Why am I the only one that can see the future?

IBM, GM, and USSR (as well as many other large organizations) have strikingly similar histories that can be broken down into 5 stages. The US government is going through a similar transformation but is only at step #3

1. Big, successful, and growing through the late 70’s

• IBM developed the first computers.
• GM’s cars were the best in the world.
• USSR was producing goods and weapons for itself and around the world as well as extending its influence onto other countries.

2. Losing money and declining in influence but refusing to change during the late 70’s and early 80’s

• IBM did nothing as the PC business took off.
• GM sat still as it was getting beaten by the small German and Japanese cars.
• The USSR government resisted reform even though its standard of living and economy were in serious decline.

3. Begin to reform albeit slowly (appears headed in the right direction) in the late 80's.

• IBM restructured, laid off some workers, and gave lip service to focusing more on mainframes and less on PC’s.
• GM started making some smaller cars.
• The USSR with Gorbachev started to reform.

4. Losing billions, crisis ensues, the leader is replaced with an outsider to implement radical reforms in the 90's.

• IBM’s stock plummeted from 100 to 40, the board fired the CEO and over 60,000 employees. A non-computer industry insider was hired to bring the company back to profitability.
• GM lost billions in one quarter, the stock fell sharply, the CEO was fired, and tens of thousands of workers were laid off.
• The USSR suffered a revolution, the entire country was broken up, and communism was deemed illegal.

5. New reformed, decentralized organization repairs financial situation (present).

• IBM is profitable and its stock has rallied back to over 100.
• GM still has a way to go, but is also profitable.
• Russia and the other republics are now democratic capitalist countries with a slowly growing economy.

The US government with the New Deal took on many new responsibilities and received great respect from the American people during the 50’s - 70’s (step #1) , but began seeing problems with its social programs and started to go into debt in the late 70’s and 80’s (step #2). Currently the US government is spiraling deeper and deeper into debt as social security and Medicaid approach total collapse. The election of Clinton and emergence of Perot and some weak efforts to decrease the increases in spending shows the US Government is now at step #3.

Unfortunately the US government appears unlikely to make the radical reforms necessary and will likely wait for a crisis to push it into action. Since IBM, GM, and the USSR were all forced to change mostly by economic factors, the same should be expected from the US government. Most likely a collapse in US Government bonds will force the US government into step #4 and put a non-(Democratic or Republican) Party candidate in charge.

I can’t wait for step #5, but I’m not holding my breath!

P.S. Readers often assume that a total downsizing of the US government is negative and bad for the country. Just as IBM getting its act together was good for the computer industry and USSR breaking up was good for the world, a downsizing of the US government will be great for the US.

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