Dear A-Letter Reader:
Does anybody in America care that freedom, liberty and privacy are being diluted, diminished and destroyed? Or that government is running up some of the biggest deficits in annual spending, foreign trade and national debt ever recorded? Or that America has become a de facto world empire that already is in decline?
Kevin Phillips' new book, American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century, puts together an amazing array of historical, religious, economic and political data to argue that the U.S. is about to join its imperial predecessors on the downhill slide - Rome, Spain, the Netherlands and Britain.
Phillips says the alarming signs are everywhere from the desperate attempt to retain oil sources by invading Iraq; to the "theocrats" seizing the Republican Party; to the evolution of the U.S. economy in which the production of valuable, manufactured goods has been replaced by a massive funny-money system of finance and, most ominously, government and private debt.
The scope of this book is massive and his analysis reads like a warning. Phillips sketches a future bankrupted nation by a web of religious, energy and debt that leaves America, the world's remaining superpower, all but helpless before emerging powers such as China, well before 2050.
An examination of empires in world history (Rome, Spain, Holland, and the United Kingdom), shows an identifiable progression from expansion, to dominance, to maturity and to what seems like inevitable decline. In that latter stage, governments and most people rarely see what's coming. Those who do can profit from their foresight.
Phillips, a friend of my long ago youth, traces the imperial journeys of each of these empire nations. He goes back centuries and compares those historic events to the current situation in the United States, the present world imperial power.
Phillips examines many aspects of each nation's imperial progress, politics, economics, religion, industry, finance and war. As he says: "The United States is hardly the first [empire] and we can profit from the examples of what went wrong before." There's a lot of arresting facts and figures in this book, although I don't agree with all of the author's conclusions. But you will come away fascinated with these disturbing past parallels -- and what they may portend for America's future.
It's an eye opener -- and it's not a pretty picture for Uncle Sam and Americans.
Phillips notes that two economic predictors of imperial end times are: 1) marked declines in a nation's manufacturing and industrial capacity and; 2) an increase in what he calls "financialization" as all sorts of intangible financial services replace tangible production.
In 1950, 30% of U.S. GDP came from industry and only 10.9 from financial services. In a reversal, 2003 U.S. industrial production amounted to only 12.7% of GDP and financial services had grown to 20.4%. Even more telling, in 2005, 45% of all corporate profits came from financial services and only 7% from manufacturing. And as Phillips shows, a lot of these modern "financial services" consist of little more then creating new forms of debt, then pushing all those debt papers around while collecting fees for doing nothing really productive.
In the declining years of the Spanish, Dutch and British empires, virtually the same patterns developed as we now see in the United States. Similarities with the current dilemma of the U.S. include a huge national debt, major and continued deficit spending, worrisome huge trade imbalances and a decline in the value of the imperial nation's currency.
Sounds familiar, doesn't it? And yet another reason to consider offshore as the place for your financial haven.
That's the way that it looks from here.
BOB BAUMAN, Editor