1. Nixon's breaking the connection between the dollar and gold established the greenback as a purely fiat currency. The implications of this considering that the dollar was and remains the world's reserve currency cannot be overestimated in terms of the financial implications both for the US and the world. Such a concentrated relationship of money and power cannot but end badly.

Simultaneously, Nixon established a new GOP coalition with his Southern strategy. Nixon also embarked on creating an American empire with him as emperor, announcing the transition with the introduction of an "imperial" honor guard that was promptly laughed out of existence. (At the time, the people and the media still had a sense of propriety.) However, the rest of the agenda was kept in place, and Nixon's resignation only postponed its implementation. The architects remained major players in the GOP elite.

2. Reagan's rule established the dominance of neoliberalism economically and politically through the wildly successful GOP mantra: small government, low taxes, strong military, and family values. His "voodoo" economic policy was designed to massively transfer wealth to the top through regressive taxes, destroying the bargaining power of labor, privatizing the commons, favoring the military-corporate-governmental complex, and firmly establishing Big Money in control of the levers of government. (Prior to this the US had been ruled since its inception by "old money" rather than Big Money. Old money considered itself the elite committed to preserving traditional national values, whereas nouveau riche, haute bourgoise Big Money was committed to the expansion of Big Money.) Reagan realized the GOP's imperial aspirations with the ending of the Cold War, leaving the US as the world's only superpower. Bush I simply extended this program.

3. Clinton shifted the Democratic Party to the center, effectively ending the Democratic policy that had been dominant since the FDR years. This shift meant that there was then only one party in the US, controlled by Big Money, with two variants. Under Clinton, Wall Street honcho Robert Rubin solidified dollar hegemony globally and crafted policy with an eye chiefly on the bond market, the bastion of Big Money. Clinton, with his Republican defense secretary, continued the role of the US as global cop.

4. The Bush/Cheney Administration consolidated the Reagan Revolution economically lowering taxes on the wealthy, while extending it through vastly expanding privatization of the commons through cronyism and corruption. Under Bush the program was not merely transferring wealth upward through advantageous fiscal and monetary policies, as well as deregulation and absence of oversight, but by governmental collusion and establishing policies expressly for the purpose of transferring wealth to political cronies. Under Bush, top administration officials publicly proclaimed that the US is now an empire, and the doctrine of the unitary executive anointed the president as emperor who could rule by imperial fiat. At the same time, the US is becoming a two-tier society as wealth accumulates at the top and social mobility declines.

5. ???? The next step is still hanging in the balance. There are several possibilities. It is possible that there will be another GOP administration that continues the neoliberal, neo-imperial and neocolonial agenda. Or it may be that the Democratic Establishment will moderate it while effectively continuing it at some level. It is possible but unlikely that the cycle will end with the accession of a populist reformer who will set America on a progressive course. We are still in the throes of this cycle that began with the Nixon presidency. If Big Money has anything left to say, this cycle is not yet over, and I suspect that BM still has a lot to say. This cycle will not end in the absence of a catastrophe that sufficiently angers enough peasants for them to pick up their pitchforks and end the rule of Big Money.

Admittedly, things seem to be going badly for the economy at the moment, and it is possible that we will see the onset of another Great Depression, in which case all bets are off. However, the US economy has a lot of momentum going for it, and a lot of influence in the world. Big Money will not give up easily. They are on the verge of establishing neoliberalism as the global economic order through growth (asset appreciation coupled with a large enough labor pool to obviate corresponding wage growth). The big challenge now is price stability. If that can be managed, then neoliberalism will have essentially won, and it will be difficult to dislodge. Essential to price stability is abundant cheap energy. The simplest and most profitable solution is petroleum, since the economy is already set up for it. So look for the US to seek to dominate world petroleum reserves, aggressively if need be instead of promoting conservation and alternative energy sources. The US will also do all it can to avoid addressing global warming and when it must, count on it to be promoting centralized solutions like nuclear power, "clean coal," and agricultural biofuels, instead of decentralized ones like solar and wind.

Moreover, all the levers are in place -- the surveillance state, repeal of Habeas corpus and posse commitatus, etc. -- to target and suppress dissent, so it will be difficult to organize effectively against the ruling powers.

This neoliberal, neo-imperial and neocolonial cycle may have a good bit of wind in it yet, as long as overreach doesn't force their hand or blow up in their face, which it could very well do, and pretty abruptly. At present, a credit meltdown stemming from both over-indebtedness and financial overreach, as well as a dollar crisis, threaten to end the current cycle and pitch the US, and the global economy, into uncertainty. However, uncertainty is the bane of the risk adverse and a boon to those who operate well in high risk. This favors the US executive class, who are virtually risk-addicts and operate well even under shock. A global catastrophe could just present another chance to apply the shock doctrine.

It is pretty generally agreed that the US is now in constitutional crisis, with the executive branch claiming imperial powers and the legislative branch challenging that interpretation of the Constitution. Seems that we are now either at the point of or approaching a constitutional moment, where a major decision is going to be forced upon the country regarding where it is going and how it is going to get there.

Hi
I think your about right and even if there is a change in the WH will they have the will or need to turn the country back to pattern in were it actual helps it's citizens and doesn't think it needs to spread US style democracy the heathens. I would be nice to just help people of the world and let them decide on the type of goverment they want not one forced feed. The other side is well orginized and the minute there a chance to subject this country another round of tough love it will happen. The citizens will be the loosers in the WS mess as we were in the SL melt done. I still think we can pull out of it but most believe that a political victory will solve the problem and have forgotten/don't know how entrenched they are in the system.

jo6pac

Thanks for the story and your input and lets hope help is one the way.
No spelling corrections today.

with clear, apolitical watersheds.

http://mauberly.blogspot.com/

wrong, but I think Stirling would say the crisis started in 2000.

