And this is exactly what Bush and Paulson and their fellow "conservatives"- intend. This is the magic of "globalization,"- that the Heraldic voices of Thomas Friedman and others eulogize as inevitable.
Globalization means liberating capital from all obligations to national well being, freeing it to pursue only the highest returns it can find, no matter where they may lie. That means seeking out the lowest paid labor and shifting all possible jobs there. That means China, India, or Vietnam. (Vietnam's average hourly wage is something like 25 cents.)
The U.S. worker and the U.S. economy will be left to their own devices. All social safety net systems must and will be dismantled. Why? Given the colossal debt, they can no longer be afforded. I'm talking about social safety net systems such as welfare, unemployment and disability insurance, pensions, health care, Medicare, Social Security, job retraining, and eventually, education. The U.S. is a high cost economy in a world where, when capital is perfectly mobile, low cost wins. If capital is to be honored, then the U.S. must be ballasted, and then abandoned, in the way the British economy was in the aftermath of World War II. It will be milked of its remaining assets""that is what the huge run-up in debt is intended to do""and then thrown away.
The only government programs of substance that will be maintained will be police and military systems. The Patriot Act, with its massive recissions of civil liberties, is not so much directed at foreign terrorists as it is at future domestic dissidents, citizens who dare confront these putative inevitabilities with demands for democratic (as opposed to capitalist) recourses. The military is, of course, needed to carry out the nakedly colonial expropriations such as Iraq that remain the last hope of America to compete in the world, i.e. by controlling the oil, the substance without which no industrial civilization can operate.
Paulson's job, then, is to arrange the write down of debt that must accompany the ongoing bankruptcy of the U.S. He will have to promise an IMF-like fiscal austerity to foreign lenders to keep the funding flowing . . until there is nothing left to take. This will mean draconian cuts in social spending, no tariffs, and the removal of all remaining controls on the mobility of, and returns to, capital. The dollar will be precipitously devalued with the consequence of massive inflation and stratospheric interest rates, which will only accelerate the decline. A new international reserve currency, based on a basket of currencies including the euro, the yen, the Chinese yuan, and the dollar, will be devised.
None of this will come as a surprise to Henry Paulson. It is Paulson, perhaps more than any other private individual, who has so successfully, happily, and ever-so profitably laundered the huge bubble of U.S. debt to his rich clients throughout the world. It is Paulson and his coterie of wealthy capitalists who have so diligently used the U.S. government to increase returns to, while removing democratic constraints on, private capital. Indeed, it is these same wealthy owners of capital who are Paulson's""and Bush's""true clientele.
The question for Paulson, therefore, as he looks into the Abyss of this final Circle of Economic Hell, is this: "Whose interests will he be serving as Secretary of the Treasury? Those of the American people or those of his investor class?"- It is truly a question of Dantean proportions, for the Second Ring of the Ninth Circle of Dante's Inferno is peopled by those who betray their class.
Ominously, however, the Innermost Ring of Hell is reserved for those who betray their masters, their employers. Paulson's employer is now the people of the United States. Who will Paulson be compelled to betray? Do we really need to ask?
