“War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself”
— John Stuart Mill
Every American old enough at the time remembers where they were on 9/11! Some remember it as distinctly as the day President Kennedy was assassinated or the Space Shuttle Challenger exploded after liftoff. On that fateful September day, radical Islam declared a new religious crusade against Western Civilization. In an act of war, terrorists sounded their call for the destruction of our very way of life. Denouncing everything we say we stand for: truth, liberty and justice, they took aim at what they believe our nation is founded upon. Money!
As the World Trade Center’s Twin Towers buckled amidst plumes of smoke, hundreds of thousands, millions across the planet cheered for the destruction of America. Our hearts sank at the tragedy – they praised Allah. Over a decade later, and the nightmare has only deepened. The war in Iraq and the ongoing war Afghanistan collectively endured longer than both World Wars combined. The death toll is only rising with militant fundamentalists in Pakistan and Iran fueling the chaos.
Make no mistake about it. As September 11, 2001 proved- the threat is real. The wars in Afghanistan and Iraq, the bombings in Spain and England, the attacks on Mumbai, the genocide in Darfur, the fragile stability of Pakistan, and the belligerence of Iran’s president, Mahmoud Ahmadinejad – all of these are testaments to the absolute malevolence we are facing.
Americans are constantly on terror alert, paranoid much the same as we were of Russian spies and nuclear holocaust during the Cold War. And every day that we are called on to put our sons and daughters in the line of fire we question our purpose and our resolve is tested. This dichotomy of good and evil in religion is not new to the history of man, but this time it is most insidious and horrifying.
Before we can address how we should wage the war on terror, we must first understand the reality of what exact threat it is that we are facing. What every American needs to understand with absolute clarity is just how severe and pervasive the threat really is, because it is clear that so many of us are unaware of the profundity of this ideological menace.
Now, media pundits often make the case that our government is war mongering, striking fear into the hearts of American citizens for the tactical purpose of some ulterior motive. They will argue that the threat is nowhere near as terrible as President Bush made it out to be. I wish it were the case, but the unfortunate truth is that the media’s conspiratorial claims are misguided and they do the American citizens a horrible injustice by sugarcoating the severity of the clear and present danger posed by Islamic Fundamentalism.
The jihad being waged by radical Islam is not being fought by a mere band of scattered guerilla warriors hiding in far off deserts or the remote caves of Tora Bora, Afghanistan. Radical Islam does not consist only of Al Queda and the Taliban; it is a way of life, an extreme and fanatic mentality bread into the hearts and minds of millions across the globe.
We must remember that with the destruction of the World Trade Center, there was a general response within the Muslim world of jubilee. Two days before the attacks of September 11, the Mufti of Palestine, the senior religious figure in the Palestinian authority, and with millions of followers, openly prayed on radio for Allah to destroy Great Britain, Israel and the United States. After the Twin Towers buckled, almost immediately, Palestinian airwaves were flooded with propaganda, boasting that a divine blow in the name of Allah had been dealt against the enemy [the United States] and that Israel is to follow.
We must understand further that this propaganda machine is not confined to remote villages or forgotten corners of the world. The machine is vast, spanning continents and infecting the minds of people in Africa, Asia, Europe, South and North America. There are the Pakistan based Lashkar-e-Taiba and Jaish-e-Mohammed, who seek the Indian state of Jammu and Kashmir’s accession to Pakistan; the Bangledeshi Jamaat-ul-Mujahideen; the Chechnyan separatist “Special Purpose Islamic Regiment”; the Sunni Hezbollah of Turkey and the Shia Hezbollah of Lebanon. In Iraq there’s the Abu Musab al-Zarqawi’s al-Qaeda affiliate, and Al-Faruq Brigades, a militant wing of the Islamic Movement in Iraq (Al-Harakah al-Islamiyyah fi al-arak) to name only a few. There’s the Israeli and Palestinian Al-Aqsa Martyrs’ Brigades and Hamas, which calls for the destruction of Israel. Armed terrorist organizations are growing in Algeria, Yemen, the Philippines, the Sudan, Russia, Georgia, Spain, France, England, Germany – the list goes on and on as the cancer spreads – even into the United States!
The dangerous ideology these extremists preach is in fact more than simple dogmatic propaganda. It is a media of terrorism. And it is so prevalent, literally as ubiquitous as CNN and Fox News are to us Americans, that the fanaticism it preaches has become part of the way the populations of these regions see the world. The machine targets youth – often the most innocent, those that are lost, without shelter, food, medical care, a family. It pontificates a culture of hatred, a demonization of western culture, appealing to those in extreme poverty, those with the least hope, by promising heaven in the afterlife if, and only if, an oath to wage jihad against America is taken.
The infiltration of radical Islam into our cultures is so deep and pervasive, it is shocking. The frontlines aren’t just in Iraq and Afghanistan, or even Pakistan, Israel or India. Their ideology is spreading like a malignant tumor, feeding on human desperation with frightening speed. The front lines, my fellow Americans, are in Madrid, Paris, London, Berlin, Washington D.C., New York, right down to Fort Hood, Texas. Their twisted worldview of unquestionable obedience to Allah and destruction of Judeo-Christian Civilization is in our very own backyards. Their war, their ideology of hatred, has come ashore our land of liberty, and they have sworn to take us down by any means.
