Fractured America

TLR considered alternate titles for today’s commentary and stuck with “Fractured America” because it conveys the shocking reality that American society is coming has come apart.  It has not simply bifurcated separated into a few dissimilar schools of thought.  It has come unglued, sundered, splintering Americans and Americanism into a myriad of misshapen pieces, each with a different belief in fact and truth and each with a different understanding of what is real and what is fake.

No country and no society can survive such a fracturing.  Surprisingly, only a minority of Americans recognize that America has sunk to reached this desperate point …, and fewer yet what it means for America’s future …, while those who count themselves as America’s enemies recognize it quite well, as do those who once counted themselves among America’s friends.

America’s culture and its brand of government have been unlike those of any other country … ever.  America has presented the world with unparalleled transparency and a clear window into its inner workings – into America’s electoral system, the details of America’s economic engine and the nuances of its vulture capitalism, America’s consistently world-beating application of the Rule of Law, and Americans’ constant striving to do better and be better (oftentimes referred to as the American Dream).  That window has been shattered, not by aliens or foreign invaders, but from within – by a series of cumulatively incompetent terribly poor under-performing leaders (a problem discussed by TLR here), disruptive politicking by former President Trump, his election capers, America’s divisive social media (discussed most recently by TLR here), the perceived lack of success of American manufacturing capitalism (previously discussed by TLR here and here), the scorn heaped by Americans – Americans! – on successful American entrepreneurs (whether Bill Gates or George Soros or Jeff Bezos or Sergei Brin), the George Floyd murder and its African-American, Asian and related repetitions, an endemic and functionally unaddressed spree of mass murders and gun violence, the proliferation (and explicit acceptance by those in authority) of Wokists and Denialists (previously discussed by TLR here), Supremacists and similar extremists, and the American public’s ready acceptance of each such flaw in 21st Century America – with the consequent erosion of faith in the American Way and America’s global leadership.  These broken shards no longer can be readily pieced together.  They present a divisive conglomeration of socially-, economically-, and culturally-cloistered – and often warring – tribes, each living its own self-manufactured, factually-warped “reality” …, whether Republican or Democrat, Christian or Muslim, Pro-Gun or Gun-Control, Pro-Abortion or Anti-Abortion, Wealthy or Poor, Black, White or Yellow, Reddit-Reality or … well, Reddit is Reality!  In short, virtually EVERYTHING once considered to be “culturally American” has fractured into something smaller, something that conflicts with core Americana.  “Culture Warfare” doesn’t begin to accurately describe the carnage … or the consequences.

Americans historically saw themselves not as mere players on the world stage, but as builders of a uniquely New World model, an innovatively heterogeneous society that successfully functions as an inclusive, multi-ethnic, multi-religious, multi-cultural capitalist democracy.  America was not intended by its Founders to be insulated from global influences – it was intended to integrate the best of humanity into the American quilt.  It was not intended to generate productivity growth solely with New World-generated labor or to fuel population growth through genetic purity self-perpetuation.  America is not Japan or China.  That was never its model.  Americanism is the epitome of tolerance, accepting all religions, emphasizing free enterprise and egalitarianism, and encouraging the freest of speech.  It has not aspired to a single racial or cultural more or to a single ethnicity or religion.  It relies instead on a set of frontier values that promote individualism, diversity and a continual influx of manual and intellectual capital – during the 19th and 20th Centuries, that capital came by way of immigration from such dis-reputable places as Ireland, Italy, Puerto Rico, The Philippines, Mexico and Vietnam.  America was then – and still is today – the world’s only true melting pot, blending races, religions, ethnicities and cultures, a magnet for “your tired, your poor, your huddled masses yearning to breathe free.”  America was Ronald Reagan’s 20th Century exemplar, its “shining city on a hill.”  What would Reagan now say about America?  Would he see it as a successful multi-cultural capitalist democracy, the leader of the free world, the shining city on the hill that he perpetuated in the 1980s?  Or would he instead see America as a molten cauldron of disunity and rancor, a society riven by tribalism with its belligerent factions unable to agree on truth and fact, a polyglot of angry disconnections?  Would he be able to piece together the broken shards?  The American Experiment, after all, was aspirational.  Why should it end differently from its historical predecessors?  The world has never seen a successful multi-ethnic democracy, one in which no single tribe represents a majority and all members share in political, social and economic opportunity and equality.

