Friday, December 31, 2010
Really...??
Now, I'm not typically the guy who makes someone an offender for a word, but when you're held up as some heroic policy wonk and yet you a) don't even know in which century the Constitution was written b) become confused by the strange, archaic language of the document, or c) can't see the value in reading the Constitution at the invocation of a Congress that, like all others, has sworn to uphold and defend it ... then I have to go all ad hominem and declare: This guy is dumb. I now fully understand the budget woes of newspapers. If they're reduced to getting their analysis from freshman journalists who don't have the first clue about American history, I can see why subscriptions are down. SHEESH!!
Wednesday, December 1, 2010
Misguided Patriotism and the Pledge of Allegiance
“God provided that in this land of liberty…our allegiance and the only allegiance we owe as citizens or denizens of the United States, runs to our inspired Constitution which God himself set up.”
- President J. Reuben Clark, Jr.
“I pledge allegiance to the Flag of the United States of America and to the republic for which it stands; one nation under God, indivisible, with liberty and justice for all.”
- Francis Bellamy, 1892
I have to admit to a fair bit of nostalgia when I read the above words of our Pledge of Allegiance. They invoke memories of elementary school mornings. We would collectively stand together and while looking at the flag over the chalkboard recite in perfect unison our sacred oath of patriotic loyalty to the state. We spoke with a verbal cadence borne of vain repetition and rote memorization that belied a lack of full understanding but nevertheless firm resolve to…if nothing else, pledge allegiance. “I pledge allegiance…to the Flag…of the United States of America…and to the Republic…for which it stands…etc.”
For a young schoolboy or girl, the Pledge is a timeless, binding promise of national fidelity. Prior to Michael Newdow’s anti-religious, establishment clause case of 2002 no one had ventured to change the Pledge since the Knights of Columbus, a Catholic civic organization, persuaded Eisenhower to add “under God” 1954. No one with the authority to do so has dared strip it of any spiritual or patriotic significance since. Aside from that most consequential change, the Pledge had undergone a couple earlier revisions: a change from the Bellamy Salute to right hand over heart (more on that later); and, a change in the words “my Flag and the Republic” to “the Flag of the United States of America, and to the Republic”. There is more history which I won’t go into here, except to say, the author, Francis Bellamy, a self-described Christian Socialist and cousin of utopian socialist Edward Bellamy, may not have had the same pure motives as Francis Scott Key when he memorialized the Flag in “the Star Spangled Banner”.
More to the point, I’d like to examine the importance of the Pledge of Allegiance, and perhaps, in so doing, patriotism itself. The Pledge like any other oath carries significance beyond words and it is important to honestly appraise our willingness to carry out the implied promises we make as we recite it. Of course, as children, we act on blind faith, motivated by feelings of unity and national superiority (along with a fear of being criticized for sitting out the Pledge). We were rightly taught that America is the greatest nation in the history of the world. Who then would dare to refuse such an affirmation of loyalty to “the Flag…and to the republic for which it stands”? (Not me! I didn’t want to be like that J.W. kid who never had a birthday or got Halloween candy). Fortunately, children usually don’t struggle with those kinds of existential conflicts. Adults, however, should take a more considerate approach to something as important as oath-taking.
Let’s examine the Pledge’s component parts.
“I pledge allegiance to the Flag of the United States of America…”
A pledge of allegiance, first and foremost, is a statement of intellectual or emotional commitment; a binding affirmation to a particular course of action. Pledging allegiance to a flag alone is not a very compelling proposition. It must be strengthened by deeper explicit and implicit meaning, which we’ll look at below. However, if we were to try and glean something from this phrase alone, we could look to the design of the flag and what it represents. We all know from junior high civics that the stars on the flag represent the individual, sovereign states of the nation, while the stripes represent the original 13 colonies which unanimously declared their independence from Great Britain becoming sovereign states. As for the colors of the flag, there was no originally prescribed meaning. Certain colors have been used throughout history to represent different ideals or virtues (white=purity, red=valor, blue=integrity/truth), but these were never officially adopted. The implied commitment here is to follow the Flag of the United States of America into any conflict or cause.
“…and to the republic for which it stands…”
We make an oath to uphold the republic. There was a time when “republic” meant something more specific than: “everything but a monarchy”; when the word was not freely interchanged or co-opted by democracies, dictatorships, communists, socialists, and theocrats. This confusion is plainly manifest in those taking the Pledge of Allegiance. If the Pledge was taken seriously, we wouldn’t be living in a functioning socialist democracy. The erosion of language to the lowest common denominator has led to a host of doublespeak substitutes that confuse and alter our discourse, which, in turn has led to the gradual devolution of our political and philosophical understanding. Present circumstances notwithstanding, the propriety of pledging allegiance to a republic is, for most people, pretty innocuous. Even if we don’t do anything about it, it’s a noble ideal, especially, if the republic is seen as the logical extension of the Constitution.
