"America, What the Hell Happened?"
A retrospective look and the gradual decline of a once-great power...
by Bill Bonner
Baltimore, Maryland - "In Bishop Fulton J. Sheen’s book (1954, 63 cents), “Way to Happiness,” he lamented, and I quote, “Lenin once said that America would collapse by spending itself to death.” I assume that the good bishop was paraphrasing Vladimir. US Federal debt at the time stood at nearly $300 billion compared to the $33 trillion that you and colleagues have been slamming (rightfully) over the past several months. What a ‘way to happiness.’" ~ From a Dear Reader
"We are looking at how things have changed…from the dynamic prosperity of the ‘30 glorious years’ 1950-1980…when Bishop Sheen wrote his book…to the huge, (largely fake) boom of our adult lives, the 1980-2020 period. The rich got very rich in the second period, including Buffett and Munger. But everybody else struggled to stay even. Debt rose. Prices rose. Real wages did not.
As we’ve seen, Milton Friedman’s new money system did not really eliminate inflation and debt crises; it made them worse. Honest prices – especially honest prices for credit – are the True North to navigators on the wide capitalist sea. There’s a lot of water. And it’s not easy to get where you want to go. Distorting prices with Fed policy mistakes is like shifting the stars or bending the compass; a lot of sailors end up on the rocks.
In Search of a Solution: “Do you have to write about it every day?” asks a sympathetic reader. Of course not. But the facts change daily. And we, trying to make sense of them, can’t afford to get behind. It is like a giant box into which your 7-year-old has scrambled all of last year’s Christmas lights. The sooner you get started…untying the knots, following up the loose ends, replacing the bulbs…the sooner you’ll be able to put them up again. But how do the strands connect? Where are the plugs, the adapters…the switches? There’s no other solution: you have to dig in and find them.
Besides, our insights come with the news, in 24-hour cycles. We see the reports. We read the headlines. We wonder. Then, usually around 5am…we have an insight: we left the controls in the drawer under the sink! It’s not the actual price movements…or the incoming ‘data’…that complete the picture. Both are noisy, almost random. It’s the bigger picture we want to see. Humans have changed little over the last 200,000 years. They are fairly predictable. Read history and you will see the patterns. .
Empires, for example, follow a fairly well-known arc – from growth to expansion…and then overstretch, rising costs, corruption, decay…and finally, failure. America appears to be in the ‘rising costs-corruption’ stage. We know too that every empire that comes on the scene has to exit sooner or later. And here we are thinking not so much of the US empire itself, but of the entire last 500 years of European domination.
Historians and Grave Robbers: We leave it to future historians and grave robbers to tell us when the decline actually began, what caused it, and when we Americans became the ‘bad guys.’ We don’t know, of course, but we imagine the current period – in which Europe and America are complicit with Israel in obliterating Gaza – will feature prominently in their analyses. In the meantime, we focus on what big changes that have occurred over the last 70 years.
“What has happened to America?” asks a former US ambassador to the Soviet Union. Jack Matlock was instrumental in working with Reagan and Gorbachev on the ‘détente’ of the 1980s…which led to the end of the Soviet empire. Recently, he was looking at a speech he had given in 1982. It was a speech to the Czechs, explaining why America was such a great country. Re-reading it, he wonders: what went wrong?
Highlighting the differences between Soviet Rule and the US system, he said – in 1982 – that, in the US "…States and governments are created by the people to serve the people and that citizens must control the government rather than being controlled by it. Furthermore, we believe that there are areas of human life such as expression of opinion, the practice and teaching of religious beliefs, and the right of citizens to leave our country and return as they wish, which no government has the right to restrict.
Last week, Matlock wondered if we can…“Really say that our citizens “control the government” today? Twice in this century we have installed presidents who received fewer popular votes than their opponents did.”
The Ship of State: But that scarcely scrapes the surface. Even if citizens always got the politicians they voted for, they still would not get the policies they want. Who wants a $1 trillion deficit? But we have one. Who wants to support two wars overseas, neither of which is of any vital national interest? Who wants to pay for the billions squandered in agencies, committees, programs and departments encrusted like barnacles on the ship of state?
We heard from the directors of two of those parasite organizations on Saturday night. The scene was a museum ‘opening night.’ Center stage was the director of the National Endowment for the Humanities…and some other agency we never heard of. Both took applause for a show no member of Congress and few members of the ‘public’ will ever see. Still, the museum director, the trustees, board members, collectors, and art historians congratulated each for spending other peoples’ money.
Matlock continued in 1982: “Through our history we have faced many challenges but we have been able to surmount them through a process of open discussion, accommodation of competing interests, and ultimately by preserving the absolute right of our citizens to select their leaders and determine the policies which affect their lives.”
In 2023, Matlock has his doubts: "Since when have we seen an open discussion and accommodation of competing interests in the work of the U.S. Congress? When in this century has there been a debate on foreign policy? Why has Congress repeatedly authorized violence normally legal only during a state of war without voting a declaration of war as the Constitution requires?"
In 1982, he went on: "We are convinced that no individual and no group possesses a monopoly of wisdom and that our society can be successful only if all have the right freely to express opinions, make suggestions and organize groups to promote their views.
In 2023, the story is different. You have a right to free speech “Unless you are a Member of Congress who speaks out in defense of the rights of Palestinians to live in freedom in their ancestral lands, or students at Columbia University who wish to do the same.”
In 1982, he proclaimed the intent of US foreign policy was to...“Work for a world in which human diversity is not only tolerated but protected, a world in which negotiation and accommodation replace force as the means of settling disputes.” Forty-one years later, he wonders what we were doing in “Afghanistan, or Iraq, or Syria, or Palestine…or, for that matter, in Iran, Cuba, or Venezuela.”.
Ambassador Matlock was upbeat in 1982. His cause was just. His conscience was clear. He winds up: "Nevertheless, I speak to you today with optimism, since I know that my country enters the 207th year of its independence with the determination not only to preserve the liberties we have at home but to devote our energies and resources to maintaining peace in the world.
And then, his head pops up 41 years later and asks: “OH, LORD, WHAT HAS HAPPENED TO US?” “Is this the ‘way to happiness?” he might have followed up. Ambassador Matlock is referring to US foreign policy. What about domestic policy? What has happened to us there? Stay tuned..."