Yet, in America, we tend to think of this extreme fundamentalist sect as being in the decided minority in the nation of Islam, small and distant. And while the terrorist acts on 911, in Madrid and London’s train stations, in Germany, in Mumbai, now make us turn our heads, we still generally think of Muslims as good, law abiding, faithful, loving people because we don’t see the fanaticism in the Muslims that live amongst us.
In America, this belief in the goodness innate in Muslims as a religious people is accurate and right. We know that not all Muslims are part of radical Islam, we have faith in the moral compass of our Islamic neighbors, and rightfully so. But, the false logic is this. Just because the majority of Muslim Americans are peaceful, virtuous, law abiding people, it does not mean that all are. Not internationally and not domestically.
The Qur’an is a beautiful religious text, and in its purpose to the nations of Islam as the verbal divine guidance and moral direction for mankind it stands as perhaps the finest piece of literature in the Arabic language. Just as the Bible teaches morality, compassion towards others, and the rule of law, so does the Qur’an. In fact, The Qur’an itself cites an intimate, reverential relationship with the earlier transcribed Torah and New Testament, attributing their similarities to their unique origin from having been revealed by the one God.
It is He Who sent down to thee in truth, the Book, confirming what went before it; and He sent down the Law (of Moses) and the Gospel (of Jesus) before this, as a guide to mankind, and He sent down the criterion (of judgment between right and wrong).
But our sense of security is false when we translate what we know of domestic Islam into a belief that extreme fundamentalist Islam is few in numbers and that, as “Muslims”, they actually follow the Qur’an. Whereas our system or ordered liberty is founded upon the Judeo-Christian virtues that celebrate the sanctity of life and teach us the truth that love is the fulfillment of the law, radical Islam teaches their children to hate in life and die for the sake of Allah.
These radicals, we must understand, don’t follow the Qur’an. They think they do, in fact they obstinately proselytize that they do. But in fact, many of them have not even read the Qur’an. Discounting the hundreds and thousands of these radicals that are illiterate, those that do read often don’t read the Qur’an. While the Qur’an teaches compassion, love and equal justice, they instead follow the teachings and writings of men like Mohammad Ibn Abdul-Wahhab, an 18th century zealot desert preacher who preached that all forms of adornment and modernity are blasphemous and that all non-believers in his version of Islam must be converted or destroyed.
Unlike traditional Islam, Wahhabism treats women as third class citizens, imposes the veil on them, and denies them basic human rights such as the freedom of traveling within the country or leaving it without permission or Mahram (a relative male chaperon).
In addition, Wahhabism outlaws the celebration of Almoulid, the Prophet Mohammad’s birthday, forbids religious freedom, outlaws political freedom and forces the public to observe strictly regimented prayers. Wahhabist authorities intimidate the masses by publicly beheading convicted killers and hand-amputating alleged thieves. Perhaps most telling of this “theology’s” absolute perversion is the fact that it considers itself to be the only correct way in all of Islam, and any Muslim who opposes it is a heretic who must be enslaved.
This is not Islam as learned from the Qur’an, rather a fundamentally savage, backward and perverted form of preaching that is contrary to the Qur’an and it is used to brainwash legions of extremist Muslims to become hell-bent on the destruction of America. It is not the Qur’an that has taught them to wage jihad and convert by the sword or die in martyrdom with the promise of a thousand virgins. Rather, it is an entirely different set of books, books of jihad written or orally passed down by Wahhabist-style preachers who follow and embellish upon Mohammad Ibn Abdul-Wahhab’s teachings and the like.
What we see all across the world is the utilization of these perverted teachings in order to preach Wahhabism through wrote memorization to an illiterate or otherwise impoverished, desperate and credulous set of Muslims. In Afghanistan, the Taliban employ this technique with horrifying efficiency through a network of Saudi Arabian funded schools called Madrasahs. In these Medrasahs no subjects are taught except for Wahhabism. The hopeless are brought in, given food and shelter, with the requirement of submitting to the teachings therein.
Medrasah, literally means school, and historically they have not been anti-American, anti-Western, pro-terrorist centers having less to do with teaching basic literacy and more to do with political and theological indoctrination. And certainly not all are today. But, these Medrasahs of which I speak are widespread and they are effectively brainwashing a generation of desperate Muslims to hateAmerica, to hate western civilization, and to covet the destruction of all that we stand for.
They brainwash their recruits and followers to believe that they’ve revived the Islamic jihad, dividing the world into two camps, the Muslim and the non-Muslim. They sermonize that Allah is happy when non-Muslims die. That the laws of Islam, the books of jihad, demand that non-Muslims are to be taken to the slaughter. To these radicals, any non-Wahhabist Muslim, to include American Muslims, are called Kafirs (infidels), cows to be taken to market, sold, and butchered. Quite literally, they are brainwashed to believe that no infidel is innocent, period.
Americans must understand that a countless horde has demonized us. It seems so odd and inconceivable to us that so many people have been brainwashed to this end. But, to fathom this mentality, again, we need only look to our own, relatively recent history. Recall that Christians, out of the desperation caused in the aftermath of World War 1, fell for the extreme Nazi propaganda machine calling for the eradication of the Jews. If we fell for it, why would the Muslims not when faced with similar extreme conditions?
A seed of anti-Semitism, just as it did in Nazi Germany, has burst, bringing Christianity, and all other faiths into the crosshairs. Hitler committed a crime against the youth of Germany by stealing their innocence and brainwashing them with a message of hatred. Radical Islam is committing the same crime against non-radical Islam, stealing their youth, capitalizing on desperation and ignorance to instill a fundamental hatred of any non-radical, Muslim, Christian, Jew and Hindi alike. In many regions of the world, hundreds of thousands of these radicals comprise the majority and any non-radical Muslim living in the purview of these terrorist havens is treated like a cow, a target to be slaughtered on site.
