The coming shitstorm, part 1

American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century by Kevin Phillips (Viking 2006)
Kevin Phillips thinks the country is going all to hell, a predicament that’s largely the fault, his title suggests, of people who think the country is going to Hell. But thank God for subtitles — the real situation is of course a bit more complicated.

Phillips is a former Republican strategist and a keen analyst — his 1969 The Emerging Republican Majority was one of the first analyses of the realignment of the Republicans’ presidential strategy away from the Northeast and towards its current reliance on white Sun-Belt residents. Phillips eventually came to regret this Southward and Westward turn, but he remains, apparently, a conservative of sorts, although he’s deeply uncomfortable with the contemporary Republican Party and the most visible forms of conservatism in American politics.

It’s largely because Phillips is not a flaming leftist that his criticisms of current policy and his analysis of (to use a technical term) how deeply fucked we are pack such rhetorical force. The book is concerned with what Phillips sees as the coming end of the American empire do to three forces: the approaching peak of oil production and the subsequent difficulties for the current U.S. oil-based economy, the transformation of the Republican Party into the nation’s first religious party (based on a fundamentalist religion), and the untenable levels of debt held by the U.S. and its citizens. Along the way, Phillips seems almost to take pleasure in attacking the most sacred of Republican cows: the Iraq War, “pro-family” politics, the financial-services industry.

According to Phillips, the U.S. economy’s dependence on oil places it in the position of the coal-dependent British economy at the beginning of the twentieth century. Committed to petroleum, our system may not be flexible enough to survive the end of the oil era. Phillips takes the standard peak oil analysis at face value: Soon worldwide oil production will peak, meaning diminishing amounts of oil will be available to feed increasing global demands.

Phillips analyzes the Iraq War as most likely a reaction by Dick Cheney and others to the impending oil peak. The invasion, he argues, was meant to put Iraqi oil in the hands of American companies and nip in the bud a nascent challenge to the current worldwide practice of trading oil in U.S. dollars. Phillips’s status as a non-leftist, as well as his thorough mastery of his sources, gives this account a certain credibility that other statements of basically the same ideas lack.

In fact, Phillips’s claims are downright radical, positing a government that has been acting in the best interests of the big oil companies and not citizens for many decades, well before the current Bush administration made the situation glaringly obvious. For some of us, this conclusion is not surprising, although the evidence Phillips marshals is impressive. What is a bit surprising is the conclusion Phillips draws from the analysis, or rather that he doesn’t draw any conclusions in favor of a radical course of action in the face of what is clearly a deep and systemic perversion of democracy in favor of petrocapitalists.

The same thing happens with Phillips’s discussion of debt and “financialization” (the process of financial services becoming the predominant force in an economy) as time-bombs that could destroy the empire. The current situation is dire, as Phillips makes clear through comparisons with the collapses of the previous economic empires of Spain, the Netherlands, and Great Britain. And the situation is outrageous — Phillips talks of the “credit-industrial complex” and its vast influence in Washington. Phillips applies a suspicious hermeneutic:

Deregulatory thinking, predicated on an exaggeration of Adam Smith’s vaunted “invisible hand,” simplly presupposed the legitimacy of whatever so-called market forces might produce. Preening after the enactment of the 1999 [financial services deregulation] legislation, Phil Gramm, the chairman of the Senate Banking Committee, proclaimed that instead of regulation, “we believe freedom is the answer.” Freedom for the financial sector , that is. (p. 296)

A Marxist couldn’t have put it any better. But that’s the funny thing: Despite agreeing with a radical analysis of the current situation, Phillips is not a radical. Although he plays his cards a bit close to the vest in this book, he apparently favors “the sounder sort of conservatism — the ideology of a John Adams, a George Washington, or a Theodore Roosevelt” (ibid.).

On the one hand, I think this shows a lack of imagination on Phillips’s part: Why not follow the analysis all the way, to the conclusion that the whole system is predicated on absurdity and cruelty, that neither the American empire nor any other manifestation of capitalism is worth saving? Why give up the myths of transparent democracy and benevolent capital but keep the myth of the nation or empire as proper boundary for moral consideration?

On the other hand, I tend to share Phillips’s caution towards radical change, if not his economic nationalism. It’s difficult to maintain a radical posture after the collapses of the radicalisms of the nineteenth and twentieth centuries. As a professor of mine used to say, communism (like libertarianism) just isn’t a political philosophy for grown-ups. Unfortunately, this leaves those of us who accept radical analyses of the sort that Phillips ventures in an uncomfortable situation, seemingly grasping at nothing but a tepid activism or a gray despair at ever seeing real, positive change.

