Nobel laureate Paul Krugman has pronounced an economic Dark Ages. Rupert Murdoch gives print media twenty years. Crossing the rubicon to the flat earth of government by feelings leaders are judged by popularity instead of effectiveness. Those who can afford to participate in the new digital economy are caught in a communications conundrum, using Twitter to tell their fast friends on Facebook that they've joined the slow movement buzzed up here on HuffPo.
With electronic markets disconnected from the reality of workers everywhere, the Dow just inched above 10,000. But the positive side of 'change you can believe in' is being slowed by US Treasury data indicating that a new foreclosure is being filed every 13 seconds. Secretary Geithner and others close to the president bounce blame for the crisis around like it was the single bullet that killed JFK.
After an American Century that saw social organization morph from das Kapital to human capital, the final bill for Ronald Reagan's Pyhrric victory against the evil empire of Soviet communism has come due. Mr. Gorbachev tore that wall down but Russia is back with a vengeance, replacing Saudi Arabia as the world's top oil producer. Job creation results when the Pentagon mission creeps to defend the dollar on behalf of global interests and the Kremlin shadows its moves.
With the BRIC trade group (Brazil, Russia, China, India) set to drive growth through the rest of this century, ideas for a new world reserve mechanism to replace the dollar are being discussed. Trust is a motivating factor in Brazil, where government blames US policies for triggering the crisis and the greenback has lost 26% in value to the real so far this year. And while Washington continues to advocate the same laissez-faire policies that spawned the crisis, the BRIC nations have developed the knack of successfully balancing central planning with the interests of open markets.
BRIC nations are all bullish on the continued use of English as the global language of business. But efforts to end the dollar's too big to fail status as the world reserve currency are based on political rather than economic grounds and have more to with leveraging a balanced approach to mediating cultural and religious factors driving conflict in Iraq, Iran, Afghanistan and Pakistan.
Nobel laureate economist Joseph Stieglitz has pegged the cost of the Iraq war and associated nation building at over $3 trillion, ten times the annual US trade deficit (in goods) with China. And that doesn't include the other trillion dollar price tag on the Af-Pak conflict that is becoming Obama's war. Drama sets in when you juxtapose those numbers with total US gold reserves, which are just $298 billion.
The ensuing malaise mimics the plot line of Nobel laureate Thomas Mann's novella Death in Venice where the main character, von Eschenbach, exhausts himself seeking the cause of a deadly epidemic that few would confirm since doing so would be bad for business. Ironically, the Nobel committee awarded the prize to the philosemetic German author in 1929, the year Wall Street crashed and triggered the Great Depression.
Slow and storytelling were recurring themes in the run up to that economic crisis, a period when western man developed separation anxiety at the intersection of change and intransigence. The failure of the League of Nations and Woodrow Wilson's global vision, and the rise of Hitler and Stalin were all predicated on the collapse of the world economic order.
In his work The Magician, author and British secret service agent W. Somerset Maugham captured the idleness of a rich international clique in Paris falling victim to a manipulative con artist on the eve of World War I.
Following that "war to end all wars" American novelist F. Scott Fitzgerald chronicled the schizophrenic world of Lost Generation expatriates in France and elsewhere, coining the phrase "the rich are different."
With the dollar at its pinnacle as the world's reserve currency, Colombia's Nobel laureate, Gabriel Garcia Marquez, employed the time bending theme of magical realism in Autumn of the Patriarch to capture the fall of a fictive US-backed dictator in Latin America. It was a convenient literary gambit, since when the book was published Washington was still backing Kissinger-nurtured dictators like Pinochet in Chile, Rios-Montt in Guatemala and the juntas that ran Argentina's "dirty war."
Continuing to accept the dollar as global reserve currency means continuing to support the US as primus inter pars in the world economic order. And with efforts to rebrand America's national identity in the electronic media falling flat like a bad online date, taking away the dollar's too big to fail status might be the better wake up call. After all, in a dollarized Central America where free markets have worsened the gap between rich and poor a Nicaraguan would have to work 100 years to buy two semesters of education at Sidwell Friends, where members of Washington's political elite send their kids to school.
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