VP of Analysis Peter Zeihan examines the psychological underpinnings of the American propensity to overreact and its connection to President Barack Obama's State of the Union address. Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, STRATFOR cannot guarantee their complete accuracy. The first century of any culture's history largely dominates that culture's mindset. So, in the example of the Americans, the first century was marked by very little internal strife, rapid expansion, rapid economic growth, and the idea that anyone who wanted to could stake a claim out West and make their own fortune. As a result, Americans are woefully unprepared culturally and psychologically when things don't go their way. There is an overreaction to any sort of external stimulus that is not overwhelmingly positive, and Americans become convinced that the end is near. Obama, during this year's State of the Union address, brought up the "Sputnik Moment" and that is perhaps the quintessential American overreaction. Newsreel audio: "This story of the Russian satellite burst upon a startled world early in October. Russia announcing it had shot a man-made moon 560 miles into space where it was circling the earth at the dizzying speed of 18,000 miles per hour." Let's be honest. Sputnik was a beeping aluminum grapefruit. Yes, the Soviets were able to get an artificial satellite in orbit before the Americans. But at the time, the Americans were ahead in metallurgy, were ahead chemistry, were at electronics; the Russians were simply able to launch something into orbit sooner. As a result, the Americans panicked. They launched a revolution in their educational and scientific communities that completely re-fabricated how Americans look at the world. As a result, broad-based science command and mathematics command was integrated with the labor force at every level, laying the groundwork for the next 40 years of economic expansion — all because we were scared of something that beeped. What Obama is attempting to do is remake that "Sputnik Moment" in some sort of a controlled manner. Now, this is a difficult challenge. All of the previous American overreactions — whether it be Sputnik, Vietnam, Japanophobia of the 1980s — they were all spontaneously triggered by some sort of massive American social reaction to some sort of external stimulus, oftentimes misinterpreted. What Obama is trying to do is trigger one intentionally, to harness it, to direct it toward a re-fabrication of the American industrial educational base. To do that, he has to do one of two things. First, he has to spend a lot of money, probably in the trillions, on industrial regeneration in education. In an era where budget cuts are the word of the day, that is going to be problematic at best. Number two, he has to really get the fear going and in the case of economic competition, the likely target of any state-generated fears is going to have to be the Chinese government. At present, the Obama administration has not indicated that it is willing to play hardball on trade issues, and until it does that, or something similar that captures the American capacity for fear and overreaction, it's difficult to see how this strategy will work. But the Obama administration has clearly indicated what it wants to do; the question is how it is going to do it.