Peter Turchin, whose ideas I will soon be discussing in much greater detail, thinks he has an answer. While I think there is something to what he says, I think it misses the mark in a lot of ways.
Why is there less community and, as a result, less trust in America since around the late 1960s?
One thing Turchin fails to note is that the late 1960s is when the Great Society programs were put in place–that is, the federal government started a great many welfare programs whose primary outcomes have been the destruction of community, the transformation of the family to a majority single-parent (meaning, almost always, single-mother) homes, and an increase in crime within communities which have a majority of welfare recipients, This is true regardless of race. Those who think that “welfare recipient” is code for African-American only expose their own despicable racism.
Actually, since you brought it up, the fact of the matter is that welfare was introduced to isolate those unemployed by minimum wage laws designed to create that unemployment. As economist Thomas Leonard demonstrates, it was all part of a progressive eugenics program to eliminate “social undesirables.” That is, welfare programs were in fact conceived precisely to destroy community. When the federal government replaces community by replacing private and local programs with public and distant welfare programs, the result is to break social bonds, reduce the consequences of remaining unemployed and of being personally and socially irresponsible, and as a consequence reduce trust, since you are interacting with your neighbors less and thus do not get to know them very well.
If you look at the “trust” timeline on Turchin’s page, you will see trust decreasing through the 1970s, when the government was busy creating the welfare state (and fighting an unpopular war), while trust increased with Reagan, who sought to reduce welfare, decreased through pro-welfare Bush I, increased through “end welfare as we know it” Clinton, decreased through very pro-welfare Bush II, and didn’t recover through pro-welfare Obama. The peaks were during “peak patriotism” times–the first Gulf War and 9-11–but note that they had no long-term effects. Not like changes in welfare programs do.
When the government does things to destroy communities, we have to expect trust to go down. And we know that low-trust societies are also low-wealth societies. Governments reduce wealth by reducing trust, and the best way to reduce trust is by making it so people don’t have to rely on their communities for anything. If you want to understand our cultural, social, and economic stagnation, these are some of the things you need to understand.