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  • 15

    The Real Crisis of 2009 Redux: A Dangerous Horizon
    Economy; Posted on: 2009-02-20 07:52:33 [ Printer friendly / Instant flyer ]
    The danger we face in 2009 is that our political elites ... will be seen not just as incompetent or ineffectual, but as positively destructive of our lives, our liberty, and our happiness. ... If that happens, both the traditional and rational/legal sources of legitimacy will have been undermined, perhaps irrevocably. Combine this with long-simmering resentments over high taxation, and an ongoing culture war in which the federal government ... is seen as having hijacked the Constitution for the benefit of social radicals, and you have conditions ripe for root and branch rejection of the present system among ordinary ... Americans.

    I’m reposting this entry because fast-moving events make it even more relevant than when it first appeared a month ago. Some sample evidence: Chris Hedges at TruthDig reports that top military commanders are preparing for widespread civil unrest in the United States. Overnight, world currency markets were reeling from an unusual forced liquidation of non-dollar currency holdings.

    The forced liquidation appeared to be deliberate and apparently originated in Asia. Could it be that the Chinese, who hold hundreds of billions of US Treasuries, were attempting to shore up our currency by driving everyone else’s lower? Perhaps they fear what a former Bank of England official is predicting: a catastrophic collapse in the value of the dollar as investors around the world dump their US assets.

    Meanwhile, Kansas joined California in postponing payment on income tax refunds and warned that state employees may not get paid this week.

    For its part, the Golden State, which has been running on borrowed money since November 2007, announced that 10% of the state payroll will be slashed and all public works projects suspended. Last December, General Motors and Chrysler Corporation begged for and received a $17 Billion bailout from the federal government. They were to release their recovery and restructuring plans today, February 17. They met the deadline, but their “plans” amounted to a demand for another $16 Billion and $5 Billion, respectively. Essentially, these companies are now strong-arming the American taxpayer with the threat of massive job losses and, by implication, social unrest. Not surprisingly, the Dow Jones fell 300 points today to a 10-year low.

    Yes, the sun was out today (at least in New England). And yes, people went on with their ordinary, if increasingly more difficult, lives. But skies were continuing to darken just ahead. The legitimacy of all our institutions will be in crisis this year, from capitalism to the Constitution; and each day like this one carries us nearer to that dangerous horizon.

    Original post from January 14, 2009:

    As we gain traction in this remarkable new year, the United States faces several converging crises:

    -> The economic-financial crisis, marked especially the collapse of credit markets, short-term deflationary pressures, negative economic growth, widespread business failures, rising unemployment, and, thanks to the Federal Reserve, the specter of inflation and a dramatic devaluation of the US dollar.

    -> The fiscal crisis, marked by an explosion of federal debt ($816 billion in the past 12 months alone) and the looming insolvency of many states and cities.

    -> Multiple foreign policy crises, including a doubling of the American presence in Afghanistan, renewed violence between Israel and the Palestinians, the development of nuclear weapons by Iran, escalating tensions between Pakistan and India, continued North Korean intransigence on the promise to scrap its nuclear program, and our impending withdrawal from Iraq.

    -> A lurking energy crisis, as oil prices, having fallen sharply due to reduced demand and the collapse of commodities markets, again move toward their post-Peak equilibrium.

    All of these crises will dominate the headlines in 2009, with oscillating degrees of intensity. But they are all synthesizing into a broader and deeper crisis, a crisis of legitimacy that will shake the United States to its foundations.

    Legitimacy is to a political system what confidence is to a monetary system: the glue that holds the entire edifice together. In the words of political philosopher Dolf Sternberger,

    “legitimacy is the foundation of such governmental power as is exercised both with a consciousness on the government’s part that it has a right to govern and with some recognition by the governed of that right.”

    In his groundbreaking work on democratic government, Political Man, American political sociologist Seymour Martin Lipset wrote:

    "The stability of any given democracy depends not only on eco­nomic development but also upon the effectiveness and the legitimacy of its political system. Effectiveness means actual per­formance, the extent to which the system satisfies the basic functions of government as most of the population and such pow­erful groups within it as big business or the armed forces see them. Legitimacy involves the capacity of the system to engender and maintain the belief that the existing political institutions are the most appropriate ones for the society. The extent to which con­temporary democratic political systems are legitimate depends in large measure upon the ways in which the key issues which have historically divided the society have been resolved. While effectiveness is primarily instrumental, legitimacy is evaluative. Groups regard a political system as legitimate or il­legitimate according to the way in which its values fit with theirs."

    Max Weber, the German sociologist and economist, wrote that there are three sources of political legitimacy: charismatic, as in the legitimacy conferred on popular or populist dictators; traditional, as in the legitimacy conferred on monarchs; and rational/legal, as in the legitimacy conferred on secular democratic systems based on the rule of law, equal representation, and other democratic procedural values.

