This is part III of my series of essays on morality, social groups and economics. Previously I published—
Homo sapiens — The Rationalizing Animal
Econonics As A Moral Science?
This essay presupposes you have read the first two, though I will review those essays briefly in the introduction to this one — Dave
I take it as uncontroversial that the United States is a moral failure, where failure is defined by the criteria 1) satisfactory levels of socio-economic fairness and reciprocity; and 2) reduction of harm and suffering among our society's most vulnerable members.
It may seem outrageous to you that I've simply assumed this essay's title in its first sentence, but this inquiry seeks to understand why the United States is a moral failure, or for that matter, why it seems that any large, complex, liberalized ("free") market state must inevitably lead to moral failure (as defined briefly above). That's the subject of this essay. I will use the United States as my example throughout, but my remarks (mutatis mutandis) could apply to the European Union (EU) or other OECD nations.
But first let us make no mistake about our initial assumption. I also want to review some things I explained in the two previous essays before moving on.
As I explained in Part II, it is not permissible to make an explicit moral argument in societies like the United States. For example, it goes without saying that the U.S. is now a highly stratified society in terms of social status and its most common form of expression, wealth and income. How do those with greater social status (like New York Times reporters) view this problem?
Leaving aside those benighted souls who see no problem at all, the views of Bill Keller of the New York Times are typical. This text is from his editorial Inequality For Dummies (December 22, 2013). Keller is unaware of who the actual "dummies" are in this situation, but I digress.
For starters, economic inequality is manifestly real, growing and dangerous. The gulf between the penthouse and the projects is obscenely wide...
The alarming thing is not inequality per se, but immobility. It’s not just that we have too many poor people, but that they are stranded in poverty with long odds against getting out. The rich (and their children) stay rich, the poor (and their children) stay poor...
A stratified society in which the bottom and top are mostly locked in place is not just morally offensive; it is unstable.
Not just morally offensive. Thus Keller dismisses the moral argument in the usual way—he pays lip service to it via a single reference, and then changes the subject, as I will discuss below.
Recessions are more frequent in such countries.
A widely praised 2012 book, Why Nations Fail, argues that historically when the ruling elites have pulled up the ladder and kept newcomers from getting a foothold, their economies have suffocated and died.
Note the straightforward reference to "ruling elites pulling up the ladder." I discussed that subject in Part II.
“The most pernicious fact of inequality is when it translates into political inequality,” said Daron Acemoglu, a co-author of the book and a Massachusetts Institute of Technology economist. “That means our democracy ceases to function because some people have so much money they command greater power.”
The rich spend heavily on lobbyists and campaign donations to secure tax breaks and tariff advantages and bailouts that perpetuate their status. Not only does a dynamic economy stagnate, but the left-out citizenry becomes disillusioned and cynical. Sound familiar?
Sound familiar? Of course it does. Acemoglu is talking about the inevitable corruption of the political system by extractive, predatory "elites" who have "pulled up the ladder" and thus shut out the disenfranchised. I will have more to say about the apparently self-defeating nature of liberalized market societies later in this essay.
But Keller now totally ignores the fact that the United States is no longer a democracy—after all, there are unelected "ruling elites"—and examines the policy positions of various political (social) groups in the United States. But only one group's policy (moral) preferences count—guess who!—so let's look at that one.
Keller sees Barack Obama as holding a "center-left" position, which we can take as reflecting the moral preference of America's ruling elites. Review the final sections of part II for a brief discussion of Barack Obama in the general scheme of things.
The center-left — and that includes President Obama, most of the time — sees the problem and the solutions as more complicated.
Yes, you want to provide greater security for those without independent means (see Obamacare), but you also need to create opportunity, which means, first and foremost, jobs.
The jobs mantra has no merit of course if the jobs in question keep workers mired in poverty or living paycheck-to-paycheck.
Yes, you can raise taxes on the rich, but you don’t want to punish success.
“You want to increase social mobility by providing an opportunity for the bottom to become rich, not forcing the rich to become poor,” said Acemoglu, who aligns more with the center than with the populists...
Needless to say, if a relatively few people currently at the bottom of the economic ladder receive and successfully seize the opportunity to become rich themselves, such fortuitous events for the lucky Few changes nothing for the disenfranchised Many.
