The decline and fall of the American empire of debt

Review of Kevin Phillips’ “Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism.”

…As for oil, while at first it might seem a bit off-putting to find a chapter on “peak oil” in the middle of a book mostly devoted to financial shenanigans, the current price tags of a barrel of crude and a gallon of gasoline obviously pile even more stress on top of an economy already teetering after years of gross mismanagement. Phillips has long castigated the Bush administration for its energy misadventures — believing, as do many Bush critics, that the invasion of Iraq was motivated in large part by geopolitical petroleum concerns. But how could two oilmen in the White House have screwed up so spectacularly? Dark times are ahead, he foresees, as the major powers of the world struggle for control of the world’s dwindling supplies of fossil fuels. But as this time of peril hastens toward us, the once mighty U.S. is no longer master of its own manifest destiny.

If financial markets are just a giant Ponzi scheme, then, as viewed against the tapestry of imperial history, the U.S. has made the wrong strategic bet. Phillips has his most fun comparing the 21st century United States with the late stages of three great imperial powers before it — the Spanish, Dutch and British empires. There’s a distinct “The Rise and Fall of the Great Powers” thesis at work here, though Paul Kennedy’s name is not mentioned.

As empires get long in the tooth, they appear to forget what made them strong.

Salon.com