I think it is incorrect to lump together the Articles of Confederation and the Constitution in the same historical era. The Constitution was a distinct break, especially in the view of some of the most important actors of the time: George Washington, Alexander Hamilton, and James Wilson. The Constitution, in fact, was largely a reaction against the Articles of Confederation, specifically the Confederation’s failure to erect and maintain a strong central government able to overcome the centrifugal forces of the various states and sections, but most especially its failure to create a functioning national economy.

An excellent book that covers this in detail is The Great Challenge: The Myth of Laissez-Faire in the Early Republic, by Frank Bourgin (1989, George Braziller Inc., New York, NY; 1990, Harper & Row, New York, NY). As Borugin writes near the beginning of the book, James Madison said that the credit problems of the economy:

”contributed more to that uneasiness which produced the Constitution and prepared the mind for a general reform” than any political inadequacies of the Articles. The public credit was gone, due to inability to pay foreign bankers and debts owed to the demobilized army officers. As conditions worsened, debtors pressed the state legislators for relief to pay off their debts in cheap paper money. In the autumn of 1786, there had occurred in Massachusetts the uprising of farmers and others demanding that further judgments for debts be suspended. It was this so-called Shay’s Rebellion and the issuance of unfunded paper money by seven states in 1786 that more than anything helped crystallize public opinion that a new system of government was necessary.

As Bourgin notes a little further on, the Founders clearly regarded the Revolution, despite the War being over, as an ongoing ongoing process, and quotes a pamphlet urging ratification of the new Constitution written by Benjamin Rush:

“The American War is over, but this is far from being the case of the American Revolution. On the contrary, nothing but the great drama is closed. It remains yet to establish and perfect our form of government, and to prepare the principles, morals and manners of our citizens for these forms of government after they are established and brought to perfection.”

Bourgin shows that contrary to the “Adam Smith” myth that has reigned supreme in the U.S. the past half century, the Constitution was carefully crafted to make sure the national government would have the authority and the power to intervene forcefully in the economic life of the new nation, so as to ensure a rapid enough and broad enough level of economic development that would render the U.S. truly independent of the economic and financial influence of any and all European princes. The key individual, of course, was Hamilton, both at the Convention, then as the first Secretary of the Treasury, and also as the cabinet member Washington most depended upon.

Anyone that is truly interested in how the United States was actually formed, must read this book. Interestingly, Bourgin originally wrote this as a Ph.D. dissertation in the 1940s at the University of Chicago, but it was rejected. When Arthur Schlesinger saw it in the 1980s, he speculated that it ran afoul of the radical free market “Chicago boys.”

Also, Bourgin utterly shatters the myth that the U.S. economy began life a radically “free market” ala Milton Friedman. This book is an incredibly valuable weapon that can be used to beat back the radical free market direction of the past half century.

Also, I agree with tjfxh above, regarding the importance of the August 1971 abandonment of the Bretton Woods system of fixed exchange rates. Just look at the table and discussion in the Wikipedia page on Financialization I created last week. As you can see from the bottom two lines in the table (I’ll put it in below), there is a qualitative shift in the financial markets in the 1970s.

Think of all the Jesuses seen in splotches of peanut butter, dust, or other random things or the pictures your mind forms in clouds.

Take the civil war, was it fought over states right to leave or slavery? After all the Southern States did not leave the union over federal harbor improvements, canals, forts or arsenals. Even so, State Rights did not get really whacked until the 1950-1970s.

One could look at the History of the US being bound up in either what to do with the Negroes, Indians and Empire. Slavery being a festering problem from the War of Independence to Reconstruction and the attending civil rights problem until the present day.

I just see a series of problems that are solved by generations, the best explanation is that when any group is dominant, it tends to keep power in increasing older folks whose passions and energy lay in the past, but who can hold the 'levers or power' simply because they have them. They freeze out ambitious younger folks who must find other ways to power. Be it revolt or elections.

As proof, look at the line up of the GOP vs Dems candidates in the 2008 presidential election. Or the Religious leadership where the old firebrands are dropping dead or looking like it.

but I'm not sure I'd put that much weight on length of periods. Kevin Phillips points out that good management can postpone a crisis (or really good management can avoid it), and bad management can precipitate one.

That said, I think the crisis moment is here and probably even passed. I don't think anybody sees America or the Constitution the same way we used to.

Otherwise all that is happening is the categorization of events in some pattern which may or may not have validity. For a theory to have value, it must be predictive. In fiction, Psychohistory, http://en.wikipedia.org/wiki/Psychohistory_%28fictional%29 is an example. The predictive nature of a theory allows for its validation.

That all said, we are entering a crisis that will stretch for a long time out. For example for the first time since the industrial revolution, an non western power(s) is/are likely to be more powerful than the western nations. At some point this will result in a military crisis that will not be fixable by good hair or sound bites.

Likewise our economic system is challenged both externally by non western countries and internally by the inability to provide for our citizens.

The conservatives have lost it, simply because this cannot be solved by conservative ideology and the leaders are old. The progressives have the new ideas, but not enough support to implement them but have the enthusiasm, they have the new leaders. The powers that be are discredited, have the money and power to continue, but their inventiveness is limited to making more money from a poorer citizenry.

How it plays out will be interesting.