How can the current decline in the status of the Union be reversed?

An essential preface to our assessment of the State of the [American] Union is that we must make a distinction between our view of the United States in a longer historical perspective and our view of recent administrations and their policies.

A few years ago, I wrote that for many, the American image was Norman Rockwell's "anything-is-possible-in-this-wonderful-country" image. The flip side - many years ago - was John Steinbeck, whose Grapes of Wrath was only one of the classics that imaged the American soul. But even the flip side had its more appealing aspects: the political system could be reformed; not by socialism, that word was always anathema, but through a caring, charitable-democratic ethic that could smooth the sharp edges of the capitalist robber-barony.

The nacissistic American image prevailed in the gruelling torment of the Second World War. More than other Allies, it was, above all, the American image that prevailed - for Americans and much of the rest of the world. Something of the simple, honest, generous Norman-Rockwell "good-guy" persisted. The ugly American was around too but mostly in the background, until such things as Vietnam and race riots thrust it centre-stage.

Then Norman Rockwell and the squeaky-clean family and police images of The Brady Bunch and The Untouchables gave way to the vision of such as Joyce Carol Oates. Gone was any looking-glass factor and the innocence of childhood. The sheriff doesn't come, wearing his white hat, to round up the bad guys; the cops, wearing fake white hats, beat up innocent "Uncle Toms" in the street. And it has all the appearance of truth.

More than halfway through the first term of the Bush-the-Younger Administration, how much of the above is still true? Is the Joyce Carol Oates picture unjust or is the Norman Rockwell image now being used, with evil deliberateness, as a deceitful screen for the greed, megalomania and politico-corporate corruption behind it?

In traditionalist, great-power terms, the United States is undoubtedly the most mighty military power on earth. Those who welcomed the Yanks to Australia in the dark days of 1942 and fought beside them to victory in the Pacific tend to be reflexively comforted by that thought. But have we - and more importantly have they - forgotten why we fought, what our aims were when we negotiated such documents as the United Nations Charter and the constitutions of the many postwar specialised agencies?

Above all, we sought to bring an end to the miseries that had plagued us in the 1930s and 1940s, and, in particular, to put an end to economic depression and war.

For 25 years after the shooting stopped, we pursued that aim, largely with the United States as our leader, with a high degree of success. There were blips - some of them huge. Stalinism had to be opposed but was McCarthyism the way to do it? Was Vietnam really the way to hold back the tide of world communism? Could it - or adventures like it - really succeed in promoting the political, strategic, social and economic objectives to which we believed ourselves to be dedicated? Did they involve deceptions which were unacceptable to our "open" democracy?

However, in that quarter-century, the State of the Union was, in a great many respects, sound and the "Union" was quietly booming. Democrats and Republicans - Truman and Eisenhower - the younger generation and the more traditional - Kennedy and Johnson - helped to lead the world to prosperity and, for a couple of decades, kept it there, while giving practical impetus to multilateral cooperation for peaceful change and worldwide welfare. "By far the best years for both [Europe and America] from the perspective of economic growth, wealth creation and rising living standards were the 1950s and the 1960s." That view of Dr Kurt Richebacher applied to the other continents too. To Australia of course. Even Africa got independence, and, along with it, hopes for a better life.

To quote Dr Kurt Richebacher again, "Both productivity and profits rose at record rates for two decades. Yet, looking back, it strikes us that neither in Europe nor in America did this cause any exuberance, rational or irrational. Year after year, economic and income growth exceeded prevailing, modest expectations. On both continents, policymakers, economists and the public took this brilliant economic performance in its stride, regarding it as just normal."

Then it all fell apart.

Insofar as there was a single cause, it lay with American policy. July 1969 was the month man first walked on the Moon - and, for one glorious moment, almost everything seemed possible for all humankind. But it was also the month that the Fed hiked interest rates and ushered in stagflation and what has proved to be 30 years of economic and social instability, high and chronic unemployment, the shifting of American - and Australian - industry "offshore", the rise of casino capitalism, the emergence of hordes of speculators in the form of junk-bond and derivatives dealers, the curtailment of domestic welfare and international aid, the destitution of much of the world's population in the rich as well as the poor countries and the failure of representative democracy as political parties at all points of the political spectrum have moved resolutely and stubbornly to the centre and right.

In this process, the State of the Union has seemed to many to have remained robust, the United States to have increased its preponderant power and for the superpower, now alone, to have become a hyperpower and a super-imperialist.

Is this true?

On the economic side, the world's greatest creditor has become the world's greatest debtor. The world's most prolific producer has become the country most dependent ever on supply from outside. The world's richest population has never saved so little or been burdened with so much personal, largely consumer debt. Fixed-capital investment - the prime engine for real growth - has lagged, both for the private sector and public. Depreciation of public infrastructure has been so great for so long that many years of catch-up effort will be needed to restore it.

