The Misguided Outcry for "Perp Walks"

It is bad enough to hear the lie that capitalism caused our economic crisis repeated ad nauseum by both the dishonest and the clueless. It is even worse to hear some of the “solutions” proposed by the incoming presidential administration and other hardcore Keynesians; now that most people are convinced that “laissez faire” is to blame for our troubles (as if the outgoing regime wasn’t as Keynesian as Keynes himself). Worst of all, since the so-called “experts” have been so wrong, even blow-dried talk show hosts feel empowered to render their completely uninformed opinions. None have been more annoying than the latest outcry over the lack of “perp walks” during the sub-prime meltdown and subsequent economic disaster.

The argument, if one could call it that, is that although the government has failed in the past to regulate properly to avoid economic crises, they have at least prosecuted the greedy perpetrators who supposedly caused them. For example, during the accounting scandals of the early 2000’s, Ken Lay, John Rigas, and Bernie Ebbers were just a few of the executives who were prosecuted and sentenced to particularly harsh jail terms for their roles in the demises of their respective companies. The SEC even took the bizarre step of prosecuting Arthur Anderson – not its executives, but the corporation itself – proving that even imaginary entities were not beyond the long, destructive arm of the federal government. Supposedly, these headline-making witch hunts “send a message” to the rest of the high finance class that it’s time to clean up its act. It also seems to make financial talk show hosts (who seem to learn nothing about economics no matter how long they remain on their jobs) feel much better about things, no matter how little these prosecutions have to do with the economic problems said hosts pretend to report on. Of course, ratings never suffer when the wealthy are marched off to the prisoner's dock.

During this crisis, however, there have been no such prosecutions for the “fraud” everyone keeps talking about as if it actually played a major role in the mortgage meltdown. Don’t get me wrong, I’m sure that there was fraud committed, and the perpetrators should be prosecuted. However, both the media and most of the public continue to demonstrate their complete lack of a sense of proportion when they point to fraud related to tens or even hundreds of millions of dollars while we are experiencing a crisis involving TRILLIONS of dollars. We can burn all of the witches we want, but it won’t get us any closer to solving this crisis. As our socialism bubble continues to deflate, we must confront the systemic problems that caused it or they will finish devouring what is left of our once powerful economy.

It is a little too easy to simply dismiss the lack of prosecutions as the Bush administration refusing to go after its friends during their waning days in office. No matter how friendly they may have been to Wall Street (at our expense) over the past eight years, they have not hesitated to turn on their friends at the first sign of trouble, as the above-mentioned prosecutions demonstrate. Ken Lay in particular seemed to be a close personal friend of President Bush, but when the heat came, Mr. Lay found that door firmly closed. No, close ties to Wall Street are not the reason for the lack of prosecutions for fraud in this crisis.

As I’ve said before, this latest crisis was not caused by fraud or even greed, it was caused by theft. To understand this, one must acknowledge all of the parties in the transactions in question. Whether it is out of ignorance or by design, our politicians and media[1] consistently fail to acknowledge one of the parties. It is hard to give them the benefit of the doubt, because this omission is crucial to promoting their great lie, the failure of free markets.

For example, when talking about sub-prime loans, the only parties acknowledged are the borrower and the lender. Supposedly, the “predatory lenders” misled the borrowers about the terms of the loans, duping them into taking more risk than they should have. At the same time, many borrowers were irresponsible or even dishonest in taking on more debt than they could afford. Even those lenders that did not perpetrate some kind of crime in misleading the borrowers were at least grossly irresponsible because of their “lax lending standards.” So, the case is made that these two parties, acting freely as economic agents in a supposedly laissez faire environment, made bad decisions causing enormous losses that could have been prevented with more regulation. Thus, it is more regulation that is needed to prevent a similar catastrophe from occurring again.

The obvious question that one would ask is why anyone needs to be protected from the consequences of their own actions. If the lenders or borrowers take too much risk, they may lose their money. However, it is their money to lose, and if they lose it, what harm could this do to anyone else?

