, but there are more of them than used to be. In 2007, over 50% of Americans were receiving some type of government check. I think that is a good sign of parasitism, and the rate in Europe might be pretty high as well.
As a country, I agree that the Marshall plan was quite selfless, as U.S. had contracts bid out to German companies. It was quite different in Iraq, where contracts were just handed to Haliburton and there was not such a serious concern to build up Iraq's infrastructure. Of course, Germany had an industrious culture, but I think the U.S., as a whole, was rather self-sacrificial.
I agree with just about everything Gordon says.
Just one thing: when we speak of parasites, we can focus on the people on the dole, or on the billionaires on top. I suppose too many people on the dole is a problem, and yes, there are probably more of those in Europe than in the US, since Europe is still a more generous welfare state. And then, what does the "dole" include, precisely? I retired at 67, after 42 years of full-time teaching and many years of assorted other jobs. Am I now on the dole because I receive a modest pension?
So the question is, who is the greatest parasite - a lower-class welfare family that lives on $450 of public assistance per month, or a multi-billionaire whose wealth is often inherited?
Well, I have read your comments and this discussion hit me like a lightening rod. I think that we could be on the brink of an economic collapse and seriously, a war could erupt. It is just a matter of time before Americans start having to move perhaps to other countries to make a living. We cant keep up and our dollar is not as strong. Other countries will see opportunity here in America to seek land and other ownership and they should as we have competed; however, I think that we are going to have to deal with the mess of owing more than we have to pay;I now think hard before I buy things because I have a mom and unemployed family member to support-Could we be at the end of this great nations history of being a superpower? Every country has taken a beating and it could be our turn-I just hope that we have learned from the past atrocities and wars but I am afraid to say that history does repeat itself. I hope that I dont sound too pessimistic-Social revolutions are taking place all around us and the US is no exception. The dollar is collapsing and big business has to find new capital to feed on and we the parasites may be running out of food-This country is in a hot mess-I could see the possibility of war and this hurts because it goes without saying that its all about the paper. Money rules. Yes its all about the paper.
This is a challenging blog-
Gail
Hi Gail,
thanks for your worried comment. You may be right that there are looming problems. But hey, when were there not?
The question is always whether the glass is half full or half empty.
How I answer this question on any given day depends on my mood. Right now, I see it as half full. Let's see what happens. Maybe we'll muddle through, as we have done so often in the past.
Bye
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