I also contrasted the situation in Rome with the last four decades of the American experience.  In Chapter 8, I point out that between 1973 and 2001, correcting for inflation, household income for the bottom 90% of the population rose at a rate of barely more than 1% per year.  This week I found more detailed information that helps explain why income grew so slowly.  A recent report by the Census Bureau shows that the average yearly wage for men has actually declined since 1973.  That year, just before the recession of 1974, men, as a group, earned an average of $48,452 (measured in 2008 dollars).  The average wage for men declined gradually, with a few brief upward swings, until 2000, when wages began to fall steadily.  By 2008, the average male earned $46,367 – more than $2,000 less than males earned in 1973.

Why has household income gone up?  Women in the household went to work.  Starting in 1965, there has been a steady rise in the workforce participation rate of women and a gradual increase in the average wage for women workers.  In 1965, a little less than 40% of the adult female population worked, but that figure grew to 58% in 2000.  The wage information reported by the Census Bureau shows that women earned an average of $22,881 in 1965 (in 2008 dollars), $29,815 in 1985, and peaked at $36,148 in 2001, just as the stock market boom was going bust.   With women earning more and more women out working, household income was able to creep ahead between 1973 and 2001.  This fits with my general impression since the 1980s that households or families where two adults work are more prosperous than households or families where only one person works.

Unfortunately, since 2001 the average woman’s wage has stagnated, falling slightly to $35,745 in 2008, and the workforce participation rate for women declined to 54% that year.  Unlike in the 1970s, 1980s, and 1990s, female household members have not been able to bring in more income to compensate as men’s wages declined during the last decade.  Consumer purchasing power jumped during the 2003 – 2006 period when people took equity out of their homes by refinancing, but that option is gone for a very long time.

We are left with a population that, in general, has had to run very hard while gradually losing ground since the crash of 2001.  In addition, most households have no significant income gains from previous decades to fall back on.  The result, in 2010, is a general rage, running straight through the once secure American middle class.  Everywhere, people who are either laid off, working part-time, or re-employed at a job with less pay have a sense that it is all slipping away.  To understand American politics in 2010, we need to remember that this nasty recession has fallen upon a population whose standard of living has stagnated since the early 1970s – a whole generation.  They have a right to be angry.

Mr. Packer also said that Obama, like the Progressives, believes in expertise and group discussion in order to reach the right policy prescriptions.  Once he reached the White House, Obama moved away from his campaign “man of the people” persona and adopted a more deliberative, expert-oriented, decision-making process.  While this was most evident during the three month process that preceded his decision to drastically increase military activity in Afghanistan, the same process was also used for major issues like saving the financial system, pushing for health care reform, and addressing climate change.

Unfortunately, the mere listing of those last three issues, banks-health care-climate change, highlights the dramatic way in which President Obama is not at all like the Progressives of the early 20th century.  Those reformers were passionately opposed to the abuses of large corporations and banks.  The “Robber Barons” were not loved by most Americans and numerous movements rose up to challenge their ability to exploit workers and consumers.  In fact, by the 1912 presidential campaign between Teddy Roosevelt, Woodrow Wilson, and Howard Taft, there was a fierce debate over whether big companies should be dismantled through anti-trust court action (Taft), closely managed through a system of powerful federal regulatory agencies (TR), or some combination of the two (Wilson).

Needless to say, Mr. Obama has never considered any of those alternatives.  Instead, following the advice of his experts, he, and the Democratic leadership in Congress, have attempted to purchase good behavior through open-ended bail-outs of financial firms, concessions that preserve the profits of drug and insurance companies, and subsidies and exemptions for dirty energy providers and users in the cap-and-trade bill that passed the House last summer.

Obviously, President Obama has been confronted by over-the-top belligerence from the Republican Party, but the policy choices he has made in an attempt to moderate their opposition and get cooperation from our modern day Robber Barons have added up to a demoralizing failure to promote the national interest.  Millions of his strongest supporters have been reduced to stunned disbelief.  Perhaps what we are seeing is the exhaustion of modern liberalism; a philosophy that was once guided by the principle of using government resources to improve the well-being of the great majority of the population.  Now the party of liberalism seems to have no political strategy other than using tax money to bribe rogue corporations and banks in the vague hope of moderating their behavior.

