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How Did America Fall So Fast?
In 2000, America was described as the sole remaining superpower - or even the world's "hyperpower". Now we're in real trouble (at the very least, you have to admit that we're losing power and wealth in comparison with China).
How did it happen so fast?
As everyone knows, the war in Iraq - which will end up costing $3-5 trillion dollars - was launched based upon false justifications. Indeed, the government apparently planned both the Afghanistan war (see this and this) and the Iraq war before 9/11.
And the financial system collapsed last year due to looting and fraud.
How Empires Fall
But Paul Farrel provides a bigger-picture analysis, quoting Jared Diamond and Marc Faber.
Diamond's book 's, Collapse: How Societies Choose to Fail or Succeed, studies the collapse of civilizations throughout history, and finds:
Civilizations share a sharp curve of decline. Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power...
One
of the choices has depended on the courage to practice long-term
thinking, and to make bold, courageous, anticipatory decisions at a
time when problems have become perceptible but before they reach crisis
proportions
And PhD economist Faber states:
How [am I] so sure about this final collapse?
Of
all the questions I have about the future, this is the easiest one to
answer.Once a society becomes successful it becomes arrogant,
righteous, overconfident, corrupt, and decadent ... overspends ...
costly wars ... wealth inequity and social tensions increase; and
society enters a secular decline.
[Quoting 18th
century Scottish historian Alexander Fraser Tytler:] The average life
span of the world's greatest civilizations has been 200 years
progressing from "bondage to spiritual faith ... to great courage ...
to liberty ... to abundance ... to selfishness ... to complacency ...
to apathy ... to dependence and ... back into bondage"
[Where is America in the cycle?] It is most unlikely that Western
societies, and especially the U.S., will be an exception to this
typical "society cycle." ... The U.S. is somewhere between the phase
where it moves "from complacency to apathy" and "from apathy to
dependence."
In other words, America's rapid fall is not really that novel after all.
How Consumers, Politicians and Wall Street All Contributed to the Fall
On
the individual level, people became "fat and happy", the abundance led
to selfishness ("greed is good"), and then complacency, and then apathy.
Indeed,
if you think back about tv and radio ads over the last couple of
decades, you can trace the tone of voice of the characters from Gordon
Gecko-like, to complacent, to apathetic and know-nothing.
On
the political level, there was no courage in the White House or
Congress "to practice long-term thinking, and to make bold, courageous,
anticipatory decisions". Of course, the bucket loads of donations from
Wall Street didn't hurt, but there was also a religion of deregulation
promoted by Greenspan, Rubin, Gensler and others which preached that
the economy was self-stabilizing and self-sustaining. This type of
false ideology only can spread during times of abundance and
complacency, when an empire is at its peak and people can fool
themselves into thinking "the empire has always been prosperous, we've
solved all of the problems, and we will always prosper" (incidentally, this type of false thinking was also common in the
1920's, when government and financial leaders said that the "modern
banking system" - overseen by the Federal Reserve - had destroyed
instability once and for all).
And
as for Wall Street, the best possible time to pillage is when your
victim is at the peak of wealth. With America in a huge bubble phase of
wealth and power, the Wall Street looters sucked out vast sums through
fraudulent subprime loans, derivatives and securitization schemes,
Ponzi schemes and high frequency trading and dark pools and all of the
rest.
Like the mugger who waits until his victim has made a
withdrawal from the ATM, the white collar criminals pounced when
America's economy was booming (at least on paper).
Given that the people were in a contented stupor of consumption, and
the politicians were flush with cash and feel-good platitudes, the job
of the criminals became easier.
A study of the crash of the Roman - or almost any other - empire would show something very similar.
