The Day After
I laid claim to a kind-of tipping point in last week's Ides of March post, but Morgan Stanley's Steven Roach is betting on the 16th as a better bet.
In my view, March 16, 2005 could end up in the running as a possible tipping point for America. Suddenly, the US has taken on a very different aura in an increasingly unbalanced world: The confluence of a record current account deficit, a disaster from General Motors, and yet another new high for oil prices all speak of an increasingly precarious role for the global hegemon. World financial markets have barely begun to sniff that out.
From Moon on Alabama, the G.M. situation appears worse than Chrysler -- "This is a company headed for bankruptcy but the Wall Street pimps will not admit it until the bitter end.".
From what I have read about corporate bureaucracies that start to head south, the first thing workers detect in their environment is a huge increase in paperwork. In essence, this meaningless paperwork amounts to shuffling the deck chairs on the Titanic; ultimately telegraphing the action of suits in the head office as they get increasingly nervous over trying to justify their existence. I sometimes wonder if the same effect exists at the federal government level as we get deeper in the doo.
In Paul Kennedy’s historical framework, America is extending its reach at precisely the moment when its economic power base is weakening -- a classic warning sign of the fall of a Great Power.
Was March 16, 2005 America’s tipping point? Only time will tell. The optimist can hope that it was a wake-up call for a saving-short US economy to put its house back in order. For once, call me an optimist. It’s time for America to smell the coffee.
Also, oil depletion author Michael Klare provides more background info on Grag Palast's U.S. imperial conquest findings in Mapping the Oil Motive.