For example, on January 29th, a small A.P. story noted that durable goods orders (things that last a while like refrigerators and televisions) rose only 0.3% in December, far less than the 2% rise predicted by professional economists.  Traditionally, when our economy rebounds from a recession, durable goods orders jump as consumers begin spending again.  The latest number was a huge disappointment, given that durable good orders fell 20% during 2009.  The same article points to the reason – 470,000 people filed claims for unemployment benefits the week before – that is, even as government statistics show the GDP going up, nearly half a million Americans got laid off.

On January 30th, a small A.P. story reported that even if you kept your job during 2009, things got worse.  Overall, wages rose an average of 1.5% in 2009, far below the official (doctored-down) inflation rate of 3%.  On February 1st, a tiny Bloomberg News article reported that Nouriel Roubini, the economics professor who predicted the financial crisis before most “experts” noticed there was a problem, said that unemployment will remain over 10% even if statistics show the GDP is growing.  He said, “It’s going to feel like a recession even if technically we’re not going to be in a recession.”

On January 28th, Michell Singletary wrote about President Obama’s “Middle Class Task Force,” which has, after a year of study, recommended that debts for the Federal college Loan Program be forgiven after the student pays 10% of his or her income for twenty years – a reduction from the current 25 year requirement.  This minor change comes from an administration that has fully cooperated with the Bush administration’s handout of more than $600 billion to banks and hedge funds with no requirements for increased business lending, no requirements for renegotiation of mortgages with individuals who are facing foreclosure, and no significant limitations on management bonuses.  Highlighting the contrast, an A.P. article on the same day noted that the Federal Reserve reported that lending is still contracting.

I could go on, I clipped out a week’s worth of stories with the same message – the aftermath of the great financial crash of 2008 is not going to be a return to normal.  While GDP “growth” might be trumpeted in the news, our friends, neighbors, and family are going to be unable to find jobs and the purchasing power of those who keep jobs will continue to decline.  Meanwhile, the Obama administration, moving in slow-motion as it follows the advice of its Wall Street born and bred economic advisors, will only propose tiny changes at the margins, while right-wing Republicans in the Senate will howl about government deficits and bloc even those reforms.  We are on our own.

At the time, I felt there was no longer a pressing need for a blog about the American empire; a systematic, historically-based criticism of the wars and hardships that accompany the country’s restless urge to control the earth’s resources and destiny.  Deep down, I had been rooting hard for Obama and, like many others, projected my hopes and dreams of reform onto his candidacy.  I also thought that he understood the urgent need for change and would be eager to seize the moment.

Most ironically, about the time of my last post it was becoming clear that Al Franken was going to eventually win the Senate seat in Minnesota, giving the Democrats 57 seats along with two Independents – even if one of them was that miserable tool Joe Lieberman.  With the help of the remaining moderate Republicans like Snow and Collins from Maine and the political weathervan Arlen Spector of Pennsylvania, a series of reforms would wash away eight years of awful rule by Dick Cheney and his amiable sidekick.

How misguided that whole mood seems today!  The 60-40 split in the Senate morphed with President Obama’s odd desire for bi-partisan legislation, giving enormous power to the most conservative Democrats in the Senate.  Combined with the “filibuster everything” strategy followed by all of the Republicans, the Senate has become a bastion of reaction.  Just as Cato and his faction in the Senate of the Roman Republic were willing to risk civil war in order to crush reform politicians, the hard-line conservatives who control the Republican Party and much of the media are will to bring Obama’s government to a halt.

Disheartening as these events were, the real shock was President Obama’s willingness to pump up the defense budget and expand the war in Afghanistan.  These actions confirm the thesis presented in my book – that the American empire is a deeply bi-partisan effort to dominate political and economic affairs in every part of the globe.  Thus, the blog is back and I hope that people of good-will all over the U.S. turn their efforts toward restoring the vitality of the American Republic before it is too late.