The "opportunity" rationalization is always stated in terms of maintaining incentives—making the rich poor (let alone cutting off their heads) destroys incentives to accumulate wealth. But of course no one politically to the right of Robespierrre, Mao-tse-tung or V.I. Lenin has suggested "forcing the rich to become poor," but the "centrist" Acemoglu wants to make sure we're all engaging in "right thinking" here
The center-left (I’m somewhat oversimplifying these categories) agrees on the menace of inequality, but places equal or greater emphasis on the fact that the economy is not growing the way it did for most of the last century.
The sluggish growth means that not only are the poorest stuck at the bottom, but the broad middle is in economic decline...
Let's pause and review. Obama's moral preferences (expressed as policies) reflect those of a subgroup ("center-left") of America's "ruling elites" as discussed in part II, and Keller and Acemoglu's preferences reflect those whom I called the beneficiaries of the status quo in part I.
As I discussed in part II, the main rationalization both groups use to dismiss moral arguments is the call for more economic growth, which will be achieved by piecemeal changes (e.g., raising the minimum wage) which leave the status quo largely intact. For example, Obama's "let's create more jobs" mantra (as echoed by Keller) is viewed entirely as a function of more growth, not as the "right" thing to do, not as a moral imperative which states that humans require food, shelter, etc. to keep breathing, and thus should always be provided a way to obtain those necessities.
As sociologist Shamus Kan put it, "to get back to what made America great, when the many and not the few were winning... we must stop conflating moral arguments with economic ones." America's elite and its beneficiaries invariably conflate economic and moral arguments. Economic arguments are ultimately self-serving, and thus arise out of self-interest which may or may not reside in consciousness—altruism is verboten! The call for more economic growth usually disguises a strong attachment to the morally bankrupt status quo.
We can see the stark difference between economic and moral arguments in a part of Obama's opportunity speech which Keller quotes.
... Of the arguments that pit Democrat against Democrat, three strike me as most important: The first is how to restart the engine of growth...
But [liberals] divide over policies that might unleash the energy of the private sector.
In a line from his speech that was not widely quoted, President Obama said, “The fact is if you’re a progressive and you want to help the middle class and the working poor, you’ve still got to be concerned about competitiveness and productivity and business confidence that spurs private-sector investment.”
While closing loopholes, Obama would also lower corporate tax rates; he would do trade deals to expand our diminishing share of foreign markets; he would shrink long-term deficits and streamline regulations.
If you're a progressive ... you've still got to be concerned about competitiveness and productivity and business confidence, says Obama. That was the "tell" (a poker term) in Obama's speech . Let's focus on productivity, which is a quantifiable thing.
What's wrong with this picture? President Obama stated that progressives have still got to be concerned about productivity (among other things) to spur investment in the private sector. Look above to see the a comparison of hourly compensation for non-supervisory workers and their productivity since 1948. Source
This is not rocket science.
Productivity (output per unit time) diverged from hourly compensation for good in about 1977. Productivity grew and grew while wages remained mostly flat. That trend is now 37 years old and continues to this day.
As I discussed in my Note on Economic Growth, as social stratification (expressed by wealth and income inequality) grew and grew, as reflected in 37 years of stagnant wages, the economy (measured by real GDP) also grew and grew (outside of two minor and one major recession).
Thus the call for more economic growth to solve the problems created by social stratification is unmitigated, self-serving bullshit (a rationalization) designed to maintain the status quo. Minor tweaks to economic policy give the appearance of meaningful action. For example, Obama wants to raise the Federally-mandated minimum wage, but he would also lower corporate tax rates. While throwing a bone to long-suffering low-wage workers, Obama would also ensure that America's ruling elites will sacrifice nothing to achieve a fairer distribution of the income. Socially unaccountable corporations will thus be free to increase profits, shareholder value and CEO salaries at the expense of non-supervisory workers [graph above] just as they have done for decades now. All this leads to more social stratification, not less, which I daresay is the idea.
There is nothing subtle about this duplicity. From a moral preferences point of view—fairness & reciprocity, harm & suffering—the economic growth argument is not only specious but, more to the point, breathtakingly dishonest. George Carlin said our ruling elites want "obedient workers," but failed to say that they also want cheap obedient workers. In fact, let's watch George now with fresh eyes in this context.
I hope I have demonstrated to your satisfaction that it is uncontroversial that the United States is a moral failure, which is the way I started this essay. Let us now move on to a discussion of theory and practice in so-called "free" market economies.