But let me get back to the third danger Phillips sees for America: the transformation of the Republican Party into a religious party for know-nothing fundamentalists. According to Phillips, this threat is different from the other two. By itself, the theocracy movement will not bring down the economy the way oil and debt have the potential to. But, Phillips says, the religious right prevents the nation’s political system from effectively dealing with threat and crises; as oil and debt weaken America’s place in the world, fundamentalism’s influence in politics supports those who are making the situation worse rather than better.

Phillips gives a nuanced and learned view of the history and contemporary landscape of American Protestantism and its relationship to ethnicity and geography. He argues persuasively that the Southern Baptist Convention, the nation’s largest Protestant denomination and an organization that since the late 1970s has become increasingly conservative and increasingly political, is a good analytical proxy for the religious Right as a whole, although he also points out that Mormons are even more pro-Republican and pro-Bush on a percentage basis and are numerous enough to matter politically in some areas.

But while I agree with Phillips that the theocrats and their followers are a grave problem, I never quite figured out why Phillips thinks they are. On the one hand, he disagrees with their substantive views on issues from climate change to condom distribution. Fair enough. But how does “family values” theology prevent an effective response to peak oil or fiscal crisis?

One matter that Phillips touches on repeated but somewhat unconvincingly is the evangelical and fundamentalist obsession with the end times. Believing Jesus will return soon and sort out the righteous from the wicked takes the pressure off of dealing with any tricky problems ourselves. And Phillips is quite convincing when he shows that the Tim LaHaye Left Behind books’ emphasis on Babylon as the seat of the Antichrist allowed the Bush administration to use “double-coded” messages to the faithful in support of the Iraq war. Next time you hear pundits worrying about the number of people who get their news from the Daily Show, remember that a much larger number gets their news from apocalyptic pulp novels.

Phillips hints, then, is that fundamentalists are too stupid to hold productive views on pressing issues; or, in other words, they are stupid enough to be easily mislead by unscrupulous Republican politicians who want to solve the peak oil problem by invading Iraq and have encouraged a debt bubble to enrich the financial services industry. This “stupidity thesis” may be true, but Phillips offers little evidence for it. Are people who believe in a literal flood less inclined to think that the earth’s oil reserves are limited than, say, sensible Reform Jews? Are fundamentalists more prone to bizarre beliefs based on bad evidence than are Episcopalians? I’d like to see much more discussion of this question, supported by social science research.

Some may accuse Phillips of producing his own kind of apocalyptic literature, crying the impending end of America as we’ve come to know it over the last hundred years. But the tone is not Isaiah but rather Gibbon, lamenting the excesses of empire and coldly but with a touch of sadness dissecting the causes of its fall. In all, Phillips has produced an astonishingly forceful statement of our current, precarious situation. The question remains whether his analysis can find enough of an audience among those with the power to change things.

5 responses to “The coming shitstorm, part 1”

  1. MF says:

    Dave, thanks for this post. It highlights a number of things I’ve been thinking about (as have we all!) lately.

    On the point of the transformation of the Republican into a religious party… The danger is that for religious followers, the religious issues trump any of the other political issue (think war). Those concerned with legalizing religious “values” ignore other political issues, giving complete freedom (?!) to Republican leaders to pursue their own interests (and that of their oil friends).

    On the issue of debt… Having dabbled a little in real estate, I have observed (with extremely high levels of frustration) how rediculously high prices have been made by financing. Along with the double income family factor, being able to easily finance wildly more money than one ever expects to pay off (people will sell a house long before they’ll pay off the mortgage) has led housing prices to rise to astronomical rates. What’s more… if one wants to own a home, one has to play the game. Few of us will be able to save enough money in a five year period to equal the rise in prices of that same period. If we don’t get in the game, we risk never being able to. And that’s how the financial services industry keeps making more money.

    This kind of false pricing has parallels in many markets outside of real estate. And at some point… somethin’s gotta give.

  2. Dave says:

    The housing thing is quite crazy — the “creation” of wealth through a Federal Reserve policy of low interest rates. I was amazed to hear of people refinancing with adjustable-rate or interest-only mortgages and taking tens of thousands of dollars out of their newfound equity, then quickly spending it on cars, flat-screen TVs, etc.

    Even crazier, it seems, are the newfangled trading instruments created for hedge funds and other big investors. According to Phillips and others, derivatives and other instruments have become so complex that nobody really knows the level of risk they involve. The LTCM fiasco could be just a taste of future collapses.

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  4. […] Dave B, “The Coming Shitstorm” (Parts 1 and 2) Dave B, “Hope: a non-sermon” Scott Godfrey, “A journal of hope” […]

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