Afghanistan started 50 years ago

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[Get started now.]( Sponsored --------------------------------------------------------------- Afghanistan highlights a deeper problem - Vietnam changed the public perception of government - Trust in government never recovered - The erosion of trust created an environment for inaction - Defense spending doesn’t rely on wars to rise - Private sector can help government adapt to new threats 50 years ago marked some historic events in the United States. - Nixon pulled the United States off the gold standard - The 26th amendment lowering the voting age was ratified - Henry Kisinger visits China America showed a remarkable amount of cooperation and comity. Yet, it was two other major events that crushed one of the most critical aspects of U.S. history - institutional trust. We were never the same American confidence in their government was on the decline. In 1971, it plunged. Twin torpedoes came in the form of Nixon’s secret recordings alongside the release of the Pentagon papers. Data from the Pew Research Center paints a vivid portrait of the psychological damage. Trust bottomed in the 1980s with President Ronald Reagan. Despite the disturbing events of the Iran-Contra Affair, a cold-war moral cohesion began to bear fruit. Coupled with exceptional economic growth, trust briefly rebounded. Against the backdrop of the Iraq War, we saw confidence erode under President George Bush. President Bill Clinton took over at a time of immense economic growth with diminishing wide-scale global conflict. Trust rebounded. It peaked under President George H.W. Bush in the early 2000s. And then, the light of hope we held for our government extinguished as we entered the 20-year war in the Middle East. Trust slid to its lowest levels, never to recover. Low Trust = Inaction When congress passed the massive $1.7 trillion stimulus package last summer, it seemed out of place. For decades, the decline in institutional trust created a polarization in politics defined by inaction and grandstanding. Congresspeople were elected as much for their ability to stifle the opposition as they were for their ability to govern. Continual inaction coupled with a need to prove the other side wrong allowed an unpopular war to drag on well past its time. The recent calamity of our pullout is the unfortunate culmination of this process. But by no means is it unique. In the end, it cost more than 2,500 American lives and $2.26 trillion according to Brown University. Defense Dollars Former President Donald Trump hasn’t had very nice words for his successor. Yet, he lauded President Joe Biden’s decision to pull out of Afghanistan, actually hoping they could meet his original deadline of early summer. This highlights a general shift in American politics driven by populist nationalism and war fatigue. In the last decade, the U.S. allocated less money to defense from 2011-2015 to total dollars spent. As a percentage of GDP, that number declined from 4.63% in 2010 to 3.06% in 2018. Interestingly, defense companies like Lockheed Martin (LMT), Raytheon (RTX), and Booz Allen Hamilton (BAH) rose with the overall market while total defense spending declined. Most far outpaced the S&P 500 in terms of total gains. Defense dollars aren’t reliant on wars. Politicians can spend money in a multitude of other ways, as long as it benefits their constituents on a micro level. Real world impacts Distrust bred inaction. And now it’s spread. Digital currencies are here to stay. They first surged onto the scene nearly 3 years ago. Yet, it’s only now that government entities decided to address this wild-west frontier. They left trillions of dollars untaxed, copious amounts of money laundered, and few consumer protections. This shouldn’t surprise anyone. Populist distrust of institutions drove a political sea change in 2016. 50 years ago, removing the U.S. off the gold standard was only meant to be temporary. Yet, free-market systems took over and changed the face of currency markets for the next half-century. Many assumed this would happen with digital currencies. But it didn’t. It wasn’t until the size of the market and the number of problems rampant that politicians took notice. Our hot take Private sector stands to gain from governmental inaction. While regulatory frameworks stall, companies invested in cybersecurity and digital technology can help the government adapt to the changing landscape. We need look no further than Palantir (PLTR), whose size came primarily through defense contracts. To ensure delivery of all emails, [whitelist us](. You are subscribed to email updates from [InvestingChannel](. To stop receiving these emails, you may [unsubscribe]( now. InvestingChannel, Inc., P.O. Box 118 New York, NY 10018. 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