- advertisements -
"...what do we do about it? "
Proclamation on the Federal Reserve System of the United States of America
www.RevokeTheFed.com
March 2008WHEREAS, Article I, Section 8 of the Constitution of the United States of America authorizes Congress "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures";
WHEREAS, on December 23rd, 1913 the US Congress enacted the Federal Reserve System;
WHEREAS, the Federal Reserve System is considered an independent agency within the federal government, with oversight of Congress and containing appointed public officials on its board of directors;
WHEREAS, the Federal Reserve System Controls the Federal Reserve Note, the official currency of the great nation of the United States of America;
WHEREAS, there may be controversies regarding the legality and constitutionality of the Federal Reserve System, it is recognized that the said system has operated continuously as the central banking system of the United States since the inception of the Federal Reserve Act of 1913;
WHEREAS, the Constitution of the United States of America granted Congress the authority to create the current Federal Reserve System, it also does grant Congress the authority to modify or revoke the Federal Reserve System;
WHEREAS, the actions of the Fedreral Reserve System represent the credit and currency of the United Stated of America to the citizens of this great nation and to the world;
WHEREAS, the Federal Reserve System, acting independently within the federal government allowed, supported, and even promoted parasitical and non-productive uses of the money and credit of the United States of America;
WHEREAS, the United States and likely the entire world's financial system is undergoing massive de-leveraging of the said parasitical and non-productive uses of the credit and money of the United States of America (as well as other nations' currencies);
WHEREAS, the US dollar, the "Federal Reserve Note" is declining in value due to these parasitical activites, as well as potentially other causes;
WHEREAS, it is recognized that the citizens of the United States and other nations did willingly participate at some level in the creation and propogation of said parasitical activities;
WHEREAS, it is also recognized that the United States of America, a sovereign nation, has the legal, moral, and God given authority to take actions to benefit its citizens and to protect its good name, credit and money in times of difficulty;
WHEREAS, it is recognized that the current time is such a time of great difficulty;
WHEREAS, it is recognized the parasitical financial institutions and their activities are at odds with citizens of the United States of America and the good credit and money thereof;
WHEREAS, the current indications are that the Federal Reserve System is acting to preserve the financial system currently flooded with the parasitical activities;
WHEREAS, the current indications are that the neither the Federal Reserve System, nor the Congress of the United States, nor the people of the United States have access to the books of the institutions being preserved by the Federal Reserve, and therefor the degree of inter-connectivity and risk associated with the institutions and other entities cannot be determined;
WHEREAS, the Federal Reserve System is accepting non-performing assets as collateral for credit with ultimate taxpayer responibility to entities not under its legislative mandate;
IT MUST BE CONCLUDED, that the Federal Reserve System is not acting to the benefit of the people of the United States of America, its credit, money, and good name;
WHEREAS, it is recognized that the political will and capability of the government of the United States of America may not be up to the task of prosecuting this proclamation ; It is also recognized that this may be the only hope for the continued survival of the United States of America as the great nation as it has historically existed.
NOW THEREFORE, it is PROCLAIMED by those supporting this Proclamation that the Congress of the United States of America FULLY NATIONALIZE the Federal Reserve System, and take full control of the credit and money of our great nation; The Congress must take whatever action necessary to seperate out, sequester, disown, or otherwise neutralize the effect of the parasitical financial activities which led to the current crisis; The Congress of the United States of America must reorganize, replace, or terminate the Federal Reserve System as appropriate; or otherwise devise a system for creation of the national currency.
IT IS FURTHER PROCLAIMED, that the Congress of the United States of America in cooperation with the Executive of the United States of America contact allied nations and any other nation willing to participate in the overhaul of the failing and parastical financial sytem currently in operation and create new treaties and alliances as necessary to create a sane and productive system of finance with the express goal of supporting a productive national, and by extension and through voluntary cooperation, world economy;
FURTHERMORE, it is PROCLAIMED that it should be the goal of such an international effort to maintain fair international trading practices allowing for protection in national interest of labor, resources, and productive capabilities;
WHEREAS, it is recognized that such a move on the part of the United States of America may result in the necessity of an isolationist policy IF the other developed nations do not follow our lead; If such occurs, so be it.
SO HELP US GOD!
duplicate...musica in its stead: http://www.youtube.com/watch?v=OpiJLpGvosY
First order of business is to position yourself so you're as self sufficient as possible. How to do that varies tremendously person to person, but a resourceful individual can get there. Then you reach out beyond yourself and help as many people as you possibly can.
Don't buy into the system as it exists today (debt life, corporate foodchain, dependancy) for that is the surest path to servitude.
Steak,
Check. Check. (But could I do more to help more people? I'm sure anyone could criticize the effort I'm making and suggest ways of doing more... who is a role model here?) Check.
But I fail to understand why I should stay in America and fight for it if collapse is inevitable. Why not move to Norway, New Zealand, etc? If America is on the path to a failed economy/failed State/failed society, why not vote with your feet and be a citizen in a country that values labor, plays by the rules, enforces the rules, and provides a higher standard of life?
What is the strategy behind being self-sufficient and defensive, Steak? How is that better than joining a functioning and improving economy/state/society?
Several issues here.
Alternate places may be nice to visit but living there they all have their personal internal disipline requirements.
These alternate places may be nice to visit but they all have their personal internal discipline requirements. And, I suspect, other than the internet, you would find both Norway and New Zeland boring after a few years. (Skiing isn't as much fun when you get older.)
Born in 1935, my favorite theoretical source of great change is the boob tube. Shortening of attention spans and constant in your face presentation of fantasy worlds to young minds isn't good. Contact with and struggle within, the real physical world is both educational and humbling.
But "the genie is out of the bottle" Next best thing starts with exposure of young children to real outdoor experiences - early. Suitable team sports (social skills). Strictly limit boob tube time (under law?) until they are 7-10 years old at least. This might not do any good in many cases but some parents do that now and the results show. If results are evident it should garner more general support. I have one step grandchild whose mother used a speaker (with selected music) assembly on her tummy while he was still in the womb. He appears to me to be socially ahead of his cousins.
