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Still Superman?

letsgetitdone's picture

There have been many reactions to S & Ps action in downgrading the credit rating of the US, Apart from the widespread annoyance and repudiation of S & P and its procedures, there are some who are saying that it won't have much effect on interest rates. Others even saying that it is a “non-event,” and still others saying that S & P should be investigated and prosecuted on a number of grounds. However, I found two views of the “non-event” particularly interesting.

The first was Warren Buffet's, quoted by Fox Business news:

Berkshire Hathaway Chairman and CEO Warren Buffett told the FOX Business Network that S&P's downgrade of the United States' triple-A credit rating "doesn't make sense."

"I don't get it," Buffett told FBN late Friday night. In fact, Buffett reaffirmed his belief in the quality of the United States' credit telling FBN, "In Omaha, the U.S. is still triple A. In fact, if there were a quadruple-A rating, I'd give the U.S. that.”

Buffett also said:

"Think about it. The U.S., to my knowledge owes no money in currency other than the U.S. dollar, which it can print at will. Now if you're talking about inflation, that's a different question."

And so, now we know that Warren Buffett gets a fundamental premise of MMT!

He knows that the US cannot become insolvent because it can make USD at will and it owes nothing that is not denominated in USD!

We can only hope that he'll clue in his friend Barack Obama that the US is NOT running out of money. Perhaps Mr. Buffett even knows about Proof Platinum Coin Seigniorage (PPCS) and he can tell his friend Barack that using it would be a good way to give S & P a sharp stick in the eye.

The other reaction was one to my post on S & P tugging Superman's cape. The commenter asserted that, considering the US Government's domination by an increasingly powerful oligarchy, “the US Government is not Superman.” This squares with views being expressed by Yves Smith and others that this downgrade is about a power struggle. People who write about this struggle characterize it differently.

I think it is a power struggle between sovereign nation states and globalizing international elites whose loyalties are to the emerging new international feudalism in which corporations and enormously wealthy individuals wield the only real power. Some write as if they think that nation states are already and irrevocably subordinate to international elites. But I think that is not yet true.

The forces of nationalism are not yet spent, and will still be used against the international elites when the reality of their growing power and its negative impacts on working people are both fully recognized. People still need nation states for physical protection. People without a favored position in the emerging plutocracy still owe their primary loyalties to their nations, and I don't think they will long accept the subordination of their national Governments and institutions to foreign powers, whether those are other nations or international financial interests. At the moment, the influence of globalizing elite institutions is very great and very real; but they still exist and function on the sufferance of nation states and their internal politics, however parasitical they may be.

Even with all its faults and the mess being made by the special interests and the parties, the US is still Superman if we can free ourselves from the constraints imposed by various Congresses in the past, and from the financial lilliputians.

1. As I say in this piece, and Marshall Auerback says in this one, the US (the Fed and the Treasury) can control interest rates contrary to the desires of the bond markets and the vigilantes. There is no realistic prospect that benchmark interest rates will go up unless the Government wants them to.

2. The US can also de-certify the ratings agencies and prosecute rating agency executives for fraud and other violations. I think they'd be well-advised to do so, if only to show S & P who's boss. And

3. The President, finally, can use very high value PPCS and kill the “austerity” trope of the international elites for good.

So, forgive me my optimism, I still think that's Superman!

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letsgetitdone's picture
Submitted by letsgetitdone on

Joe. Glad you liked it!

Submitted by lambert on

Joe writes:

Some write as if they think that nation states are already and irrevocably subordinate to international elites. But I think that is not yet true.

I agree. I write as if it were a done deal, because as is my way, I came to the idea through the process of continual posting on current events, and it seemed to me that the surrender of national sovereignty to trans- and post-national elites was a key process that was undergirding everything.

So, although I write as if the process were complete, I don't believe it is complete. The situation is fluid and dynamic. "Not yet true" captures this precisely.

nihil obstet's picture
Submitted by nihil obstet on

I think the elites as owners of governments are trying to surrender to themselves as global oligarchy. They're trying, with considerable success, to use the power of the nation-states to loot the people. In effect, they're using their financial organizations to do what they used to use conquering armies to do.