    Political legitimacy in the United States rests on the deep attachment of the American people to their Constitution (rational/legal), as well as the mythological superstructure maintained by traditional interpretations of American history (traditional). It is interesting that the part of the country most characterized by intense patriotism, the Deep South, was also engine of the secessionist movement that inaugurated the Civil War. That region’s patriotic impulses are, I think it’s fair to say, more rooted in American mythology than, say, Vermont, where American identity is more associated with the mechanisms of representative government, and even traditions of direct democracy like the town meeting. That is, legitimacy in the South is grounded more on traditional authority than in New England, where rational/legal authority is privileged, and this has implications for the Crisis of Legitimacy, as I’ll discuss below.

    The danger we face, it seems to me, is that as the crises listed above converge, the ability of political elites to manage them will fail. We have already seen a model of this failure in the disaster now known as T.A.R.P: the Troubled Assets Relief Program. After spending $350 billion over the past few months - borrowed money, by the way - not only has TARP failed to relieve troubled assets, but there has been little or no accountability for the money spent. Worse, TARP appears to have had no ameliorative effect on the conditions it was intended to improve. Now, the federal government intends to pump the second $350 billion TARP tranche into the economy, with no greater expectation of success. Moreover, President-Elect Obama has promised to inject another $1 trillion in borrowed money into the system in the form of a “stimulus” package of tax cuts and new spending.

    But what happens if that stimulus fails to reverse the economic crisis? Or if its inflationary effects are so great that things are worse a year from now than they are today? Now, imagine these things coming to pass while gasoline prices are rocketing higher, the value of the dollar is falling, layoffs are accelerating, states and cities are declaring bankruptcy, and an over-committed American military is deployed to another far-flung corner of the globe?

    As history shows, such a welter of converging crises is the seed-bed of revolution, and the germ of the seed is a collapse of legitimacy, especially among the vast middle classes. This was true in what Marx termed the “bourgeois revolutions” of the eighteenth century: the Dutch Revolt, the English Civil War, the American Revolution, and the French Revolution. Jefferson’s words in the Declaration are thoroughly bourgeois, and likely to be reappropriated by middle class Americans in 2009: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive to these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."

    The turning point, the key phrase, in Jefferson’s famous declaration is “whenever any Form of Government becomes destructive to these ends …” The danger we face in 2009 is that our political elites - and the system they embody - will be seen not just as incompetent or ineffectual, but as positively destructive of our lives, our liberty, and our happiness. Americans may well conclude that while our present form of government, our Constitution, was sufficient for securing our rights in the past, it has now failed to do so catastrophically, and that the events and figures of our present represent a decisive break with what we will still view as a glorious history. If that happens, both the traditional and rational/legal sources of legitimacy will have been undermined, perhaps irrevocably. Combine this with long-simmering resentments over high taxation, and an ongoing culture war in which the federal government - and especially the Judicial Branch - is seen as having hijacked the Constitution for the benefit of social radicals, and you have conditions ripe for root and branch rejection of the present system among ordinary (read: bourgeois) Americans.

    The result will not necessarily be a revolution in the traditional sense. It is an open question whether a popular revolution is even possible in a nation like the United States, where the techniques and technologies of social control, although latent, are easily deployed by a government desperate to hold on to power. More likely is a cascading disintegration of civil authority. States may ignore the federal government. Cities and towns may ignore their state governments. Wards and neighborhoods may ignore local authorities. Individuals and extended families may ignore what authority is asserted in their wards and neighborhoods.

    Civil unrest may occur in the cities, although one anomaly of the Crisis of Legitimacy may be that minority communities emerge as the most committed to our present form of government since they have been habituated to such an attachment during four decades as wards of the state.

    The Crisis of Legitimacy will be most acute among the white middle class, especially in the South, where disenchantment with the American form of government can be expected to revive the counter-mythology of the Old South. In the North, especially New England, New York, and Pennsylvania, where a civic culture based on the town meeting still persists, more legitimacy can be expected to be retained at the local level.

    Most of the blind spots in our national mythology originate in the conception of America as a “shining city on a hill,” a special country, set apart, enjoying a divine dispensation from the vicissitudes of history. That notion, which was always false, is about to be decisively contradicted by history itself. Over two hundred years, we have become a great power; but nations that rise also fall … they always fall. And the conditions we face today fit neatly into the historical conditions that marked the tumble of all great powers: empire, debt, excess, structural failure, and a loss of political legitimacy. In 2009, the United States will discover that there are no exemptions from history.

    The Crisis of Legitimacy is the real crisis of 2009. If I’m right, this year could mark an historic break with our American past, even as it points the way toward the reconstitution of an American government that lays its foundation on such principles and organizes its powers in such form, as to us shall seem most likely to effect our Safety and Happiness.
    News Source: Suicide of the West http://suicideofthewest.com/?p=803

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