The Decline and Fall of Western Civilization

Historical analysis is all about searching for patterns and finding tipping points. Start with the proposition that no one society or way of life endures forever, and 400 years (plus or minus) is fairly average for generally sustainable and solid governmental structures. The fall of major social and governmental structures is generally due to one or more of the following factors: (i) resource depletion and environmental damage (including plague, pestilence, and famine), (ii) attack by external forces, (iii) a strong tilt towards a small group of special interests who prosper while the vast majority of citizens are suffering (often resulting in civil war or internal disruption that bring down governments), (iv) the rise of more competitive nations, and (v) misallocation of financial capacity resulting in economic collapse.

The rise of Western Civilization had a lot to do with colonization of primitive but resource rich satellite territorial grabs; the United States equivalent was a vast frontier sparsely populated with Native Americans that screamed opportunity to those brave enough to venture forward. We had so many crops, minerals, oil and electrical capacity that we literally supplied the world until well after World War II. In fact, the massive public works projects that built hydroelectric capacity during the depression literally powered the factories that produced military hardware in such volume that the Japanese and Nazi war machines were crushed. Immigrants rushed to the United States, bringing drive and their unique cultural experiences into the melting pot of America. Ideas mingled, meshed and gave birth to new combinations that made us particularly resilient, dynamic and economically explosive.

Europe was forced to leave its colonies, and for a while had the industrial capacity to make up for the loss of resources. To certain extent, Germany, Scandinavia and to a lesser extent France still provide those values. England contracted as a manufacturing giant, but created financial institutions that create value for those privileged members of the upper and upper middle class able to partake. As the American frontier hit a wall and as we became a net importer, Americans increasingly forgot what made them great and began a long process of clinging to what we had/have, excluding newcomers and forgetting that to grow, you actually need to invest in the future. The Tea Party is fear personified as good and solid Americans want to cut as many costs as possible, including infrastructure, research and education, tighten immigration laws so that there is no one we need to share the value with, and cling desperately to the America they know and love.

The BRICs (Brazil, Russia, India & China), some former colonies, are rising rapidly. Not so with any Western nation or Japan. Without colonies or frontier, without growth from new citizens, Western society continued with the lifestyle that their earlier life had provided, even modernizing and upgrading the benefits. But without the support of undervalued commodities once readily available in a colonial world or a frontier filled with cheap productive land and abundant water resources, the mechanism to support this continued and improved standard of living came from debt. With more top-of-the-line universities and a fundamental entrepreneurial spirit, the United States still clung to an ability to invent and create new values that was significantly less across the pond in Europe.

If you go back to the first paragraph, you will see that the United States has been significantly impacted by each of the elements that bring down societies. And while the external attacks have hardly resulted in a crushing invasion by a more powerful military presence, our overreaction to global hostility has reallocated resources into military expenditures while downgrading our investments in long-term value producers. As I have blogged before, and consistent with former President Dwight Eisenhower’s warnings, we have created elite manufacturing and service providers, thoroughly manned by retired staff officers from our own military, able to convince both citizens and legislators alike that we cannot live without buying more and more of their exceptionally expensive wares.

We have slowly deregulated our financial institutions (particularly with the Clinton-era repeal of Glass-Steagall that had separated commercial banks from investment and trading institutions) and allowed them to run a parallel and elite universe that appears to be in a different legal and taxation system than the vast majority of Americans. Their wealth grows as unemployment and foreclosures have decimated the ranks of our middle class, a societal grouping that is contracting so violently that will probably redefine our class and economic structure, polarizing ourselves into basic haves and have-nots, for our remaining years as a nation. American financial institutions are free to follow opportunity around the world, even at the expense of needed investment and credit in the United States itself.

As Spaniards and Greeks protest (and even riot) at the “new austerity,” we shouldn’t be too quick to smile smugly. As the Arab Spring toppled regimes across the Middle East, we shouldn’t be blind to the possibilities in own backyard. Our House of Representatives represents the most clearly solid evidence of collapse of a functional government. That our president believes that he can still spend massive sums on unproductive wars while his country stagnates is just short of incomprehensible; he has succumbed to the very financial and military industries elite that he railed about when running for office. Whole sections of our inner cities are not within elected governmental control. These sections are run by gangs that enforce their own brand of pseudo-justice, control the local economy and determine the fate of coming generations in ways that have to give us pause.

Students are graduating with expensive and economically vapid degrees and encumbered by loans that they will never be able to repay. Middle aged and older workers have been laid off with skill-sets that guarantee their opportunities are over. Foreclosures and collapsed real estate prices have killed savings and the American dream for millions. Think of what a $200,000 per home reduction in mortgages would have done at the beginning of 2009 to end the recession that a direct bailout to Wall Street did not! We’re smart enough – I think – to figure out how to reignite the American spirit to generate new jobs, new skills and a new and dynamic future. It most certainly is not to circle the wagons, cut all governmental investment and hope we can survive and prosper without committing to the future. The harder we try to maintain what we have without investing or bringing in new blood, the less it will be worth.

And for those “it can’t happen here” believers, look at how a little protest on Wall Street, which generated a few arrests along the way, is beginning to grow across the land. It may not be “this one,” but sooner or later those with nothing left to lose can inflict severe and permanent political damage to the future of this country. “A loose-knit populist campaign that started on Wall Street three weeks ago has spread to dozens of cities across the country, with protesters camped out in Los Angeles near City Hall, assembled before the Federal Reserve Bank in Chicago and marching through downtown Boston to rally against corporate greed, unemployment and the role of financial institutions in the economic crisis.

“With little organization and a reliance on Facebook, Twitter and Google groups to share methods, the Occupy Wall Street campaign, as the prototype in New York is called, has clearly tapped into a deep vein of anger, experts in social movements said, bringing longtime crusaders against globalization and professional anarchists together with younger people frustrated by poor job prospects… ‘Rants based on discontents are the first stage of any movement,’ said Michael Kazin, a professor of history at Georgetown University. But he said it was unclear if the current protests would lead to a lasting movement, which would require the newly unleashed passions to be channeled into institutions and shaped into political goals.” New York Times, October 3^rd. This could be the beginning of the end… unless we unite and decide to believe in our country, take it away from the elites that Eisenhower and other great leaders warned us about, and invest in our own future.

I’m Peter Dekom, and as the Arab Spring has so totally demonstrated, there is nothing more dangerous that a large group of disenchanted people with nothing to lose.