I’ve been reading a terrific book lately, Liaquat Ahamed’s Lords of Finance, about the bankers who ran the economies of the four great nations of the earth during the 1920s and 30s, and how their stubborn allegiance to a monetary policy based on the gold standard led to the Great Depression, and eventually to the dreadful events of the 40s and beyond. The main characters of the book, Benjamin Strong, Montagu Norman, Emile Moreau and Hjalmar Schacht, are a bit overshadowed by a fifth figure, John Maynard Keynes, who was also active during the period, a gadfly, commenting throughout, who had the annoying habit of being right pretty much about everything. Since I just wrote a play about Keynes, I found myself wishing I’d read this a year ago! But better late than never.The big Four bankers in the book clung to the gold standard because, as far they knew, doing so had always worked before, so why change? In fact, the gold standard never really worked well at all; major panics and recessions plagued the Industrial Revolution at regular intervals, and nobody knew how to prevent them. We still don’t, though our better grasp of monetary policy does seem to have smoothed things out somewhat, 2007-8 notwithstanding. (And the Great Recession was as much caused by bankers and governments ignoring the lessons of the past as by applying them). But the point is, the bankers of the 20s and 30s really were sensible men, busy applying the lessons of the financial crises of the past, and unable to comprehend how completely the world had changed. We do that, we humans. Generals fight the latest war by the strategies and tactics of the previous one, business people apply the successful models their grandfathers employed, election campaigns follow the blueprints of earlier contests. We think about the world through existing prisms, and though ‘thinking outside the box’ has become a cliche, boxes continue to constrict cogitation. I’ve thought about this quite a bit the last few days, in relation to a few major stories. First, the current unrest in the Ukraine, and the emerging narrative on the Right about what our President has done poorly, and what we should do now. Second, the release by the Joint Chiefs of new proposals for national defense spending. And a third thing: the debate in Utah over air quality. As you probably know, Vladimir Putin has sent troops to the Crimea, a direct violation of the Budapest accord, which Russia, the Ukraine, the US and the UK signed in 1994, guaranteeing Ukrainian sovereignty. I think it goes without saying that Vladimir Putin doesn’t give a rip about international law, or that he just violated a treaty to which the nation he leads is signatory. Although US media sources are quick to declare that claims of violence directed towards ethnic Russians living in the Ukraine are merely pretexts for Putin’s invasion, there have in fact been reports of such violence. I think it’s likely that if the Crimea were to hold an open plebiscite, that Crimean Russians would probably vote for the region to rejoin Russia. That’s also a factor. But really, this seems like a power grab. Putin has publicly mourned the end of Soviet hegemony over its former republics, and just as he sent forces to Georgia in 2008, he’s doing the same now in Ukraine. German Chancellor Angela Merkel apparently told President Obama that, in her conversation with Putin, she wasn’t sure he was completely sane. Makes sense; he’s reliving the Cold War, at least to some extent, which always was irrational. But so is the American Right. In a moment of international crisis, it’s customary for politicians to set partisanship aside and support the President. Not this group of conservatives, who have apparently decided to set aside patriotism in favor of more name-calling and second-guessing. He’s ‘weak,’ we’re hearing. He doesn’t ‘project strength.’ The Russians will always test a new President, and Putin, having tested this President’s resolve in Syria, has now decided it’s okay to push even harder, and retake part of an old Republic. We’re re-fighting the Cold War, in other words. Weak=bad and strong=good, and the Russkis only respect tough guys. But we had a tough guy in the White House in 2008, and it turns out, the Russians tested him too, in Georgia. And George W. Bush didn’t do much about it then either, because, let’s face it, his options were very very limited. As are this President’s. We can apply diplomatic pressure. Putin doesn’t seem to care. We can kick Russia out of the G-8. But Germany has balked at that, because Germany needs Russian oil and gas. Or we could send troops in. Which, let’s face it, we’re not going to do, anymore than President Bush would have in Georgia. We simply do not have any compelling national interest in the Crimea. Unless we’re seriously contemplating sending our young men and women into harm’s way so the President can ‘look strong’ when John McCain or Rudolph Guilani makes fun of him. The Cold War is over. And Iraq and Afghanistan have made us very leery about foreign adventures. What we have not done, as a nation, is rethink our national priorities. We haven’t had a national conversation about the military, about what we want it to do, and where we want it to go, and under what circumstances we are willing to send young people to fight, and kill, and die. Are we in fact the world’s policeman? Isn’t