By Paul Craig Roberts
in my line of work you got to keep repeating things
over and over and over again for the truth to sink
in, to kind of catapult the propaganda." (
at the Athena Performing Arts Center at Greece
Athena Middle and High School Tuesday, May 24, 2005
in Rochester, NY)
--- - When he departs the White House on 20
January, 2009, the current resident will bequeath to the
American people and the next administration an interminable war
in the Middle East and a depreciated currency.
that’s the good news. It assumes there is a successor
administration and that no Cheney-contrived “national emergency”
will make it possible for Bush to test drive National Security
Presidential Directive/NSPD-51 and Homeland Security
Presidential Directive/HSPD-20 to cancel the 2008 election.
Neoconservatives led by vice president Dick Cheney remain
determined to effect “regime change” in Iran. The allegation of
weapons of mass destruction falsely brought against Iraq is now
being deployed against Iran.
International Atomic Energy Agency says that there is no
evidence that Iran has a nuclear weapons program. The IAEA
is the institution that polices the Nuclear Non-proliferation
Treaty by inspecting the nuclear facilities of the signatories
to the treaty of which Iran is one. However, the neocon/Cheney/Bush
regime is prepared to bomb Iran on the basis of fibs alone.
Faithfully repeated by the propaganda ministry that masquerades
as the “mainstream media,” those fibs have been trotted out so
many times in recent months that significant numbers of
Americans now believe themselves to be in peril from nonexistent
this way the regime gains the complicity of the American people
and their representatives in Congress for what will be
unprovoked aggression against a third Middle Eastern country, a
third war crime under the Nuremberg standard.
“war on terror” is a hoax. It serves as a cover for the drive
for US and Israeli hegemony in the Middle East. Iraq, Iran, and
Syria became neoconservative targets, because they were the only
Middle Eastern countries that are not American puppet states or
Afghanistan was attacked, because the Taliban were uniting the
country under the banner of Islam, a development that, if
successful, could lead to the overthrow of the governments in
America’s puppet states and dependencies.
war rhetoric against Iran ratcheted up when the White House
belatedly realized that the result of “bringing democracy to
Iraq” was to empower the majority Shi’ites, thereby creating a
Shi’ite crescent from Iran to southern Lebanon and alarming
America’s Sunni Saudi Arabian dependent.
Israel’s goal is to have the Americans eliminate the Muslim
states that support Hamas and Hezbollah’s opposition to Israel’s
theft of the remainder of Palestine and southern Lebanon, whose
water resources Israel covets. Israel’s goal thus precisely
coincides with that of the Cheney regime.
“Cakewalk War” in Iraq was supposed to be over in a few weeks
and to pay for itself out of Iraqi oil revenues. The war is now
five years old and has cost American taxpayers, and those left
dependent on government programs by decades of a welfare state,
$1 trillion in out-of-pocket and already incurred future costs.
large and troublesome as this cost is, it pales in comparison to
the damage the war has done to the value of the dollar and its
role as reserve currency. Since 2001, the Euro has risen 60
percent against the dollar.
This means much more to Americans than the higher cost of a
European vacation and status symbol German cars. The US dollar
is losing its reserve currency role when the Euro, the currency
of a nonexistent country--Europe--becomes so much more desirable
than the dollar that it rises 60 percent in value.
Euro is a monetary unit that has run far ahead of the political
entity whose currency it is. Europe still consists of separate
sovereign states, and many of them are unhappy with the Euro.
Yet, since 2001 people throughout the world have been shifting
from dollars to Euros.
is not normal for people to flee from the reserve currency. It
only happens when people believe it cannot continue to fill that
US dollar is under double assault. One assault is from the
offshoring of American jobs, which turns US GDP into foreign GDP
and worsens the US trade deficit. It is not possible to achieve
a trade balance when the production of goods and services for
the US market is being moved offshore by US corporations.
other assault is from the US budget deficit. Americans have
become so hard pressed that their savings rate is negligible.
The US government has to rely on foreigners to lend it money for
its annual expenditures. Washington’s two biggest bankers are
China and Japan, the countries with the largest trade surpluses
with the US.
transformation of the Iraq “cakewalk” into an interminable war
has run up a one trillion dollar price tag, and an even larger
war with Iran is looming. US generals and neoconservative
ideologues predict a decade or multi-decade long war in the
Middle East. Washington’s bankers are waking up to the reality
that they will not be repaid.
only reason the dollar has not already lost its reserve currency
role is that the only alternative is the currency of a
non-existent political entity. Yet, even the Euro, a virtual
currency, may have taken the dollar’s role by the end of 2008.
Full of hegemonic hubris, the US government does not understand
that US power and hegemony have always depended, not on missiles
and military force, but on the financial power conveyed by the
dollar’s role as reserve currency.
reserve currency is world money, good in any country to pay any
bill. The reserve currency country is not a debtor in the usual
sense. As the reserve currency can be used to settle
international accounts, the reserve currency country can borrow
at will until lenders lose confidence in the currency.
There is abundant evidence that the loss of confidence in the
dollar is underway. When it is complete, the US will no longer
be a superpower.
decline in American power and influence could be dramatic. Part
of America’s power results from European countries going along
with Washington. However, the sharp rise in the Euro’s value
has hurt European exports, squeezing profit margins, wages, and
encouraging offshore production. Fights over monetary policy
between European capitals could doom both the EU and the Euro,
leaving the world with no reserve currency and America with
embittered former allies.
going to war for hegemony, the Bush Regime has brought about
American decline. While the neocons have spent two
administrations trying to deracinate Islam, real threats to
America’s power have been neglected. Offshoring, which turns US
GDP into imports and larger trade deficits, together with war
debts, has eroded the dollar’s status as reserve currency,
undermining the foundation of American power.
Paul Craig Roberts wrote the Kemp-Roth bill and was Assistant
Secretary of the Treasury in the Reagan administration. He was
Associate Editor of the Wall Street Journal editorial page and
Contributing Editor of National Review. He is author or coauthor
of eight books, including The Supply-Side Revolution (Harvard
University Press). He has held numerous academic appointments,
including the William E. Simon Chair in Political Economy,
Center for Strategic and International Studies, Georgetown
University and Senior Research Fellow, Hoover Institution,
Stanford University. He has contributed to numerous scholarly
journals and testified before Congress on 30 occasions. He has
been awarded the U.S. Treasury's Meritorious Service Award and
the French Legion of Honor. He was a reviewer for the Journal of
Political Economy under editor Robert Mundell. He is the
co-author of The Tyranny of Good Intentions. He is also coauthor
with Karen Araujo of Chile: Dos Visiones – La Era Allende-Pinochet
(Santiago: Universidad Andres Bello, 2000).
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