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US Economic Expansion
1877s - US - Trade Dollar
The Bush administration’s military expansion has connections to its economic expansion. Large US-based transnational oil companies, looking for increased profits, played an important part in the invasion and occupation of Iraq, which has the world’s second largest proven oil reserves. Through the International Monetary Fund, the World Bank and the World Trade Organization, the US exercises economic power over poorer countries and shapes the international trade framework. However, the US financial position is deteriorating, due largely to its growing trade deficit. The US is more dependent on the rest of the world for capital than at any time in the past 50 years. Analysts argue that the US can neither sustain nor expand its empire under these conditions. Increased military spending and other related costs put further pressure on the weakened economy, through government deficits, reduced social safety nets, unemployment and sinking domestic demand for goods and services outside the military sector.
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Empire?
General Analysis on US Economic Expansion
This section provides a general overview of US economic expansion.Oil and Economic Interests in Iran
Iran nationalized its oil industry in the early 1950s, but a CIA coup soon overthrew the democratic prime minister, Mohammed Mossadegh, installing instead the authoritarian pro-US Shah, Reza Pahlavi. Iranian oil remains a key issue today, long after the Shah was ousted by the Islamic revolution of 1979. Chinese and European companies have recently signed big oil contracts, while US companies dream of regime change. This section analyzes how oil and foreign intervention have always been closely interwoven.Oil in Iraq
Iraq has the world’s second largest proven oil reserves. In the post-war setting, with Washington running the show, the US-UK companies expect eventually to overcome their rivals and gain the most lucrative oil deals that will be worth hundreds of billions, even trillions of dollars in profits in the coming decades.Corporate Contracts
US occupation authorities have assumed control of the reconstruction process in Iraq and awarded lucrative contracts to US firms with direct links to the White House. Washington has also retaliated against countries opposing the war by excluding their firms from major reconstruction contracts. These US-favorable corporate contracts offer limited transparency and abound in corruption and scandal.The Three Sisters and Other Institutions
The World Bank, the International Monetary Fund and the World Trade Organization wield tremendous power and influence, but exclude the voices of developing countries most adversely affected by financial and trade policies. Money rules at the World Bank and the IMF, and "consensus" at the WTO is often the product of behind-the-scenes "greenroom" bargaining and pressure from trade heavyweights such as the United States. These articles address the need for democratization, accessibility, accountability and transparency at all three institutions.Dollarization
In many countries, the US dollar has become the national currency. In others, the national currency has been pegged to the US dollar. In still others, major transactions like real estate usually take place using the dollar. Dollarization eliminates the possibility of independent national monetary policy and it exposes countries to policies set in Washington.International Trade Agreements
Through regional trade agreements, such as FTAA, NAFTA, and CAFTA, the US negotiates trade deals to open markets and increase trade with mainly poor countries. While supporters of these free trade deals argue that they will promote development, the focus on cost effective production sets aside respect for labor, human rights and environmental standards. Moreover, while poor states agree to open their markets, the US refuses to even negotiate its large export subsidies that prevent poor countries from competing on fair terms.
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