The answer lies in the true nature of the transactions in question. The argument above assumes there were two parties to each loan, when in fact there were three. However, unlike the borrower and the lender, the third party – the taxpayer - WAS NOT acting freely. The third party was forced to put up his or her money as collateral, without which not one sub-prime loan would have occurred. Moreover, the mortgage-backed securities that are playing such a pervasive role in the collapse of the financial system also would not have been sold had the purchasers not been assured that the government was backing the loans. This was nothing resembling a failure of free markets. It was an easily predictable consequence of government distorting the financial system and the economy by intervention into the markets. As is always ultimately the case, its intervention boils down to armed theft of property. Regardless of the fraud that may have been committed by lenders or borrowers, it was this crime by government that is responsible for the crisis.

Obviously, this is the reason that we haven’t seen “perp walks.” It is unlikely that our federal government is ever going to indict itself for any of its crimes, no matter who is president or what party has a majority in Congress. As for the private sector, the truth of the matter is that most of the conduct by the lenders actually amounted to them doing exactly what the government told them to do. They relaxed their lending standards because government pressured them to give loans to people that they wouldn’t have otherwise lent to, using money stolen from us to remove the onerous risk. Had the lenders been more responsible, they faced charges of discrimination against minorities or other disingenuous “fairness policies” designed to help our government achieve its age-old socialist dream of forced equality. In fact, as I’ve said before here, even the executives at Fannie Mae began to come forward and express concern about the risk that the GSE’s were taking on. What was the answer from our government? The GSE's were told that they weren’t doing enough; they should be “helping” more people. Government stole money from us to cover bets that even their own people were telling them were losers.

Therefore, if there are going to be any perp walks, it should be members of the federal government themselves that should be doing the walking. While we are making arrests, let’s not let the guilty from past presidential administrations escape justice. As I’ve previously argued, it was really the Clinton administration that sowed the seeds of this crisis. It was Clinton that raised the GSE’s to such prominence and pushed through legislation making it a crime to deny a mortgage. Even using the government’s faulty reasoning[2] that a lack of regulation is to blame, it was Clinton that signed the bill repealing the Glass Steagall Act and paving the way for the government-enabled speculation that followed.

Ironically, as bad as the Bush administration has been in so many other ways, it was actually their failure to reverse these Clinton policies that represents their most significant contribution to the mortgage crisis. Most importantly, neither Clinton, nor Bush, nor the majority of the members of Congress can deny their guilt in the central crime that has been perpetrated. They all had a hand in government theft of property. For these perp walks, the federal marshals won’t have to fly to Chicago or New York to make the arrests. They need only walk down the street.

[1] I still observe the quaint practice of referring to them as if they were separate entities.
[2] The Glass Steagall Act is another of those FDR regulatory schemes that is only perceived as necessary because of risks that ultimately exist because of government’s improper involvement in the economy.

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The Bill Clinton Myth Finally Debunked

Whether you are watching the stock market, the headlines, or merely your 401K account balance, there is not much that is positive to draw from the economic collapse that is just getting underway in the United States. With each new negative earnings report, bankruptcy, and ominous unemployment report, it gets a little harder to see the silver lining around this enormous black cloud. Some have argued that the collapse of the present system will provide an opportunity to remake America as a free country again. They may be right, but that is a bet with long odds that wouldn’t pay for years, possibly decades. However, there is one positive consequence of the economic debacle that we can point to right now. The Bill Clinton Myth has finally been debunked.

Most people are familiar with the Bill Clinton Myth, but are unaware that it is not historically accurate. It’s a wonderful story, if you are a Democrat or even just a government-worshipper in general. For those who practice that religion, the Bill Clinton years serve as a Golden Age to talk about, to write about, and even to pray about, hoping for its return. However, this myth does not even offer the benefits of its more interesting ancient predecessors. In fact, while the ancient myths of gods and monsters contained spiritual and philosophical truth underneath their obviously fictional plotlines, the Bill Clinton Myth contains no truth at all. Perhaps “myth” is the wrong word, because it gives good myths a bad name.