“…one nation under God, indivisible…”
Here we begin to see more clearly what exactly Francis Bellamy had in mind when he wrote the Pledge. Remember, “under God” was not originally included in the Pledge. Bellamy’s daughter, Marion, remarked that he would not have been pleased with the change (google it). The addition interrupted what Bellamy intended to be a coherent, continuous phrase with a specific meaning. In 1892, Bellamy was not far removed from a Civil War fought over the right of individual states (as outlined by Jefferson and Madison in the Virginia and Kentucky Resolutions) to nullify their compact if the federal government overstepped its enumerated powers, as outlined in the Constitution; a position that would challenge the superiority of the nation-state over the commonwealth or individual. I’m not going to bother taking a position on this argument here as it’s now settled history. Lincoln won and the Union was forced back together. However, during and after the war’s conclusion the federal government effectively disenfranchised thousands of voters, would-be public servants, and even private business owners through the use of loyalty oaths similar in meaning to our Pledge of Allegiance, by asserting the indivisibility of the Union, punishing all who took even a philosophical stand in support of the right of individual states over the Union.
Loyalty oaths are not a 19th century novelty. They have been used repeatedly throughout history; in WWI, WWII, during the Vietnam era, and even at the 2004 campaign speeches of George W. Bush. Latter-day Saints (and many other religious groups) are very accustomed to oaths and covenants. We make them weekly in sacrament, in the temple, at Boy Scout meetings, and in private prayer with our God. Oaths and pledges are not inherently evil or coercive. They can serve as a reminder of personal goals and ambitions, unite groups in a common cause, and even serve as a contractual bond for legal purposes…protecting the franchises of liberty and free enterprise. Pledges become problematic when used as a token of feigned devotion or when taken in ignorance of the obligations, hence, serving only to make the affiant a liar, or disingenuous at best, when not taken seriously.
At worst, the above phrases from the Pledge represent nationalist propaganda delivered with the stamp of government authority to a compliant audience of children educated in a mandatory school system. The idea of a union of sovereign states was as much a non-sequitor in 18th century America as federal supremacy seems to be in mainstream America today. Bellamy and other avowed socialists sought to encourage loyalty to the nation-state over the local commonwealth, God, family, or any other individual interest. There’s an axiom in public discourse that as soon as you compare anyone or anything with the Nazis, you effectively stamp out any civil debate. However, in rare cases, the comparison is apt. Observe this photograph of schoolchildren making the Bellamy Salute during the Pledge of Allegiance.
This sort of genuflection before the supreme state characterized above is no different than what happened in German schools prior to and during WWII. My grandmother grew up in Germany during this period and the pressure to join the Hitler Youth was intense. My grandmother recalls begging her mother to let her join, so great was the nationalist pride and sense of belonging. She was forbidden to do so by a wise mother who properly recognized the danger of indoctrination into a burgeoning cult of personality.
“…with liberty and justice for all.”
This sounds like another high ideal extolled in the Pledge of Allegiance. However, the continued message is that our right to liberty and justice is granted by government (at the very least as a mediator “under God”). The reality is that our government is supposed to derive its just powers from the consent of the governed, not the other way around. The order of importance should not be God, State, Individual, but God, Individual, State. Rather than pledge our allegiance to the state as the mediator of liberty and justice, we ought to be more mindful of scriptural history and give credit where credit is due (Moses 3:17, Hebrews 9:15).
According to LDS theology, justice is an eternal law that cannot be violated without throwing the universe into a tailspin. Thus, the only way to protect God’s children from damnation is to provide a Savior. Thereby man’s agency would be held inviolate while satisfying the demands of justice. The war in heaven was not fought through the artifice of a nation-state. It was a contest of ideas between those who would make us slaves and those who laid claim to liberty, and that same battle rages today. Man’s birthright to freedom is a testament to the outcome of that pre-mortal struggle. When we fail to recognize that liberty is a birthright and instead make an oath of obeisance to a substitute benefactor, we give God’s glory to another claimant, namely: Government.
It has taken me a while to outgrow that boyish enthusiasm for reciting the Pledge of Allegiance, but I’ve gradually become uncomfortable with this sort of unqualified patriotism. Having said that, I didn’t write this article to declare myself morally superior or drive a wedge between believers. Also, because I hold personal liberty in such high regard, I would never campaign against the right of any person to pledge their allegiance to the flag. I’ve simply come to the conclusion, for me, that the high ideal of patriotism implied by the act of pledging allegiance to the flag has been used in recent decades as a convenient excuse to sidestep arguments on principle and, perhaps, ignore what should be the object of attention and loyalty. I know the pledge is held sacred by many today, but consider that George Washington, Ben Franklin, and Thomas Jefferson never made a similar pledge to the flag and no one would call into question their credentials. It’s speculation, but I think I can safely say Jefferson would have even found such a thing repugnant.
