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America in Crisis: Correcting the Narrative

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Last week we wrote about the endemic dysfunction in our institutional system to draw attention to something that is becoming increasingly obvious to ever more Americans: Our country is in the grip of existential crisis. We also said that this crisis represents an opportunity for laying a foundation for better times to come. But to seize this opportunity fully, we must first understand what out trouble is about and what are the forces that have brought us to the situation we are in now. The official narrative pushed by the Left – which includes the mainstream media, the Democrat political establishment, the education system, high-tech elites, and corporate and financial coteries – is that our crisis is due to systemic racism which

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Last week we wrote about the endemic dysfunction in our institutional system to draw attention to something that is becoming increasingly obvious to ever more Americans: Our country is in the grip of existential crisis. We also said that this crisis represents an opportunity for laying a foundation for better times to come. But to seize this opportunity fully, we must first understand what out trouble is about and what are the forces that have brought us to the situation we are in now.

The official narrative pushed by the Left – which includes the mainstream media, the Democrat political establishment, the education system, high-tech elites, and corporate and financial coteries – is that our crisis is due to systemic racism which is deeply and inextricably embedded in the fabric of American society.

This narrative, however, is simply not true. Nothing, in fact, could be further from the truth. Even though some people may harbor racial prejudice – including blacks themselves (read here, here and here) – American society and institutions most certainly do not discriminate against black people. Quite to the contrary, not only do black people in America genuinely enjoy all the rights and constitutional protections in the fullest sense of the term, they also have special benefits and privileges that are unavailable to the rest. We wrote previously about this here, but rather than repeating the points already made, we quote an exquisitely worded and succinct dismantling of the racism canard by the writer Fred Reed. This is what he recently wrote:

“In truth, America has made the greatest effort ever essayed by one race to uplift another. Reflect: In 1954 an entirely white Supreme Court unanimously ended segregation. Later it found the use of IQ tests by employers illegal because blacks scored poorly, then found “affirmative action,” racial discrimination against whites, legal (hardly oppression of blacks, this). An overwhelmingly white Congress passed the Civil Rights Act in 1964, the Voting Rights Act the next year. A white President sent troops to Little Rock to enforce desegregation. There has been an enormous flow of charity to blacks: Section Eight Housing, AFDC, Head Start, hiring quotas, set-asides, sharply lowered standards in police and fire departments. We now have free breakfasts for black children, then free lunches, in addition to outright welfare. In aggregate they resemble a distributed guaranteed basic income.”

Fred Reed is exactly right: Never in history has one race made a more genuine, concentrated and costly effort to uplift and help another race. White Americans not only laid down their lives in the hundreds of thousands in a war that ended slavery, they expanded trillions of dollars since the 1950s to render financial and material assistance to the black community. And as if this was not enough, they even instituted reverse discrimination against themselves in a sincere effort to help black people.

The contention that America suffers from systemic racism is a complete myth. It is propagated by the demagogues on the Left who peddle this lie for political and financial gain. It is remarkable that they have been able to get away so easily with a claim which is so obviously untrue and absurd. And the fact that so many of us roll over so easily before the shameless lie and kneel whenever asked to also defies comprehension.

Be that as it may, systemic racism – given its complete lack of existence – cannot be the explanation for America’s present crisis. But why do we, then, have the burning cities, paralyzed law enforcement and institutions that are falling apart at the seams? Since this crisis has obviously not arisen due to the reasons given by the official narrative, it must have been brought on by something else.

The great question is: What is the real cause of America’s crisis.

This we need to know, because if we let the demagogues control the narrative our society will be completely engulfed by the mayhem, chaos and confusion that their lies have unleashed. Only if we know the true causes of our predicament can we hope to take effective steps to see us through.

The story of our era

To understand the forces that have brought violence to our streets and turmoil into our society, we need to briefly step back from the immediate drama so that we can see our place in history.

Since Colonial times, America has lived through several distinct phases which can be thought of as periods or eras. Each era had its peculiar character and mindset as well as a set of values that was reflective of that time. The character of each era was embodied in its institutions which were fashioned and configured in a way that enabled American society to lead its existence in accordance with the ethos of the given period.

The era in which live at this moment – and which is now drawing to an end – began at the close of World War 2. Toward the end of that conflict – after some fifteen years of hardship brought on by the Great Depression and a global war – American society suddenly went through a deep Reset in which the institutional dross of the previous period was shaken out and a new order was put into place. Even though the new institutional configuration was not perfect (it never is), it proved to be vastly more efficient than the previous one.

This new order carried America on a period of unprecedented growth, expansion and prosperity which lasted for nearly three decades and continued at somewhat slower pace and with fluctuations until the early years of the 21st century. During that time America became the richest, most dominant and powerful country on the planet. In the early decades of the post second World War era, a large portion of the American population achieved a standard of living, material affluence, freedom and security not previously seen or even thought possible. This historically incomparable level of prosperity and wealth that most American came to expect for themselves and their children were captured by the phrase “the American Dream.” America became, in a real way, a shining city on the global hill, a model and a magnet for peoples from all over the world.

But it was America’s very success and prosperity that laid the seeds of the crisis we find ourselves in today. Human nature being what it, there are certain psychological tendencies and traits that almost invariably develop in those who live – and especially those who come of age – in affluence and plenty. Such is our nature that the more we have, the more we want, and the more we get the more we expect. Nothing is more conducive to the proliferation of desires than the ability to satisfy those desires. This holds true on personal as well as collective level and pertains to money, material possessions as well as pleasure.

