Socialism, George W. Bush Style

America is experiencing a decline of its power and the financial crisis is only one sign of that. Therefore, Europe has to assume more responsibility.

A few weeks from now, it will be 19 years since the Berlin Wall fell and the cold war ended. In the ensuing years, the United States stood alone on the pinnacle of global power. A new American century loomed, determined and shaped by superpower America alone.

Today, just 19 years later, we’re witnessing the downfall of that American influence. This downfall can essentially be traced back to a mixture of arrogance and blindness on the part of those in power in the United States.

The high point of this decline, at least temporarily, is the current crisis in American financial systems that can only be compared with the Great Depression of 1929.

Governments and citizens alike in the United States have long been living beyond their means, driven by the Federal Reserve’s policy of cheap money. The day of awakening to hard economic realities was bound to come someday.

In addition, an underground economy in the banking and financial system was created that successfully bypassed the existing controls and legal limitations placed upon it. Markets took on a life of their own and, not for the first time in the history of capitalism, unbridled greed ultimately proved a recipe for self-destruction.

Truthfully, the process didn’t begin with the election of George W. Bush as 43rd President of the United States. But since his election and the neo-conservative accession to power in the year 2000, it has gone constantly downhill from there.

Under the motto “for a new American Century,” Bush and the neo-conservatives embarked on a policy of unilateral American supremacy. The results can now truly be seen:

America has lost its moral credibility because of Guantanamo and its use of torture; thanks to the Iraq war, Iran has become the foremost power in the Middle East; America’s military has been over-taxed because of this phony, unnecessary war; Bush inherited a budget surplus from Clinton and has transformed it into a gigantic mountain of debt; China is now America’s largest creditor; the dollar is in serious danger of losing its role as the world’s dominant reserve currency; the American financial system is in serious danger of collapsing. This crisis threatens to destroy the entire global financial system and the best solution the Republican administration in Washington can come up with is “nationalization”!

When stand-up comedians’ jokes about the crisis start sounding old and tired, then it’s usually crunch time. The mother country of market economics nationalizes its financial system and real estate loans! And it happens under a Republican President! If the situation weren’t so serious and dangerous it would really be funny.

Actually, there’s nothing at all to laugh about because the failure of the American global growth engine will pull the world’s economy down with it. That’s likely to cause increased danger of internal tensions and social conflicts that could easily spill over into foreign policy.

One can, and from time to time one actually must harshly criticize American foreign policy. But as a power capable of enforcing world order, it can neither be replaced by Russia nor China at present. And, unfortunately, neither can a divided and paralyzed Europe do the job. A downfall of American power will therefore make itself negatively evident in international politics because the United States will be unable to perform its traditional role of keeping the peace.

Historically, there has always been a nexus between economic and political crises and the road to war. Thus, the depression of 1929 eventually led directly to the Second World War. Fortunately, the danger of another global hot war is not likely today because deterrent force can prevent it. A reduction in free world trade, among today’s population of 6.6 billion compared to 1929’s 2 billion, and the completely new communications technologies would still only result in losers. The increase in regional or even global tensions, however, means it can’t be entirely ignored.

Add in the negative consequences of failed American power and one has to hope that this is only a temporary period of weakness and not the start of permanent American decline. Meantime, we Europeans need to finally wake up, come together politically, and prepare ourselves for tougher times and increased responsibility.