The Limits of Power (Part 3)

Today another President wants to "give" Americans both guns and butter as LBJ did over 40 years ago. President Obama wants to re-form America while fighting two foreign wars. The financial system is collapsing, and yet many Americans still haven't looked behind the curtain, many still believe the magic of something for nothing.

Ironically Moyers, who was a part of LBJ's administration, still doesn't get it: he still believes the magic. Now a journalist, Moyers still believes the federal government can re-form society. In an August 28, 2009 interview on HBO's "Real Time With Bill Maher", Moyers said he wants the Obama administration to battle Rs for healthcare "reform":

"I think if Obama fought, instead of finessed so much, he stood up and declared for what is really the right thing to do and what is really needed instead of negotiating the corners away, instead of talking about bending the curve, and talking about actuarial rates, if he were to stand up and say, 'We need this because we're a decent country', I think it would change the atmosphere."

Moyers misleads in a manner common to "Great Society" advocates: they ignore the reality of scarce resources and pretend the government really has magical powers. Economist Thomas Sowell warns against this in his book, Basic Economics: A Citizen's Guide to the Economy:

"Too often a false contrast is made between the impersonal marketplace and the compassionate policies of various government programs. But both systems face the same scarcity of resources and both systems make choices within the constraints of that scarcity. The difference is that one system involves each individual making choices for himself or herself, while the other system involves a smaller number of people making choices for others."[1]

Finding the Right Metaphor: Uncle Sam as the Candy Man

Moyers hasn't learned from his past nor has he applied the lessons of the "limits of power" to the current situation as he encourages Obama to be profligate with other people's money. Ever the press secretary, Moyers believes Obama has to "find the right metaphor" to sell Americans on another government encroachment into healthcare:

"He didn't find the right metaphors ... and he didn't speak in simple powerful moral language."

Moyers was "intrigued" by Bacevich's metaphor of the federal government engaging in a "de facto Ponzi scheme," but not enough to convince himself that more meddling in healthcare by the federal government is doomed to failure:

BILL MOYERS: And you use this metaphor that is intriguing. American policy makers, quote, "have been engaged in a de facto Ponzi scheme, intended to extend indefinitely, the American line of credit." What's going on that resembles a Ponzi scheme?

ANDREW BACEVICH: This continuing tendency to borrow and to assume that the bills are never going to come due. I testified before a House committee six weeks ago now, on the future of U.S grand strategy. I was struck by the questions coming from members that showed an awareness, a sensitivity, and a deep concern, about some of the issues that I tried to raise in the book.

"How are we gonna pay the bills? How are we gonna pay for the commitment of entitlements that is going to increase year by year for the next couple of decades, especially as baby boomers retire?" Nobody has answers to those questions. So, I was pleased that these members of Congress understood the problem. I was absolutely taken aback when they said, "Professor, what can we do about this?" And their candid admission that they didn't have any answers, that they were perplexed, that this problem of learning to live within our means seemed to have no politically plausible solution.

Obama may not have found the right metaphor, but Tim Hawkins has. Watch his three-minute video. Even Moyers might understand this one.

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[1] Basic Economics: A Citizen's Guide to the Economy, Thomas Sowell, Basic Books, New York, N.Y., 2000, pp. 49-50

The Limits of Power (Part 1)

In the US, many consider the "Department of Defense" a misnomer. For a country with troops in over 100 nations, "Department of Offense" seems more accurate. In truth, US military troops overseas aren't intended to defend America or Americans. Under the guise of defending America, they defend the fiat dollar. To actually defend America, a much smaller military would do.

In The Limits of Power: The End of American Exceptionalism, author Andrew Bacevich, a modern day Smedley (War is a Racket) Butler and Professor of International Relations at Boston University, predicts the end of the American Empire caused by a misguided foreign policy based on "an outsized confidence in the efficacy of American power as an instrument to reshape the global order."[1] Bacevich decries a US foreign policy that uses military power to prop up a financial system enabling continual overindulgence by Americans: what Bacevich calls "the crisis of profligacy."

In an August 15, 2008 interview by award winning journalist and former Johnson administration press secretary, Bill Moyers, Bacevich elaborated on "the crisis of profligacy":

BILL MOYERS: And this is connected, as you say in the book, in your first chapters, of what you call "the crisis of profligacy."

ANDREW BACEVICH: Well, we don't live within our means. I mean, the nation doesn't, and increasingly, individual Americans don't. Our saving - the individual savings rate in this country is below zero. The personal debt, national debt, however you want to measure it, as individuals and as a government, and as a nation we assume an endless line of credit.