The closest synonym of patriotism is nationalism. When our leaders can no longer convince the people of the merits of a cause on principle, they appeal to love of country. For example, if you’re a patriot you can’t possibly be against the Patriot Act! Charges of being “unpatriotic” effectively stamp out all rational debate. Patriotism is the reason we’re embroiled in a never-ending, worldwide war against an ill-defined enemy (see also War on Drugs, War on Poverty). How can you possibly wage war against a battle tactic? Have we lost our minds? Well, according to the Behavioral Correlates of War Project, there is a link between high levels of perceived patriotism and proclivity for war. I believe this is probably most common when nationalism has become a substitute for patriotism. Whereas true patriots made every effort to avoid conflict, even acknowledging in the Declaration of Independence the prudence of patiently suffering through usurpations for a time, before taking an oath of such gravity as to require their “Lives, Fortunes, and sacred Honor.”
The sort of patriotism our Founders exhibited has to do with protecting the life, liberty, and property of “family & fellow countrymen” (Greek: patriṓtēs, literally fellow countrymen or lineage member) against oppressive forces. This sort of zeal is not only forgivable but admirable. I have a great amount of respect for those military men and women who put their lives on the line for this cause. “Greater love hath no man than this” is an apt description of their selfless service. To the extent that a man uses their righteous desire and sworn loyalty as a tool for oppression, he alone is responsible. He is guilty of unrighteous dominion and should be removed.
“It would be a cruel God that would punish His children as moral sinner for acts done by them as the innocent instrumentalities of a sovereign who He had told them to obey and whose will they were powerless to resist.”
- Pres. David O. McKay, General Conference Address, 1942
Ron Paul lamented,
“We now live in a post-9/11 America where our government is going to make us safe no matter what it takes. We are expected to grin and bear it and adjust to every loss of our liberties in the name of patriotism and security.”
This is hardly the type of loyalty Washington would have commanded as general and president. So, until our flag and republic stand for more than false freedom and aggressive militarism, I will stand, cover my heart, and silently mourn the loss of liberty, justice, and lives that so many have fought righteously to protect. If that makes me unpatriotic…so be it.
- President J. Reuben Clark, Jr.
“I pledge allegiance to the Flag of the United States of America and to the republic for which it stands; one nation under God, indivisible, with liberty and justice for all.”
- Francis Bellamy, 1892
I have to admit to a fair bit of nostalgia when I read the above words of our Pledge of Allegiance. They invoke memories of elementary school mornings. We would collectively stand together and while looking at the flag over the chalkboard recite in perfect unison our sacred oath of patriotic loyalty to the state. We spoke with a verbal cadence borne of vain repetition and rote memorization that belied a lack of full understanding but nevertheless firm resolve to…if nothing else, pledge allegiance. “I pledge allegiance…to the Flag…of the United States of America…and to the Republic…for which it stands…etc.”
For a young schoolboy or girl, the Pledge is a timeless, binding promise of national fidelity. Prior to Michael Newdow’s anti-religious, establishment clause case of 2002 no one had ventured to change the Pledge since the Knights of Columbus, a Catholic civic organization, persuaded Eisenhower to add “under God” 1954. No one with the authority to do so has dared strip it of any spiritual or patriotic significance since. Aside from that most consequential change, the Pledge had undergone a couple earlier revisions: a change from the Bellamy Salute to right hand over heart (more on that later); and, a change in the words “my Flag and the Republic” to “the Flag of the United States of America, and to the Republic”. There is more history which I won’t go into here, except to say, the author, Francis Bellamy, a self-described Christian Socialist and cousin of utopian socialist Edward Bellamy, may not have had the same pure motives as Francis Scott Key when he memorialized the Flag in “the Star Spangled Banner”.
More to the point, I’d like to examine the importance of the Pledge of Allegiance, and perhaps, in so doing, patriotism itself. The Pledge like any other oath carries significance beyond words and it is important to honestly appraise our willingness to carry out the implied promises we make as we recite it. Of course, as children, we act on blind faith, motivated by feelings of unity and national superiority (along with a fear of being criticized for sitting out the Pledge). We were rightly taught that America is the greatest nation in the history of the world. Who then would dare to refuse such an affirmation of loyalty to “the Flag…and to the republic for which it stands”? (Not me! I didn’t want to be like that J.W. kid who never had a birthday or got Halloween candy). Fortunately, children usually don’t struggle with those kinds of existential conflicts. Adults, however, should take a more considerate approach to something as important as oath-taking.