Make government subsudies available for toys like Tinker Toys, erector sets, model airplane kits, etc. to be used (at least for young boys) in the playtime educational processes. The program would need lots of input from both sexes. Take only the best elements from the draconian NCLB (No Child Left Behind) program.
What would such a program cost? One billion per year? What was allocated for the NCLB program? What do we spend in IRAQ in a month?
It has been hypothesized that oriental children are more skilled at math because Chinese language is pictorial. (Left brain-right brain argument). There is no reason that the elements of the Greek alphabet, used in mathmatical symbology could not be introduced early. By the time they are used in high school, these symbols will be friendly familiars.
As an engineer, I have to observe that, as the world found out in the LCTM meltdown, necessitating bailout of the Chase, the use of the statistics was flawed. “We should have used fatter tails.” For my professional engineering life, I would have considered such a remark as indicating incompetence ((in people licensed(?) to handle other peoples’ money). (Coins or dice do not communicate.)
Watching Larry Summers and Alan Greenspan in testimony, I see the great political skill but just don’t see the intellectual merit.
Most decent engineering schools require a passing grade in vectors and tensor math for the masters’ degree. In science, competence in tensor math is required to deal with models of the “real world”. If financial engineers of the future were required to MASTER the real world math perhaps they will have a chance to be able to handle their job.
Great post hbjork.
Why Stay? I very good question. While I think things will get very bad here, I think they will get worse elsewhere. Norway? Soon to be renamed Muscovia. New Zealand? Which part? The part soon to belong to Greater China? Or the other part, you know, the post-nuclear bombed out wasteland ...
The strategy is to ensure the survival and well being of yourself and those close to you. We are being pulled apart in so many different ways that many have lost sight of what it means to be a part of a community...to contribute something positive towards that community...and draw strength from them in times of need. It is cliche, but this country will not be rebuilt from the top down. By doing the best we can for ourselves and supporting those close to us the best we can, we can build a foundation.
I'm lucky, I can leave if I want. And I am looking at how I would bring as many of my friends and family with me as possible if need be. Laying the groundwork now just in case such a need comes to pass. Its a gut wrenching decision...as the son of immigrants I've only ever heard the USA is the best country on Earth. But I am making plans nonetheless...
No doubt many of the symptoms of decline you mention are there. But I distrust the ability of historians to go back and catalog past declines with such accuracy, identify ten distinct phases, etc. Life is messier than that.
Still, it's undeniable that we haven't handled the post-Soviet, "unipolar" era very well. We squandered historic opportunities.
The main problem with the thesis that there will be a precipitous decline into squalor is the sheer height we'd have to fall from.
Will we be on top forever? No, but will our "collapse" be catastrophic? No. The UK lost its global empire. Is it an unlivable Mad Maxian hellhole? No, it's just a country which matured past its empire phase.
It often stated that the US military is a huge "asset" of the country, when it fact is its biggest liability.. it represents a huge malinvestment of wealth and is the main reason for the ongoing deficit financing and accelerating debt.
Money spent here is wasted and produces no return. In some cases it produces negative return.. take our GDP over to Iraq and blow it up, and destroy Iraq's infrastructure as well.
China, whose military expenditures are miniscule compared to the US is thriving by winning the international trade game.
One main cause of the decline of the US are the fruitless and endless war mongering, from Vietnam to Afghanistan and all the expensive wealth destroying adventures in between.
"War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.”
U.S. Marine Major General Smedley Darlington Butler, one of only 19 people to be twice awarded the Medal of Honor
"If tyranny and oppression come to this land, it will be in the guise of fighting a foreign enemy. Of all the enemies to public liberty, war is perhaps the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. The loss of liberty at home is to be charged to the provisions against danger, real or imagined, from abroad."
James Madison
What you are saying, and I agree is that our economy can survive, and do ok. The problem is the financial system. We need a new currency and bankruptcy type reorganization of the current Fed system and much of the private financial system attached to it too. This is the only solution I can see.
www.RevokeTheFed.com
These are all excellent points, chet. My suspicion is much like yours, I don't think we're destined for a full-on collapse into the abyss - though it's still not entirely out of the question - but more likely a Greater Depression II - with, granted, some rather substantial and widespread misery the likes of which my generation (born in '66) and even most boomers can only marvel at while watching "The Grapes of Wrath" on Turner Classic Movies.
But the basics of the US, from our (human and natural) resources to our (let's face it) newly battle-tested military are going to remain formitable going forward.
We desperately need a reboot of our (collective and individual) souls and return of back-to-basics, work-hard-play-hard-play-fair business mindset (yeah, we were never there but it was always an ideal to be strived for) mentality. And to relegate "Entitlement Nation" to the ashbin of history, of course. And that will all take time - sucks for those of us who were hoping to retire early, but all and all hardly not at all much to ask. IMHO, of course.