The downgrading of US debt this summer didn't have huge economic consequences, but the psychological ones were truly devastating for the national elites who have run this country for nearly a century. For a State that regards itself as infallible, it was a huge blow that market forces delivered against the government, and it is only one of thousands that have cut against the power elite in recent years.
Another recent example was the vanishing of the much-vaunted Obama jobs bill. He pushed hard for this scheme for a month. He made an FDR-like national speech that attempted to whip up a public frenzy. He promised that if the legislature passed his law, supply and demand for workers would magically come together. We only need to agree to spend a few hundred billion more!
Well, the bully pulpit has become the bull-something pulpit. It seems that hardly anyone even took the speech seriously as a political point. It was reviewed and treated as the theater that it was, but the universal reaction to the specifics was a thumbs down, even from his own party.
No, Obama is not FDR. This is not the New Deal. The public will not be browbeaten as it once was. The polls show a vast lack of even a modicum of confidence in political leadership, the failures of which are all around us.
The longer the depression persists, the more the rebellious spirit grows, and it is not limited to the Wall Street protests. Poverty is growing, incomes are falling, business is being squeezed at every turn, and unemployment is stuck at intolerably high levels. People are angry as never before, and neither political party comes close to offering answers.
The State as we've known it – and that includes its political parties and its redistributionary, military, regulatory, and money-creating bureaucracies – just can't get it together. It's as true now as it has been for some twenty years: the Nation State is in precipitous decline. Once imbued with grandeur and majesty, personified by its Superman powers to accomplish amazing global feats, it is now a wreck and out of ideas.
It doesn't seem that way because the State is more in-your-face than it has been in all of American history. We see the State at the airport with the incompetent bullying ways of the TSA. We see it in the ridiculous dinosaur of the post office, forever begging for more money so it can continue to do things the way it did them in 1950. We see it in the federalized cops in our towns, once seen as public servants but now revealed as what they have always been: armed tax collectors, censors, spies, thugs.
These are themselves marks of decline. The mask of the State is off. And it has been off for such a long time that we can hardly remember what it looked like when it was on.
So let's take a quick tour. If you live in a big metropolitan city, drive to the downtown post office (if it is still standing). There you will find a remarkable piece of architecture, tall and majestic and filled with grandeur. There is a liberal use of Roman-style columns. The ceilings indoors are extremely high and thrilling. It might even be the biggest and most impressive building around.
This is a building of an institution that believed in itself. After all, this was the institution that carried the mail, which was the only way that people had to communicate with each other when most of these places were first erected. The state took great pride in offering this service, which it held up as being superior to anything the market could ever provide (even if market provisions like the Pony Express had to be outlawed). Postmen were legendary (or so we were told) for their willingness to brave the elements to bring us the essential thing we needed in life apart from food, clothing, and shelter.
And today? Look at the thing that we call the post office. It is a complete wreck, a national joke, a hanger-on from a day long gone. They deliver physical spam to our mail boxes, and a few worthwhile things every once in a while, but the only time they are in the news is when we hear another report of their bankruptcy and need for a bailout.
It's the same with all the grand monuments of yesteryear's statism. Think of the Hoover Dam, Mount Rushmore, the endless infrastructure projects of the New Deal, the Eisenhower interstate highway system, the moon shot, the sprawling monuments to itself that the State has erected from sea to shining sea. As I've explained elsewhere, these all came about in an age when the only real alternative to socialism was considered to be fascism. This was an age when freedom – as in the old-fashioned sense – was just out of the question.
The State in all times and all places operates by force – and force alone. But the style of rule changes. The fascist style emphasized inspiration, magnificence, industrial progress, grandeur, all headed by a valiant leader making smart decisions about all things. This style of American rule lasted from the New Deal through the end of the Cold War.
But this whole system of inspiration has nearly died out. In the communist tradition of naming the stages of history, we can call this late fascism. The fascist system in the end cannot work because, despite the claims, the State does not have the means to achieve what it promises. It does not possess the capability to outrun private markets in technology, of serving the population in the way markets can, of making things more plentiful or cheaper, or even of providing basic services in a manner that is economically efficient.
Fascism, like socialism, cannot achieve its aims. So there is a way in which it makes sense to speak of a stage of history: We are in the stage of late fascism. The grandeur is gone, and all we are left with is a gun pointed at our heads. The system was created to be great, but it is reduced in our time to being crude. Valor is now violence. Majesty is now malice.
Consider whether there is any national political leader in power today the death of whom would call forth anywhere near the same level of mourning as the death of Steve Jobs. People know in their hearts who serves them, and it is not the guy with jack boots, tasers on his belt, and a federal badge. The time when we looked to this man as a public servant is long gone. And this reality only speeds the inevitable death of the State as the 20th century re-invented it.