Date: Tue, 14 Oct 1997 20:23:14 -0500
From: Doug Henwood <dhenwood-AT-panix.com>
Subject: M-I: Re: M-TH: Liberalism and Fascism


Rakesh Bhandari wrote:

>I ask this because Einser, a liberal, is little bothered by US trade
>deficits, for as he writes "as long as we continue to run a current account
>deficit, we get a free ride because foreigners find the US dollar to be a
>good investment."
>
>This then raises the question of why the dollar is a good investment;
>Eisner is not clear here--some master defetishizing seems necessary here
>(for example,  do US dollar denominated assets remain valuable because
>dollars are needed to buy the weapons over which the US has a monopoly?)

Eisner is the equal of the supply siders in his panglossianism (which is
why he appears on the WSJ edit page). He's arguing this with decent
intentions - loyally Keynesian opposition to austerity - but, like a
Canadian arguing that that country's foreign debt is just a Bay Street con
job, he's pretending that a country can consume more than it produces
forever. He's also famous for some truly silly arguments that the U.S.
budget deficit of the 1980s didn't exist; if you account for things
properly (which means invent reason the debts are illusory, and pretend
that devoting 15% of your expenditures to interest payments isn't an
elite-enriching waste of public money) then the deficit disappears. Voila!

The U.S. dollar is valuable because the U.S. still accounts for almost 25%
of global product, because its financial markets are so deep, and because
crucial commodities like oil are priced in the unit. This may all change if
and when the euro happens (and, by their articles of incorporation, the HQ
of the Bretton Woods institutions would have to move to Europe should the
continent ever unite politically and become the WB/IMF's largest
shareholder - and could you imagine how Washington would take *that*?). But
for now the U.S. dollar is the world's lingua franca currency, on one side
of most foreign exchange transactions. If you want to change Greek drachmas
to Thai baht, for example, it's likely you'd use the dollar as an
intermediate step (in this role, it's called a "vehicle" currency). The
yen's role as an international currency has been hampered by Japan's
political reticence and the lack of a yen T-bill market.


>Since the problem is not with capitalism, it would seem that it would
>become even easier to impugn those who don't make the transition, though
>they have been given education. This sets the stage for more punitiveness,
>more prisons and eventually death camps.

Rakesh, please. Eisner is a decent, if somewhat silly guy. I'd be very
surprised if he's a fan of the carceral state. I don't know why you're
pursuing this liberalism = fascism line, but it's bizarre and not very
enlightening.

>It would seem that American liberalism is imperialism and that it already
>shows continuities with fascism.

"Liberals" founded the CIA and prosecuted the war on Vietnam. Does that
make them fascist? They're nasty, murderous, and hypocritical, but so are
most imperial politicians. Doesn't fascism apply to a much narrower
phenomenon than this? You, for example, are allowed to say these things in
public (not that anyone listens), but in Nazi Germany, you'd be locked up
and probably shot.

Doug





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