Karl Polyani And Free Markets
I confess I have not read Karl Polyani's The Great Transformation since my college days, so I will be content to quote others who are more familiar with it. No great loss follows from my failure to quote the text itself, for the role of Polyani's arguments in current debates about how societies should be run is very clear in the recent secondary sources I will quote.
Pope Francis got the ball rolling in a recent Apostolic Exhortation which was discussed by Heather Horn in Pope Francis's Theory of Economics at The Atlantic (November 26, 2013). Horn notes that the Pope's views are closer to those of Polyani than those of Karl Marx, and then explains why.[pictured left, clockwise from top left, Keynes, Polyani, Hayek and Marx surround Pope Francis]
Economic activity, Polanyi says, started off as just one of many outgrowths of human activity.
And so, economics originally served human needs. But over time, people (particularly, policy-making people) got the idea that markets regulated themselves if laws and regulations got out of their way.
The free market converts told people that "only such policies and measures are in order which help to ensure the self-regulation of the market by creating the conditions which make the market the only organizing power in the economic sphere. Gradually, as free market-based thinking was extended throughout society, humans and nature came to be seen as commodities called "labor" and "land." The "market economy" had turned human society into a "market society."
In short ... instead of the market existing to help humans live better lives, humans were ordering their lives to fit into the economy.
Pope Francis denounces, specifically, the complete rule of the market over human beings—not its existence, but its domination.
"Today everything comes under the laws of competition and the survival of the fittest," he writes. "Human beings are themselves considered consumer goods to be used and then discarded," and "man is reduced to one of his needs alone: consumption."
Next the Pope makes precisely the same point I made in the introduction to this essay.
He rejects the idea that "economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world."
Instead, he argues, growing inequality is "the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation," which "reject the right of states, charged with vigilance for the common good, to exercise any form of control." And he repeats the exact language he used in an early address: "Money must serve, not rule!"
Despite what should or must occur in the Pope's view, money rules; it does not serve.
The Pope echoes Polyani's main point, which states that growth in market economies supporting ever-greater consumption has become an end in itself instead of "just one of many outgrowths of human activity" which "help humans live better lives."
This confusion between ends and means is perpetuated by proponents of free markets, as opposed to markets which are subject to social constraints. These "ideologues" claim that unrestrained economic activity is the best, most efficient way to serve the economic needs of the greatest number of people.
I take it as uncontroversial that Polyani's (and the Pope's) critique of free market fundamentalism is correct. We are left to fend for ourselves in a world in which the primacy of economic exchange and growth is unquestioned. All other Social Goods fade into the background.
The notion that the pursuit of economic self-interest alone can lead to morally desirable outcomes is ridiculous on the face of it. No human society governed solely by this ideology would last five minutes. This particular delusion is based on an convenient misreading reading of Adam Smith, which I will discuss in my fourth essay in this series.
First and foremost, humans are social animals. Happily for us, truly "free" markets do not exist in the Real World. Still, there are degrees of freedom. Moral disaster always follows when markets are to some large extent free of assiduous oversight, especially in Finance and closely related markets like Housing. (Humans get particularly confused when handling money )
Thus we must distinguish between the morally hopeless (free market fundamentalists) and the morally challenged (those who would regulate such markets). In the large liberalized market societies of the early 21st century, the argument between these competing camps frames the entire debate, given the social dominance of economic exchange and growth which Pope Francis decried. Moral arguments—explicit appeals to our "humanity"—are dismissed as irrelevant.
That debate was summed up beautifully in a post called No Such Thing As A Free Market, which was published on the Longview Institute website in 2008. It was written by Fred Block, and again the subject was Polyani's The Great Transformation. Interestingly, this piece was written shortly before the financial meltdown in the fall of 2008.
The New York Sun recently published a critical "reconsideration" of Karl Polanyi's mid-20th Century text, The Great Transformation. Fred Block shows that the issues are not academic but are critically relevant for today's political and economic debates.
And here's Block's response to the New York Sun piece.
It is hardly surprising that the neo-conservative New York Sun chose to publish a reconsideration of Karl Polanyi's, The Great Transformation, written by Greg Clark, a U.C. Davis economic historian. Polanyi was one of the last century's most articulate critics of "free market" ideology—an ideology that is on the defensive today because of the Bush Administration's disastrous management of the economy. Following the old maxim that the best defense is a good offense, Clark’s strategy is to change the subject by attacking critics of the free market as wooly headed, naïve, and in energetic denial of “historical reality.”
