The United States is at the beginning of a crisis that will increase over the next decade. The good news is we’ve been here before. The bad news is it will get worse before it gets better.
The last transition took place in the 1970s, featuring the same list of issues but with different names like Kent State, Nixon and Vietnam. Many Americans were convinced that this lack of civility signaled the decline of the United States. Add to this the economic situation where interest rates on mortgages were at 18 percent.
But, over the next 50 years, the United States transformed itself through the introduction of the microchip. There are core technologies from which endless other technologies and projects flow. Electricity and the internal combustion engine are examples of core technologies that dominated and defined an era, and transformed the world. As one becomes mature, a vast company like General Motors emerges and seems eternal. The core technology that drove our economic development in this current generation was the microchip, which enabled other technologies and businesses. Companies like Apple, Google and Amazon seem eternal.
Now, the microchip is maturing. It is 50 years old and like the automobile in 1965 reaching the point where, while still essential, the technology around it is running out of new ideas. All of the tech companies are microchip related and without it none could exist. That’s the nature of a core technology. The 2020s will be an era awaiting a new technology to surge the economy.
Perhaps it already exists and some teenager is playing with it in his garage, not knowing truly what he has.
Meanwhile, the condition of the industrial working class and their children will come to a head. The average lower-middle-class income is about $35,000 a year per household, with take home pay less than $3,000 a month. The lower middle class used to be able to afford a home, a car and a cheap vacation. People in it are now struggling to simply survive. Donald Trump was elected by this group because he empathized with the transfer of their jobs to China. Today Bernie Sanders speaks to the same group. The general election, if Sanders is nominated, will be between two men claiming to speak in very different voices to this class.
Another key crisis in this coming decade is that universities are moving toward financial instability. They depend on government-guaranteed loans to students, allowing universities to increase the cost of attendance, knowing that preposterous fees will be covered by these loans.
Such outstanding student loans amount to $1.6 trillion, more than the outstanding subprime mortgages in 2008 and the federal government will likely not repay the debt when the borrower defaults. The default rate on these loans is already high and institutionalized. The government has created programs for reducing debt. There are about 5,000 college endowments in the United States and almost all would fail without tuition payments.
In a similar sense, the federal government is facing a crisis. Playing a dominant role in society and economics, it has become vast and controlled by experts who see their part but not the whole. The Social Security Act transformed old age in 15 pages. Our health care regulations were about 15,000 pages and no one is quite sure what was said. Most of all the federal government has undermined a fundamental right of all citizens: the right to petition the government. No citizen today can find the person in the federal government to petition. It has become an enclosed entity, protected from problem-solving by regulations intended to do good, but making reasonable solutions impossible.
This is only a sense of what is coming in the next decade. Problems we all see will intensify and shape themselves into a crisis toward the end of the 2020s. As in past eras, it will look hopeless and it will be a painful decade. But the foundation of American civilization is inventiveness.
The United States was formed by our founders as an invention and regularly recreates itself.
During the process of crafting a new era, America normally spends a decade or so unaware that the nation is transitioning to a new cycle, but believing that it is in the midst of destroying itself. The country is filled with fear and rage, the leaders are simultaneously loathed and worshipped. Before Trump there was Nixon, and Herbert Hoover and so on, each ending and beginning a new era. Although each era is different they share a near-universal rage at whoever is blamed for what is happening.
We faced far worse in the Civil War and Depression. American civilization will show its worst side in the coming years, but as always we will transition to a new era with new institutions and a new sense of what’s possible.
George Friedman is the founder and chairman of Geopolitical Futures and author of “The Storm Before the Calm: America’s Discord, the Coming Crisis of the 2020s, and the Triumph Beyond.”
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