One would think that drawing a similarity to Hitler’s Nazi regime would be the most horrifying analogy possible. Yet, the circular dogma that lead to fascism under the Nazi regime was actually less dangerous and sinister than radical Islam. In Hitler’s Germany, Nazi’s hated and killed in the name of the Fuhrer, while in radical Islam, jihadists terrorize in the name of God. Their creed is the same; destroy all those that do not believe as they do. With the Arian race, this hatred was primarily confined to the Jews, whereas radical Islam has widened its sights and taken aim at Christians, Budhists, Hindi, and even Muslims that do not believe as they do.
America must wake up to this unfortunate reality. And we must be willing to appropriately and decidedly address any insight to violence against Western Civilization, regardless of whether the origin of the incantation is domestic or foreign.
A clear understanding of this threat, though, is only the first step to thwarting it. The next question is one that has to date eluded us on many fronts; how do we fight this terrorism?
As aforementioned, we must first look inward to see what we are made of. To be clear, I’m not talking of our strength and resolve, as I believe our endurance through the Iraq and Afghanistan Wars is proof of America’s tenacity. Further, a proper understanding of the threat’s pervasiveness should only fortify our steadfastness as a nation. Rather, I am talking about our morality. Perhaps more pointedly, I am talking about our priorities.
You see, these terrorists have made a calculated decision in the way they are waging their war. Presented with the dilemma of taking down a giant, a world superpower with a vastly superior military, they have hedged their bet. Strictly speaking, they have bet that we are consumed by money and that if they can take down our economy, they can win their war. Why do you think Osama bin Laden chose the World Trade Center as his first target on 9/11?
Radical Islam preys on the impoverished, brainwashing extremism into the minds of those living in extreme conditions. They promise something as simple as food and shelter to the hopeless, the desperate, and the forgotten souls of society, and then bombard them with fanaticism. It is a vicious cycle of impoverishment leading to fanaticism and extremism which inexorably results in violence.
Radical Islam is aiming to create the same impoverished and hopeless reality in western civilization. It starts with one street in Detroit perhaps, where nobody has jobs, everyone has been evicted from their homes, crime and drugs are rampant. Then they offer their poisoned apple in this extreme reality, promising the fruits of a happier, sanctified life. Instead, they will give over strict fanaticism, breed extremism, and eventually demand violence. We are already witness to this reality.
They hope to do this, first, by bringing down our economies. Their design is to turn our collective societal wealth and comfort on its head, lead us into bankruptcy and then allow what they perceive as our immorality to tear us apart from within. Much like the Spanish Conquistadors divided and conquered Incan civilization when they came ashore in South America, they aim to factionalize us, get us to fight amongst ourselves over a dwindling supply of money, and then convert us by the sword when our defenses are down.
We must understand that, to the terrorists, we are not a nation of moral, benevolent people. Instead, we are non-believers who are laden with greed. They see us as power hungry demons thirsting for global dominance and filthy riches. Their bet is that in bankruptcy we will turn our back on our own Constitution; that we will brush our Bill of Rights under the rug and denounce everything we say we believe in.
Of course, each one of us will unwaveringly respond to this gross characterization adamant that we are not what they perceive us to be. We believe it in our hearts – we know it! And I absolutely believe it to be the truth that we are not these greedy, filthy demons; rather we are a force for justice, for liberty, for morality and peace.
That being said, and it utterly pains me to say, our greed and increasingly sedentary ways are of grave concern. Our economic crisis is beginning to shed light on some of our true, less flattering colors. And it is incumbent upon us, individually and as a nation, to take a long hard look at ourselves in the mirror. We must recognize our flaws, embrace the fact that we have a lot of work to do, understand that we are far from perfect, and move forward with our core ideals reaffirmed. If we can do that and only if we can do that – the war on terror is already won and America will come back stronger than ever.
To start then, let us look in the mirror.
The economic collapse, exacerbated by the war on terror, is testing the moral fabric of our society. Capitalism, our fundamental system of free commerce, is being impeached, our banks and industries are collapsing, and our infrastructure is corroding in disrepair. Our homes, nearly ten million of our American Dreams, now stand vacant, devoid of families. Unemployment has reached 10% nationwide, crimes of extreme moral turpitude, divorce and domestic violence are rising sharply and our boarders are being invaded by illegal aliens without respect for the law.
Unfortunately, while these trials and tribulations befall us, our government is failing us. As we look to our elected officials, too often, the mirror they reflect of us is one in accord with radical Islam’s disgusting critique of our society. I say this because Washington’s answer to all our troubles seems to be one dimensional: throw money at the problem and demonize the opposition. Mark my words – if this continues, we fail.
The question that presents itself in this pivotal moment in history is whether, in the face of deepening financial turmoil, we will continue with the materialistic, over-indulgent, sedentary mindset that set us up for our current economic collapse, or whether we will reaffirm our moral grounding as a nation and fight for all that is good in America by standing, rolling up our sleeves, and doing what is right, regardless of the difficulty.
Regrettably, our government is acting only to reinforce our materialism, exactly as they have for decades. Government policy has encouraged us to spend on credit and take on mounting debt to where by the end of 2009, total U.S. consumer debt reached an astronomical $2.45 trillion, with total individual household debt, including credit cards, mortgage, home equity, and student loans, skyrocketing to nearly $17,000 per household. The mean average unpaid credit card balance jumped to $3,389 per person in America.