The Bill Clinton Myth goes something like this. After “mismanagement” of the economy by President George H.W. Bush, which resulted in the recession that coincided with the 1992 election, Clinton took office and “managed the economy” wisely during his eight year presidency. Clinton’s “centrist policies” were just what the economy needed at a time of technological revolution, and his wise stewardship resulted in not only unprecedented growth and low unemployment for the economy, but balanced budgets and even surpluses for the federal government. By the time Clinton left office, the United States was more powerful economically than it had been at any time in its history.

Like the Populist Myth of the 19th Century, this one is a great story. Also like the Populist Myth of the 19th Century, none of it is true. While even some Republicans begrudgingly credit Clinton with the mythical budget surpluses or the equally mythical prosperity in the 1990’s, they do themselves a disservice in regard to their quest to discredit every Democrat who ever (or will ever) lived. As we have now learned, the facts are that there were no federal government surpluses, the lion’s share of the prosperity was no more than a Federal Reserve-created bubble (the dot com bubble), and what real economic growth there was occurred despite Clinton’s policies, not because of them.

It might be necessary to go back and read that last sentence again. It is heresy, as surely as Galileo’s heliocentrism was to the Roman Inquisition. However, it is also just as undeniable as heliocentrism, regardless of the fact that it may shatter the world view of the government-worship cult (including, but not limited to, the Democratic sub-cult). Let us look at these “heresies” one at a time.

First, there were no federal surpluses. As this writer clearly explains, the appearance of a surplus was merely the result of the increased tax revenue from the dot com bubble allowing the Clinton administration to borrow more money from Social Security. Thus, while the public debt went down in the last four years of the Clinton presidency, the intergovernmental debt (mostly to Social Security) went up by an even greater amount, resulting in an increase in the overall national debt in each of those years. While the writer of this article could be quite correctly accused of a conservative bias, his argument here is based upon easily verifiable facts out of the published federal government budgets for those years. In other words, whatever else he might think about Democrats, he is stating facts here that are not in dispute. Only spin and distraction keeps the great majority of people from simply looking up the budgets from 1997- 2001 and seeing the deficits for themselves.

Second, there is the technological revolution and its resulting prosperity. Certainly, there were astounding developments in technology in the late 1980’s and throughout the 1990’s. One could look at this decade as a mild version of the technological revolution that occurred at the turn of the 20th century, although the breakthroughs, mostly in computing, were not as paradigm-shifting as the invention of the steam engine or the automobile, much less the telephone or the computer itself. However, there were vast increases in productivity due to the “new economy,” and a whole industry that did not before exist was born that employs people in higher paying jobs and has revolutionized communication, commerce, and efficiencies.

All of this happened during Bill Clinton’s presidency (although its roots go back at least as far as the Reagan years, possibly even Carter), but what, SPECIFICALLY, did he do to cause it? Nothing. Microsoft, Oracle, Apple, and the rest of the REAL new companies that emerged during this technological revolution were children of the free market. Gates, Ellison, Jobs and the rest were all creative entrepreneurs who took enormous risks based on their superior vision of where breakthroughs in technology could take commerce. Anyone old enough to remember knows that government had very little understanding of the tech sector, and frequently complained that it had not yet come up with regulations that would address the new types of products or methods of conducting business that the tech sector presented. In other words, much of the reason for the explosive growth was the ABSENCE OF GOVERNMENT INVOLVEMENT, despite government’s wishes to the contrary. For a short time, until the lumbering machinations of government caught up, a free market in technology existed that allowed for spectacular innovation and growth.