... Clark’s denunciation is a way to get at his real targets-those lesser social sciences such as sociology, political science, and anthropology—that have found Polanyi’s work to be extraordinarily useful in analyzing the last three decades of destructive market fundamentalism. He writes:
"The Great Transformation has attained the status of a classic in branches of sociology, political science, and anthropology. Stacks of it await undergraduate initiates each year in college bookstores. Citations to the work continue to accumulate in scholarly articles. Yet in economics the work is unknown or, when discussed, derided."
This last assertion will come as a surprise to Joseph Stiglitz, the 2001 Nobel prize winning economist, who wrote a foreword to the most recent edition of the book. Rather than deriding the book, Stiglitz insists that “Economic science and economic history have come to recognize the validity of Polanyi’s key contentions." (p. xiii) [Full disclosure: I wrote the introduction for the edition that includes Stiglitz' foreword.]
And now we get to the crux of the matter.
But Clark's piece also fails to grasp one of Polanyi's most important distinctions. According to Clark: "Indeed, the more we learn of history, the more evident it is that the free market was not an 18th century innovation, but one of mankind's oldest social institutions."
Clark's insertion of the four letter word "free" into that sentence is the issue.
In fact, Polanyi spent years documenting that markets are indeed one of humankind's oldest institutions, but markets thrived historically because they were controlled by social institutions such as kinship, religion, and politics.
What was novel at the beginning of the 19th century was the invention of the "free market"—the idea popularized by Malthus and Ricardo that human society should be organized around an integrated system of self-regulating markets for land, labor, goods, and capital that were supposed to be free of any kind of social control.
Polanyi insists—and Stiglitz and many others agree—that this idea of a "free market" society is utopian.
It is utopian because it assumes that humans can once and for all be released from all forms of social regulation and legal coercion and that the market forces of supply and demand will spontaneously and freely produce optimal outcomes.
As I noted above, there's little doubt that the notion of a "free" market society is utopian in the sense just described, although the terms 'insane', 'bat-shit crazy' or 'delusional' might serve as better descriptors. It is easy to dismiss morally hopeless ideologues like Greg Clark.
History in fact has shown us again and again that market-based societies only work because markets are embedded within legal and political rules that prevent opportunistic and predatory behaviors and that can also assure that the supply and demand for land, labor, money and other key commodities will roughly balance.
According to the Polanyian view, the actual history of market society of the last two hundred years has involved systematically increasing the state's economic role in order to make markets work...
Social controls (political rules, regulation and so on) prevent opportunistic predatory behaviors. But now we are right back to the centrality of morality in this debate, although, ironically, it is not permissible to make explicitly moral arguments in contemporary America. To see this, reconsider the definition of morality I used in Part II.
Let us therefore try to define what morality is...
This is not an easy task — nor is it a task to be taken lightly — as many definitions, conceptions, and versions of morality exist. In an effort not to detract from the significance of this variability, we prefer a broad characterization over a definition of morality and moral systems, one that should obviously be devoid of moral prescription.
We understand morality as a sense of right and wrong that is born out of group-wide systems of conflict management based on shared values.
This characterization of morality and moral systems is close to Boehm’s [see below], for whom morality is the product of shared values imposed on the individual by the group, and to Alexander’s (1987), for whom moral systems are systems of indirect reciprocity.
Moral systems thus provide a set of rules and incentives to resolve competition and conflicts within the group in the service of the ‘greater good’, that is, the benefits (to individuals) derived from resource distribution and collective action.
Taking a liberalized market society as a whole to be the human social group we are most interested in, morality provides a sense of right and wrong born out of group-wide systems of conflict management. Thus moral systems provide a set of rules and incentives to resolve competitions and conflicts within society. In modern terms, we understand those rules and incentives to be political (legal) rules enforced by executive or bureaucratic regulators (appointed watchdogs) at the national or state level of governance.
In short, the morally hopeless—these people do not want any rules—are hopeless because that's not the way Human Nature runs. Group-specific systems of conflict resolution (moral preferences) evolved over hundreds of thousands (if not millions) of years. Moreover, we can reasonably surmise that from the very beginning of the 5-7 million year old hominin lineage small-group survival depended on the kind of conflict management described by Christopher Boehm in Conflict and the Evolution of Social Control.
