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America is two steps away from an acute crisis

Veniamin Popov, November 28, 2024

The number of problems modern America faces is constantly increasing. The main issues include the stubborn fight for positions of power with the aim of gaining more advantages and benefits, as well as the serious confrontation with the nation.

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Does the ‘American nation’ exist?

Two issues are increasingly dividing American society today. Firstly, there is a stubborn, almost irreconcilable war between Democrats and Republicans, the two main political parties in the United States. This, however, is not a fight in the interests of the American people, but a relentless struggle for positions of power to gain advantages and benefits.
The US needs restructuring, but this could easily turn into a shootout

Secondly, it is a serious confrontation within the American nation, if there even is one (there are constant disputes about this). The Unites States were created by white migrants in the 18th century. Then it began to attract immigrants from many other parts of the world and many communities were formed – communities that do not always put the interests of the United States first.

Although many have written that the US has become a sort of melting pot, even local political scientists identify three large ethnic groups that often behave differently from others:

  • African-Americans (dark-skinned)
  • Latinos (Spanish-speaking)
  • Asians (this is mostly Chinese people, as well as others from Asia)

The populations of these three groups are growing faster in comparison with white Americans and, if current trends continue, in 5-10 years white people may become a minority in their own country.

However, following the November elections and D. Trump’s victory, an increasing number of media outlets began to write about a new challenge standing before not only the United States, but also the rest of the world. This is a possible symbiosis of large capital and power, which can lead to colossal cataclysms.

The expanding power of corporations is leading to an even greater gap between rich and poor

Famous innovator and billionaire Elon Musk has entered the inner circle of president-elect Trump. An alliance between one of the world’s leading politicians and the richest man on the planet (his net worth is estimated at $350 billion) creates an unprecedented concentration of power that both of them want to use “for an explosive effect: to reduce bureaucracy, blow up liberal orthodoxies and deregulation in the name of growth”, believes the Economist magazine.

Despite the US’ economic success, most of the local oligarchs are disappointed by the wastefulness and incompetence of the government. The US state needs restructuring, however reform under the leadership of Musk risks creating a new problem for the States, i.e. the emergence of a dangerous and corrupt oligarchy.

As a result, this restructuring could turn into a shootout.

Trump will put Musk in charge of a new department that will focus on improving the efficacy of the government. Musk has already announced that he will seek to reduce the nearly $7 trillion annual federal budget by $2 trillion and abolish multiple government agencies. Naturally, with a budget deficit of 6% of GDP and debt of almost 100% of GDP, serious reforms are needed. However, there is a big possibility of collusion between politicians and tycoons. As the state progresses in trade, industrial policy and technology, the incentives to overthrow the state grow. There is a real danger that business titans will be in constant contact with the dominant politicians.

Former German Chancellor Angela Merkel recently drew attention to this risk. According to her, politics should find a balance between the interests of the rich and ordinary people. If decisions depend too much on corporations, whether financial or technological giants, this can undermine the social fabric of society. Elon Musk already owns 60% of all satellites in space. In the event that corporate influences on the government increase, this will become an unprecedented challenge for society in its entirety.

That unpredictable Musk…

After Trump was elected president, Musk’s net worth rose by $83 billion. His main companies are Tesla, an electric car manufacturing company, Space X, a satellite communications and rocket company, Twitter (currently named X) and X.AI, an artificial intelligence start-up, accounting for about 2% of the US stock market. The character of Musk is such that he is an experimenter and revolutionary who believes that innovation can overcome all the problems of humanity, from climate change to the colonisation of Mars.

The realisation of these far-off ideas depends on constantly reviewing industrial processes. His desire for more freedom to act helps to explain his disdain for orthodoxy, including conformism (from the bureaucrats, who allowed the US state-owned space launch market to be highjacked by defence firms, to the California officials who regulate Tesla factories). He views the state as an obstacle to growth.

Musk has repeatedly stated that within 30 years he will create a colony on Mars. However, the book ‘A City on Mars’, published in 2023, which, by the way, has received a number of awards, claims that this project is doomed to fail. The authors’ research has made them firm skeptics about space settlements: “leaving Earth, which is 2 degrees warmer, for Mars is like leaving a dirty room to live in a toxic waste dump”.

At the same time, political scientists draw attention to the fact that Elon Musk, who is actively doing business with China, can become a serious mediator for the normalisation of relations with China. It is noteworthy that Musk’s 76-year-old mother regularly comes to China to perform and work as a model, appears in advertisements for a prominent smartphone and cooperates with ‘Oleada’, a brand selling bags. She is very popular among the Chinese, has 570,000 subscribers and her book of memoirs ‘A Woman Makes a Plan’ was published in Chinese and is in great demand among female readers.

Trump constantly consults with Musk, who lobbies for cabinet appointments. This is far from the first time that a tycoon has an unusual influence in the US. In the 19th century, the economy was dominated by John D. Rockefeller and in the early 20th century, when there was no Federal Reserve system, J. P. Morgan acted as the sole central bank.

However, Musk’s companies and designs are now more global than the large monopolies of the 19th and 20th centuries. Elon Musk uses technology to cut costs in competitive markets.

A number of analysts believe that the fusion of power and large capital will lead to acute problems not only for the US, but also for the whole world. The gap between rich and poor is deepening day by day, and the concentration of power in the hands of powerful corporations is fraught with new cataclysms in society.

 

Veniamin Popov, Ambassador Extraordinary and Plenipotentiary, Candidate of Historical Sciences

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