The most significant action undertaken by the Clinton administration regarding the REAL technological revolution was its anti-trust case against Microsoft. Here, Clinton’s true contempt for free markets and property rights came shining through. The basis for this action was rooted in the century-old (at least) antagonism toward natural monopolies, which benefit customers, as I’ve discussed here, as opposed to government-created monopolies that harm customers. This particular anti-trust case had an even more bizarre twist, as it was based upon the ludicrous assertion that Microsoft had some responsibility to build opportunity for its competitors into its own product. Thus, government tried to “ensure competition” by using its coercive power to cripple the leader, rather than protect the property rights of all. Only through the government looking glass could such preposterous reasoning be called “free markets.”

However, that is certainly not the whole story behind the 1990’s. There was another side to the tech revolution – the dot com bubble. This side of the story is not characterized by Microsoft or Apple, which are viable companies to this day. This side of the story is characterized by Pets.com, online supermarkets, and other hare-brained schemes that only got capitalized due to the reckless monetary policy pursued by the bubble-maestro himself, Alan Greenspan. To be fair, Clinton may not deserve much blame for this bubble. Most politicians demonstrate little understanding of monetary policy, beyond their belief that lower interest rates raises stock prices and higher stock prices equals votes. At one point, he actually made a speech wherein he claimed that the business cycle had been eliminated,[1] which seems to indicate that his understanding was as limited as that of most other presidents. In any case, the dot com bubble can either be a minus for Clinton, if you attribute the activities of the Federal Reserve to the corresponding presidential administration, or merely the Fed doing what the Fed does (inflate and distort the economy), regardless of who happens to be in office.

Finally, in addition to the false credit that Clinton receives for his imaginary role in the perceived prosperity of the 1990’s, he seems to have somehow escaped all blame for his very real hand in the problems we are facing now. Remember, it was Clinton who appointed FDR II (Franklin Delano Raines) as CEO of Fannie Mae, and then pressured the GSE to significantly increase its loans to riskier sub-prime borrowers. In fact, the Clinton administration bragged about the fact that it had not only had a hand in the first black CEO of a Fortune 500 company,[2] but also that it had made home ownership possible for millions of Americans that otherwise could not have obtained mortgages. Of course, it is poetic justice that Raines is now the subject of over 100 civil lawsuits and a huge percentage of those mortgages are defaulting. As is always the case, government’s results when interfering in markets are exactly the opposite of its intentions.

So, contrary to the Clinton Myth, the facts behind the Clinton presidency reveal that it had nothing to do with what real prosperity there was in the 1990’s, was as clueless and impotent as most other administrations in taking any action while the Federal Reserve blew up an enormous bubble on its watch, and sowed the seeds for the mortgage crisis that started the present economic cataclysm. Economically, the Clinton presidency was an unmitigated disaster, and hopefully it is clear to all but the most fervent government worshippers that his “stewardship of the economy” is a myth.

Lest this be seen as a partisan attack, let me clear the air. There have been two presidents credited with prosperity that seemed to coincide with their years in office during the past 40 years. One was Reagan, a Republican, and the other, Clinton, a Democrat. In both cases, they were falsely credited with prosperity that was mostly an illusion caused by the Federal Reserve, and their policies otherwise failed miserably.[3] These were not so much personal failures on the part of either of these men, but rather failures of a false ideology. They both represented failures of the ideology that government has a role in the economic interactions between people beyond enforcing contracts and preventing violence or fraud. Until we cease demanding that government “do something about the economy” and recognize that government CAUSES all of our economic problems, we are going to keep getting the same results, whether a Democrat or a Republican occupies the White House.

Now that the Clinton Myth has been exposed as a fraud, it is time to reject the entire government religion as a whole. Centuries ago, most peoples of the earth ceased sacrificing animals to bring rain, better crops, or good fortune hunting. At some point, they realized that there was no cause-effect relationship between killing a goat and the end of a drought. It is time that we likewise recognize that no politician has ever had any more to do with prosperity than those unfortunate goats had to do with the weather.[4] Once the superstition of this religion is rejected, it is clear that only free markets, individual effort, and creativity can create wealth and prosperity.