As individuals, the line of credit is not endless, that's one of the reasons why we're having this current problem with the housing crisis, and so on. And my view would be that the nation's assumption, that its line of credit is endless, is also going to be shown to be false. And when that day occurs it's going to be a black day, indeed.

The Limits of Power Overseas

In The Limits of Power, Bacevich describes the folly of military officers and national security experts who propagate a fantasy of a military so powerful and with bombs so smart, that war is quick, clean, and effective.[2] A West Point graduate and 20-plus-years career soldier, Bacevich writes that:

"...events in Iraq and Afghanistan have demonstrated definitively that further reliance on coercive methods will not enable the United States to achieve its objectives."[3]

Now that Gen. Stanley A. McChrystal's "confidential memo" calling for more troops in Afghanistan has been leaked to the public, President Obama (D) would do well to listen to Bacevich:

"America doesn't need a bigger army. It needs a smaller- that is, more modest-foreign policy, one that assigns soldiers missions that are consistent with their capabilities. Modesty implies giving up on the illusions of grandeur... reining in the imperial presidents who expect the army to make good on those illusions. "[4]

The Limits of Power at Home

Bacevich wrote The Limits of Power before the 2008 election, but his logic applies to any administration. They all try to give Americans something for nothing, and fail miserably every time. Bacevich's description of the existing system in Washington, D.C. as a "gang that couldn't shoot straight" forecasts ominous prospects for the future of healthcare after it is re-formed by bureaucrats:

"Regardless of which party is in power, the people in charge don't know what they are doing. As a consequence, policies devised by Washington tend to be extravagant, wasteful, ill-conceived, misguided, unsuccessful, or simply beside the point. To cite examples drawn from just the past several years, think of the bungled efforts to 'reform' the Social Security and health care systems or to fix immigration policy. Think of the inanity of the never-ending 'war on drugs.' "[5]

Bacevich sees symptoms of American overindulgence in the trade imbalance in manufactured goods as Americans export fiat dollars and import manufactured goods (pdf). Bacevich calls the time from 1965 to 1973 a "tipping point" in American history, the start of an excessive consumption by Americans enabled by the US military presence overseas:

BILL MOYERS: You say in here that the tipping point between wanting more than we were willing to pay for began in the Johnson Administration. "We can fix the tipping point with precision," you write. "It occurred between 1965, when President Lyndon Baines Johnson ordered U.S. combat troops to South Vietnam, and 1973, when President Richard Nixon finally ended direct U.S. involvement in that war." Why do you see that period so crucial?

ANDREW BACEVICH: When President Johnson became President, our trade balance was in the black. By the time we get to the Nixon era, it's in the red. And it stays in the red down to the present. Matter of fact, the trade imbalance becomes essentially larger year by year.

So, I think that it is the '60s, generally, the Vietnam period, slightly more specifically, was the moment when we began to lose control of our economic fate. And most disturbingly, we're still really in denial. We still haven't recognized that.

Just as Bacevich predicts the end of the American empire caused by a misguided foreign policy based on force, I predict the end of the fiat dollar and our financial system caused by misguided domestic policies based on “an outsized confidence in the efficacy" of government power "as an instrument to reshape the domestic order." Policy experts, government bureaucrats, and profligate Americans, who want something for nothing, continue to believe an illusion of an all-wise and capable federal government with unlimited resources to solve all problems, despite all evidence to the contrary.

Let's see what happens when the "gang that couldn't shoot straight" gets its hands on healthcare "re-form."

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[1] The Limits of Power: The End of American Exceptionalism, Andrew Bacevich, Metropolitan Books, N.Y., N.Y., p. 7.

[2] Ibid. p. 127. Listen to any politician bloviate on strategy and you'll hear about "surgical strikes." E.g. This September 22, 2009 NY Times article, "Obama Strategy Shift in Afghan War," outlines V.P. Joe Biden's proposal, which is just what Bacevich is talking about:

"Mr. Biden proposed scaling back the overall American military presence. Rather than trying to protect the Afghan population from the Taliban, American forces would concentrate on strikes against Qaeda cells, primarily in Pakistan, using special forces, Predator missile attacks and other surgical tactics."

More current examples of defense policy experts: "So Who Were the Advisers for McChrystal’s 60-Day Afghanistan Review?" and "Meeting the Challenge: Time Is Running Out."

[3] Ibid. pp. 162-163. While Bacevich explicitly acknowledges the limits of coercive methods in the Middle East, and sees the flaws of the imperial presidency, he doesn't connect the dots and acknowledge that domestic coercion is an equally limited strategy. E.g. He concedes there are arguments with "indisputable merit" for a draft on page 155.

[4] Ibid. p. 169.

[5] Ibid. p. 71.