Everybody’s building the big ships and the boats — Some are building monuments –Others, jotting down notes — Everybody’s in despair — Every girl and boy — But when Quinn the Eskimo gets here – Everybody’s gonna jump for joy — Come all without, come all within — You’ll not see nothing like the mighty Quinn!  (Bob Dylan, The Basement Tapes)

How is it that a dangerous socialist radical, a scary multi-racial man, an elite lawyer from Harvard, a first-term Senator, has suddenly become The Answer?  Who knows, but when word leaked that Obama was choosing Tim Geithner, currently head of the NY Federal Reserve, to be Secretary of the Treasury (not a very surprising choice) the stock market rose 500 points IN ONE HOUR.  Rarely has a new president been so eagerly awaited, never before have people wailed and moaned about the terribly long time between election day in November and inauguration day in January.  It seems to me that he is being given an extraordinary opportunity to propose bold new steps in both domestic and foreign policy – let’s hope he seizes this historic moment.

But when Obama the President gets here — Everybody’s gonna run to him — Come all without, come all within — You’ll not see nothing like the mighty Obama!

I bring up this sorry episode as a warning when we consider Obama’s repeated promises during the fall debates to hunt down Osama bin Ladin and kill him, with or without the help of the Pakistani government.  It is unclear to me how he can carry out this promise without continuing the new American policy of unannounced cruise missle strikes in the mountainous areas of western Pakistan, a policy cooked up by the Bush administration this summer.  Not surprisingly, these attacks on a sovereign country are destabilizing our relationship with the new Pakistani President and the country’s largest political party.  To frost the cake, Obama also explicitly and repeatedly said he would send more U.S. combat troops to Afghanistan in order to defeat the Taliban.  He has created very high expectations and will have a difficult time backing out of these commitments – commitments that could lead to the collapse of civilian rule in Pakistan and the creation of a new quagmire in the remote hills of Afghanistan.

Leaving aside the folly of adopting any policy created by the Bush Administration, I believe these Osama-Afghanistan promises are a classic example of how the Democrats have historically been drawn into defending the American empire.  In the heat of an election campaign, Obama felt he had to show how tough he is, how he would be a vigorous Commander-in-Chief.  Just like Kennedy and Johnson had to show how tough they were by keeping the commies out of Vietnam.  These military promises are powerful because they fit right into the imperial job description that so many military, journalistic, academic, and political leaders attach to the Presidency.  It is a job description that many Democratic and Republican voters believe in as well.  As such, they are the policy equivalent of painting yourself into a corner and then claiming you are free to go anywhere you want.  The appropriate response is – Yes, within your little box.

Of course, Obama is not as trigger-happy as McCain, but the criticism from Hillary Clinton this spring and then McCain and the media about his “credentials” to be Commander-in-Chief (see my posting in September) have forced him to become much more militaristic than he was when he started the campaign.  We are actually watching, in real time, how the dynamics and pressures of empire shape individuals who become leaders.  No matter what their pre-presidential ideas about foreign policy, the pressures of the political system puts them in a position where, in order to advance to the presidency, they must commit to defending the empire.  In Perils of Empire, I explain in detail how the dynamics of the Roman political system consistently generated leaders who sought war and expansion of territory – and the American political system has been doing a similar thing since at least the end of WWII.  Without a powerful peace movement that opposes wars and treaties the promote the empire, Democrats get pushed into the imperial system, even those who begin with good intentions.

Obama has assembled this commanding lead by combining the strategies advocated in two “big picture” books by Democratic political strategists.  The first, The Emerging Democratic Majority, written in 2001 by John Judis and Ruy Teixeira, said the Democrats could become the dominant party in the 21st century by appealing to people who live in urban areas with predominantly information/high tech economies – areas that are generally multi-cultural, socially liberal, and internationalist.  Their research showed that urban areas with these characteristics are growing in electoral importance in many states that traditionally have leaned Republican.  For example, the metro-Denver area in Colorado; the fast-growing suburban areas of northern Virginia; the Las Vegas-Reno area in Nevada, and the sprawling metro areas of Phoenix, Arizona and Santa Fe, New Mexico now have more voters than the conservative rural areas that have previously defined politics in those states.  They pointed out that several states considered swing states in the 1960s and 70s, for example Washington and California, had already become Democratic strongholds by 2001 because of the rising importance of metro-Seattle and the cultural transformation of the metro-Los Angeles area.

