Part of the psychology of the Greenspan Bubble  a policy of bank credit expansion that distorted market signals and led to the over-valuation of certain assets, such as real estate  has been the vaunted overestimation of America’s staying power as a global hegemon. Standing alongside the hubris that brought down the financial edifices of Bear Stearns and Goldman Sachs is the foreign policy corollary: the triumphalism of the neoconservatives, who imagined that American military power could solve all the world’s problems: or, at least, most of our own. They sneered at the “declinists,” like Paul Kennedy, who pointed to “imperial overstretch” as the cause of our impending economic and geopolitical demise.

Samuel Huntington, for one, attacked the “declinists” as being primarily of a “liberal or leftist” bent, and pooh-poohed calls to rein in the budget deficit  which had, at the time (1988), reached noticeable proportions  as symptoms of undue alarmism. Why, even now, he assured us in an article [.pdf file] in Foreign Affairs, the situation is undergoing a “reversal,” and, besides, the international economy “naturally generates equilibrating tendencies.” Somebody should tell that to Secretary Paulson, the US Congress, and the denizens of Wall Street, because they don’t seem to understand all they have to do is take a chill pill. After all, what’s a couple of thousand-point drop in the stock market, in the face of our inherent invincibility?

Deficits? Not to worry, said Huntington: Papa Bush will take care of that, with some combination of spending cuts, new taxes, and some good old-fashioned fiscal discipline. One problem: it never happened. Instead, the spending spree  including an orgy of military spending  continued, as did the policy of bank credit expansion, which was carried to an extreme by former Federal Reserve chieftain Alan Greenspan. Oh, but don’t worry. The US, averred Huntington, is a “multi-dimensional” power, one not based on any one factor  economics, geography, ideology, natural resources, demography  but combining all of these into one overwhelming and unassailable force in world history. While conceding economic power is “more fungible” than other forms, Huntington reassured us that the transformation of such power into, say, military heft would be “costly,” and, in any case, no other nation on earth had comparable advantages.

This is the big problem with the Huntington analysis, and its imitators over the years: it viewed the US only in relative terms, as a contender in a competition, which pitted America against other possible aspirants to the role of global hegemon  Russia, during the cold war, and, since then, the EU and notably China. All, however, were found wanting: they could never measure up, Huntington observed, and so have no fear, we’re still Number One. What he wasn’t counting on, however, was that, in declining, we would drag everyone else down with us. The shocks from the US economic meltdown are clearly reverberating throughout the globe. So, in a sense, Huntington was right: no one is overtaking us  because we’re all going down.

Some of the anti-declinist rhetoric, looked at in retrospect, is embarrassing. Here‘s neocon Robert J. Lieber, one of academia’s fiercest war-hawks, polemicizing against declinism in the Summer 2008 issue of World Affairs:

“On the economic front, without minimizing the impact of today’s challenges, they will likely prove less daunting than those that plagued the U.S. in the 1970s and early 1980s. The overall size and dynamism of the economy remains unmatched, and America continues to lead the rest of the world in measures of competitiveness, technology, and innovation. Here, higher education and science count as an enormous asset. America’s major research universities lead the world in stature and rankings, occupying seventeen of the top twenty slots. Broad demographic trends also favor the United States, whereas countries typically mentioned as peer competitors sag under the weight of aging populations. This is not only true for Russia, Europe, and Japan, but also for China, whose long-standing one-child policy has had an anticipated effect.”

Here, again, the economic picture is portrayed as a competition of nation-states, when, in reality, it is a seamless web of economic networks and transactions that has been profoundly disrupted on a worldwide scale. All the insignia of success  we have seventeen out of twenty “top slots” in the university research sweepstakes!  don’t seem to matter much when the economy is imploding. And make no mistake about it: this isn’t the economic “malaise” of the 1970s and early 1980s  it’s more like the 1930s.

While economics may not be Professor Lieber’s area of expertise, what he and Professor Huntington leave out of their apologias for American globalism is the simple arithmetic of imperialism, which adds up to a net loss for the United States and the American taxpayers. Huntington denies that military spending is a drain on the economy, and blames “consumerism, not militarism,” for America’s status as the world’s number one debtor. Yet how does he imagine we financed the biggest military build-up in world history? How did we manage to bloat our military budget until it grew larger than the defense expenditures of all the rest of the world combined?

We rang it up on our national credit card. We built an empire on a mountain of debt, and now it’s all come tumbling down. Yet it’s more than an economic debacle: the Greenspan Bubble was made possible by a certain kind of psychology, a cultural ethos that gave little thought to the long-term consequences of US monetary and military policy, and lived only in the here-and-now. The Bubble pumped up not just the stock market, but also our pretensions, our hubris, our sense of entitlement  not only to big overpriced homes and a dozen different credit cards, but also to our global preeminence as world policeman. If pride really does cometh before a fall, then one can only observe that we had plenty of warning.

The declinists were right: the burden of empire is unsustainable, and had to end in the way it is ending  with a 5,000-point dive in the stock market, and a crash heard ’round the world.

It’s important to realize, however, that the decline and fall of the American empire was not due to some defect inherent in our national character, one that grew like a cancer until it overwhelmed an otherwise healthy body politic. We are bearing the consequences of policies undertaken by our leaders  elected and unelected  who, heedless of critics such as Paul Kennedy, Chalmers Johnson, Ron Paul, and this author, among many others, rushed down a road well-littered with the bones of deceased empires.

In the world of the ancient Greeks, hubris  an overweening pride  was a cardinal sin in the eyes of the gods, and they visited upon prideful sinners all sorts of unpleasant fates, such as suffered by Icarus. Hubris, in the Greek mythos, was soon followed by Nemesis  the cause of the sinners’ ultimate downfall.

Our own nemesis is the puffed-up pridefulness of our leaders, who thought they were gods, and believed, as one top official put it, that

“We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality  judiciously, as you will  we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors and you, all of you, will be left to just study what we do.”

Reality has caught up with the lords of the American empire, and all the frenzied attempts at “creating other new realities” are to little avail. Sure, future historians will indeed study these vaunted creatures, “history’s actors” of the year 2008. Yet it won’t be with any sense of admiration for their great achievements. They’ll be studied as exemplars of failure on an unprecedented scale, economic suicide bombers whose spectacular demise shredded the global financial network  and triggered our own long slide into post-imperial senescence.

NOTES IN THE MARGIN

For more on the economic crisis, and its political implications, go read my piece in Taki’s Magazine on the “Establishment Messiah”  and, yes, you guessed it right .