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On the morning when I was on the plane coming home from Washington something had clicked in my mind that caused my carefully preserved world of placid illusions to fall apart. We were indeed loosing the Cold War.
When a stewardess passed out the usual newspapers after takeoff, I asked for the Washington Post. In the financial section, a two-column headline said something about a systemic banking collapse. I didn't even know for sure what this meant.
In June, the largest bank of America had reported a slight operating loss, a month later heavy losses with a warning that the whole financial industry was so deeply in trouble that the entire pyramid could be tumbling down once reality would move people instead of their illusions. The writer of the article found it alarming that the world's largest banks were in dire straits, but he found it even more alarming that their stock still kept on rising sharply in value, and that this pattern was visible everywhere. The Dow had been on a continuous upswing for years in total disregard of the economic facts. Steel production had slumped by a whopping 70% during this timeframe, so the article warned. The machine tool and farm equipment industry fared not much better. While everyone was taking about a recovery, the article noted that production plants, mills and blast furnaces were being torn down all across the USA. The gap in lost production was filled with imports. Household names of America's farm equipment sector, like International Harvester, John Deere, Allis-Chalmers, which once stood synonymous with American prosperity, were fast on the way to becoming relics of history.
I put the paper down and shook my head. The Russians must be laughing at us, I kept thinking. I remembered the uproar some time ago when US Steel dynamited its flagship operation, the National Tube Plant in McKeesport, Pennsylvania. They said that this became necessary after years of depressed prices, when steel production became unprofitable in the post-industrial-society era, the era of the brave new irrational world. The Russians could just as well have bombed the place. The result would have been the same. This time the global oligarchy that hates prosperity as a threat to its existence had chosen a more novel approach than war. It had somehow managed to get the American people to blow up the plant themselves. They were calling the USA checkmate without having taken one single pawn in the game. They were the great chess masters for sure. This insanity had defined the battle for us in a war that we were close to loosing.
No sooner had I laid the paper down, which had told the ugly story, that I picked it up again. A sub-headline glared at me; "Two out of Three trillion in loan assets are worthless!"
The writer insisted that this was only the tip of the iceberg of the economic chaos, considering the tight interdependence of the entire economic strata. With basic industries collapsing and unemployment forcing defaults on mortgages amidst slumping prices, mortgage loans became worthless, and the trend was having a ripple effect that was just beginning to gather momentum.
I laid the paper down again. The banking crisis was undoubtedly real. It all made sense. I recalled the chaos when Bell and Beverly went under, with paper assets of over five billion. Deregulation and bad management had been blamed for the failure. This, suddenly, looked like a shameful excuse. There was a pattern behind this spreading wave of disaster that the article brought into focus.
The Ogarkov Plan came to mind again, and its possible connection with the world-financial disintegration. It seemed logical to me that before an adversary could even dare to think of waging a war against a military giant like the USA, it would first have to bring the giant to its knees. This, of course, the article didn't say. The fact, however, was clear. According to the article, the once proudest of all giants, the mighty USA, lay dying, financially and economically wounded from within.
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