So at least we can say that Karl Polyani and his modern day supporters like Fred Block (quoted above), whom I call the morally challenged, hold views consistent with how humans actually evolved and how humans still behave in modern times. Group survival (in this case the survival of a coherent society) is constantly endangered if there are no legal and political rules designed to manage intra-group conflict, as we've just seen in Ukraine. We also saw this recently during America's Housing Bubble years, the subsequent financial meltdown, and its still ongoing tragic aftermath. Regulation of financial and other markets broke down (was repealed) and all hell broke loose.
I have not yet explained why I say that people like Fred Block or Robert Reich (to pick another example) are morally "challenged." Let's look at that.
Moral Failure In Liberalized Market Societies
Those who would regulate "free" markets to make them work and make them "fair" seem to abide by Immanuel Kant's maxim that "out of the crooked timber of humanity, no straight thing was ever made," but it only seems that way. In fact, Kant himself believed, and modern-day progressives still believe, that effective regulation of markets, if done assiduously and "correctly", i.e., so as not to destroy wealth-creating incentives, can suffice to insure that Human Progress will continue.
But even a casual review of events prior to and after the financial meltdown in the United States in 2008, which can be lumped together with many other historical examples, demonstrates that regulation of markets of inevitably breaks down, causing moral failure on a large scale, as we see in the United States in 2014. Thus the vision of Kant and modern-day progressives constitutes a kind of "liberal" utopia countering the "conservative" utopia of markets free of all regulation.
The "liberal" utopia is less delusional than the "conservative" utopia because it acknowledges that strict measures must be taken to suppress opportunistic predation, but "less" delusional is still delusional because regulatory systems devised to rein in immoral excesses must be enforced (or not) by flawed human beings. Immanuel Kant notwithstanding, experience tells us that out of that crooked timber no straight thing was ever made.
For example, the New York Federal Reserve, which was run by Tim Geithner before Obama appointed him Secretary of the Treasury, was entrusted with regulating the Big Banks before and during America's Housing Bubble. This is a version of the fox guarding the henhouse (see below).
The Roman satirist Juvenal asked quis custodiet ipsos custodes?, which can be rendered as who will guard the guardians? The answer of course is that there is nobody to guard them. If flawed humans watch over the guardians, we quickly get into an infinite regress from which there is no escape. (Who will watch the watchmen of the watchmen?, etc.) In short, there is no escape from the Human Condition.
Looking deeper, what is it about humans which explains their inability to enforce fairness & reciprocity, and reduce harm & suffering, in large, liberalized market states? Political philosophers have gone 'round and 'round on this question, so I will simply tell you what is there to be observed. This is not rocket science.
Social stratification has existed in every large, complex human society since the rise of such societies in the early-middle Neolithic (within the last 7,000 years). (And see this recent post.) Therefore the rise of an Elite is inevitable. The Elite always controls the surplus wealth in such societies (as opposed to quasi-egalitarian social arrangements in hunter-gatherer small-band societies where there was no surplus). Income and wealth inequality are thus characteristic of large, complex human societies, not the exception to some utopian rule. On the existence of America's elite class, for example, see here or here.
In a society in which great economic or military power is highly concentrated, the inevitable Elite becomes drunk with that money and power; these are powerful drugs which are attractive to others who opportunistically seek to feed at the same trough. And even worse, in some lucky or well-adapted strivers, no amount of money, power or social status ever seems to be enough. As Lord Acton said, Power corrupts, absolute power corrupts absolutely. Corruption means that private (economic) and public (political) power become indistinguishable over time. The law-makers and regulators become indistinguishable from the regulated. This is often illustrated by so-called revolving doors, but corruption occurs in many complex ways. In the United States, the free flow of huge sums of money into election campaigns is perhaps the dominant form of corruption. Psychologically, corruption is often subtle and unconscious, although self-interested conspiracies clearly exist, especially in Finance (see below). Most often, however, the law-makers and regulators simply and unknowingly internalize the values of those who they are supposed to watch over. Regulators and the regulated live in the same social world, so it is no surprise that they come to see things the same way, and that leads to the frequently observed revolving door (as between the Executive and Wall Street). It follows that this kind of corruption is an instinctual social behavior arising out of simple self-interest and human "groupiness" as I labeled it in my first essay on these subjects. Thus the already fuzzy group boundaries between the regulated and the regulators eventually become blurred and, finally, non-existent.