Believe it or not, this spelled disaster for the Federal Government, but not because the amount was too high, rather because the total U.S. Consumer debt had dropped sharply from $2.56 trillion at the end of 2008. The recession meant that people weren’t spending. Something had to be done!
So, in short-sited reaction to this fiscal meltdown, our government has responded with an economic stimulus plan centered on encouraging us to spend. First, we were given a measly $200 tax refund and encouraged to quickly go and spend it – God forbid save it. And, we spent it, plus some, just as the government wanted us to. Why? Because, we’ve been told that our economy is based upon consumer spending and that if we stop spending, the engines of our economy will grind to a halt. If Washington can just keep us spending our hard earned money, they believe the economy will continue to grow at a healthy rate. Unfortunately, they are wrong! And they are wrong because our spending is no longer rationally linked to our production. Because income is being eclipsed by our expenses we have for decades now been forced to live on credit. What happens when that credit runs out?
Washington governs itself with this same spendthrift state of mind that we have individually adopted, and as a result the United States public debt (the “Federal Debt”), which consists of two calculations: “Debt Held by the Public”, defined as U.S. Treasury securities held by institutions outside the United States Government, and the “Gross Debt,” which includes intra-government obligations such as securities held by the Social Security Trust fund or the Federal Reserve, is absolutely staggering.
Note that the costs incurred in World War II, in addition to President Roosevelt’s New Deal, and the social programs of the Truman presidency caused a sixteenfold increase in the Federal Debt from approximately $16 billion in 1930 to $260 billion in 1950. As a Republican, it pains me to say that this debt more than quintupled during the Reagan and Bush presidencies from 1980 to 1992. Then came the war on terror and during the administration of President George W. Bush, the debt increased from $5.6 trillion in January 2001 to $10.7 trillion by December 2008, rising from 58% of GDP to 70.2% of GDP. But now, under the Obama administration, the situation has deteriorated at a far more alarming rate.
As of September, 2010, the Federal Debt of $13.56 trillion was approximately 94% of U.S. annual GDP – now, in January, 2012, our debt of $15+ trillion is more than 100% of our annual GDP. In simple terms, we are drowning. And this is what radical Islam wants. Because, with such unconscionable debt, more and more of our money must go to the purchase of government debt, rather than into investments in productive capital goods such as factories and computers, leading to lower output and incomes than would otherwise occur, further exacerbating the situation. A downward spiral is begun much the same as an individual with too many credit cards fighting to pay even the minimum monthly balance, drowning in interest, and never saving for the future.
The Federal Debt is a phenomenal threat to our national security. Why? Because if higher marginal tax rates are used to pay the rising interest costs of this debt, individual and corporate savings will be reduced and work, industry, and innovation will be depressed. How then will we pay for the renovation, much less the re-engineering of our decaying infrastructure? We won’t! We will continue to import 9,013,000 barrels of oil per day at a staggering cost of $297 billion per year. Over $50 billion of which goes to countries that harbor and arm terrorists bent on our absolute destruction.
In fact, the interest costs on our debts are already forcing reductions in government programs that the government actually ought to be administering. And, it’s not just the federal government – nearly every state in the Union is facing a massive budget crisis. As a result, more and more Americans are out on the street with nobody to turn to. No help, no food, no hope. This growing crowd of people has already become malcontent and in many cases outright enraged at the government. Occupy Wall Street is just the beginning. How much worse will it need to get before there are armed riots in the streets?
It is upon the most impoverished, uneducated, enraged and hopeless of this crowd that radical Islam will focus upon to recruit domestic terrorists. It is upon these people they are already successfully preying upon in Europe.
Unfortunately, the situation is only primed to worsen. As a result of our over-consumption, individual, corporate, and government alike, and the tremendous amounts of money we have spent bailing out Wall Street, we will eventually have to pay a price in terms of higher taxes to meet the interest on that debt. Higher taxes will unfortunately become requisite to meet the claims of our foreign creditors.
Yet, our government, on both sides of the isle it now seems, is increasingly adept at hearing one message sounding from us: no more taxes. How then can the government deal with this debt? First off, to date, they have not. For thirty plus years our government has kicked the can down the road for future generations to deal with the problem. That generation is us, now!
Historically, in an attempt to forego raising taxes, such debts have been met with the temptation to default by stealth. In other words, allowing the dollar’s value to deflate.
But, the dollar’s deflation means something equally as grave for Americans – inflation. Soon, we likely could see the cost of a gallon of milk rise to $15, an ear of corn to $5, cereal, butter, sugar, meats, our entire grocery bill could go up in cost by 20-30%. This inflation, coupled with an unemployment rate that continues to climb, and where salaries are frozen or slashed for those still employed, spells even further economic disaster. It is a recipe for civil unrest!
More and more people will fall into impoverishment. The middle class will become the poor and the poor will become the destitute. It is in this economic climate that radical Islam wants us to fester. We must wake up from this nightmare immediately because commodities have already skyrocketed in cost and that expense is already being passed on to the American consumer. Across the board, everything from groceries to clothes, plastics, etc. have already increased in cost by 5-15% in the last few years. Inflation has already begun!
The first and most important thing we must do in order to intelligently combat terrorism, then, is to revamp our economy. I’m not speaking of turning our back on capitalism in favor of socialism as many of the disillusioned have proffered out of fear. Not at all. In fact, I believe passionately that the key to our economic salvation is capitalism, in its true, pure form.