Abundance rarely breeds thrift, modesty or prudence and affluent societies almost always overreach their bounds and means. The plenty creates the illusion that the means are inexhaustible and the ability to do things unlimited. Of even greater concern is the fact which has been often observed that plentitude and easy life tend to breed moral loosening, especially in those who did not have to work for their comforts. People who are born into ease do not need to grapple with the world in order to survive or live well, and as a result they have a surplus of time and energy. Since there is not much to worry about externally, such people tend to direct their attention inward to themselves and become self-focused and self-absorbed. And from there is only a small step toward self-indulgence, self-seeking and selfishness.

Not surprisingly, these qualities became evident across the swathes of the baby boom generation. Perhaps the most cuddled and sheltered young cohort in America’s history, they grew up in the post war boom of prosperity, watched over by their dotting and increasingly affluent parents who sought to insulate their offspring from the hardships of life they had themselves endured during the Great Depression and the War.

Feeling secure from birth, the boomers did not inherit the work ethic, modesty and moral restrain of their parents. Quite the opposite, many of them openly rebelled against it and instead made the satisfaction of their own desires the goal of their lives. So much so that one commentator observed that “the baby boomers are the most spoiled, most self-centered, most narcissistic generation the country’s ever produced.” Calling the boomers “the children of plenty,” a writer for Time magazine described their general attitude in his 1969 article as follows:

“With a surprising ease and a cool sense of authority, the children of plenty have voiced an intention to live by a different ethical standard than their parents accepted. The pleasure principle has been elevated over the Puritan ethic of work. To do one’s own thing is a greater duty than to be a useful citizen.”

Starting to come of age in droves in the second half of the sixties, the sheer pressure of their numbers began pushing this attitude into American culture and mindset. Self-focus and self-pursuit became so palpable and prevalent in the United States in the 1970s that the whole period was dubbed the “Me Decade.” With this kind of thinking on the rise people naturally began to feel a sense of entitlement to things, pleasures and benefits of all kinds.

To meet all these demands, however, required money… lots of money. And although America was rich, it was not rich enough to satisfy all those wants and desires be it on private or collective level. What America needed was more money. Pressured by the ever-increasing financial demands – both on the domestic and foreign policy fronts – America’s leaders did something that would enable them to obtain easy access to much-needed funds. In 1971 the United States came off the gold standard thus making the dollar a fiat currency. This was without question the most significant change to America’s post war era institutional regime. Few at the time fully appreciated the dangers and the far-reaching significance of this action. One of the reasons for it was that the move was skillfully portrayed as an effort to ward off speculators who allegedly sought to unduly benefit at the expense of the US dollar. The true motive behind it, however, was to get rid of the restraint that the gold standard imposed on borrowing and money creation.

With the gold standard out of the way, America gained access to seemingly unlimited quantities of money. From then on, the US government has been able to inflate the money supply at will. This it does in two major ways: through increased borrowing and subsequent buying of debt, and through infusion of money into the financial system via the manipulation of interest rates and related mechanisms. The ability to obtain this easy money came at a steep price, however. Even though we had more money in relative terms, we did not grow correspondingly better off in the long run. Quite to the contrary, since the day we abandoned the gold standard the dollar began its long steady decline. Real wages began stagnating and today the salaries of many workers carry less purchasing power than those of their parents or grandparents 45 years ago. The infusions of easy money lent itself to misallocation of capital in what is called malinvestments. Various asset bubbles developed over time and their bursting sent shockwaves through the economy. Since our money was no longer tied to anything real, the need to produce real things also diminished. This, combined with our ability to borrow easily, resulted in a gradual destruction of our manufacturing base and the loss of tens of millions of jobs. Over time we went from being the world’s largest producer to the world’s largest debtor.

Furthermore, the power to manipulate money gave those connected with government and the institutions tasked with this manipulation opportunities to game the financial system in ways that would benefit themselves. Given keys to the treasure box and driven by natural human greed, they twisted and exploited the system to the point of destruction even as they themselves made off with immense wealth. Their misconduct came into full view during the global financial crisis of 2007-2008. Needless to say, the culprits responsible for this disaster – both in government and in the “private sector” – managed not only to walk away scot free, but forced middle class Americans to pick up the tab for their recklessness and greed.

Hammered by the excesses, misdirection and misdeeds of the power players in government, finance and industry, the mangled American economy has grown increasingly anemic, providing ever fewer opportunities for working Americans. At the same time, the gap between the rich and the poor has grown to untenable proportions. We have sought to fix and redresses the misbalances, inefficiencies and wrongdoing through various rules, regulations and taxation but with little success. In fact, such measures often further compounded the very problems they sought to remedy.

The depth and extent of our trouble is there for everyone to see: skyrocketing public debt, wage stagnation, blatant profiteering, stifling regulation, out of control healthcare and higher education costs, diminishing opportunities and falling standards of living for many Americans, especially the common man. There are those who contend that this represents a failure of capitalism, but the truth is that we have not had free-market capitalism in this country for some time. What we are seeing now is, in fact, the inevitable consequence of government interventionism. The hubris, excesses and misbalances that followed our decision to throw off fiscal restraints in 1971 have now brought our financial and economic systems to the brink of collapse. As almost every other wealthy nation or civilization of the past, we fell into the trap of thinking that those who have plenty should have plenty ever more even if it should come at the expense of doing things right.

America’s current financial and economic decline, which has its roots in the attitudinal change wrought – paradoxically enough – by the success and boom of the early decades of the post-war era, is one of the three major trends that have brought on the crisis we are going through today. Systemic racism – a phenomenon which is quite imaginary and completely non-demonstrable – is certainly not one of them despite the impassioned assertions to the contrary. We will discuss the other two trends soon as we attempt to put forth a more accurate and realistic narrative of our present woe.

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