How Did America Fall So Fast?

By Washington Blog

October 21, 2009 "Washington Blog" -- 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.
	 
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