We must unleash the power of American ingenuity; promote and foster intellectual investment in American business so that we may once again produce for export as well as domestic consumption. For Washington’s belief that consumer spending is essential to keep the engines of our economy running is true, but it is only half of the equation.
Production is the necessary second half of the economic equation, for when a company produces something that people want to consume, the basic and elementary economic law of supply and demand is fulfilled. Yet, for decades, America has failed to produce at a level necessary to meet the demands of our own consumption and the result is nearly a trillion dollar a year trading deficit.
The U.S. has held a trade deficit since late in the 1960s, but since 1997, our trade deficit has been increasing at a rapid rate. Between 2005 and 2006 for example, the U.S. trade deficit increased by $49.8 billion to a worldwide record high of $817.3 billion. It is now over a trillilon dollars per year.
“We must always take heed that we buy no more from strangers than we sell them, for so should we impoverish ourselves and enrich them.”
–Fernand Braudel, The Wheels of Commerce
To be clear, the concern here is not necessarily with the size of the trade deficit. This is because the trade deficit can be affected by myriad factors such as the cost of production (land, labor, taxes) in the exporting economy vis-à-vis the importing, the cost and availability of raw materials, exchange rates, trade restrictions, and the price of goods manufactured. In fact, as Milton Friedman, the Nobel Prize-winning economist and father of Monetarism contended, trade deficits are not necessarily, in and of themselves, omens of economic failure, because high export levels increase the value of the exporting currency, eventually reducing aforementioned exports, and vice versa for imports, thus naturally removing trade deficits not due to investment.
By reductio ad absurdum, 19th century economist and philosopher Frédéric Bastiat, even argued that the national trade deficit was an indicator of a successful economy, rather than a failing one. Bastiat predicted that a successful, growing economy would result in greater trade deficits, and an unsuccessful, shrinking economy would result in lower trade deficits. And it seems these theories are being proven fundamentally sound given that since the Great Recession began the annual U.S. trade deficit has fallen by over $3 billion.
The real concern here is the fact that the Federal Deficit is mounting along side a trade deficit – compounding the issue. Essentially, we are borrowing money to trade in the red. Or to play off of a syllogism: We are borrowing from China so we can rob Peter to pay Paul.
The reason for this phenomenon stems from America’s continuing failure to produce goods for the marketplace, both domestic and international. The free system of enterprise, the liberties afforded us as a people, long left people like Andrew Carnegie to modernize the production of steel. Yet, for a number of reasons, America is no longer producing goods for sale. Instead, we consume and put the cost on our credit cards, individually, and as a nation.
Post-World War II, America was primed as the world’s industrial superpower. The factories previously manned by “Rosie the Riveter” women in order to crank out the war machines were primed to build modern America. And when the greatest generation returned from saving the world from fascism they were ready to go to work in the only true remaining industrialized nation on the planet. All other industrialized nations sizeable enough to compete, after all, had been leveled in the war.
What came next were America’s economic golden years. Through grit and hard work, we built the wealthiest, most industrialized, modern nation on the planet. The United States GDP grew to a record $482.7 billion by the end of the 1950s. In the 1960s our nation enjoyed the most sustained period of economic expansion we’d ever known, accompanied by rising productivity and low unemployment. With real income rising 50% during the decade we were sitting pretty with more Americans enjoying the luxuries of the middle class lifestyle than ever before.
But, then came the advent of deindustrialization in the late 1960s and early 1970s. Among other factors, increased free trade, globalization and high corporate taxes resulted in U.S. companies shifting their manufacturing and heavy industrial operations to second- and third-world countries with lower labor costs. It literally became more attractive to the American corporation’s bottom lines to dismantle their industrial infrastructures in favor of producing elsewhere. While this meant a flood of cheaper imported goods into our economy for us to purchase, these policies resulted in a massive reduction in the percent of the U.S. labor force engaged in industry (from over 35% in the late 1960s to under 20% today).
Detroit and the auto-industry are an unfortunate example of de-industrialization and the effect it has had on our nation. Once the world’s largest center of automobile production and associated with a high standard of living, Detroit today is associated with a high concentration of poverty, unemployment and manifest racial isolation. The vast urban production complexes that once built the automobiles driving on our highways stand abandoned and over one third of Detroit’s residents now live below the poverty line. Similar fates have befallen the steel industry of Pittsburgh, the manufacturing and shipping industries of Baltimore, and so the list goes on.
The simple fact stands that the American economy has undergone a fundamental shift from a manufacturing and industrial based economy to a service based economy.
After World War II service industries accounted for less than10% of non-farming employment, compared with 38% for manufacturing. But, since the late 1960s the American economy has moved away from producing goods to providing services at a disquieting rate.
In 1970, there were approximately 50 million service-providing workers in the United States and 23 million employed in the goods-producing sector, representing a service-to-goods ratio of about two-to-one. According to the Bureau of Labor Statistics, the ratio of service-to-goods workers soared to five-to-one with over a third of the U.S. population employed in the service industry by 2005. The face of our economy has completely changed – and it is destroying us.
American consumption currently accounts for over 70% of our GDP. Of this 70%, half is spent on services, such as hair cuts, car washes and restaurants. The problem, then, is this: if we’re just going out to restaurants, what are we selling to the rest of the world? With all that China is selling to us, what are we selling to them and the remainder of the world? Very little! And hence our enormous trade deficits.
