O, America! On failed wars, sporting emotion and the space version of the South Sea Bubble

The United States may no longer be the “indispensable nation” that Madeleine Albright, President Bill Clinton’s Secretary of State, named it in the 1990s, but it remains the unavoidable nation. This week it represented the past, the present and the future, each with different emotions: sadness, at the decline of America’s standing in the world; joy and hope, as football’s World Cup opened; greed and fear as Elon Musk’s SpaceX became by far the biggest stockmarket flotation in history, creating either a symbol of America’s technological prowess or an omen of future financial collapse.

The fact that the 250^th anniversary of America’s birth as an independent nation in 1776 is being celebrated when Donald Trump is in the White House was always bound to bring sadness to the ghosts of George Washington, Thomas Jefferson and the country’s other noble Founding Fathers. After all, Washington, as the country’s first president, warned in his farewell address against “entanglements” in foreign wars of just the kind that Trump has trapped America in since he ordered joint US-Israeli attacks on Iran on February 28^th.

That war, which Trump forecast would be short and successful, has now dragged on for more than three months and has achieved none of the aims the Americans claimed for it. The past week of threats, renewed attacks by both Iran and the United States, and renewed claims by Trump that a “great” peace deal is imminent have not changed that picture. It is obviously good news that Trump called off a fresh round of bombings at the last moment on June 11^th and that oil prices have fallen, but the deal with Iran’s theocratic, military leadership that seems to be emerging will further damage America’s reputation.

At least the failure in Iran has happened more quickly and has cost many fewer lives than America’s long-drawn-out past failures in Vietnam, in the 1960s and 70s, and in Afghanistan and Iraq in the 2000s. The key difference this time is that the Iran failure has left America with even fewer allies than it had when the war started. America’s lack of success in eliminating Iran’s missile and drone armouries or in removing the country’s theocratic regime mean that Saudi Arabia, the United Arab Emirates, Qatar and the other Arab countries around the Persian Gulf feel they have suffered Iranian attacks and big economic losses for little benefit and will now have to find ways to live with a hostile but still dangerous neighbour. Trump has even ended up by alienating Israel, America’s most loyal partner in the Middle East.

George Washington did also warn in his farewell address in 1796 against America making “permanent alliances”, but he would nonetheless be shocked by how readily Trump has sought to weaken or even destroy the country’s modern partnerships. Europeans were not surprised this week to learn that America plans to withdraw a third of its fighter jets from America’s European bases, along with other assets it has made available for joint NATO missions but will have been shocked by the suddenness of the move. One man who will feel vindicated is Britain’s Secretary of Defence, John Healey, who resigned from Sir Keir Starmer’s fragile government on June 11th in protest at Starmer’s failure to provide sufficient funds to rebuild Britain’s military.

By attacking a commercial oil tanker this week in the Gulf of Oman and thereby killing three Indian sailors, for no obvious military purpose, America has further damaged its relationship with India, a country previous administrations considered to be a vital partner. And by commencing deportations of immigrants, including Iranian asylum-seekers fleeing the very regime Trump has been attacking, to the Central African Republic, a country the US State Department warns publicly is too dangerous to visit, America has confirmed that under this administration it doesn’t care about morality or human rights.

To a degree, the world’s attention is always on America, thanks to its power, its cultural magnetism and its technological leadership. The opening of the World Cup, albeit a tournament shared by America with Mexico and Canada, two other alienated partners, will at least mean that for the next month some of that attention will be for joyful purposes, even if the coverage of the football will inevitably also feature commentary about over-priced match tickets and about protests against the Trump administration. The booing that greeted Trump when he attended a basketball final in New York may prove a portent of things to come.

The biggest portent, however, came from Wall Street. Amid heavy marketing by Wall Street investment banks and great speculative excitement, Elon Musk’s SpaceX raised US$75 billion in the world’s biggest-ever public offering. This values his space-rockets, satellite communications, artificial intelligence and social media company at an extraordinary US$1.77 trillion, despite the company having lost money on revenues last year of only US$18.7 billion. To justify this valuation, the company will need to make colossal amounts of money either from selling AI software or by renting out data centres in space which will be cheap to run but will cost enormous sums to build and launch – or by creating some other profit-making activity that Musk has not yet thought of.

By any reasonable calculation, this stockmarket valuation is absurd. It can only be based on Musk’s reputation as a risk-taking technological genius. Yet although he has certainly been a bold pioneer in many ways, his businesses have never yet been very profitable: his vast personal wealth is based on highly-valued share prices, not on flows of income. The fact that this South African immigrant is openly racist and uses his social media platform to incite violence in other countries (most recently Britain) in protest at what he calls “mass uncontrolled migration” has not yet damaged his aura of success.

In that respect, Musk epitomises some of the contradictions about Trump’s America: a country that can be seen simultaneously as a technological and capitalistic leader, as an unpleasant, authoritarian and corrupt bully, and as a military and diplomatic failure. The question is whether reality might eventually resolve these contradictions.

It won’t, of course, do so through the World Cup, or even the martial arts contest Trump is staging on the White House lawn on his 80^th birthday of June 14^th. Nor, based on past experience, will the military and diplomatic failure in the Middle East change the country’s conduct in a lasting way. The likelier chance of a resolution will be on Wall Street, where the SpaceX flotation is to be followed by further massive share offerings from OpenAI and Anthropic, the country’s two leading artificial intelligence companies.

Those companies and SpaceX will be fighting for the same revenue, in markets that are unproven, to say the least. To financial historians, the nearest analogy is to the 18^th century “South Sea Bubble”, when a British company seduced investors with stories of massive profits to be made in mysterious ways in faraway countries, eventually causing a massive financial collapse when reality caught up with the myth. It was rather like promising profits to be made out in space.

“O, America” is a song written in 2009 by an Irish songwriter, Brendan Graham and performed at inaugurations for both Barack Obama and Donald Trump. The best known recording is by the Irish group Celtic Woman