What's happening though is that it's failing. It doesn't work for the industrial countries, it works for China (laughs), who gets all the offshored production, and so American GDP becomes Chinese GDP, and American jobs become Chinese jobs, and American consumer income becomes Chinese consumer income. What's happening is the balance of power in the world is shifting completely away from the West. It's washed up.
Rob Kall: So what you're saying is, the more trade agreements that Obama and any President signs, they're basically accelerating the transition of power to China.
Paul Craig Roberts: Exactly. Yeah. And India, other former third World countries, but they're the rising countries now.
Rob Kall: The BriC countries.
Paul Craig Roberts: Look, the Chinese manufacturing force, you know how large it is? 112 million! You know how large the American is? Eleven million. Eleven!
Rob Kall: But let me get back: is it possible if we could find and elect a leader who said "My first step as the new President is to cancel these global trade agreements." Would that be possible, if they were able to stand up to all these different people.
Paul Craig Roberts: How would he get financed to get elected?
Rob Kall: That's another issue, but could it be done? Could we just step away from them and "These aren't working. We're going to start over again and write new, real global trade agreements that reflect on our need to protect our industries and not let them just be totally destroyed.
Paul Craig Roberts: It can't happen for the reason I said, that right now it serves the interest for the power, so they're not going to overturn it. Now, when it becomes apparent that we've destroyed ourselves, you can't get the power back. You think the Chinese are going let you all of a sudden let you overcome this? No. They'll hold the upper hand. They're not going to say "OK, let's now destroy ourselves the way the Americans destroyed themselves." I think it's all over with for the West. I don't think they can come back, and so what we're going to be in is a period of transition in which the West becomes no longer the ruler of the universe. It will be slowly declining. In fact, the collapse could be sudden. We don't know what -
Rob Kall: Now you've written about that. You've written about how at some point the dollar is going to burst, and you've talked in some interviews and your writing about how, in these different bubbles -- are we in the middle of a dollar bubble right now, a money bubble?
Paul Craig Roberts: Yes. The dollar is one of the biggest bubbles in history. The Federal Reserve is creating over a trillion new dollars annually, but the demand for dollars is not rising by a trillion annually. And so, sooner or later, this has to affect the price of the dollar, that is, the exchange value. And we already see the important nations moving to decouple from the dollar.
We have the BriCs: this is China, Russia, Brazil, India, South Africa. Altogether now, that's probably about half the world's population. And it's probably half of the traded goods (laughs). And so they're setting up a system in which they settle their trade with one another in their own currencies. The dollar is no longer used as a reserve currency. They're setting up their own version of an IMF. They're just going to bypass all the Western institutions. We see in China and Asia the rise of an Asian currency bloc, which is being organized around the Chinese currency. We see deals with Japan and China to settle their trade with one another in their own currencies.
So the demand and use for the dollar is about to rapidly constrict. We'll have a situation where the Feds are not only creating a trillion new dollars more than the demand is growing, but the demand will be shrinking! And so the thing will blow up. And when the dollar bubble pops, so does the bond market bubble, the stock market bubble. We will have the biggest economic catastrophe in the history of the world, and there is no solution. The United States will go from being a so-called superpower to a nothing!
It could happen at any time. It's a perfect storm that the idiot policy makers have created because they don't serve the public interest, they serve a few rich bankers. The whole thing has been keyed toward protecting the banks that our deregulation policy allowed to get to big to fail. Not only that, but the public officials, the Secretary of the Treasury, the FED, the financial regulatory agency heads, they're all the former bankers themselves, all their proteges. You have a situation where the class that caused the crisis is running the solution, and the solution is to keep the banks from having any pain; what it does to the rest of us is not their concern.
Rob Kall: I've been calling, along with a number of others, for an end to billionaires, a "No Billionaires" program. That the billionaires have just too much power, these oligarchs are buying and running our politics, our nations. What do you think about the idea of a no billionaires policy?
Paul Craig Roberts: I don't mind it, but I don't think that addresses the real issue. Because the people running the policy are not individual rich people: they are the very large financial institutions. They may finance billionaires in some scheme a billionaire has, but the power is Goldman Sachs, JP Morgan Chase, Citibank, Bank of America. It's these financial institutions, they have financialized the economy. The economist Michael Hudson has made it clear that what's happened is Industrial Capitalism is over and done with. We have Financial Capitalism, and what they do is, they organize a whole economy so that all the surplus is drawn off in interest paid to banks.