Analogy time: Think of Jamaica, or almost any destination in the Caribbean archipelago. What is the common thread between the economies of these beautiful islands? All of their economies are primarily dependent on the tourism industry. They do not produce much of anything, rather, they provide services, and as a result their economies are weak, unemployment is high, and those that do work earn low wages. Well, in America, the problem is much worse to scale.
While we provide services to ourselves, all we are doing is redistributing wealth amongst ourselves. But, in order to provide those services we are consuming products from overseas. The result: we are redistributing wealth amongst ourselves from a dwindling pot.
There has been a forty-year mass exodus in America from our time-honored tradition of rolling up our sleeves, working hard, and making products for sale in the marketplace. Instead of reversing this trend, however, the drift has been worsening in recent years. Post 9/11, the United States has shut down nearly 45,000 factories, equating to a loss of one-third of our manufacturing jobs in that timeframe. At the end of 2009, 12 million jobs in the U.S. were geared toward the manufacture of goods. The last time so few jobs in the United States comprised the manufacturing sector was prior to World War 2, before we climbed out of the Great Depression, and when our population was far fewer in numbers.
The result is a reality in America where overall capitalization in the stock market exceeds 100% of U.S. GDP. Historically, the stock market’s value has been approximately 58% of GDP with lows hovering at 37% in the early 1950s and 25% during the Great Depression. Highs in this measurement were around 75% of GDP, each occurring at all the significant market downturns in the last eighty years, including the 1929 and 1966 crashes.
As recently as 1991, the market was at the historic 58% level of GDP. Since then, however, we’ve completely lost site of this economic indicator. By the 4th quarter of 1999 stock market capitalization increased to a confounding 185% of total GDP!
We’ve all seen this at play. Each day when we watch the news or check our phone apps, we see that the stock market is soaring or strong. But how can it be that the Dow Jones Industrial Average is doing so well when America is drowning in unemployment and debt? The answer, unfortunately, is that two economies have burgeoned. One for the rich, and one for the poor, with the middle class being torn in either direction, more often than not toward the poor.
America’s economy now primarily consists of one’s and o’s – digital currency for the rich to play with and the poor to sit out. When we aren’t producing anything the only way to make money is to invest in others that do and maneuver around the marketplace with snakelike craft. Wall Street is first-rate at this, but the result is the constant ebb and flow of boom and bust in the marketplace. The dot.com and sub-prime lending bursts are just the most recent, and with each bubble, the rich are getting richer; with each burst, the poor are getting poorer.
This last crash has been the most telling of this wealth disparity. Since the dawn of the Great Recession, Americans have lost an estimated average of more than a quarter of their collective net worth; housing prices, historically our largest nest egg, have dropped over 30% from their 2006 peak; total retirement assets, Americans’ second-largest household asset, dropped by 22%; savings and investment assets lost $1.2 trillion and pension assets lost $1.3 trillion across the board. Taken together, these losses approximately total an unimaginable loss of $10 trillion from the pockets of hard working Americans.
Meanwhile, the number of millionaires living in the U.S. has spiked. In 1928, one year before the Great Depression began, the wealthiest .001% of the U.S. population owned about 892 times more than 90% of the nation’s citizens. Today, the top .001% of the U.S. population owns over 976 times more than the entire bottom 90%.
Then there’s this fact which has Americans enraged: according to a study by the Institute for Policy Studies, in 2008, top executives in the United States took home salaries that were 319 times greater than the average worker (about $10 million per CEO). We see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to $700 billion in TARP funds – our tax dollars. No wonder we are exercising our First Amendment right to assemble in the streets and protest corporate greed.
Here is where we must be very careful however. Many have begun to argue that the financial crisis is merely a subset of a systemic crisis – capitalism itself. According to Samir Amin, an Egyptian Marxist economist, for example, the constant decrease in GDP growth rates in Western Civilizations since the early 1970s created a growing surplus of capital which did not have sufficient profitable investment outlets in the real economy. The alternative was to place this surplus into the financial market, which became more profitable than capital investment, especially with subsequent deregulation. The result being the financial bubbles that keep on bursting. This, by the way, is exactly what radical Islam wants us to do – impeach our own economy.
But, capitalism is not to blame. I do agree that the decrease in GDP growth rates have lead to insufficient profitable investment outlets in our real economy, leading to engorgement in the financial market. The problem, however, is failure to produce, not capitalism. Our economic policies must again be geared toward the promotion of capital investment, because socialism, history has shown us, will do just the opposite. Capitalism, then, is the answer!
Instead, our government is itching to intervene in corporate operations in order to cut CEO pay. But this is America. We don’t disparage wealth. In fact, we always have and must continue to encourage it. This is precisely why President Obama’s $500,000 cap on executive pay sets a bad precedent. Cutting executive pay simply is not the answer.
Instead, regulating corporate expenditures is a disincentive to innovate and produce. Government intervention in the free market, we must continue to recognize, is a very dangerous thing. Now, Obama’s decision actually was palatable in that it applied only to executives of firms that we, as taxpayers, bailed out to the tune of $700 billion- but it must stop there.
CEO’s making as much money as they do, we must understand, is a natural function of the free market. Understandably upset at our losses, we often forget that these people lead major multinational corporations with scores of employees and $50 billion in annual revenue. Performing properly, they create thousands of jobs, deliver a lifetime of wealth for innumerable investors, and drive life-changing innovation. While most chief executives are in fact compensated at a far lower rate than our NBA superstars and Hollywood celebrities, the criticisms thrown at them are far more relentless. Moreover, in the economics of large multinational corporations, $10 million is no more than a line item budget amount for office supplies such as pens and paper.