The second book, Whistling Past Dixie, written in 2006 by Thomas Schaller, says that the Democrats should focus on capturing western and northern states with culturally diverse populations rather than becoming more conservative on racial or cultural issues in a vain attempt to best the GOP in the south.  He specifically pointed to the southwestern states of Nevada, Arizona, New Mexico, and Colorado, but included states with tight presidential races in 2004 like Iowa, Wisconsin, New Hampshire, and Oregon.  His strategy is to confine the GOP to the conservative, religious, non-urban states of the deep South, Texas, and the lightly populated Great Plains.

Note that in both of these portraits of the American electorate, Ohio is a swing state outlier in the North because it doesn’t have a high tech urban area and southern Ohio is culturally similar to Kentucky and Tennessee.  In addition, Florida is a swing state outlier in the South because it has some high tech areas and a diverse mix of people due to immigration and retirement communities.

The attention and false claims of a McCain surge directed toward Pennsylvania reveal the nature of Obama’s success.  Unless McCain can somehow come from behind to win in Pennsylvania, victories in Ohio, Florida or other “swing states” of the past will make no difference.  We will know quickly on Tuesday night whether the Obama strategy of winning in the west and in multi-cultural urban areas has succeeded.  If he captures the eastern time zone states of Pennsylvania and Virginia then it will be time to discuss color patterns for the Obama White House drapes.

Saakashvili seems to have been lured into initiating the war with Russia by the Bush administration’s push for Georgia to be admitted into NATO.  If so, the war and its aftermath are the result of a series of aggressive U.S. moves since the fall of the Berlin Wall in 1990.  While dragging his feet on a nuclear arms reduction treaty with Boris Yeltsin, President Bill Clinton initiated a policy of offering NATO membership to the former communist countries of Eastern Europe.  The Bush administration enhanced this policy by pushing for NATO membership for former Soviet Republics, like Ukraine and Georgia, on Russia’s borders.

It is here, as with the situation in Iraq before the invasion, that national security policy intersects with oil.  The Clinton administration and now the Bush administration have been pushing for the building of pipelines from oil-rich Azerbajain (Georgia’s neighbor to the east), Kazakhstan, and Turkmenistan through Georgia to the Black Sea.  This would by-pass the largest existing pipeline route to the large European market.  That pipeline runs through Russia.  Once again, Cheney is working toward an expansion of the American empire into an unstable oil region through armed diplomacy.  In fact, as Sarah Palin pointed out last week in her TV interview, if our European allies had given in to Bush administration pressure last spring and admitted Georgia into NATO, then the U.S. would have had a treaty obligation to send soldiers into Georgia to confront the Russian threat.  “Asked whether the U.S. would have to go to war with Russia if it invaded Georgia, and the tiny country was part of NATO, Palin said, ‘Perhaps so.”

Into this potent mix of military treaties and oil scheming steps John McCain.  The Republican presidential candidate was quick to support Saakashvili, telling an audience, “I told him that I know I speak for every American when I say to him, ‘Today, we are all Georgians.’”  McCain has already signaled his intention to take an aggressive stance against Russia, proposing last spring to evict Putin’s country from the Group of Eight industrial nations that meet yearly to discuss the world economy because Russian is not a functioning democracy.  Thus, election of the McCain-Palin ticket is likely to mean a return to a confrontational cold war relationship with Russia – just as Cheney has planned it.

Hillary Clinton’s whole campaign was based on her perceived readiness to be Commander-in-Chief.  Remember the ringing telephone ad, “Its 3 a.m., somewhere in the world, something is happening” breathes an excited voice.  Couldn’t you just see Hillary leaping out of bed and launching cruise missles in her presidential pajamas?  The sad thing is that the ad helped her win the Ohio and Texas primaries.  According to the Wall Street Journal , by a 57% to 40% margin, Ohio voters felt Mrs. Clinton would be a better Commander-in Chief.  So it isn’t just the power mad neo-conservatives or the hard-nosed realists who are looking for a Commander-in-Chief, a significant portion of Democratic voters are, too.