Disunity inevitably leads to disaster …, as history has taught.  Winston Churchill, a keen observer of America, was confident that America eventually would do the right thing …, but only after it had exhausted all of its alternatives, only after it had been confronted by crisis.  Has America reached that crisis point?  Will America do the right thing?  There is no current groundswell for unity …, and the fracture points are widening.  TLR previously addressed the devolution of the American Dream (here), Democracy (here), America’s Constitution (here), American Exceptionalism (here), Capitalism (here), and (perhaps most importantly) American Education (here).

A disheartening example of the breadth and depth of Americans’ descent into the surreal, into belief systems anchored in unreality, is found in America’s malfunctioning stock market – and, yes, that too has turned to tribalism.  Market economists have relied on the efficient markets theory (EMT) to both explain and justify stock market valuations …, with a properly-functioning stock market being a cornerstone of American capitalism.  Regrettably, EMT no longer provides the sole grounding for valuation of America’s stocks.  Some portion of that grounding now originates on social media.  EMT states that publicly-traded share prices appropriately reflect all available market information and that stocks accordingly will be valued at, and will not deviate too widely or for too long a period of time from, their fundamental fair market values.  That has ceased to be true.  Stock prices today at times are driven by the whims of social media influencers.  Those whims all-too-often dictate price movements … and for lengthy periods of time.  There was disbelief amazement surprise earlier this year when GameStop’s stock price went ballistic (discussed here), indicative of the detachment of fact, value and “reality” from fundamental value …, a detachment that has persisted.  Most recently, that same detachment was present in the parabolic rise of AMC, a company that unsuccessfully advised its investors not to buy its stock because it was overpriced (“we caution you against investing in our Class A common stock”), listing several sound economic reasons why an investment in AMC would be imprudent, including that the value of AMC had become detached from reality because of social media promotions on Reddit and Robinhood – the madness of crowds –, the impact from complex trading strategies (“gamma squeezes” and “short squeezes”), and additional fundamental factors that created disproportionate levels of risk, etc., etc., etc.  In short, AMC advised the public DON’T BUY OUR STOCK!  But the public did …, and in massive quantities (in fact purchasing all the stock that AMC was legally permitted to sell, itself historically unprecedented) … at prices that defied logic, reason and, most importantly, value.  But value today is whatever the relevant tribe is told chooses to believe.  Like political America and cultural America, investing America has adopted its own reality.  What can be said for AMC, however, is that it provided an attractive bonus to purchasers, providing each with a  “free large popcorn usable this summer while attending a movie at an AMC theatre.”  Perhaps it was this free popcorn that magically imbued AMC stock with its enormous premium value?

The historical outcome for a shattered society has been decline and fall, often through revolution or war.  That need not happen to America.  TLR‘s economic view that “This Time is Different” (discussed here) argues that economic calamity need not necessarily follow on the heels of decades-long Central Bank and government meddling with the economy overreaching.  The same differences-this-time may set the stage for resolution of America’s political and cultural conflicts.  As noted above, America’s brand of government – its democratic and capitalist systems – are unlike those of any other country … ever.  The role of America’s elected officials is to bring together America’s multi-ethnic, multi-religious, multi-cultural and multi-tribal constituencies, balancing contradictory viewpoints, reconciling the conflictual realities of disparate cadres, ensuring that there are appropriate incentives and rewards for hard work, fulfilling the American Dream by ensuring equal opportunity and an efficient economic system to both address nascent inequalities and incentivize Keynesian “animal spirits.”  America pulled back from the economic, cultural and societal brink in 1933.  It avoided a cultural catastrophe again in 1981.  It can do so now as well.  Accomplishing that feat will require American leaders who are capable of risking – and likely ending – their lifetime sinecures political careers.  The times today indeed are different … and so too could be the outcome.

Finally (from a good friend)

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