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.