Let’s examine the Pledge’s component parts.
“I pledge allegiance to the Flag of the United States of America…”
A pledge of allegiance, first and foremost, is a statement of intellectual or emotional commitment; a binding affirmation to a particular course of action. Pledging allegiance to a flag alone is not a very compelling proposition. It must be strengthened by deeper explicit and implicit meaning, which we’ll look at below. However, if we were to try and glean something from this phrase alone, we could look to the design of the flag and what it represents. We all know from junior high civics that the stars on the flag represent the individual, sovereign states of the nation, while the stripes represent the original 13 colonies which unanimously declared their independence from Great Britain becoming sovereign states. As for the colors of the flag, there was no originally prescribed meaning. Certain colors have been used throughout history to represent different ideals or virtues (white=purity, red=valor, blue=integrity/truth), but these were never officially adopted. The implied commitment here is to follow the Flag of the United States of America into any conflict or cause.
“…and to the republic for which it stands…”
We make an oath to uphold the republic. There was a time when “republic” meant something more specific than: “everything but a monarchy”; when the word was not freely interchanged or co-opted by democracies, dictatorships, communists, socialists, and theocrats. This confusion is plainly manifest in those taking the Pledge of Allegiance. If the Pledge was taken seriously, we wouldn’t be living in a functioning socialist democracy. The erosion of language to the lowest common denominator has led to a host of doublespeak substitutes that confuse and alter our discourse, which, in turn has led to the gradual devolution of our political and philosophical understanding. Present circumstances notwithstanding, the propriety of pledging allegiance to a republic is, for most people, pretty innocuous. Even if we don’t do anything about it, it’s a noble ideal, especially, if the republic is seen as the logical extension of the Constitution.
“…one nation under God, indivisible…”
Here we begin to see more clearly what exactly Francis Bellamy had in mind when he wrote the Pledge. Remember, “under God” was not originally included in the Pledge. Bellamy’s daughter, Marion, remarked that he would not have been pleased with the change (google it). The addition interrupted what Bellamy intended to be a coherent, continuous phrase with a specific meaning. In 1892, Bellamy was not far removed from a Civil War fought over the right of individual states (as outlined by Jefferson and Madison in the Virginia and Kentucky Resolutions) to nullify their compact if the federal government overstepped its enumerated powers, as outlined in the Constitution; a position that would challenge the superiority of the nation-state over the commonwealth or individual. I’m not going to bother taking a position on this argument here as it’s now settled history. Lincoln won and the Union was forced back together. However, during and after the war’s conclusion the federal government effectively disenfranchised thousands of voters, would-be public servants, and even private business owners through the use of loyalty oaths similar in meaning to our Pledge of Allegiance, by asserting the indivisibility of the Union, punishing all who took even a philosophical stand in support of the right of individual states over the Union.
Loyalty oaths are not a 19th century novelty. They have been used repeatedly throughout history; in WWI, WWII, during the Vietnam era, and even at the 2004 campaign speeches of George W. Bush. Latter-day Saints (and many other religious groups) are very accustomed to oaths and covenants. We make them weekly in sacrament, in the temple, at Boy Scout meetings, and in private prayer with our God. Oaths and pledges are not inherently evil or coercive. They can serve as a reminder of personal goals and ambitions, unite groups in a common cause, and even serve as a contractual bond for legal purposes…protecting the franchises of liberty and free enterprise. Pledges become problematic when used as a token of feigned devotion or when taken in ignorance of the obligations, hence, serving only to make the affiant a liar, or disingenuous at best, when not taken seriously.
At worst, the above phrases from the Pledge represent nationalist propaganda delivered with the stamp of government authority to a compliant audience of children educated in a mandatory school system. The idea of a union of sovereign states was as much a non-sequitor in 18th century America as federal supremacy seems to be in mainstream America today. Bellamy and other avowed socialists sought to encourage loyalty to the nation-state over the local commonwealth, God, family, or any other individual interest. There’s an axiom in public discourse that as soon as you compare anyone or anything with the Nazis, you effectively stamp out any civil debate. However, in rare cases, the comparison is apt. Observe this photograph of schoolchildren making the Bellamy Salute during the Pledge of Allegiance.
This sort of genuflection before the supreme state characterized above is no different than what happened in German schools prior to and during WWII. My grandmother grew up in Germany during this period and the pressure to join the Hitler Youth was intense. My grandmother recalls begging her mother to let her join, so great was the nationalist pride and sense of belonging. She was forbidden to do so by a wise mother who properly recognized the danger of indoctrination into a burgeoning cult of personality.
“…with liberty and justice for all.”
