“There never was a democracy yet, that did not commit suicide. It is in vain to say that democracy is less vain, less proud, less selfish, less ambitious or less avaricious than aristocracy or monarchy. It is not true in fact and no where appears in history.”
– John Adams
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August 2, 2024 — The American empire is, at its core, an unplanned one. We didn’t fight or conquer for it.
We simply followed what Benjamin Franklin once pitched as the country’s motto: “Mind your business.”
For a country founded in part over rejecting a two-cent tax on tea, there’s a comforting logic to that.
Plus, after the United Kingdom left the colonies in a state of neglect, their attempt to reassert authority was seen as foreign. It left early America as a land of people willing to interact with foreigners for trade, but wary of foreign entanglements.
George Washington mentions foreign influence on the young republic no less than 15 times in his farewell address.
This drive to work, trade, and build, while avoiding the drama unfolding in other nations is part a part of America’s DNA. The country’s uniqueness. And even, perhaps, its exceptionalism.
Perhaps it was only a matter of time that a nation so enamored with creating wealth would eventually become the de facto world reserve currency. And by doing so without going forth to conquer foreign lands.
Historically, the position of having the world’s reserve currency has been won through war, like the British or Roman empires. Or through massive colonization, trade, or the discovery of vast commodity deposits, such as the Dutch or Portuguese.
In the United States, the position came by default, largely as European countries exhausted centuries of fortunes in the trenches of World War I. But we were still reluctant about being an empire, still preferring isolationism.
The end of World War II destroyed any remaining isolationist strain.
But empires are more than just having the world’s dominant currency…
Turning toward the global scene, the American empire was built in part on winning the Cold War by bankrupting the Soviet Union with a massive military buildup. And funding allies and proxy wars along the way.
Policing the world isn’t cheap. And the U.S. empire has made some big mistakes along the way. One of the biggest? Spending 20 years, thousands of lives, and $2.3 trillion in Afghanistan simply to replace the Taliban with … the Taliban.
Plus, in just over two years, we’ve provided over $100 billion in aid to Ukraine. We’ve bent over backwards to do everything short of committing troops.
Today, we turn things over to Grey Swan Investment Fraternity contributor John Robb.
John provides a checklist of how America has strayed from its founding ideals, particularly in its decision to act as the world’s policeman and entangle itself around the world. Enjoy ~~ Andrew
CONTINUED BELOW…
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What Went Wrong With America?
John Robb, Global Guerillas
U.S. election chaos, already worse than we’ve seen in over a century, is symptomatic of a deeper problem; the U.S. has suffered catastrophic damage to the nation’s foundational elements;
- Cohesion. Fragmented. Tribal. Polarized. Low trust.
- Legitimacy. Lies. Misinformation. Systemic corruption. No accountability. Tribal alignment.
- Competence. Repeated failure. Can’t fix problems. Throws money at problems.
The damage to these foundations is so severe;
- It’s unlikely that this erosion is due to any single crisis or individual.
- This degree of damage, done so quickly (decades), can only be attributed to a cascade of bad decisions affecting all areas of American life.
- The only explanation for this cascade of bad decision-making is that America has suffered an orientation failure.
Orientation
John Boyd, America’s most significant strategic mind, maintained that orientation is the focal point of decision-making since it shapes how we observe, decide, and act (the four steps in Boyd’s OODA loop).
Orientation is a pattern of understanding informed and constrained by experience, training, culture, education, means, capabilities, desires, aspirations, etc. It is the step in decision-making that shapes sense, goal, and path-making to navigate a complex environment successfully.
With a solid orientation, every decision, regardless of its success, yields advancement through attentiveness, focus, hard work, and incremental improvements. Moreover, with each advance, new advances come faster and more easily.
In contrast, a broken orientation converts every decision into damage regardless of the effort’s apparent success. The longer this failed orientation persists, the greater the loss in cohesion, coherence, etc.
Examples of broken orientation; nation-building in Afghanistan, Blockbuster Video, etc.
While orientation is tough, reorientation is tougher, as the U.S. found at the end of the Cold War. In that case, reorientation was particularly difficult because of the success of the prior orientation.
Examples of reorientation failure; successful executive —> retirement (there’s a reason heart attacks spike in the first year of retirement), successful single —> marriage (divorce if they can’t reorient to married life), etc.
What Went Wrong
At the end of the Cold War, the U.S. reoriented itself to meet the challenges and opportunities of a world without an existential foe. To simplify things, we can boil it down to a choice between two orientations;
- National. A focus on America and the prosperity of America’s citizens. Lead the world by example. Invent the future (tech). Reluctant to use military force, join alliances, or intervene in foreign wars. Fair trade. Maximize independence and minimize dependence. Trust busting. Constrain financialization. A return to America’s traditional orientation. Nationalism, moderated by democracy. American citizens. Pragmatic idealism.
- Global. The manager and enforcer of a global system. Focus on the world’s prosperity. Open trade. Open borders. Actively intervene militarily to shape global outcomes. Welcome dependence. Welcome foreign entanglements. Be willing to sacrifice to ensure the system’s success. Financialize everything. Massive multinationals. Double down on Cold War globalism without the requirement to guard against communism subversion by advancing domestic prosperity. Democracy replaces nationalism. Global citizens. Utopian idealism.
Flush with hubris due to its victory in the Cold War, the U.S. chose the global path, and everything began to unravel.
~ John Robb, Global Guerillas
So it goes,
Andrew Packer
Managing Editor, Grey Swan
P.S.: How did we get here? For a complete review of the financial, economic, and political history of the United States from Demise of the Dollar through Financial Reckoning Day and on to Empire of Debt — all three books are available in their third post-pandemic editions.
Empire of Debt: We Came, We Saw, We Borrowed is now available at Amazon and Barnes & Noble or if you prefer one of these sites:Bookshop.org; Books-A-Million; or Target.
Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com
