End of an empire?


For those enamoured by free markets and deregulation, the US experience makes for sobering reflection – although some argue that the Military-Industrial-Media Complex is hardly a model of free market economics.

For some time now, market fundamentalists had preached that the government should have as little do as as possible in regulating business. Now, we see Wall Street being brought to its knees and turning to the US government to bail out failed financial institutions, the victims of their own unbridled greed. All this is the result of financial deregulation with little oversight.

This is also what happens when the Occupation of Iraq meets financial deregulation, a wild credit bubble (cheap credit) and a colossal debt:

A shattering moment in America’s fall from power
The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over

John Gray
The Observer,
Sunday September 28 2008

Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.

You can see it in the way America’s dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America’s standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.

Full article here.

Please help to support this blog if you can.

Read the commenting guidlelines for this blog.
Notify of

Most Voted
Newest Oldest
Inline Feedbacks
View all comments

I think the golden rule applies – if you borrow too much and spend too much, don’t earn enough and don’t save enough, then as an individual you’ll face a financial crisis. When that happens to a nation collectively, when the banks don’t care whether you can pay back, then the country faces a financial crisis. Simple as that. It happens to Msia in 1997, it happened to the US last year and it’s happening to Dubai. Wasteful spending always leads to a downfall. Don’t underestimate the Americans .. they will bounce back. Don’t underestimate China .. they have secured… Read more »

simon li

miwaki, can you use an american name next time
people might mistake you for a japanese
it’s no fun reading about america by a japanese


You people do not have to worry about USA,they know how to solve their problems.Whether you like it or not,US is going to be fine and remains a great financial and military power in years to come.Worry about our country,malaysia is in distress !

simon li

Most people understand money as a ‘Token for Exchange’ but this idea actually blinds us to the host of evil greed behind this game of exchange as it is played and led by America. For a grasp of why the USA’s (and likely, the world’s) financial system is now collapsing, money should be understood as nothing more than “Promises by the Financial System”. Let me explain. When you render a service or sell a product in direct exchange, it means that you accept the other person’s promise of a specified service or product in return, to be delivered upon exchange… Read more »

Elohe Sra

# int on September 30th, 2008 at 3.13pm The empire lives on, stronger than ever… in China. Except that this “Chinese empire”, like so many others today, depends on the US market for its well-being and on US manufacturers setting up factories there. I would agree that reports of the US collapsing or losing its influence anytime soon are greatly exaggerated. I think many people simply have no idea about the sheer size of the US economy. This so-called economic crisis is probably going to turn out to be more of a correction than anything else. However, there seems little… Read more »


The empire lives on, stronger than ever… in China.


Haha, 700 billion is petty cash? then why on earth did the bill not pass in congress? simon li is right, of course. america thought it could go on overspending and incurring huge debts because the world because in an integrated global economy such as exists today, the world could not let it sink. and so they keep issuing the treasury notes and kept spending with funds from abroad, from japan, china, saudi and the rest. what is the greenback backed by today? if the americans are not careful, their currency could well be on the way to becoming the… Read more »

simon li

I fell off my chair reading stuff like “the US economy is too robust and $700 billion is petty cash to the American economy”. In the distant past, money was backed by gold reserves in order to enjoy the necessary confidence in it as a token for exchange. But ever since the evil empire and its allies succeeded in dominating the world, $700 billion nowadays is only the USA’s digital money created by a computer keystroke (used to be called “printing money”) and certainly not even real petty cash. It is ‘financed’ by a big fat number in America’s national… Read more »


There was time when the American economy rested on strong fundamentals. Banks only lent out their money on strong economic basis. Nowadays, the banks are only interested to put borrowers in trouble. The way in which they pushed their credit cards without any regard as to the creditworthiness of the borrowers is going to be another fuse ready to set the American economy ablaze, and in fact the economies of other countries that avidly follow the footsteps of these American financial whiz-kids. Fanciful investment instruments were created without any underlying support or assets to back them up. In other words… Read more »


We’ll see. Maybe they’ll pull out of this tight spot. Maybe they won’t.

Remember, people said the same back in 1929 and 1980s.


It’s funny how the United States’ government also suffers from this “political syndrome” of saying one thing, and doing another.

Like government intervention, cap on free-market trades…the list is endless.



Ludwig von Mises has long ago warned about how government intervention distorts the market. He even explained the desparate steps people take when the unwinding of their con game causes large economic corrections. Government intervention caused most of these troubles, and the troublemakers themselves blame free market, conveniently. The guns of criticism should be pointing to central bankers, who control the supply of money, and governments, whose interventions often make their buddies rich though the military-industrial-media complex mentioned. Interest rates suppose to reflect the savings in an economy. There’s totally no rationale for such low interest rates in the US,… Read more »

Phua Kai Lit

Dear All

For more analyses from the American progressives,
check out


Dalbinder Singh Gill

Hey anil,

is the movie war on democracy downloadable from the internet ? thanks

Yes, Dalbinder, I think you can download it somehow from here.

There is a way to download it I think… see here:



The financial crisis in US It had been written in the Holy Bible Those bible crusaders talked about it For years nobody belief Greed of wealth Power corrupts the minds Law makers forget their roles Descended to the quests of masses Gay marriages The rules bend to popular reasoning The personal crisis is brewing Yet the powerful US is dreaming The massive earthquakes will hit her shores The US will never recover when this massive earthquake strikes Starting from the land of Africa it travels to the US coastlines Hitting them the magnitude of many times tsunami The world leaders… Read more »


Oh but I think that the fall of American global hegemony has already begun. Any world power needs a moral authority or credibility to complement its financial and military power and the US is fast running out of moral credit. China holds trillions of US debt. American wars in the past few years are expected to cost upwards of a trillion dollars. Russia is aggressively crushing any move by US to expand NATO bases to its borders. The usual sphere of dominance of the US, South America has gone left and the Russians are definitely going to pay the US… Read more »

Lochos Vestu

That article is highly laughable. Financial crisis occur on a cyclical nature, probably on average once every 10 years. What is going on in the US will also affect all countries globally, like the likes of Europe, China, India and Russia, due to the interconnected and globalized nature of the world economy today. Financial crises in the US have happened before. And the same predictions have occurred in the past from anti-US left-wing European publications like the Guardian. Be assured, the “fall of US dominance” is highly overrated. I would say that the article you quoted is a load of… Read more »


one should read the book “the rise and fall of nations” by kennedy and you will understand why. history is replete with downfall of nations due to arrogance and complacency as well as wanton display of financial indiscipline.


The economic crisis of capitalism is also an ideological and political crisis, and this unavoidably places Marxism back on the political agenda. Read more at :


The fall of the financial institutions was due to too much regulations and interference by the authorities. Since the 90s the US govts have been forcing Freddie Mac and Fannie Mae to lend generously to help out the lower income group to buy homes. This is the downside. The home buyers could not eventually pay back the loans. AIG is another matter. People are dreaming. The US economy is too robust, and can sustain a hundred bankrupt AIGs. $700 billion is petty cash to them. Don’t hold your breath waiting for the US to fall. The rest of the world… Read more »