This sounds like another high ideal extolled in the Pledge of Allegiance. However, the continued message is that our right to liberty and justice is granted by government (at the very least as a mediator “under God”). The reality is that our government is supposed to derive its just powers from the consent of the governed, not the other way around. The order of importance should not be God, State, Individual, but God, Individual, State. Rather than pledge our allegiance to the state as the mediator of liberty and justice, we ought to be more mindful of scriptural history and give credit where credit is due (Moses 3:17, Hebrews 9:15).
According to LDS theology, justice is an eternal law that cannot be violated without throwing the universe into a tailspin. Thus, the only way to protect God’s children from damnation is to provide a Savior. Thereby man’s agency would be held inviolate while satisfying the demands of justice. The war in heaven was not fought through the artifice of a nation-state. It was a contest of ideas between those who would make us slaves and those who laid claim to liberty, and that same battle rages today. Man’s birthright to freedom is a testament to the outcome of that pre-mortal struggle. When we fail to recognize that liberty is a birthright and instead make an oath of obeisance to a substitute benefactor, we give God’s glory to another claimant, namely: Government.
It has taken me a while to outgrow that boyish enthusiasm for reciting the Pledge of Allegiance, but I’ve gradually become uncomfortable with this sort of unqualified patriotism. Having said that, I didn’t write this article to declare myself morally superior or drive a wedge between believers. Also, because I hold personal liberty in such high regard, I would never campaign against the right of any person to pledge their allegiance to the flag. I’ve simply come to the conclusion, for me, that the high ideal of patriotism implied by the act of pledging allegiance to the flag has been used in recent decades as a convenient excuse to sidestep arguments on principle and, perhaps, ignore what should be the object of attention and loyalty. I know the pledge is held sacred by many today, but consider that George Washington, Ben Franklin, and Thomas Jefferson never made a similar pledge to the flag and no one would call into question their credentials. It’s speculation, but I think I can safely say Jefferson would have even found such a thing repugnant.
The closest synonym of patriotism is nationalism. When our leaders can no longer convince the people of the merits of a cause on principle, they appeal to love of country. For example, if you’re a patriot you can’t possibly be against the Patriot Act! Charges of being “unpatriotic” effectively stamp out all rational debate. Patriotism is the reason we’re embroiled in a never-ending, worldwide war against an ill-defined enemy (see also War on Drugs, War on Poverty). How can you possibly wage war against a battle tactic? Have we lost our minds? Well, according to the Behavioral Correlates of War Project, there is a link between high levels of perceived patriotism and proclivity for war. I believe this is probably most common when nationalism has become a substitute for patriotism. Whereas true patriots made every effort to avoid conflict, even acknowledging in the Declaration of Independence the prudence of patiently suffering through usurpations for a time, before taking an oath of such gravity as to require their “Lives, Fortunes, and sacred Honor.”
The sort of patriotism our Founders exhibited has to do with protecting the life, liberty, and property of “family & fellow countrymen” (Greek: patriṓtēs, literally fellow countrymen or lineage member) against oppressive forces. This sort of zeal is not only forgivable but admirable. I have a great amount of respect for those military men and women who put their lives on the line for this cause. “Greater love hath no man than this” is an apt description of their selfless service. To the extent that a man uses their righteous desire and sworn loyalty as a tool for oppression, he alone is responsible. He is guilty of unrighteous dominion and should be removed.
“It would be a cruel God that would punish His children as moral sinner for acts done by them as the innocent instrumentalities of a sovereign who He had told them to obey and whose will they were powerless to resist.”
- Pres. David O. McKay, General Conference Address, 1942
Ron Paul lamented,
“We now live in a post-9/11 America where our government is going to make us safe no matter what it takes. We are expected to grin and bear it and adjust to every loss of our liberties in the name of patriotism and security.”
This is hardly the type of loyalty Washington would have commanded as general and president. So, until our flag and republic stand for more than false freedom and aggressive militarism, I will stand, cover my heart, and silently mourn the loss of liberty, justice, and lives that so many have fought righteously to protect. If that makes me unpatriotic…so be it.
Geostrategy and the Future of Dollar Dominance
For the earth is full, and there is enough and to spare; yea, I prepared all things, and have given unto the children of men to be agents unto themselves.
Doctrine & Covenants 104:17
There is a global war at hand. It is primarily an economic war which has ramifications that run much deeper as we’ve witnessed over the last 10 years. The genesis of the conflict began long ago and is coming to its fullest expression as we speak.
Very few believe, without qualification, the pure motives of the military campaign we’re currently prosecuting under the label “War on Terror”. Put bluntly, we’re not fighting isolated bands of terrorists to ensure domestic safety and tranquility; we’re fighting the whole world to maintain economic dominance.
I don’t want to speculate about which parties are behind many of the unstated objectives of our aggressive geopolitical strategy, but instead define the objectives, their ramifications, and a possible prescription for returning to a more humble foreign policy with as little short-term pain as possible.