Finance is an always-present special case which deserves mention in this context. Once the firewall between political authority and the finance industry breaks down, once financial regulators have been "captured" in the usual parlance, the rentier class (creditors) is free to make all sorts of economic mischief, which always reverberates back to the Real Economy where the hoi polloi (the Disenfranchised) try to make a living. Thus the inevitable result of financial "crises" (or "panics", "depressions" or "recessions") is to decrease fairness & reciprocity and increase harm & suffering among a general populace who had nothing to do with bringing about bad economic outcomes, or were suckered into participating in them (e.g., speculative homebuying during America's Housing Bubble). The profits of the financial industry come from rent—“any kind of income that people get by controlling existing resources—or exercising officially conferred privileges—as opposed to creating new wealth through labor or investment.” In short, those in the rentier class are parasites.
In my view, the developments sketched out above are inevitable in any large, liberalized market state in which great power has become highly concentrated. That is why the United States, and not, say, Finland or South Korea, is archetypal with respect to moral failure following from the inescapable existence of a corrupt, self-serving elite.
America In The Decades After World War II
It is unfortunate in the United States that political liberals and progressives always take the post-World War II decades as illustrative and exemplary with respect to what they believe is possible in achieving their desired utopia. I have given considerable thought to that historical period, a time when a large, prosperous Middle Class arose in America, for it is in many respects exceptional in human history. I grew up during those decades but have learned since that yearning for their return is a form of progressive nostalgia. We are very unlikely to see the return of the more inclusive moral preferences of the 1950's and 1960's.
I have a theory about how such an egregious socio-economic exception to the historical rule arose. After the victory of the Allies in World War II, the United States became without question the most powerful nation the world has ever seen. Most of the victors (in western Europe) and the vanguished (Germany, Italy, Japan) became in effect client states of the United States, outside of isolated China and the Russian sphere of influence. All of these states to one extent or another also participated in the economic boom of the post-war decades, helped and encouraged by the United States to liberalize their societies in accordance with the American model
In the United States, it became clear during the war that America's citizens were largely indistinguishable from its active military. Every American, whether they were in uniform or not, joined in the war effort. It was ordinary Americans who won the war, and it would be ordinary Americans who would share in the prosperity which followed the victory. By contrast, World War I was the creation of and a conflict among the elites of various old European powers, for whom conscripts and patriotic volunteers of the various nations fought and died. World War II was among the Allies (and the Axis powers) the first "people's war", an all-hands-on-deck affair which remains unique to this day [1943 poster left].
Thus the heightened inclusiveness of the war effort carried over into the decades following the victory. And so for a relatively short time in U.S. (and human) history, during the war and thereafter, America's elite and America's people had a shared sense of purpose and shared moral preferences. Moreover, their shared experiences during the war meant that America's elite and its ordinary citizens were to some significant extent one and the same people. America's generous, more inclusive values were also encouraged in the client states (the Allies and the vanguished in Europe and Japan).
World War II created a close-knit social in-group made up of veterans of that war. This group ran the United States for a long time. It wasn't until Bill Clinton in the 1990's that an American president had not served in some capacity during World War II!
One might write a book to flesh out this theory—for example, unity of purpose and inherent superiority (the "American Way of Life") was constantly reinforced by the Cold War with the communist world—but suffice it to say that the unprecedented social unity brought about by World War II, which was reinforced by countless political pronouncements, corporate messages, intellectual books, TV shows and Hollywood movies over the decades which followed, eventually and inevitably faded away.
We now live in the more historically typical United States of the early 21st century, a society which still has great socio-economic wealth and military power, but whose many wars are fought by a voluntary military made up of disenfranchised citizens without prospects, and whose elite has confiscated almost all of the income gains and most of the nation's financial wealth, thus shafting the large majority of America's citizens.
The usual story about the post-World War II decades is thus like a fairy tale in which, once upon a time, we Americans were all in it together fighting the good fight, making Progress happen, and spreading Goodness everywhere we went. (Never mind about CIA-sponsored coups in Latin America, Iran, etc.)
But that's all over now. That fairy tale died 35 years ago, if not many years before that during the Nixon presidency and the Vietnam Era.
But many Americans are loathe to give that story up, or, if it obviously isn't true now, they say "why couldn't that story be true once again?" After all, the American story in the decades just after World War II is such a Good Story, it's such a Hopeful Story—who wouldn't want to believe it could happen again?