[1] I recall him making this ludicrous statement, but have not been able to reference it. Perhaps someone can provide the citation in a comment.
[2] The focus by both the Clinton administration and the media on Raines, a political hack who took over a Government Sponsored Entity, was a disservice in that it distracted attention from REAL black executives, like Kenneth Chenault, and Richard Nanula, who had risen to their positions based upon their talent and hard work.
[3] To be fair, Reagan’s rhetoric was admirable. He talked constantly about lower taxes, smaller government, and more personal liberty. However, he failed to implement this ideology to any significant degree, possibly because of a Democratic Congress. More importantly, he ran huge deficits due to defense spending and the growth of entitlement programs on his watch that constituted bigger government rather than smaller.
[4] Actually, the government religion is far more harmful than the ancient religious cults. When the ancients sacrificed a goat, they neither benefitted nor harmed anyone (other than the goat). When government tries to “create prosperity,” it harms everyone in society.

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Obama and the Ghost of FDR

President-elect Barack Obama has not even taken office yet, and already the entire world seems to be celebrating the death of the last vestiges of capitalism. With the Democrats in control of both the executive and legislative branches of government, calls for a “new New Deal” are as commonplace today as the expression “it’s a free country” once was (you don’t seem to hear that much anymore. I wonder why?). It is not as if the “Change” Obama proposes to bring will be that radical. The United States has not practiced free market capitalism since at least before the last Great Depression, despite the ludicrous claims that capitalism is to blame for the next one. However, Obama will have to come up with something original if he is to leave an imprint upon history comparable to that of the original New Dealer. Not only did FDR turn the Hoover-created depression into the ten-year Great Depression, he has now actually reached from beyond the grave to take down the world’s largest automaker. Even apocryphal stories of the holy Obama walking on water pale in comparison to that.

It is nothing less than astounding that GM can fail so spectacularly as a direct consequence of the policies of the first FDR, while the entire world not only ignores the fact that the New Deal caused it, but actually demands another New Deal as the solution. Not even O. Henry gave us irony like this.

There is actually very little debate about what has caused the destruction of the American auto industry. Occasionally, a weak attempt is made to imply that the Big Three should not have concentrated on trucks and SUV’s while foreign competitors were making more energy-efficient vehicles. However, it is very easily demonstrated that the U.S. automakers had no choice but to concentrate on vehicles that had the necessary margins to cover their huge labor costs, both for current and retired workers. Decades of concessions to powerful labor unions have driven their costs so high that they are simply unable to make an automobile that competes with foreign imports.

There are those that argue that “unregulated capitalism” caused American manufacturing jobs to migrate overseas, where manufacturing labor was cheaper. However, this fallacy refutes itself. If “market forces” truly were in play, how did U.S. labor costs get so high? Did “greedy capitalists” simply abandon their profit ambitions and decide to pay their employees more than they could afford to? Surely, this would have required not merely irresponsibility but utter foolishness from the same crowd that MADE GM the largest automaker in the world. What caused this decades-long failure of basic business sense?

Of course, everyone knows the answers to these questions, but want to pretend that they don’t. The reason that manufacturers, especially the automakers, continually promised labor unions more than they could afford to pay was because government FORCED them to do so. It really is that simple. Under the euphemism “collective bargaining,” the government made it illegal for a manufacturer to refuse a demand from a union. An illusion of choice was sustained by merely requiring the employer to “make a reasonable counter-offer,” but the courts were there to see that “reasonable” meant that if the union asked for the moon and the stars, the employer would have to at least agree to a few planets. In the end, the employer could not choose freely as far as what to pay their employees or what benefits to offer. Without free choices, market forces are suspended.

To make this as plain as it can possibly made, this game is played like this: The union demands compensation beyond what the business model will support. The employer replies that they are unable to agree if they wish to stay in business. The government says, “Just give it to them or we’ll shoot.” Another “victory for the workers,” is won and the inevitable end draws nearer.