The Objectives
"Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world."
There is really only a singular overarching objective for the geopolitical strategist – secure, for the longest term possible, national economic superiority (not merely opportunity, freedom, or contentment), national security, and prosperity by whatever means necessary, not excepting the schadenfreude of base exploitation. For the last forty years the United States has experienced the greatest degree of strategic success. While the value or advisability of these strategic ends, in the context of a fallen world and consequent survivalist instinct, are a matter of conjecture, a study of the means employed should be closely examined as we consider a future course of action.Henry Kissinger
In 1971, the United States, under President Nixon, backed out of the 1944 Bretton Woods Agreement. This agreement, made between the Allied Nations, following WWII set up a cascading currency standard for all nations to follow, pegged to gold (and by extension the US Dollar as a function of its huge trade surpluses and military strength), which they supposed, would provide for greater international stability and broad economic prosperity.[1] Like most centrally planned economic protocols, it failed miserably beginning in the mid-50s when the US was forced to cure balance of trade surpluses by essentially giving money to Europe to rebuild their infrastructure, industry, and ostensibly “help them catch up”. The Marshall Plan drew a line in the sand in the nascent battle of East/West powers and repaired Europe's ailing infrastructure, but the gesture would not be enough to save the Bretton Woods agreement and in the late 60s, primarily as a result of huge Vietnam War expenses, European members of the UN/IMF began demanding payment for trade imbalances in gold instead of dollars. Since we didn’t have enough dollars to make these payments at the $35/ounce price, we were forced to send our gold reserves overseas. Gold flowed out of the US steadily for 20 years under a policy of “benign neglect”, reducing our stockpile to somewhere between $9B and $20B.[2] The writing was on the wall and the Bretton Woods Agreement was formally broken unilaterally by the United States, to avoid further hemorrhaging of our gold reserves.
It was at this critical juncture that one of the great strategic geniuses (evil, pragmatic, or both?) of our time, Henry Kissinger, stepped in to engineer a partial replacement for Bretton Woods that would reestablish US Dollar world reserve status and consequent US economic dominance for decades to come. He brokered a deal with the Saudis which extended to all of OPEC to make mandatory a new protocol for payment of international oil purchases in a single currency: the US Dollar. Demand for US Dollars instantly quadrupled. Oil is unique in that it drives industrialization, production, and trade between nations (due to its volume and impact on current account balances).[3] Without it, an economy cannot prosper, at least while utilizing the predominant fossil-fuel dependent technology. This set up a de facto system where demand for the US Dollar was linked with the ever-increasing demand for oil. Furthermore, New York and London banks became the depository of oil revenues, allowing them to take advantage of even more leverage.
One begins to see how the great economic booms we’ve experienced have come primarily as a result of trade and finance, not innovation and productivity. Following the latest round of quantitative easing, Ben Bernanke’s announcement of $600B to keep the presses busy, there was an outcry from the rest of the world about the unfairness of such a move. One has to wonder, if not informed about the real power of the US Dollar, why other countries’ central banks wouldn’t just match in earnest any monetary move we make, effectually nullifying its effects. These central bankers know why, so they impotently bristle to anybody who will listen,
The US Dollar has not been a purely fiat currency since PetroDollar recycling began. Whether the PetroDollar protocol is still fully functional or not is irrelevant. The US Dollar may be backed by oil, to an extent, but more importantly by F-16’s.[5] Try to mess with profitable arrangements like the former and you get a visit from the latter.“[Our] exporting success is based on the increased competitiveness of our companies, not on some sort of currency sleight-of-hand”.[4]
The Ramifications
Understanding the global state of affairs without grasping the causes and history of economic warfare is like trying to do a 1000 piece puzzle without the box. It is the underlying reason for the fall of Soviet communism, the liberalization of the Chinese economy towards a capitalist manufacturing hub, the “lost decade” in Japan, development of the Euro as a competing currency, the color revolutions, the growth (and subsequent gradual decline) in power of the OPEC oil cartel, the new axis of Iran/China/Venezuela/Russia - and all other global political and economic developments.
Holding the status quo together has been a momentous challenge. We’re seeing it unravel as I write this; a trend that will surely continue. Just this week, China and Russia signed a pact to trade in their own currencies. Experts say this is not an attempt by the developing Sino-Russian alliance to provoke a global currency battle with the US Dollar, but it nevertheless weakens the US dollar's virtual monopoly on foreign trade payments. The US unofficially said today it would back an IMF European bailout that would cost American taxpayers something in the neighborhood of $250Bn.
