![]() National pride is at an all-time low, and the “vibe” in America is that things are not good. We’re NotĬulturally you could build a compelling case. Empires win and lose their hegemony depending on their reserve currency status, and in Ray’s view, we’re near freefall. Ray Dalio, the founder of the world’s largest hedge fund, hinges his recent bestseller, Principles for Dealing with the Changing World Order, on America’s inability to adapt to our loss of status and power. JPMorgan recently flagged it, an ex-CIA adviser plainly predicted it, and one prominent tech investor bet $1 million on it. Many believe we are in the midst of “dedollarization,” ceding our status as the world’s reserve currency because of our unsustainable spending habits and an overall loss of faith globally. Two months ago, ratings agency Fitch downgraded America’s credit rating due to “fiscal deterioration” and “erosion of governance.” The debt ceiling debacle didn’t help: Investors “ should worry.” Our debt-to-GDP ratio is hovering around 120% back when it was 70%, Brookings called it “the real national security threat.” Among economists there’s a growing school of thought that our situation is dire. These headlines are click bait, and we still take the bait: Three-quarters of Americans believe our country is in structural decline, and the song of the summer is an ode to our demise. ![]() January 6 was the “ beginning of the end.” Russia’s invasion revealed a “ great unwinding.” Nations view us “ with pity,” and we are “ on the brink of collapse.” Just last week, the New York Times opinion page compared us to Rome (again). Today the decline is (supposedly) more imminent. Each offered a similar theme: Our time was running out. The tragedy of 9/11 was described as an “inevitable outcome.” Our subsequent invasion of Afghanistan inspired books including Dark Ages America: The Final Phase of Empire, and Are We Rome? The Fall of an Empire and the Fate of America. In the early aughts, our soft tissue was geopolitical. Japan’s GDP soared to 40% of ours, and we feared what might happen when that number hit 100. In 1984, Walter Mondale asked Reagan at the presidential debates, “What do we want our kids to do? Sweep up around the Japanese computers?” Three years later, Paul Kennedy wrote a book about it, The Rise and Fall of the Great Powers, comparing the U.S. Computers and cars were the future, and Japan was building them faster, better, and cheaper. My second year in business school (Berkeley ’92) was devoted to a forensic analysis of our loss to Japan. In the ’80s, we decided Japan was doing to us economically what they couldn’t do militarily four decades prior. The doomed nation, according to Americans? A: America. ![]() For decades, America has predicted - arrogantly and repeatedly - the imminent fall of a nation. ![]()
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