Dot Connections

Kevin Phillips, former Republican strategist and current political commentator, wrote a book published in March 2006 entitled American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century.

What does this book say?

All great world-dominating powers - from ancient Rome to the British Empire - have been brought down by a lethal combination of global overreach, militant religion, diminishing resources, and crippling debt.

America's security, solvency, and standing in the world are being undermined by:

1. military miscalculations in the Middle East;

2. the surge of fundamentalist religion; and,

3. the staggering national debt and the costs of U.S. oil dependence.

President George W. Bush's political base has three main pillars: oil interests, religious fundamentalists, and the financial services sector. Bush's policy decisions - both domestic and foreign - particularly the invasion of Iraq - are best understood as responses designed to serve the interests of his political base. Unfortunately, the interests of Bush's base are inimical to the interests of the United States as a whole. If America cannot reverse course from the agenda set by the Bush Administration, the future of the United States is likely to be very bleak.

Why Did the United States Invade Iraq?

The United States' emergence as a global empire was predicated on an oil-based industrial complex fueled by access to cheap and abundant petroleum. The era of inexpensive and abundant oil may be coming to an end. The precise state of Saudi oil reserves is a closely guarded secret, but many experts have warned American policy makers that the Saudis may be close to, or already have passed, the point of peak oil production. This means that in the near future, the law of diminishing returns will govern oil production - it will begin to cost more to produce oil even as there is less oil to produce. This could set the stage for resource wars as competing powers - China, the U.S., and Europe - scamper to maintain their oil lifelines.

The invasion of Iraq had a great deal to do with ensuring that America maintained control over a resource that is essential to its well-being. After 9/11, the Bush Administration had the perfect pretext for deposing Saddam Hussein and trying to establish American hegemony over Iraq's oil reserves (the second largest proven reserves in the world).

The opportunity to develop Iraq's relatively untapped oil fields was a tantalizing prospect for America's oil giants, whose long-term prospects have been in doubt because of a marked decrease in the share of the world's oil reserves they control. The Bush Administration could not sell the campaign to oust Saddam Hussein to the American people as a war for oil. Bush's political base, which includes a high percentage of devout Christians, would find the idea of a war for natural resources offensive to their deeply held beliefs. However, the Bush Administration's efforts to demonize Saddam Hussein and cast the notion of regime change as a crusade to spread liberty throughout the Islamic world was certain to strike a chord among many evangelical Christians.

What is the Role of Religious Fundamentalists?

According to Phillips, many in the Christian right, of which George W. Bush is the de facto leader, have an apocalyptic mindset, which is shaping the way a significant portion of the electorate approaches current events, particularly foreign policy issues regarding America's involvement in the Middle East. According to the apocalyptic scenarios subscribed to by religious fundamentalists, the faithful can expect wars on a worldwide scale, economic crashes, earthquakes, diseases, and virtually every other calamity imaginable. Thus, for a large segment of the population, the troubled occupation of Iraq and the administration's larger policy failures in the Middle East are not signs of executive incompetence, but rather, evidence of apocalyptic prophecies coming true.

It is not clear to what extent Phillips is asserting that the Bush Administration policy is shaped by such fundamentalist beliefs, or whether the Bush Administration cynically tailors some justifications for its policies to fit in with such beliefs, thus garnering popular support from fundamentalist voters. Phillips is clear, however, in asserting that such end-of-times views, in which religious fever was translated into military fervor, have, historically, proven dangerous and delusional.

The Financialization of the Economy

According to Phillips, the so-called FIRE sector - finance, insurance, and real estate - now accounts for 20 percent of America's GDP, well ahead of the 14.5 percent represented by manufacturing. The displacement of manufacturing by finance has prompted some to describe the U.S. as the "borrower-industrial complex."

It is estimated that he national debt the U.S. owes to foreign lenders exceeds $7.8 trillion. Household and corporate debt are also at record levels.

Historically, the ascension of finance is invariably associated with large gaps between rich and poor. In other words, when the most important economic activity is the creation and trading of abstract financial instruments, rather than the production of real goods and services, the rift between the haves and have-nots widens and society begins to fall apart.

Historically, a financial-services economy is not a recipe for long-term national success. This is because money is not necessarily wealth unless it is "expended on things that yield profits and attract riches from without to augment riches from within." It is questionable whether the U.S. can continue to attract the foreign investment it needs if it lacks "hard industries," companies that actually make products the rest of the world wants to buy. Many experts argue that if the U.S. loses its manufacturing lead, it will also lose its lead in research and development and once it loses that, it loses everything.

Rather than develop a comprehensive national economic strategy for the 21st century, the Bush Administration has placed its faith in "the invisible hand of the marketplace." For many critics, such as Warren Buffet and Clyde Prestowitz, relying on the "magic of the market" when factories are closing, neighborhoods are crumbling, and jobs are being outsourced is a myopic abdication of responsibility. This amounts in the end, as in so many other contexts for the Bush Administration, to a substitution of faith for reason.

Conclusion

Phillips warns that America's indebtedness and oil-dependence are symptomatic of imperial senescence. The United States can avoid the fate of past fallen empires only if it stops allowing ineffective bunglers and weak-willed leaders to try to preserve the status-quo by relying on a feeble faith that the future will always resemble the past even if one fails to prepare for it. Instead, the U.S. must forthrightly address the challenges ahead by, among other things, curbing public fuel consumption and controlling spending.