In 2000, Iraq decided it would no longer abide the PetroDollar protocol. It deposited its Oil for Food revenues, $10B, in a French bank, effectively sidestepping PetroDollar recycling.[6] The US made plans for war (without the support of the French predictably) and invaded to protect our national security (even if the cited claims of WMD didn’t pan out, this was nevertheless true since demand for dollars is the cornerstone of our economic security and any threat to that had to be dealt with in order to avoid very severe economic consequences).
Once he took office and was “briefed”, Pres. Obama tempered his anti-war stance, taking the same pragmatic approach the last 6 presidents have taken; namely expanding our military influence to “protect our national interests”. War is, unfortunately, the only way to ensure the survival of the current protocol. We are admittedly unequal beneficiaries and other nations and groups of nations don’t think it’s fair. Do we care? Not so much. We protect the golden goose with Machiavellian zeal.
Arguments about the morality or even advisability of such arrangements notwithstanding, we as a nation are on the downside of world domination. Agreements are being struck almost daily between individual nations to weaken our position. China is buying oil from Nigeria, Venezuela, Iran, and other American antagonists to avoid PetroDollar recycling back to the US. Proposals are being made for replacement of the dollar as world currency standard with a basket of currencies. The chorus of calls for uniform global monetary control is widening. All of these actions will cumulatively weaken demand for our largest and most important export (dollar inflation) and lead to a severe correction based not on loss of manufacturing, decreased productivity, or domestic natural resource availability, but solely on reduced demand for the dollar. The inertia of four decades of militant economic warfare is extremely difficult to unwind but it is happening, largely against our will. It is clear that, for the United States, this will be a painful process.
We must understand the results of this changing economic paradigm:
1. Continued and magnified susceptibility to increased volatility in resource prices as a result of cartel pricing of exports to the US and political manipulations aimed at further damaging our world dominance.
2. Shifting to a defensive domestic security posture rather than our current preemptive military posture will surely reduce our bargaining power in many political and trade agreements as the credible threat of attack or promise of a protective presence abroad is, out of necessity, weakened.
3. We will no longer be able to rely on the sweat and natural resources of other nations for our prosperity. In order to regain our place as a formidable world power while turning away from aggressive militarism and economic warfare, we will need to exploit what domestic resources are available to us, including: cumulative technological advantages, natural resources, consumer demand for goods, and competitive free markets.
Even with a comprehensive market transition to greater domestic resource exploitation and alternative energy development, we will likely still experience a severe stagflation (inflationary interest rates as a result of crippling debt payments, hefty entitlement payments, and fewer foreign treasury purchases; coupled with negative consumption sentiment and diminished liquidity).
A Prescription for Change
The only way to reduce the pain of contraction of demand for US Dollars is to produce, exploit, and develop domestically enough goods, services, and natural resources to equal the margin (exported inflation, imported prosperity) we currently make from foreign oil contracts; in combination with decreasing the size and scope of government along with future entitlement spending. This presupposes the ability to provide for our own as well as foreign demand. Currently our stripped-down manufacturing base, while highly productive (efficient), does not produce enough goods to make up the difference for decreasing dollar demand, as our current account deficit today clearly attests. We’ve become primarily a service-based economy (even though much of it has been outsourced) with little opportunity for importing a profit margin against our material exports. We not only need to recognize what’s coming, but we need to move towards what’s next.
The American tradition of innovation and foresight needs to be rekindled towards a more positive future. This needs to begin with getting “our own house in order”.
The Lord works from the inside out. The world works from the outside in. The world would take people out of the slums. Christ takes the slums out of people, and then they take themselves out of the slums. The world would mold men, who then change their environment. The world would shape human behavior, but Christ can change human nature.
Our “nature” for the last forty years or more has been to look “outside in” for our prosperity. This has made us susceptible to forces outside of our direct control absent the deployment of military muscle to secure “national interests”. It is time to scale back the empire and capitalize on our native strengths to rebuild a healthy republic and domestic economy from the “inside out”; the hope being that, in time, our greatest export will be freedom – not by coercion, but through the medium of economic prosperity and peace.Ezra Taft Benson, “Born of God”, Ensign 1985
Here’s what I recommend (lowest hanging fruit first):
1) Bring home foreign military forces and reduce military budgets. Redeploy a modest percentage of these forces to defending our own shores and borders. Be the strongest, best defended nation in the world. Stay humble and commited to just war doctrine as outlined in the Book of Mormon[7]. Stop meddling in the internal affairs of sovereign nations.
“It will not be by sword or gun that this kingdom will roll on.”
