The Storm Before the Calm: America's Discord, the Coming Crisis of the 2020s, and the Triumph Beyond

by George Friedman

Radical political movements like Huey Long’s Share Our Wealth or the Communists were not really powerful, but given time and enough pain, they would become so.

Look up Huey movement

Increasing the tax rate cut back on investable income and meant that plants would not increase their capacity and that cash would be diverted to consumption.

established the principle that the federal government was in some way responsible for the economy and could legitimately intervene in the economy and society.

What did solve the problem, ended the Depression, and finally broke the institutions of the second cycle was war.

Industrial production in such massive quantity and at such a fast pace solved the problem of unemployment.

Business thrived on federal contracts, but in turn was managed to an extraordinary extent by the federal government.

federal government grew as well.

the managers were inventing solutions and did not see themselves as in more than temporary jobs.

Things like rationing were eliminated; the size of the military shrank. And government contracts did not dominate the economy. But the government engagement with private life did not go away,

wartime system turned into a peacetime reality is the manner in which military requirements shaped technology,

The Manhattan Project could only have existed with federal money, organization, and compulsion.

Corporations received government contracts and the opportunity to repurpose technology for the public. Yet it was the government that shaped the evolution of science and technology.

Thomas Edison was the embodiment of the corporate exploitation of science, and as we have seen, he was dramatically successful. He was also a committed pacifist who opposed the use of his work by the military.

one sense, the founders did envision federal involvement in science.

drafted by Thomas Jefferson, mandated that every new state set aside land for the creation of a university.

The cell phone was first deployed for the U.S. Army in 1985.

The National Reconnaissance Office first designed the camera in the smartphone for use in spy satellites.

Because federal inventions can’t be patented, companies like Apple took the technology

America’s institutions and society after World War II were very different from what they were at the start of the war. This was the end of the second institutional cycle,

It had once been possible to sit on the Supreme Court having never gone to law school.

Technocracy is the concept that emerged early in the twentieth century that argues that government should be in the hands of nonideological and apolitical experts whose power derived from their knowledge.

But the program followed the principles of the new cycle and had far-reaching effects in helping to create the postwar middle class. In tracing its course, we can also see how it led to the crisis of 2008.

Helped create a white middle classs. These benefits were deined from black veterns.

The result was the creation of suburbs encircling cities, and the suburbs of course needed roads connecting them to the city and to each other.

New school systems had to be built, as well as houses of worship and hospitals and other services.

The VA loan concept was extended to lower-income home

buyers who had not been veterans. It was managed by the Federal Housing Administration and allowed the lower-middle class to buy homes.

This increase of available money delighted the construction industry, home buyers, and banks.

Federal National Mortgage Association, Fannie Mae, a government-created entity that handled failed mortgages in the Depression

The mortgages were sold and the risk transferred to these entangled, half-government and half-private entities,

The federal government created these entities, and no elected official had the capacity to monitor them.

It is to make the point that this started as a very reasonable program to help veterans. It turned into a program to help the lower-middle class while also aiding business. What followed was giving banks the ability to sell mortgages, which over the decades both introduced private buyers of mortgages and made lenders pretty much indifferent to the creditworthiness of borrowers.

The institutional problem was not that the government had grown too large. In fact, relative to population, it has not kept up.

The United States is like the billionaire with debt larger than this year’s income but well within his means to handle.

The problem is rather that the dramatically increasing level of federal involvement in society has outstripped its institutional capabilities.

Expertise is needed. But experts are experts in different things, and when entities are constructed with specific expertise, barriers are built between entities that are sometimes dealing with the same issue.

The other problem is entanglement, multiple federal agencies engaged in managing parts of the same problem.

And there is hardly any area where only a single agency is involved.

As society became more complex in its own right, and the federal imperative to try to manage this growing complexity tries to keep pace, management becomes more complex, regulations are created that are less comprehensible, and authority is less clearly defined.

His formal powers have not increased, but his weight in the overall system has.

result of his ability to interpret the meaning of laws in the course of writing regulations and administering the law. The second and the real impetus to the rest was the shift in his powers in foreign policy.

Nuclear war operates with a speed that prevents the president from consulting with Congress.

President Truman claimed that since the UN Security Council had declared a police action, and the United States was part of the UN, waging war in Korea required no congressional approval. It was the first war of any size without congressional approval.

The president claimed the authority to conduct surveillance on American citizens’ telephone activities and other collective communications. Many of the aspects of the program were secret and not known to Congress at all.

Staffers to the president and experts scattered through the intelligence, defense, and foreign policy communities could affect the decisions being made far more than could Congress.

The crisis is this: institutions built on expertise are no longer working.

Universities are increasingly inefficient, with tuition and student loans at staggering levels, making the cost of acquiring credentials increasingly out of the reach of much of the population.

The accumulation of wealth by experts, combined with the decreasing efficiency of technocracy, is creating this third institutional crisis.

Every fifty years or so, they go through a painful and wrenching crisis, and in those times it often feels as if the economy were collapsing,

The political elite insists that there is nothing wrong that couldn’t be solved by more of the same.

The old political elite, and its outlook on the world, is discarded. New values, new policies, and new leaders emerge.