The entire union concession/cost escalation dynamic goes back to the National Labor Relations Act of 1935 and other New Deal legislation. It was these fundamental departures from capitalism that sowed the seeds of the eventual destruction of American manufacturing. What is honestly horrifying is that Americans can observe this government coercion of industry and seriously refer to it as “unregulated capitalism,” or to the series of concessions made by manufacturers at gunpoint as “market forces.” We are truly through the looking glass where a bull is stumbling through the china shop and the storekeeper is reprimanding the broken glass.

While it might seem unfair to blame a man that has been dead for over six decades for the failure of a company in 2008, one must consider the dominance that America enjoyed in the manufacturing sector to begin with. At one time, American manufacturers flooded the world with high-quality, low-cost goods, while still paying wages many times higher than their competitors overseas. There was no sector where America was more dominant than automobile manufacturing, an industry that America literally invented. It would not be brought to bankruptcy overnight. Year after year, decade after decade, the companies grew a little less profitable as government forced them to raise their labor costs IN OPPOSITION to market forces. It was not until decades later that those costs rose beyond the point where the companies could remain competitive.

However, the length of time it took for the disease to run its course does not change the nature of the virus that caused it. Indeed, the same reasoning could be applied not only to the entire manufacturing sector, but to other sectors of the American economy as well. The collapse we are experiencing is the result of an entire economy that has been rendered profoundly unproductive by systemic problems that all relate to government intervention into markets. We have still not found a cure for cancer or the New Deal. To be fair, the poisons we use to try to kill cancer before the they kill the patient are far less deadly and have a much higher rate of success than the medicine we are about to apply to our current economic crisis. The survival rates for many cancers continually improve. The survival rate for American businesses might not be significant enough to measure.

So, Obama will have to be creative to achieve staying power comparable to FDR’s. While Obama’s stated economic policies are terribly destructive, there is not much left of the American productive structure to destroy. More than likely, his interventionist and redistributive policies will merely apply the coup de grace to an economy that at this point merely retains the superficial façade of its former capitalist glory. In order to truly emerge from the shadow of the Ghost of FDR, Obama will have to find a completely new, original way to rend the fabric of our once-free society. One can only dread what that might be.

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Our Last Emperor

Within hours of his historic victory, the official story of Barack Obama’s presidency began to be written by the corporate media machine. The general consensus of all of the coverage is that Obama is inheriting huge problems in the economy and foreign policy of the United States, and that he alone will have to solve them. Associated Press writer Jennifer Loven’s article of this morning, carried the headline, “Great Expectations: Obama will have to deliver.” The New York Times featured an article called “For Obama, A Towering Economic To Do List.” Perhaps most ominously, an article from Bloomberg contained this passage,

“The Democratic president-elect has much more on his agenda, amounting to what may be the broadest overhaul of the U.S. economy since Franklin D. Roosevelt's New Deal. Beyond job creation and big investments in public works, Obama intends to shift the tax burden back toward the wealthy, roll back a quarter-century of deregulation, extend health-care coverage to all Americans and reassess the U.S. government's pursuit of free- trade deals.”

Fate has not been kind to Barack Obama. His task is not monumentally difficult – it is impossible. An entire nation and, to some extent, an entire world, is looking to this relatively young man to bring back to life an American Empire that is beyond resuscitation. We are presently witnessing the spectacular failure of an ideology that has dominated the world for the past century. Like his predecessor, Obama brings terribly bad (although superficially different) ideas to the White House. Like his predecessor, Obama will make a bad situation a lot worse, albeit with different tools out of the same toolbox. However, the end of the Empire that will occur on his watch is inescapable, no matter who occupies the White House. The Empire is ending because, like all empires, it is unsustainable.

Make no mistake, Obama’s policies will make things much worse. For an economy that has never really recovered from the original New Deal, the policies described in the Bloomberg passage alone should be enough to put America’s “mixed economy” out of its misery. Following the example of past American emperors, particularly from the (in past decades) more socialist Democratic party, Obama may do damage in one term that another president might take two to do. Nevertheless, this collapse is not going to be remotely his fault, although he may take much of the blame.