We are understandably upset at the chasm growing between the rich and the poor, and as such, it is only natural for the middle class to look up at the rich with disdain as they fall toward the lower class. However, it is my opinion that the only real problem with CEO compensation is the fact that we, the government and the media are demonizing the wrong people. Out of anger, we are looking for a scapegoat, the rich. We’ve grown to hate those that are succeeding in their industries because our livelihoods are vanishing.
We must pause, take a step back and realize just how un-American the abhorrence of the rich is and turn our attention back to the real problem facing our nation’s economy.
America is the land where enterprise and the chance at becoming rich has always been encouraged. We must never discourage people from getting rich, lest we discourage innovation and progress. It is wrong of us to detest those that have gotten rich in their industries. What is proper is for every American worker to be upset at the fact that there are fewer and fewer opportunities for them to get rich or even sustain middle class status. We should also be mad that many of the rich are ostensibly hijacking Congress to ensure they remain rich despite the hurtful consequences to the remainder of the constituency.
The real problem in America, what is causing the growing rift between the rich and the poor in our nation is not capitalism, it is how we are wielding the power of the free market. We built our nation through hard work and determination, but for decades now we have been content to sit idle instead of continuing as the pioneers of industry.
Why? To an extent it is because of human nature. As I said before, man is much like water, instinctually inclined to take the path of least resistance. So, again, let us take a long hard look in the mirror. Individually, most of us would rather work in the services sector as white collar workers rather than in a theoretically more difficult blue collar vocation. It certainly is physically less demanding. As a nation, we worked so hard building modern America, generating massive amounts of wealth, and sometimes we feel entitled to kick back and relax. This is only human nature, and the wealth accumulated in our golden years afforded us the ability to utilize our mental talents toward innovation and pay others to do the back breaking labor for us. Why fix your sink when you can pay a plumber to do it, right?
But we must awake from this apathy because, as a nation, we no longer have the money to pay the plumber. Unfortunately, though, we’ve been very slow to wake from our lethargy in part because our economic and tax policies have compounded the issue by encouraging our instinctual indolence and masking its effects.
Now, you are probably wondering why I am talking so much about the economy in a chapter purportedly aimed at the issue of international terrorism. The reason is simple. Our economic security is intrinsically linked to our national security, especially when it comes to the war on terror. The insolvency of our nation will bankrupt our ability to fight terrorism abroad and lead to civil unrest within our boarders. This must not happen because we absolutely must win this war. What we face in radical Islam is a clash of civilizations and they have made it very clear that it is either us or them. Failure, then, is not an option.
Here is what radical Islam thinks of us: we are succumbing to sloth. We are greedy, we want to consume everything, and we don’t want to have to work for it. Radical Islam is betting that we are the next Rome and that we will implode, falling upon the sword of our own opulence. They forecast that globalization and the additional financial pressures their mounting campaigns of terror have on our bottom line will result in us becoming slaves to the third world. They believe that the third world upon which we prey for all that we consume will surpass us; that the balance of power will shift in their favor and we will grow weaker and weaker. Their hope is that our current economic crisis will snowball into a downward spiral, leaving us broken and powerless to stop the spread of their twisted creed.
But they are dead wrong! Americans work harder than the citizens of any other nation on this planet. We are the most innovative workforce on the globe and our collective talent eclipses all others. Laziness, while an exacerbating factor, is not to blame. Resting on our laurels is. This crisis is borne out of our societal ignorance and collective indifference to the direction we have allowed our government to steer the economy for the last forty years. We’ve all been playing ignorant to the effects of our service based economy; our natural human instinct to take the easy road has blinded us as to the inevitable rise of Asia as an economic powerhouse with whom we must compete. But now, after decades of craftily avoiding the unavoidable through the stock market, we are finally learning the truth. The truth of the matter is this: we must get back to work producing for ourselves and the rest of the world. For the rest of the world also wants and is willing to compete for the standard of living we’ve shown them is possible.
This is precisely why educating America about the true threat facing us, the true crisis facing our economy, and how to transcend these challenges is of paramount importance. The silver lining in the Great Recession is the fact that it is opening our eyes. The extremes we are facing, massive unemployment, for instance, are shaking us from our apathy, forcing us to ask the tough questions. The key is to answer those questions intelligently and educate America as to just how far down the wrong path we have gone so that we may redirect.
I believe that in America, our privileges, the opportunities we have, our wealth, our power – this has not made us weak and lazy anymore than it did the greatest generation before they left for World War II. We’ve had more opportunity than any civilization before us to venture down that road of lethargy, and in many respects we have, but hopefully to realize the evils of excess. In fact, the liberties afforded us in our Constitution have afforded Americans the ability to witness first hand the pitfalls of materialism run amuck. This experience, and the freedoms still afforded us, give us a unique perspective from which to correct our course, as well as the power. Perhaps the greatest majesty of our American tradition of ordered liberty is that we are all free, individually and institutionally, to look into the mirror and make the changes necessary. It is this power, properly wielded, that will win the war against terrorism as well as bring back our economy.
Having gained so much, we have so much to lose and American’s will not let go easily. It is the same determination which lead us to erect the Hoover Damn, the Empire State Building and the interstate highway system, that will empower us to overcome the current economic crisis, avoid future recessions and win the war on terror.
