Stick to baseball, George

So, the global restructuring and geo-strategic recalibration is well under way.  

America's, and Europe's, historic economic predominance can be expected to slip away - with inevitable consequences for the west's ability to lead and shape events on the world stage. In other words, all of this is about something much bigger than a few poorly-managed megabanks: we've seen this movie before. The British Empire effectively spent itself into oblivion as its economic might imploded.  

In recent years foreign central banks and sovereign funds have increasingly propped up the dollar and bought U.S. Treasuries. We can't expect this to continue indefinitely: China now is diversifying aggressively to hedge away from its exposure to a country with such dire long-term fiscal imbalances as the United States. Joseph Stiglitz (Nobel Prize, Economics) calculates the Iraq war will cost the US three trillion alone (all in), which puts Obama's fiscual stimulus package (roughly $800 billion) into perspective.  

In short, as a nation, we've been profligate idiots. This is more true in the U.S. than the UK (as Stiglitz himself has observed) but the UK has been far from prudent itself (as Warren Buffet has repeatedly observed since the 90s).  

Things didn't have to be this way, but, of course, rational discourse hasn't been permitted for a long time, and there certainly was no interest on the Sunday talk shows. Even today we have George Will still blathering about how the New Deal didn't work: it amazes me how many apologists for Hoover are still out there. World War II got us out of the Great Depression? Even if you concede that might be true (and I don't), it doesn't change the fact that massive public spending did the trick. Is George advocating another big war? Iraq wasn't enough?  

I laugh when I think about all those fiscal conservatives who demanded a balanced budget amendment in the late 90s, and who then promptly forgot about it with dubbya in the White House: they discovered John Maynard Keynes and suddenly deficit spending was, like, so cool! Except deficit spending as Kenyes conceived it had nothing to do with tax cuts for the rich. In contrast, fighting stupid wars that make no sense can work as a form of fiscal stimulus (as sort of a large public works project), but dubbya didn’t get the timing quite right. Yes, he’s probably the worst president we’ve ever had.  

But we, the People, put him in office, so who really is to blame?