As I’ve written here, we are experiencing the deflation of the mother of all bubbles, the socialism bubble. America’s problems are not the result of the mistakes of specific leaders or of the failures of specific policies. America’s problems are systemic. They are the result of building the edifice of our society and economy around the idea of central planning and an all-powerful federal government. The media ludicrously portrays the welfare state, the worldwide military force, the central economic planning via the Federal Reserve and alphabet soup regulatory agencies, etc. as failing because they have been poorly managed. Sometimes they have. The Bush Administration jumps to mind. However, it is crucial to realize that there is no way to successfully manage them. They are part and parcel of an ideology that is doomed to fail regardless of the skill of its execution. When America has prospered in past decades, it has been in spite of these institutions, not because they have been managed well. Until Americans realize this, the “change” they seek will never come.

The real tragedy is that neither the majority of Americans nor Obama himself understand this. So, all look to Obama to take some action, although most really can’t say what it is. Each time I hear Obama or one of his followers dutifully mouth his one word slogan, “Change,” I am haunted by Charlotte Iserbyt’s insightful question/retort, “From what, to what?” I have occasionally asked an Obama supporter this question. Despite long, uncomfortable silences on each occasion, I have yet to hear a reply. They do not know what they mean. They just want government to make their lives better. They do not realize that government, by its very nature, does not have the power to do so.

Not long ago, I stumbled upon Mel Gibson’s Apocalypto while channel surfing just before going to sleep. It is not a movie for the faint of heart. It depicts life at the end of the Mayan empire, complete with human sacrifice in state-of-the-art digital clarity. I was struck by the words of the sacrificer to the maniacally cheering crowd. He mentions a short list of afflictions of the people – poor crops, disease, drought – and then goes on to say,

“They say this strife has made us weak. That we have become empty. They say that we rot. I say we are strong. Great people of the banner of the sun, I say we are strong. We are a people of destiny. Destined to be the masters of time. Destined to be nearest to the gods…”

He then goes on to brutally murder two captives in order to appease the gods and renew the land.

On Tuesday night, I was reminded of this scene while watching Barack Obama’s victory speech in Chicago. The similarities were more striking than one might at first think. As in the film, tens of thousands were gathered to implore their government to save them. As in the film, Senator Obama reviewed the list of problems afflicting his people (two wars, the financial crisis, healthcare costs, etc.). As in the film, President-elect Obama’s proposed solutions will do nothing to relieve the suffering of his people. As in the film, the tens of thousands gathered erupted into wild applause and adulation at each meaningless pronouncement. I am not sure what I found more horrifying: the sight of thousands of people cheering a brutal murder, or the sight of the citizens of the so-called “land of the free” worshipping their government. Each is an outward indication of systemic societal flaws within.

Perhaps President Obama’s legacy will find some luck. The great majority of Americans still believe that FDR resolved the Great Depression, when in fact he caused it. Perhaps Obama will get some credit for the eventual recovery in America, even though it will happen in spite of his policies rather than because of them. Unfortunately for him, it would be better if Americans finally saw their present form of government clearly for what it is.

After the end of the Empire, there will still be a United States of America, just as there is still an Italy, France, Spain, and England. However, this moment in American history is different. In the past, the productivity of the American economy has eventually been able to overcome the disastrous policies of an FDR or an LBJ. That is no longer the case. The accumulated effects of government intervention and government-created systemic problems that have been built into the American economy have finally destroyed that productivity. The parasite has killed the host. This crisis is going to force some substantive change, whether for better or for worse.

The real question confronting America is what will come next. None of the empires of the past were succeeded by freer societies for their people. Will America take a different path? No nation in history has achieved the liberty of its people that the United States did during its freest, most prosperous period. It is possible that this spirit of liberty is not completely extinct. Following the reign of this our last emperor, we will have the opportunity to truly remake the United States. Instead of repeating the mistakes of history, we can make history once again. After the fall of our empire, we will have the opportunity to restore our republic and reclaim our freedom. That is the real change that we need.

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