that a better job for the United Nations? How does the UN Security Council reign in Vladimir Putin when Russia has a permanent veto over all UNSC decisions? What’s the use of having an international treaty, like the Budapest Accord, when one of the countries who signed it has no intention of being bound by it? Which brings us to the US defense budget. Here are the facts. The US has an annual defense budget of 682 billion dollars. That’s 39% of the money spent by the entire world on weapons and soldiers. That’s more than the next twelve (or ten or fourteen, depending on how you calculate exchange rates) countries combined. If we cut our military spending in half, we’d still be number one in the world in military spending. That’s crazy. That’s completely unsupportable. The doctrine that the military still relies on is this: we need to be able to fight two full-out wars on two different fronts simultaneously. That’s World War II level thinking. The threats we face today are 1) international terrorism, 2) rogue states, and 3) humanitarian military disasters in failed states. Category 3 clearly doesn’t concern us much, considering how completely the US has managed to ignore the continuing horror show in the Congo. Category 2 bothers us now in Crimea, but we’re not going to send troops there, for all kinds of obvious reasons. The biggest rogue state in the world right now is obviously North Korea, which continues to experiment with the ‘insane complete dictator’ form of government. The fact that the closest thing we have to diplomatic relations with North Korea is Dennis Rodman speaks volumes, but so does the fact that every time Kim Jung Aun starts to act up, China (its only ally) steps in quietly and shuts him up. Dude can’t feed his people; I don’t think they’re honestly much of a threat. That leaves terrorism, and right now our strategy for dealing with terror seems go as follows: figure out where a terror cell is, send in drones, kill a few terrorists with considerable collateral damage, and tick off local populations sufficiently to boost recruitment into terrorist organizations. So that works splendidly. Okay, so, here’s my standard for ‘advanced’ or ‘civilized’ or ‘industrial’ or ‘First World’ nations. I call it the ‘daughter’s fiancee’ standard. Let’s suppose that your daughter got engaged to a guy from another country, and told you they planned to live there after the wedding. How concerned would you be? If the fiancee was from, say, Switzerland, you’d be totally cool with it, wouldn’t you? So, that’s a positive daughter’s fiancee country, or PDFC. If he was from, say, Somalia, you’d freak out, right? So that’s a negative daughter’s fiancee country, or NDFC? Well, let’s compare the US to all the other ‘positive daughter’s fiancee’, let’s compare the US to all the PDFCs in the world. So let’s compare the US to other PDFCs in the world in terms of taxation. Let’s look at total taxation as a percentage of GDP. The US is around 26%. That’s low. The UK is 39%, Finland 41%, France 46%, German 40%. I linked to the chart; see for yourself. If your daughter married a French guy, you’d be delighted, wouldn’t you? Visit ’em in Paris? C’est magnifique. (It’s an interesting chart, isn’t it? Do you notice something? That PDFCs all have high tax rates? NDFCs low tax rates? How thrilled would you be if your daughter moved to Ethiopia (11.6%)? Or Bangladesh (8.5%)? Direct correlation between high taxes and functioning economies?) So here’s my point. The US has the lowest tax rates of any country you’d want your daughter to live in. It also has the highest defense spending of the next fourteen countries combined. So what things do we end up not having enough tax dollars to really do very well? Health care. Education. Environmental protections. Transportation. Pensions. Retirement. Maternity leave for mothers and fathers. Can we rethink these priorities? Right now in Utah, one of the biggest problems in the state is air quality. It’s a huge issue. Salt Lake County has the worst air quality in the country. It’s due to a combination of factors: mostly too many cars, in a valley surrounded by mountains. And, following this session, the legislature has, apparently, no plans to do anything whatever to alleviate it. Because we’ve always had single family homes in suburbs, where you really do have to have a car to get around. Public transit? More high density neighborhoods? Don’t even think about it. We need to rethink. We need to reconsider. We need to rethink the military, our place in the world, lifestyles built on non-renewable energy, recklessly expended, and rendering our planet uninhabitable. Here’s Keynes, writing in 1919:
In continental Europe the earth heaves and no one but is aware of the rumblings. There it is not just a matter of extravagance or “labor troubles”; but of life and death, of starvation and existence, and of the fearful convulsions of a dying civilization.
And, as Keynes predicted, those ‘fearful convulsions of a dying civilization’ would spend themselves in the worst kind of barbarism, violence, ferocity and genocide. I’m not saying we’re on the brink of anything similarly catastrophic. But our priorities seem to be, for now, to dig a hole, and sit in it, and pull the dirt in over our heads. All is well, all is well. But I’m not persuaded anything we’re trying works all that well anymore.