Is the U.S. Too Big to Fail?

The warning signs are all around us.

We have heard from the Obama administration that companies like General Motors or various major banks are simply “too big to fail”—a mantra whose meaning is ambiguous. On one interpretation, the sense is that such enormous enterprises, owing to the fallout attendant upon their collapse, should not be allowed to fail and need to be propped up by vast infusions of cash. At the same time, the implication is that what we might call “maximal structures” generate their own survival momentum, and while some tweaking here and there may prove beneficial they will continue to lumber on regardless. We must, it seems, have confidence in the incommensurably large. We must believe that what is “too big to fail” will either not fail or will not be permitted to fail

Analogously, we have been instructed that countries, unlike individuals and certain corporations, are too big to go bankrupt. Walter Wriston, former director of Citibank, is a firm believer in the fiscal resilience of nations. This is no consolation, however, to the people of Zimbabwe today or the citizens of Argentina between1999-2002 during the great economic meltdown. Christopher Booker and Richard Fernandez warn that Britain is on the verge of crashing: the accumulating debt to GDP ratio is frankly unsustainable. When the welfare cheques stop coming, when inflation goes through the roof, when banks invest in padlocks, when essential services are no longer provided and salaries are a fond reminiscence, a nation is effectively in bankruptcy—which is merely another term for failure. The French word for bankruptcy says it all: faillite.

There are, of course, many ways for a nation to approach the tipping point of potentially irreversible miscarriage. Economic implosion, as we have seen, is one; defenseless borders in times of conflict are another; unchecked immigration leading to ballooning social costs and a dilution of civic sentiment, as well as internal subversion, is a third; a flaccid, poorly educated and self-indulgent public unwilling to embrace austerity when necessary or bestir itself to the preservation of the polity is yet a fourth. Taken together, these factors amount to a perfect storm that will bring even a colossus to its knees.

Size in itself has nothing to do with viability. In fact, some things may be too big not to fail. The Roman Empire was pretty big and so was the Muslim imperium, but their long and undoubted success was the precondition for their inevitable collapse. Such dromocratic constructs tend to grow topheavy or the lines of communication between center and periphery weaken and fray. They peter out from misrule, debauch, apathy or torpor, or succumb to invasions and repeated military defeats, their scope and volume notwithstanding. This is also the case for more coherent entities. Classical Athens was a political and civic triumph until it began to expand far in excess of the optimal polis census of 5000 freeborn citizens.

But why stop there? By all accounts, the universe is a rather big place, but cosmology informs us that it will either dilate toward inescapable death by entropy or will reach a point when it begins to reverse its expansion, leading to a “big crunch.” “Either way,” as the Greek tragedian wrote in the Oresteia, “ruin.” If the universe can “fail,” then, presumably, anything can, irrespective of magnitude.

Which brings us to the United States of America, considerably smaller than the universe but large enough to inspire assurances of invulnerability among those inured to the lessons of history or given to intellectual complacency. The Bridge Mix of social, political and economic programs—redistribution of wealth, a bloated bureaucracy, reduction of military power, amnesty for illegals, toleration of inimical communities, government takeover of the marketplace, ideology supplanting pragmatics—adopted by the American liberal-left and rapidly being put in place by the current administration are hurtling the nation toward its moment of truth when it will have to decide whether it survives as the United States of America or devolves into something that, until just a few years ago, would have been almost unimaginable.

Often what seems to be inconceivable is only the prelude to what may well become unavoidable. And in the case of America such a scenario is all too possible. For America has only three options looming before it in a rapidly foreclosing future. The best case scenario is that, assuming a concerned citizenry, the growing Tea Party movement, a return to strict budgetary rectitude and a revival of the wisdom of the Constitution and the Founders, the United States may weather the storm of social and political dismemberment it is presently undergoing and recover its essence as a constitutional republic. To accomplish this aim, however, the policies of the Obama administration must be resisted at every turn. What Henry David Thoreau wrote in On the Duty of Civil Disobedience in 1848 has a proleptic ring to it and is truer today than it ever was: “How does it become a man to behave toward this American government today? I answer that he cannot without disgrace be associated with it.”

On the other hand the calamity of disintegration, as happened to the Soviet Union not so long ago, is a deeply troubling likelihood. The drive toward secession or what is called “disunion” along red state/blue state lines appears to be acquiring strength by the day. It is in the air. The threat of dissolution cannot be wished away or conveniently ignored. Whether such a parting of ways can be achieved peaceably and rationally or would entail violence and bloodshed remains an open question. But what resembles a bitter marriage between cultural incompatibles, the statist Left and the conservative Right, who have nothing to say to one another and disagree on just about everything, makes an eventual divorce by no means unthinkable. The clash between a pervasive scavenger mentality of collective entitlement and the ancestral belief in the values of personal initiative and individual responsibility cannot, it increasingly appears, be resolved amicably.

The third possibility is that America under the stewardship of Barack Obama and the Democratic Party will become an impoverished, socialist, Muslim-friendly country, much like the United Kingdom today or Sweden tomorrow, with devastating consequences for the majority of its citizens. As David Horowitz remarks of the U.S., “its constitutional order is threatened by a political left whose values remain socialist and whose agendas are subversive.” Such is the fundamental transformation promised by the Democratic candidate five days before his election: the intent to legislate outcome at the expense of input, to ensure a syndicalist homogeneity of status among the population while installing a privileged managerial class in the seats of power, and ultimately to transform America’s most industrious entrepreneurial sector into over-taxed and over-regulated obsolescence. Where have we seen this before?

These, then, are the three alternatives between which America will have to choose: recovery, dissolution, socialism. Regarding the latter two, to cite Aeschylus once more, it’s “either way, ruin.” Clearly, the moment of decision is not far down the road. Even a one-term administration for Barack Obama and his cohorts may be sufficient to wreak irreparable damage; a two-term presidency would probably spell the end of the noble and unique American experiment in republican democracy. For there can be little question that Barack Obama and the Democratic ascendancy together form the single greatest disaster to befall the United States in the modern era. If the country does not right itself sooner rather than later, it will find itself broken down the middle or wake up one day to discover that it is now nothing more than another socialist or quasi-Marxist Republic, which is a republic in name only.

Thoreau is on the mark again. Deploring the effects of a “wordy” and ever-compliant Congress which had “not yet learned the comparative value of free-trade and freedom” and which was devoid of “talent for comparatively humble questions of taxation and finance, commerce and manufactures,” he argues that without the “seasonable experience…of the people, America would not long retain her rank among the nations.” And we remember, too, that the United States was a much smaller political entity in 1848 than it is in 2010.

Now is not the time to take refuge in the smug conviction of indestructibility. America is not too big to fail and it may well be too big not to fail. But one thing is undeniable. As it approaches the eleventh hour, its survival depends on a determined and informed citizen “army” of genuine patriots capable of restoring the practical ideal of limited government and of conserving the proper balance between the state and the nation, the governors and the people, the collective and the individual, equality and liberty. Should that come to pass, America may recoup its forfeitures and at least partially retrieve the grandeur of its heritage.

And this, it goes almost without saying, is the real meaning of hope and change.