ASIA'S FINANCIAL MELTDOWN
& ITS CONSEQUENCES
FOR THE UNITED STATES

Chalmers Johnson, president of the Japan Policy Research Institute, writes, "For the past six months Americans have been told repeatedly that the (economic) ... meltdown in ... Asia will not affect them, their jobs, or the American stock market. Even the 1997 U.S. trade deficit with Asia of well over $100 billion is considered good news because cheap imports (which, of course, displace American workers) will keep down inflation. But what is at risk in ... Asia is the real possibility of a global collapse of demand and another Great Depression ... The Asians may save a lot, keep their children in school longer than anybody else, and recruit smarter state bureaucrats than Washington does, but they are catastrophically overinvested in the wrong industries - principally automobiles, shipbuilding, steel, petrochemicals, and semiconductors.

"By far the most important writer on this subject is William Greider. Prior to the meltdown, economic groupies in America were having enormous fun writing sour reviews of his One World: Ready or Not: The Manic Logic of Global Capitalism (1997). But after the meltdown, even the New York Times, which is as protective of Wall Street as the Los Angeles Times used to be of aerospace, thought that maybe he had something to say after all. Greider argues that multinational corporations have moved too much of their manufacturing to places where skilled workers are paid so little that these new workers cannot possibly consume what they produce. But the consumers back in the G-7 democracies also can't buy anything because their economies are either growing too slowly or they've just lost their jobs. Greider predicted that finance would lead the way in unmasking the resulting situation: 'The evidence', he writes, 'of recent years - the recurring bubbles of private and public debt that go bad and abruptly collapse - strongly suggest that it is finance capital that is overreaching reality (like the run-up of stock prices on the New York Stock Exchange). The underlying danger is a structural collapse of demand leading to recession and ultimately to something like the Great Depression."

The importance in all this insofar as the topic of this journal is concerned lies in the fact that the establishment wings of the Democratic and Republican Parties - together with the super-elite - have been able to sustain America's new multicultural ethic only because of continuing economic prosperity. As Michael Ignatief says, "Multiethnic states are able to maintain themselves only so long as conditions of stability and economic prosperity prevail."

However, when prosperity ceases, ethnic tension is the inevitable result. Thus, the global economic meltdown which Asia's financial troubles portend, coupled with the stock market's unsustainable "ponzi pyramid" [Please see our article, "Ponzi Schemes, The Investment Craze, And The 'End Of Days'."] bodes ill for ethnic peace in the United States. When the economic collapse finally comes - and it will - the U.S. may be plunged into an ethnic frenzy that none of us can now imagine, a frenzy or - as Huntington puts it - a "Civilization War" that could very well make the economic turmoil and social upheaval of the Great Depression look tame in comparison.