However, one of the developments of the late twentieth century was that peoples whose armies were defeated did not acquiesce in the defeat. Vietnam, Iraq, Afghanistan -- well, name a country that has been held without a huge occupying force. We're now seeing the same resistance spread to the people resisting the conquering financial organizations. So I agree with letsget. . .: I don't think [people without a favored position in the emerging plutocracy] will long accept the subordination of their national Governments and institutions to foreign powers, whether those are other nations or international financial interests. Not that there won't be a lot of suffering, but it will cost too much for the financial interests to occupy the countries.

letsgetitdone's picture
Submitted by letsgetitdone on

Last I looked the military participation ratio is the United States is about the level it was at during the Spanish-American War. in other words, it's pretty close to a historical low. If the people rose the elites couldn't contain us. They're not willing to pay for enough soldiers, and they worry that they wouldn't be able to control a very large army drawn from the people.

Submitted by Hugh on

Kleptocrats don't fear nationalism per se. They fear revolution. Reform is not possible inside government. The prospect of reform is just an opiate meant to keep any opposition from forming. As it is, the kleptocrats already control both political parties and so the government. They have also been very effective in quashing any real alternatives to the legacy parties. If change comes, it will come from outside the system through revolution, something they can not control.

letsgetitdone's picture
Submitted by letsgetitdone on

If nationalism turns out to be the force behind revolution then they do have to fear it.

letsgetitdone's picture
Submitted by letsgetitdone on

Hi Julia, If the nationalism isn't directed at other nations, and if it is being used by progressives, rather than the plutocrats, then I don't see why we have to fear it.

Submitted by JuliaWilliams on

I think in the US,to encourage even MORE nationalism will serve to rile up the very real xenophobia and militaristic strain running through our politics. Grabbing that tiger by the tail will be very tricky. Easier, and more to the point of a left philosophy, would be to emphasize social, economic, justice.

letsgetitdone's picture
Submitted by letsgetitdone on

We can't leave to the tea party. Of course, we need to have progressive economic and social philosophy, but we can't leave concern for country and patriotism to the right. It's just as much ours, and the fact that the government has been taken over by plutocrats is very important. but the fact that it's been taken over by plutocrats whose primary loyalty is to globalizing elites and not to the people of the United States should neither be forgotten nor de-emphasized. the globalizing economic elites put elite interests ahead of the well-being of their country. We need to message that!

Submitted by Hugh on

If nationalism turns out to be the force behind revolution then they do have to fear it.

It won't be. It will be economic conditions. Nationalism does not create revolutions. Revolutions do, however, often exploit nationalism.

I have been reading a little of Hannah Arendt's work on totalitarianism. One of the points she makes is that Hitler, who was, of course, big on German nationalism, actually had a low opinion of the German people, which I think explains his indifference to their fate at the end of the war. His idea of the master race was based on a race that didn't exist at the time but was to be developed in the future out of descendants of the SS. So even in what should be the archetypal case of nationalism as revolution, it really wasn't.

letsgetitdone's picture
Submitted by letsgetitdone on

The movement for Independence in India certainly had nationalism at its core, as did the Indonesian revolution against the Dutch and the Vietnamese revolution against the French. Also the revolution against the Emperor in China was certainly motivated in large part by nationalism, as were the revolutionary movements in Europe in 1830 and 1848. The Hungarian revolt of 1956 and the Czech revolt later were both expressions of nationalism. so, i think that modern revolutions often mix nationalism with other motivations, and that it's certainly quite possible that nationalism could drive a revolutionary movement.

in the United States, I think a movement to change things will be a movement against globalizing capitalism and its effects on working Americans, and one of the very important political appeals we will need to use is one that emphasizes the undermining of US economic sovereignty by multinationals, the ratings agencies, and increasingly internationalist NGOs representing neoliberalism, rather than the interests of the people of the United States.

Submitted by Hugh on

All of the examples you cite are anti-colonial revolts against imperial occupiers. The only revolution I can think of that was primarily nationalist at its core is that of Kemal Ataturk in Turkey. The French, Russian, and Chinese revolutions, all exploited nationalism at various points but were not primarily nationalist in outlook. All became more nationalist and imperial as the initial revolutionary impulse died away.

These distinctions are important because if there is a revolution in our future, there has already been a lot of excellent work done on them from which we can learn.