But first- back to the mirror. We are currently making a lot of mistakes, and unfortunately money seems to be the governing factor in our rash decisions. For starters, we are cutting education – an extremely short-sited, reckless and irresponsible response to our financial crisis. I will delve into that in a later chapter.
Here’s an interesting example of money overriding our logic: California passed SB 1449 on October 1, 2010, reducing the possession of less than an ounce of marijuana to a civil infraction where the person in possession is slapped with the equivalent of a mere parking ticket. The reasons sited by Governor Schwarzenneger were the cost to police the illegal drug and the possibility of raising tax revue if it were to be fully legalized and regulated. Both of these are valid considerations, no question. However, the problem is this: the decision to ostensibly legalize the drug was made solely on fiscal grounds without proper consideration of the effects of the drug or why it was made illegal in the first place. Now, to be fair, marijuana is not cocaine or meth, and its effects arguably are not even as bad as alcohol. A valid argument for marijuana’s legalization on the basis of its effects versus alcohol can certainly be made, but the decision to legalize it in California was based solely on monetary concerns. This is wrong! If money is the only consideration, the same argument can be made for the legalization of all narcotics. The same reasoning has been utilized in California to justify the release of criminals convicted of assault with a deadly weapon, battery, domestic violence, and attacks on children.
It is unforuntaely quite clear that the tactic being employed by radical Islam, namely to destroy our economy, is effective. In many respects, it is forcing us to turn on our own moral compass. Why, because it is hard to stay moral when it comes down to dog eat dog. They know this to be human nature. We must not let this happen, because the more we allow this to occur, the more we are at risk of civil unrest, revolution, loss of freedom, and a continuous wave of crisis that will lead to us turning on ourselves and our institutions. Divide and conquer!
Radical Islam abhors our freedom above all else. It therefore aims to force us to erode the freedoms protected in our Constitution for the sake of our security, because it is in a tyrannical system where freedoms are forgotten and the individual is nothing that their fanatical worldview can take root.
Unfortunately, they have already begun to succeed. In reaction to their terror, our freedoms have been truncated under the Patriot Act and our personal boundaries are being invaded by humiliating pat downs. The government has created a vast domestic spying network to collect information about Americans in the wake of 9/11 and subsequent terror plots. An immense network of over four thousand counter-terrorism organizations utilizing state and local law enforcement agencies to collect information about thousands of US residents has been created to feed information to Washington for analysis. Big Brother is upon us! Is it necessary? Yes, unfortunately. But we must not allow it to go too far – if we haven’t already.
Daily they are forcing us to decide what freedoms we are willing to forego and where to draw the line. While many of us will say we don’t mind giving up a little bit of our freedoms for the sake of security, the issue arises when we find ourselves on the slippery slope to foregoing too many of those freedoms to a government that becomes immune to habeas corpus. It is on this slippery slope that we already find ourselves, and we must be careful not to allow the protections our forefathers fought for to be swept away out of fear. That is what the terrorists want.
Our history from 9/11 on shows us that the longer the war on terror continues, the more pervasive we allow it to become, the greater number of rights and personal freedoms the government will find it necessary to overwrite for the sake of our own security. This, in and of itself, makes the war on terror one where time is very much of the essence. We must therefore act decisively and expeditiously to push radical Islam back and eradicate this threat.
Stage one to winning the war on terror, as I have mentioned, is to revamp and revitalize our economy.
If you look at Lehman Brothers, Goldman Sachs, the sub-prime lending crisis, the collapse of the Celtic Tiger, Greek debt, all the way back to our very own dot.com burst, and even the savings and loan crisis, we must realize that what we are dealing with is far bigger than these individual crisis themselves. We are dealing with a fundamental shift in the way the world economy operates. While for two hundred years America and Europe dominated world production, investment, manufacturing, and exports, Asia is now out-producing us. Instinctively, many have called for protectionist policies in reaction to this truth, but this is unwise.
As a result of production, Asia’s economy, most notably China’s economy, is growing leaps and bounds just as ours did post-World War II. Consequently, Asia’s consumer market is estimated to be twice that of ours by 2020, and therein lies our opportunity.
The first step to dealing with the current financial crisis was to stop it from becoming another Great Depression. To that end, TARP, and all the subsequent bailouts have been aimed at stopping the bleeding. Arguably, they have succeeded, for now- but they are mere band-aids covering a massive laceration because they are propping up arcane business models and industries that now serve only as relics of America’s past industrial strength. The proof in this assertion is the fact that despite all the government “stimulus” unemployment continues to rise.
Stage two to dealing with the current financial crisis is to get the global financial systems working properly, and in tandem with reality, a task that hinges on stage three – reducing unemployment, and fostering growth through economic policy geared toward encouraging capital investment and production.
I have absolute faith that we can meet this challenge. We already have the brand names and the custom built products recognized around the world, and when you combine that with the advantage of having the most innovative and technologically advanced economy in the world along with the most creative talent in the world, we absolutely have it within our power to rise to the occasion. The re-birth of the American Dream in this generation is possible and the way we do it is by tapping into our native genius and creative talent to produce high technology goods for the remainder of the world. We must ride out to meet the challenges presented by the growth of a middle class in India and Asia and capitalize on their consumer needs. Our salvation is in producing these high technology goods to satiate our own domestic consumption as well as for export to the remainder of the world, for doing so will satisfy the basic economic law of supply and demand.
PLEASE STAY TUNED FOR PART TWO OF CHAPTER SIX: THE WAR ON TERRORISM!