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One of the media's greatest failings in its coverage of the U.S.'s deteriorating economy is in ignoring the economic devastation wrought by the wars in Iraq and Afghanistan. A dangerous displacement is occurring in the public mind as the media proclaims that the economy has replaced the war as voters' chief concern, as if neither media nor public can keep two thoughts in its head at the same time. In fact, the war is a prime contributor to our economic woes, but outside of a few voices in the alternative media, no one seems to have noticed. Between widespread propaganda about the success of the "surge" and a growing focus on the economy, the war can roll on without unduly discomfiting the president, Congress, or the tireless warriors of the campaign trail. Estimates of the direct cost of the wars in Afghanistan and Iraq range from half a trillion to a trillion dollars, with no end in sight. Most of this money goes into a deep, black pit: to salaries for soldiers that represent far less than what they'd earn in a healthy economic setting; weapons that enrich a relatively few at the top of the defense, energy, and arms dealing pyramid; and contracts with the Halliburtons and Blackwaters of the world. These funds tend to collect and, from an economic standpoint, coagulate, in off-shore accounts, political campaign chests, and high-level investment. All of this, of course, is courtesy of the United States taxpayer, strapped into a system in which the poor and middle classes pay far more, proportionately, than the wealthy. In fact, we pay doubly, as much of the money we spend for energy is recycled from the Arab oil states back into the hands of U.S. defense contractors who supply the Arabs with high-tech weaponry and in-country military bases. (The Carlyle Group, for instance, comprising top ex-politicos like former President Bush, handles many of these contracts, making a fortune for all concerned, including the Bush family. Some conflict of interest there, one would think, but the same press that salivated over a stained blue dress somehow considers the web of interests spun by the Bush family and their allies too insignificant to write about). The immediate economic factors behind the current crisis have been described in some depth in the mainstream media, although not all equally. For instance, Alan Greenspan's cash-pumping policies when he was Chairman of the Federal Reserve have gone largely unremarked. The coincidence of the 2005 Bankruptcy Act being passed just before tens of thousands of Americans were plunged into bankruptcy by the credit crisis seems to be a ripe subject for investigative reporting. But of course the media holds to the line that no one anticipated this crisis. Well, perhaps not some loan-crazed bank president, but the top economists who work for the elite financial groups, and who advise the government, had to have anticipated the problems. Meanwhile, the financial markets' "creative" pyramid schemes of bundling weak mortgage loans together, selling them, and then using the proceeds as the basis for new loans with values several times that of the original bundle, created enormous profits for hedge funds, mortgage companies, and banks – for a time. When the bubble burst, executives walked away with hundreds of millions while employees of the companies and mortgage holders were left high and dry. Sound familiar? Enron all over again? Savings and Loan scandal all over again? When will we ever learn? The upshot is that major financial institutions, such as Citibank and Countrywide Mortgage, are being sold off to the new global money masters. In effect, the dollar is seemingly being rescued by the very interests holding it hostage. Simply put, America is being sold off to those nations and institutions that have collected huge pools of capital. This is bad for America but very good for those people at the very top of the nation's economic pyramid. It also follows the logic of economic policy since Ronald Reagan became president in 1981: engineer ever-greater shifts of capital from the lower and middle classes to the very wealthiest members of the national and global economies. The U.S. military invasions in the Middle East and the securing of a long-term military position throughout Central and Southwest Asia are part and parcel of this economic policy, intended to facilitate the seizing of more and more of the world's wealth. It is also propelled by a recognition that neither the U.S. population nor the global economy can withstand the rampant pillaging by the world's wealthiest individuals and institutions. The militarization of U.S. society; the "Bush Doctrine", which states that we can attack anyone we want for whatever reason we devise; the assault on civil liberties in the U.S.; and the replacement of the values of the republic with those of a runaway market economy, all grow out of an almost crazed attempt to impose a new post-capitalist economic order on the world. The causes are complex, perhaps psychological as much as political and social. Surely there is some connection as well to the truly stupid religious fundamentalism and creepy hyper-patriotism espoused by so many of the purveyors of this "new world order". But we'll put those questions aside for another time. For now, it is enough to recognize the close connections between the wars in Iraq and Afghanistan and America's economic deterioration. If a Martian observed the economic behavior of the "world's wealthiest nation", what would she, he, or maybe even she-he, think? The Martian, like any smart galactic traveler, would figure: "Cui bono – who benefits? Follow the money." Then they might reflect, "Hmm, a huge amount of money is assigned to destroying other nations and building military complexes around the world. Weapons are being produced at a record pace. A select group of very wealthy people are dancing in fountains of cash while most of the population is increasingly strapped. The world's wealthiest nation ranks low in many indicators of quality of life: 32nd in longevity, 43rd in infant mortality, number one in public surveillance. Hey, they've even created an entire system for torturing people around the world!" The Martian wouldn't have any trouble deriving some economic principles from all she-he observed. First off, forget about where all this money has gone, where has it come from? Perhaps the number Nine Trillion Dollars! (imagine the look of glee on Dr. Evil's face if he could say that number!) would reach the Martian's ears, however many ears she-he happens to have. That's the extent of our national debt. In simple terms, that means we must issue bonds to get the money we don't have and also print up dollars when we need them. Thus, the dollar is worth less. The only benefit to this is that books still cost more in Canadian