The free-market/small government ethic has cut federal taxes but left social welfare stricken. At the same time, there has been an inadvertent - and perverted - sort of "Keynesianism," directed to -

1. Massive overt expenditure of some $400 billion a year on "defence" with less overt expenditure of billions more on "privatised" or "contract" defence services.
2. Some $150 billion a year on price supports for American agriculture, including subsidies for American exports often highly destructive of other countries' export staples.
3. Law-enforcement and drug-war costs difficult to aggregate but almost certainly amounting to hundreds of billions of dollars, which, alongside the conventional police and law-enforcement "armies" have created a major industry to build prisons and house, feed and otherwise maintain more than two million prisoners - more than any other country on earth.

Against that background, it seems reasonable to postulate that, since 1969 and more especially since 1980, the United States has been not a great country reaching towards the zenith of its power but a country in serious and long-term decline. Many of the elements that brought about the collapse of the Soviet Union as a superpower - massive defence spending and a faltering economic and social base - are present in the American condition.

The megalomania of the Bush Administration shows no consciousness of this. His foreign-policy and security advisers appear to be obsessed with visions of imperial adventures - or are so deeply embedded in them - that, even if they now wish, they cannot withdraw. His economic advisers see a solution to their problems not in recognition of past errors and embarking on new courses but in turning the screws harder, so as to make the policies that have brought disaster inflict more torment still. Even the mighty Alan Greenspan still sees it as his duty to hike interest rates to curb inflation and to cut rates to stimulate the economy - and, as he sees it, possibly to stimulate inflation. After 30 years of harsh experience, he still does not see that a cut in interest rates is more likely to reduce inflation and, past a certain point, to cross the line into deflation and a plunge into long-lasting economic depression.

At the moment, the chances of reinvigorating the American economy, ameliorating the state of the society or bringing more calm to the political and strategic landscape, seem remote. One commentator has written that "credibility is the Bush administration's Achilles' heel. If the public comes to believe that it cannot trust the administration about its reasons for going to war, about the real costs of the war in human lives and American dollars, about the actual state of the nation's defenses against terror and about the real beneficiaries of its economic policies, the Bush II presidency will be crippled, if not doomed."

Even if the Bush Administration is doomed, its passing will not take place until January 2005. In the meantime, its convulsions as death beckons threaten to make the situation not better but worse for the American people and, as almost always, for the rest of us, rich and poor, all around the world.

So, at this bleak and in many ways terrifying moment in human history, we can perhaps sum up the "Real State of the Union" by taking another quote from The Human Mirror:

Thirty years ago, many people's hopes were high. Charles Reich wrote of a visionary American consciousness of the late 1960s and early 1970s: 'The extraordinary thing about this new consciousness is that it has emerged out of the wasteland of the Corporate State, like flowers pushing up through the concrete pavement. Whatever it touches it beautifies and renews: a freeway entrance is festooned with happy hitch-hikers, the sidewalk is decorated with street people, the humourless steps of an official building are given warmth by a group of musicians. And every barrier falls before it. We have been dulled and blinded to the injustice and ugliness of slums, but it sees them as just that - injustice and ugliness - as if they had been there to see all along. We have all been persuaded that giant organisations are necessary, but it sees that they are absurd, as if the absurdity had always been obvious and apparent. We have all been induced to give up our dreams of adventure and romance in favour of the escalator of success, but it says that the escalator is a sham and the dream is real. And these things, buried, hidden and disowned in so many of us, are shouted out loud, believed in, affirmed by a growing multitude of young people who seem too healthy, intelligent and alive to be wholly insane, who appear, in their collective strength, capable of making it happen. For one almost convinced that it was necessary to accept ugliness and evil, that it was necessary to be a miser of dreams, it is an invitation to cry or laugh. For one who thought the world was irretrievably encased in metal and plastic and sterile stone, it seems a veritable greening of America.'

Three decades later, after the fading of the caring and visionary society, the rise and fall of the junk-bond buccaneers, the slapstick politicians in the Reagan/Thatcher mold, the vision splendid has blurred. The happy hitch-hikers have gone, the greening become a browning. The escalator of success is no less a sham than thirty years ago; but the young no longer believe that the dreams of adventure and romance can be real. No longer are the flowers pushing up through the concrete pavements; the sidewalks are no longer decorated with street people but cracked and crowded with homeless beggars; injustice and ugliness are again accepted as part of the inevitable human destiny. Communism is dead but, for most, victorious capitalism is only slightly less gruesome than its defeated rival. Now we need a new vision, a new image, a new consciousness of self. We will get it. Our looking-glass fantasy refuses to accept that we won't. But it had better come quickly - before catastrophe, from the demise of dreams, beats it to the finish line.