All of these individuals, journalists, academics, military leaders, Republicans, and Democrats are assuming the empire.  We assume a President’s main job is to use our massive military machine to the run the world for our benefit.  Do the British or the Germans or the Japanese debate whether their candidates for high office will make a good Commander-in-Chief?  Of course not, they don’t assume that their country has the power to get involved in every conflict, assume it has the right to impose its will on other countries, in short, the right to act with imperial pretentions.  Oh, there were times when they did, and all three countries suffered in the 20th century because of those pretentions.  Perhaps that is why they are so wary when Americans point our cruise missles at another “enemy of freedom.”  While we claim to be coming to help, what we are really doing is meddling in someone else’s business.

There is an ancient parallel to our Commander-in-Chief syndrome.  Voters in the Roman Republic elected two consuls each year.  In addition to presiding over meetings of the Senate, the consuls were literally the generals in charge of Rome’s armies.  Voters, knowing that their consuls would also be generals, usually elected political leaders with good military credentials to both minor and major political offices.  As a result, ambitious men sought opportunities to enhance their military reputations, sought opportunities to incite warfare with neighboring tribes and peoples.  Politics in Rome became a viscious cycle, seeking military glory, individuals went out and provoked wars and clashes with other nations; those who were most successful at this bloody game won election to higher office.  Is it any wonder that the Roman Republic ended up beseiged, with an unruly empire, plagued by revolts by conquered peoples and demands from her generals for more soldiers, more money, and more power.  Ultimately, the political system collapsed into civil war and the elections and civil liberties that had distinguished the Roman Republic were sacrificed for the efficiency and order of an Emperor.

Read more about this dynamic in my new book - Perils of Empire: the Roman Republic and the American Republic, just click on the golden book cover to your right and order it from Algora Publishing (algora.com) or Amazon.com.

In the two weeks between Friday, July 11 and Friday, July 25 the price of oil fell 16.3%, from $147 per barrel to $123.26 per barrel.  Did China or India stop buying oil, were tensions eased betweent the U.S. and Iran, did Exxon-Mobil find a new oil field, is there peace and justice in Nigeria?  No – yet the price fell 16.3% in 14 days.  What better evidence that most of the price rise was speculation; speculation based on the falling U.S. dollar, speculation based on low U.S. interest rates, speculation based on U.S. trade and budget deficits.  The price fell in July because the speculators went too far, the U.S. dollar is not collapsing, it is gradually sinking, so they overshot their mark.  This is cold comfort as we spend $50 to $100 dollars filling our tanks.

Let’s be clear, this is not the kind of illegal, market manipulation speculation that the Democrats in Congress say they can wipe out with legislation.  This is financial managers at multi-national corporations, traders at hedge funds, investment banks in Switzerland and London and New York, doing what they do every day, year after year, move money around the globe to find the best pay-off for their cash.  Countries that have suffered runs on their currency at one time or another since 1990 include Mexico, Russia, South Korea, Indonesia, Malaysia, and Argentina.  Now it is the U.S.’ turn – our budget deficits, trade deficits, and low interest rates are a classic set-up for a run on our currency - and the traders are doing the run in oil futures because oil is paid for in dollars.  Check out my post from June 27 for a more detailed explanation of why the oil price rise is a run on the dollar.

There is a solution to this problem, but it can’t be done overnight.  It will take rare leadership ability for the U.S. to change the way it operates in the world.  If the oil price speculative frenzy is at heart a run on the dollar, then the cure is:

1) Reduce the U.S. trade deficit by greatly reducing imports of oil (take out the cost of imported oil and our trade is roughly in balance) and do it by conserving energy and ultilizing alternative energy, not by making ridiculous claims about the amount of oil that can be drilled off-shore.

2) Raise U.S. interest rates above their artificially low levels so that people can get decent interest rates when they save money and then resolve the mortgage/financial crisis by targeting aid to people who are either in foreclosure or verging on foreclosure.  It sounds expensive, but direct subsidies to homeowners in trouble would be way cheaper than what doubling the price of gasoline has cost us.  Plus, every dollar spent would stay in the United States, while our oil dollars line the pockets of companies in other countries.

3) Reduce the U.S. federal deficit by ending the Bush tax cuts for the rich and reducing military spending by ending the War in Iraq.  Most of the federal deficit run up during the Bush years is a creation of the tax cuts for the wealthy in 2001 and 2002 and by the $150 billion per year we are spending to occupy our new colony in Iraq.