dollars than U.S. dollars, even though the two are now virtually equal in value! So Canadians should flock across the border to buy their books, waving at Americans on their way to Canada to buy prescription drugs, which will at least have a salutary effect on literacy in Canada. But that fringe benefit aside, the debt means several things. Other countries are beginning to find the dollar a less secure investment instrument. Thus they raise interest rates on their loans to the U.S. government, so more of our money goes to servicing debt, i.e., down the toilet. They also may switch their investments, say to Euros, which means we have to print more money to meet our obligations and the dollar goes from the toilet to the sewage treatment plant and finally, winds up floating worthlessly in the sea. China, Japan, Europe, Saudi Arabia, and the United Arab Emirates, as major creditors of the U.S., now wield a very big stick in terms of influencing the U.S. economy and U.S. investment and foreign policies. Which is fine for those Americans who operate at the highest levels of the global system, like the major banks, hedge funds, brokerage houses, Carlyle group, oil, energy, agribusiness, and mining conglomerates, etc., etc. Their interests are not just separate from those of most Americans, but actually opposed to them. And guess who's winning. Meanwhile, the subprime crisis is in large part a response to the inflationary spiral that has been held in artificial check by Greenspan's interest rate policies, the housing bubble and its associated refinancing spree, and the easy money that the government has been pumping into war-based industries. The build-up of capital basically served as a continuous intravenous dose of 140 proof firewater that got the financial services industry so drunk they went out and squandered the food money. In the process, Americans have mortgaged their economic futures. Now imagine that in 2001 the president had said, "We're going to need hundreds of billions, nay, trillions of dollars to wage war on Afghanistan and Iraq. You'll agree to this because of all the lying reasons I'm going to feed you, in cooperation with a lap-dog Congress, The New York Times and Washington Post, Fox News and CNN, the major networks, and Colin Powell. You're going to give me blank checks to bomb the crap out of these countries; test new weapons; irradiate the environment, its populace, and our own soliders with uranium tipped shells; get thousands of our own citizens killed and maimed and mentally shattered; gain control of Iraq's oil for the major transnational petroleum companies; and, oh yeah, cut veterans' benefits and deny many of them health care. So can I have the money?" If the past is any indicator, the response would be a resounding yes, as it continues to be, if not among the public, then certainly among our nation's decision makers. But then a miracle happens. Congress gives the president all this money for these wars. And then the president turns around and says, "Surprise! Now that we see all this money is available, I'm going to spend it on health care, education, neighborhood renewal, the environment, and infrastructure! I know I'd never be able to get this money out of you if I said that's what it was for, but now that I have the money, this is what it's going towards! Oh, and by the way, we're going to build the economy one project at a time. It is no longer going to be fueled by arbitrarily multiplying the number of dollars in circulation in a vast Ponzi scheme. Even a house of good laminated cards is more stable than a house of crumpled bills." Every dollar spent at street level produces seven times more economic activity than a dollar spent on weaponry. The increase in public health and education brings more money into the economy for teachers, nurses, service workers – millions of Americans. Companies save money as worker absenteeism and health insurance costs decline. New industries are created from the investment in renewable energy, a well-educated populace, and production of "super-materials" targeted not for war but for constructive applications. Subsidies for new energy technologies, family farms, and small businesses create entirely new industries and vibrant economic centers. A moderate tax increase on the very wealthy helps reduce the national debt. Closing tax loopholes and going after off-shore accounts aimed at avoiding hundreds of billions in taxes brings the U.S. government into the black. Renewing the infrastructure, which is on the verge of disintegration, creates hundreds of thousands of well-paying construction jobs, which restabilizes the housing market. A reasonable trade policy protects economically strategic American industries and manufacturing jobs post a modest recovery. All these steps, and others similar in intent, may not create a paradise, but they sure as hell would recirculate and expand our national wealth so that it continues to produce more real wealth in the form of affordable goods and services while improving the quality of life for Americans and, in a ripple effect, the entire world. Instead, we have had the most corrupt regime in U.S. history using our wealth to fuel a bonfire of chaos and destruction and death. That is the bottom line and that is what the presidential candidates ordained by the media as the "frontrunners" continually ignore. It is what most of the mainstream media's pundits and writers about the economy continually ignore. The money we are burning in war could have been used to build the economy. The loss is two-fold, embracing not just the money we've misspent but the lack of investment in the economy and social services (health, education, infrastructure) that has actually made those services decline in value. Every cost we've ignored for the past decade is a cost that has multiplied several times in future spending – a stitch in time saves nine and all that – and has piled more debt upon the American people and added more fuel towards an upcoming inflationary – or stagflationary - cycle. The cost of war has never been more dire – in lives lost on the battlefield and in the incinerated homes of a region in chaos, to be sure – but also in the cost that Americans will continue to pay for decades. Maybe "it's the economy, stupid!", as James Carville reminded Clinton campaigners in 1992. But if we ask what's largely to blame for the state of the economy, our answer would have to be, "It's the war! Time to wake up!"
www.hothouseeffect.com Barton Kunstler, Ph.D., is author of "The Hothouse Effect", a book describing the dynamics of highly creative groups and organizations. He is a writer with a futurist perspective on education and social change, and is available as a speaker and trainer on such topics as creativity, education, leadership, and communications.
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