15 August 2015

Lawrence Wilkerson: Travails of Empire - Oil, Debt, Gold and the Imperial Dollar

"We are imperial, and we are in decline... People are losing confidence in the Empire."

This is the key theme of Larry Wilkerson's presentation.  He never really questions whether empire is good or bad, sustainable or not, and at what costs.  At least he does not so in the same manner as that great analyst of empire Chalmers Johnson.

It is important to understand what people who are in and near positions of power are thinking if you wish to understand what they are doing, and what they are likely to do.  What ought to be done is another matter.

Wilkerson is a Republican establishment insider who has served for many years in the military and the State Department. Here he is giving a 40 minute presentation to the Centre For International Governance in Canada in October, 2014.

I find his point of view of things interesting and revealing, even on those points where I may not agree with his perspective.  There also seem to be some internal inconsistencies in his line of thinking.

But what makes his perspective important is that it represents a mainstream view of many professional politicians and 'the Establishment' in America. Not the hard right of the Republican party, but much of what constitutes the recurring political establishment of the US.

As I have discussed here before, I do not particularly care so much if a trading indicator has a fundamental basis in reality, as long as enough people believe in and act on it. Then it is worth watching as self-fulfilling prophecy.  And the same can be said of political and economic memes.

At minute 48:00 Wilkerson gives a response to a question about the growing US debt and of the role of the petrodollar in the Empire, and the efforts by others to 'undermine it' by replacing it.  This is his 'greatest fear.'

He speaks about 'a principal advisor to the CIA Futures project' and the National Intelligence Council (NIC), whose views and veracity of claims are being examined closely by sophisticated assets.  He believes that both Beijing and Moscow are complicit in an attempt to weaken the dollar.

This includes the observation that "gold is being moved in sort of unique ways, concentrated in secret in unique ways, and capitals are slowly but surely divesting themselves of US Treasuries. So what you are seeing right now in the supposed strengthening of the dollar is a false impression."

The BRICS want to use oil to "force the US to lose its incredibly powerful role in owning the world's transactional reserve currency."   It gives the US a great deal of power of empire that it would not ordinarily have, since the ability to add debt without consequence enables the expenditures to sustain it.

Later, after listening to this again, the thought crossed my mind that this advisor might be a double agent using the paranoia of the military to achieve the ends of another.  Not for the BRICS, but for the Banks.  The greatest beneficiary of a strong dollar, which is a terrible burden to the real economy, is the financial sector.  This is why most countries seek to weaken or devalue their currencies to improve their domestic economies as a primary objective.  This is not so far-fetched as military efforts to provoke 'regime change' have too often been undertaken to support powerful commercial interests.

Here is just that particular excerpt of the Q&A and the question of increasing US debt.

I am not sure how much the policy makers and strategists agree with this theory about gold. But there is no doubt in my mind that they believe and are acting on the theory that oil, and the dollar control of oil, the so-called petrodollar, is the key to maintaining the empire.

Wilkerson reminds me very much of a political theoretician who I knew at Georgetown University. He talks about strategic necessities, the many occasions in which the US has used its imperial power covertly to overthrow or attempt to overthrow governments in Iran, Venezuela, Syria, and the Ukraine. He tends to ascribe all these actions to selflessness, and American service to the world in maintaining a balance of power where 'all we ask is a plot of ground to bury our dead.'

A typical observation is that the US did indeed overthrow the democratically elected government of Mossadegh in 1953 in Iran. But 'the British needed the money' from the Anglo-Iranian oil company in order to rebuild after WW II. Truman had rejected the notion, but Eisenhower the military veteran and Republic agreed to it.  Wilkerson says specifically that Ike was 'the last expert' to hold the office of the Presidency.

This is what is meant by realpolitik. It is all about organizing the world under a 'balance of power' that is favorable to the Empire and the corporations that have sprung up around it.

As someone with a long background and interest in strategy I am not completely unsympathetic to these lines of thinking. But like most broadly developed human beings and students of  history and philosophy one can see that the allure of such thinking, without recourse to questions of restraint and morality and the fig leaf of exceptionalist thinking, is a terrible trap, a Faustian bargain. It is the rationalization of every nascent tyranny. It is the precursor to the will to pure power for its own sake.

The challenges of empire now according to Wilkerson are:
1) Disequilibrium of wealth - 1/1000th of the US owns 50% of its total wealth. The current economic system implies long term stagnation (I would say stagflation. The situation in the US is 1929, and in France, 1789. All the gains are going to the top.
2) BRIC nations are rising and the Empire is in decline, largely because of US strategic miscalculations. The US is therefor pressing harder towards war in its desperation and desire to maintain the status quo. And it is dragging a lot of good and honest people into it with our NATO allies who are dependent on the US for their defense.
3)  There is a strong push towards regional government in the US that may intensify as global warming and economic developments present new challenges to specific areas.  For example, the water has left the Southwest, and it will not be coming back anytime soon.
This presentation ends about minute 40, and then it is open to questions which is also very interesting.
Lawrence Wilkerson, Distinguished Visiting Professor of Government and Public Policy at the College of William Mary, and former Chief of Staff to U.S. Secretary of State Colin Powell.

Related:  Chalmers Johnson:  Decline of Empire and the Signs of Decay