When it became clear that the Y2K bug that everyone feared would have no impact on the new millennium, people dove into the year 2000 with extreme optimism about the future. For the next ten years illusion after illusion would be shattered, and we enter 2010 a humbled and wounded nation. Here are a few of those shattered illusions:
1. Stock market growth is permanent; anyone can get rich if they are just smart enough to invest in stocks (especially new economy ‘technology’ stocks like the dotcoms). This illusion was widespread, as people focused on ever rising stock prices, with books out predicting “Dow 30,000” or even “Dow 100,000. The Dow had zipped above 11,700, and on March 11, 2000 the tech heavy Nasdaq hit 5011. CNBC guru Jim Cramer said he wouldn’t be surprised if Nasdaq hit 8000 by the end of the year. That was the high point — by the summer of 2000 stocks were in step decline as the inevitable crash came. People suddenly had to put off retirement, and the easy road to wealth vanished. The heady go-go “roaring 90s” came to a screeching halt…at least for awhile.
2. The US has solved its budget problems and now will experiences large surpluses. Based on completely irresponsible extrapolations from the economy of the late 90s it was thought the US would pay off its debt quickly, and within a decade have surpluses of $16 trillion. The dollar reached a high of 79 cents a Euro, and people claimed that our “free market” approach was working. Capitalism and liberal capitalism was soaring! Yet as early as 2002 it became clear that no surplus was on the horizon, as government revenues didn’t meet expectations, spending increased, while the Bush administration gave tax cuts — cuts paid for through borrowing. Now debt and deficits are higher than ever, comparable to past times fo war.
3. Cheap oil was here for the duration, no more oil crises! The Economist magazine, often an early detector of false illusions, fell for this one as it had a cover story about the “oil glut.” The US produced massive numbers of SUVs, ignored warnings about the environment or oil consumption, and imported very cheap OPEC oil at record levels. Gas was often about 80 cents a gallon at the start of the decade. That changed quickly, and by 2008 oil had jumped to $150 a barrell with gas prices nearing $5.00 a gallon. It’s now down to “only” about $80 a barrel, but fears of ongoing shortages and production shortfalls should economic revival occur are real.
4. After the fall of Communism the US is the dominant unipolar power, guarantor of global stability, and a force for good in the world. After fiascos in Iraq and Afghanistan, which showed the very limited capacity of the country to effectively project military power to achieve political ends, the US is no longer a feared hyper-power. The Iranians and North Koreans, hesitant early in the decade, came to mock US threats by 2006. The public turned against military options for foreign policy, and the US military became overstretched and overburdened. The suffering of US military families was immense as multiple deployments, psychological problems and strains on families mounted. The US could not shape political results in the Mideast, and was increasingly vulnerable to China, the Arab states and Europe on the economic front.
5. The real estate market is a safe investment, and a fine way to make money. Buoyed by economic policies designed to keep the economy percolating after the 9-11 terror attacks, cheap credit fed a real estate bubble that quickly “saved” the country from a recession. This bubble led to a renewed speculation, and an even starker crash when its residuals rippled through the financial sector in late 2008. Now the economy stands in deep recession, and the US appears in more trouble economically than any time since the Great Depression. This crisis has been thirty years in the making, and will not be solved quickly.
6. Barack Obama’s election marks a major turning point in American policy and will lead us to be able to solve the problems caused by the Bush-Cheney administration. Alas, blaming one administration and finding another to heroically solve the problems is the stuff of films and fantasy, not reality. The problems were not all caused by the Bush Administration, and Obama has limited capacity to solve them. As his approval rating falls, mostly due now to dissatisfaction on the left, people are coming to grips with the fact that the United States and the world are not what we believed they were on January 1, 2000. Reality bites, and it has bitten hard.
The good news is that these illusions were never true, and it was inevitable that they would shatter. The decade from 2000 – 09 was a reality check, as the United States learned that its hyperconsumerism, militarism, and belief in “the good life on the cheap” could not continue on the set course. We learned that markets are not only fallible, but extremely dangerous when unregulated. Moreover, the babyboomers are going to start retiring, taking money out of the system instead of putting money into it. The costs will break the budget, even if we can get health care under control and extricate ourselves from expensive wars. The good news is that we now can look at the past and future with a clear sense of vision.
The bad news is that there are still illusions — or delusions — being hawked by propagandists. On the right the “tea party” movement, though still small, represents a nationalist effort at scapegoating from the right (Obama is bringing socialism, climate change is a ‘hoax’, “they” are trying to change to some elitist vision “real” Americans reject). These are the same themes used by folk like Hitler and Goebbels when German illusions were shattered in WWI. Rather than confronting the problems the country faces, you aim at an enemy, and say “if only those evil liberals/socialists/pacifists would stop undercutting the war effort and believe in America, then all would be better.” Emotion is aroused, anger is kindled into a righteous rage, and the followers stop thinking. The movement becomes more important than rational reflection.
On the left, Obama tapped into a segment looking for someone to somehow fix all of what was wrong, blaming everything on Bush’s wars and tax cuts, while overlooking the structural problems caused by the way both Democratic and Republican governments led the country for the past thirty years. Obama’s campaign propaganda was just as emotion-laden as that on the right, reflecting the sense that change was coming to save the country and undo the problems of the past. When problems don’t go away people sour on the change, we yearn for those days lost in illusion, not wanting the hard work of solving real problems.
Yet, while “hope” for Obama or “rage” against “liberals” can satisfy many political voyeurs, the reality is that we now face a momentous decision. Will we actually take a close and careful look at ourselves — our culture, what we value, how we operate, how we deal with others — or will we blame others and avoid difficult choices?
Our crisis is not political, it isn’t even culture. It’s spiritual. Not in a religious sense, but in terms of values. We’re ungrounded, steeped in raw self-interest, moral relativism, a sense that image is reality, and victory means virtue. We are Rome in the end days of the Republic, losing sight of the fact that values are above both politics and consumption. Politics is not reasoned debate, but meme-construction and trying to personally assault and discredit the “other side,” often with vicious individual attacks.
This cannot be solved with a new leader, a new set of policies, or some kind of quick fix. It is neither left nor right, conservative nor liberal. It is each person opening their eyes, seeing others with a sense of love and compassion, questioning their own values and beliefs, and thinking clearly about the world as it looks today, rather than wistfully wanting to go back and party like its 1999. The first step is embracing the reality that the illusions of the past have been shattered. The second step is avoiding the allure of easy answers — a hero to change things, or an opponent upon which to blame all the problems. But it won’t be easy; change won’t come from the outside but from within. Are we up to it?