American Collapse, Afghanistan Edition

The exit from Afghanistan is producing a lot of hot takes. There are appropriate comparisons to Vietnam. Many people predicted Afghanistan would end in disaster, that the Taliban would come back to power, but these advisers weren't in power and were ignored by the ruling class. It was obvious from the start that imposing a Western society would fail. It should have been obvious to everyone after failures in Iraq and Libya. USG policymakers pushed ahead. They believed they could impose not only a Western form of government, but a "Woke" secular culture, one extremely hostile to religion and tradition, one that more than half of the American people do not support, on a hostile population.

For the markets, the lesson is the incompetence of USG leaders and institutions. The same thinking that went into Afghanistan is behind the coronavirus response, MMT, the Green New Deal, mass immigration, diversity, critical race theory, transgenderism, feminism, the recently passed (in the Senate) "infrastructure" bill and Federal Reserve monetary policy. These will all fail to different degrees, though they might seem like they work for a time. The majority of American public corporations, educational institutions, government agencies, politicians, teachers, bureaucrats, bankers and financiers are as clueless as the people who invaded Afghanistan and tried imposing a Woke democracy. They aren't going to warn you when things fall apart because they not only don't know when it will happen, they don't believe it is even possible.

Take a look at the Afghans trying to get onto the planes in Kabul. Some of them fell to their death after hanging on to the landing gear as planes took off. There is a German phrase torschlusspanik which means "gate closing panic." In the days of castles and walled cities, you didn't want to be outside the city when barbarians or a foreign army were coming to attack or lay seige. The same panic was seen in Kabul this weekend. As with the exit from Afghanistan, when USG decides to abandon the value of the U.S. dollar or can no longer prop it up, when policymakers decide to let the stock market fall or can no longer support it, when the bond market crashes, there won't be enough room for everyone to exit. When everyone realizes the truth there will be panic in all markets. It's likely some markets will be closed, perhaps even the banking system, which means anyone who hasn't prepared will be trapped.

Maybe America will wake up from Wokeness and vote for a major political shift as it did a few years after Vietnam, but that seems less likely today. Back then, the U.S. had low debt levels. It was still repealing socialist regulations from the New Deal. There were some free economic lunches and it could run up its credit balance. Today, there is not much room for regulatory relief unless we're talking about healthcare and education, two third rails in U.S. politics. More than half the country has gone off the deep end. On the right, a healthy minority believe QAnon conspiracy theories. The ruling class is no better. USG is hunting white supremacists and one of the trending topics yesterday was "American Taliban," with leftists claiming Trump supporters are like the Taliban. Instead of learning, they will double down and become more oppressive in the United States.

There is also no credible opposition at this time. Trump is possibly the leading candidate for 2024 and he accomplished next to nothing in Washington. If reelected, he would likely run up the debt as fast or faster than the Biden administration seeing as how much of the spending is locked-in via entitlements and stopping deficit spending will cause a major recession. There is no stomach for reform. Most of the GOP suported the war in Afghanistan and said nothing about the insanity of forcing feminism on the country. Many of these conservative critics wanted to stay in Afghanistan or want to counterattack. They have learned nothing from 20 years of foreign policy failures. They are as "Woke" as anyone in the Biden administration. Nineteen GOP senators voted for an infrastructure bill that is 90-percent welfare and includes outright racist policies. I do not expect the people will really vote for change until there is a major economic collapse or devaluation of the U.S. dollar because they will not throw out enough politicians and they will not vote for the types of "radicals" who are needed for change.

One final note: many people, myself included, view the Afghanistan collapse in a detached way because we do not view government policy as our own. This was not carried out by the American people, but something more akin to an occupation government. The ruling class and deep state do whatever they want, elections be damned. All Americans will suffer from the loss of prestige and reputation caused by the mess in Afghanistan, but it is not my failure. When the U.S. dollar and financial markets finally meet their end, this will repeat to a greater degree. All Americans will be greatly harmed, even those who are prepared. Even if your preparation creates a windfall for yourself and your family, you cannot save your town, let alone your state or the nation. The economic damage will greatly impact your standard of living. We can and should speak up and warn people, but nobody will heed the advice at a policy level. I doubt anyone can be elected on a platform of hard times now to prevent worse times later. The best you can do is set yourself up to assume power when events follow your predictions, when the public is ready for reforms. More than even being financially prepared, be mentally prepared for a psychologically broken nation that will lash out at foreign nations and domestic enemies. The ruling class will do anything in that moment to retain power. A sane, rational policy response is highly unlikely. That will be the decisive moment when we can return America to its former greatness or forever sink into the abyss of tribalism, tyranny or civil war.