2) Appraise and formulate a plan for responsibly utilizing our native natural resources to reduce our dependence on foreign oil. This is largely a short-term stop-gap, but it is well-established that the US is one of the most resource-rich nations in the world and it is a matter of genuine national security that we not only have a strategic reserve of oil, but the infrastructure to support its replenishment. To be economically sustainable, these measures would need to be accompanied by development of alternative energy sources. Our dependence on fossil fuels has been artificially encouraged and subsidized by the above trading protocols and their many vested interests. As these disappear, we’ll likely see price inflation in oil. This will be a market signal and impetus for private industry to aggressively pursue alternative energy sources and utilization methods such as tidal, solar, wind, geothermal, shale oil extraction, fuel cells, nano-biological, electromagnetic, etc.Joseph Smith
3) Dramatically decrease the size and scope of the federal government through elimination of services and departments that do not provide directly for the protection of life, liberty, and property. To avoid massive human casualty as a result of being weaned from our current level of state dependence, we’ll need to phase out gradually, particularly in the case of entitlement spending, while at the same time shifting to local resource utilization (family, churches, civic organizations, charities). The very idea of Christian charity has taken a beating due to its being thoroughly, and rather poorly, co-opted by government. It won’t be resurrected overnight.
4) Eliminate the income tax and institute a consumption tax which at least respects our right to choose whether to spend. I know…it’s not ideal. Many times in the Book of Mormon the subject of taxation is broached[8] and it’s always cast negatively. I’m the last person to advocate “just a little bit of evil”, but just as Adam and Eve were faced with choosing the lesser of two evils (partaking of the fruit with its consequent physical and spiritual death, or disobeying the commandment to multiply), it has to be acknowledged that we live in a fallen world and as long as we are given a roadmap for redemption, we can put up with a little injustice (see: Declaration of Independence). The very relevancy of taxation has been called into question given the Federal Reserve Bank’s power to print money at will, but with the US Dollars decline as the currency standard of the world, the power to continue printing will be diminished and we’ll still need a source of income during the transition period to provide for basic services (see also #6 below). The elimination of direct taxation altogether should certainly be pursued later.
5) Eliminate all tariffs immediately. While some damage may be done temporarily to domestic manufacturing, the elimination of direct taxation should help to dissipate the effect of uneven trade arrangements or eliminate foreign import tariffs altogether. Further, the cost of consumer goods will decrease for the large majority of Americans helping them weather economic turmoil and giving them more money to spend. Profit margins for retailers could conceivably increase leading to more workers being hired. A necessary corollary to such an action is the elimination of all subsidies to farmers, industries, and special interests, licensure requirements, value-added taxes, and other barriers to entry & consumption.
6) Eliminate the Federal Reserve Bank and the FDIC stop loss for commercial banking. Doing so will force consumers to evaluate banks in the same light as they would any investment advisor/broker. Banks will be forced to compete for a limited pool of resource capital instead of having a compliant printing press in the Fed supply them with whatever funds they needed to support their ultra-risky bets. This will eliminate the systemic risks of having highly leveraged institutions rely upon the “too big to fail” doctrine of this and prior administrations. They’re on their own and so are we. Caveat emptor. Choose wisely where you put your money. Embarking upon new ventures and investments with more skin in the game can only mean better outcomes for banks, entrepreneurs, and taxpayers.
The concept of "peak oil" has been avoided in this essay as it's not entirely germane or even subjective. However, we can learn something from the dialogue surrounding peak oil. A definition of the concept is the point of highest output after which further extraction requires greater marginal input of energy. The United States passed "peak power" long ago and has been on a desperately escalating warpath to consolidate what is left ever since. We've followed the example of prior empires - increasing and flexing our military might in the hopes of procrastinating an unavoidable judgment. Our power is depleting rapidly.
Making the transition to a more honest, humble, independent economic system from our current exploitative posture can either be accepted willingly or forced upon us by processes already well under way. The world will not abide it much longer. In the interest of lessening the economic pain associated with this transition, I suggest we adopt the above recommendations. There will come a tipping point where the benefits and feasibility of doing so will diminish. The time to act is now.
[1] http://en.wikipedia.org/wiki/Bretton_Woods_system
[2] What Has Government Done To Our Money, IV. The Monetary Breakdown of the West, Murray N. Rothbard, http://mises.org/money/4s5.asp
[3] For further information on recent flow of PetroDollars back to the United States, see: Recycling PetroDollars, Matthew Higgins, Thomas Klitgaard, and Robert Lerman, Fed. Res. Bank of NY Publications, June 2006 http://www.ny.frb.org/research/current_issues/ci12-9/ci12-9.html
[4] German Finance Minister, Wolfgang Schäuble, Nov. 2010
[5] http://www.atimes.com/atimes/Middle_East/HC10Ak01.html
[6] PetroDollar Warfare, William R. Clark, 2005
[7] D&C 98:16, 23-48; Alma 43 & 48; “First Presidency Message” April & Oct. 1942
[8] Mosiah 2, 11, 19; Ether 10; et.al.
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