“The next Fourth Turning is due to
begin shortly after the new millennium, midway through the Oh-Oh decade.
Around the year 2005, a sudden spark will catalyze a Crisis mood.
Remnants of the old social order will disintegrate. Political and
economic trust will implode. Real hardship will beset the land, with
severe distress that could involve questions of class, race, nation and
empire. The very survival of the nation will feel at stake. Sometime
before the year 2025, America will pass through a great gate in history,
commensurate with the American Revolution, Civil War, and twin
emergencies of the Great Depression and World War II.” – Strauss & Howe – The Fourth Turning
The Burning Platform: Strauss & Howe wrote these words in 1997. They had predicted the
arrival of another Crisis in this time frame in their previous book Generations,
written in 1990. This wasn’t guesswork on their part. They understood
the dynamics of how generations interact and how the mood of the country
shifts every twenty or so years based upon the generational alignment
that occurs as predictably as the turning of the seasons. The last
generation that lived through the entire previous Crisis from 1929
through 1946 has virtually died off. This always signals the onset of
the next Fourth Turning.The housing bubble and its ultimate implosion created the spark for the current Crisis that began in September 2008, with the near meltdown of the worldwide financial system. Just as the stock market crash of 1929, the election of Lincoln in 1860, and the Boston Tea Party in 1773 catalyzed a dramatic mood change in the country, the Wall Street created financial collapse in 2008 has ushered in a twenty year period of agony, suffering, war and ultimately the annihilation of the existing social order.
We have experienced the American High (Spring) from 1946 until 1964, witnessing America’s ascendancy as a global superpower. We survived the turbulent Consciousness Revolution Awakening (Summer) from 1964 until 1984, as Vietnam era protests morphed into yuppie era greed. The Long Boom/Culture Wars Unraveling (Fall) lasted from Reagan’s Morning in America in 1984 until the 2008 Wall Street/Federal Reserve spawned crash. The pessimism built to a crescendo as worry about rising violence and incivility, widening wealth inequality, and the splitting of the national consensus into extremes on the left and right, led the country into a winter of discontent. The Global Financial Crisis (Winter) has arrived in full fury and is likely to last until the late 2020’s. It will be an era of upheaval, financial turbulence, economic collapse, war, and the complete redefinition of society, as the existing corrupt status quo is swept away in the fury of powerful hurricane winds of change. History is cyclical and we’ve entered the most dangerous season, when the choices we make as a nation will have profound long lasting implications to the lives of future unborn generations.
The linear thinkers and so called progressives who believe that history charges relentlessly forward and human ingenuity overcomes all obstacles as the world becomes progressively richer, advanced, and humane ignore the lessons of history that have been re-written every 80 to 100 years for centuries. Generational theory is so simple that even an Ivy League intellectual economist, corrupt congressman, or CNBC anchor bimbo could grasp the basic concept. The four turnings in the ongoing cycle of history match a long human life. There is a reason we forget the lessons of the past. Those who remember the lessons die off after 80 years. The linear thinking status quo keep predicting an improving economy based upon their beliefs that the next fifteen years will proceed in a similar fashion to the last fifteen years. They refuse to acknowledge we’ve entered a new era that cannot be reversed to a previous point in time. Once you’ve experienced the harsh bitter winds of the Winter, you have to deal with months of depressing darkness, harsh conditions, and stormy weather before experiencing the return of the warm breezes of Spring. The tranquil days of autumn are long gone. This dynamic can be clearly visualized by comparing our economic situation in 2007, prior to entering this Fourth Turning, to our economic situation today:
End of Unraveling in 2007 versus fourth year of Crisis in 2012
- In 2007, the unemployment rate was 4.6%; 146 million people, or 63% of the working age population, were employed; and 78 million Americans were not in the labor force. Today, after three years of “recovery”, the unemployment rate is 7.9%; 143 million people, or 58.8% of the working age population are employed; and 88 million Americans are not in the labor force.
- Real median household income was $55,039 in 2007. It has fallen by 8.2% to $50,502 today.
- BLS reported inflation has risen by 12% since 2007. True inflation has risen at twice that rate.
- Median net worth in 2007 was $126,400. By 2010 it had fallen to $77,300, a 39% drop in three years. As of today, it may be a few thousand dollars higher as stock prices have risen and home prices have stopped falling.
- In 2007 there were 5.7 million existing homes sold at a median price of $218,900. Today there are 4.3 million existing homes being sold at a median price of $183,900. Over 1 million of these home sales are foreclosures or short sales, as 30% of all the homes with a mortgage in the country owe more than their house is worth.
- Federal government spending in 2007 was $2.73 trillion. Federal government spending today is $3.8 trillion, a 39% increase in five years. GDP in 2007 was $14.2 trillion. Today GDP is $15.8 trillion, an 11% increase in five years. Approximately 25% of the GDP increase is due to increased government spending.
- Government entitlement transfers totaled $1.7 trillion in 2007. Today they total $2.4 trillion, a 41% increase in five years. Interest income paid to senior citizens and savers totaled $1.25 trillion in 2007. Today interest income totals $985 billion, a 21% decrease in five years. Wall Street bankers needed the money to pay themselves bonuses, so Ben Bernanke obliged.
- The annual deficit in 2007 totaled $161 billion. Today, the annual deficit is $1.1 trillion. We add $3 billion per day to the national debt as a gift to unborn generations.
- The national debt in 2007 was $9 trillion. Today the national debt is $16.3 trillion, an 81% increase in five years. The national debt will reach $20 trillion during the next presidential term. Normalization of interest rates to 2007 levels would result in annual interest expense of $1 trillion, or 40% of current government revenues.
Those in power today are using their ample wealth and control over the legal, economic and political systems to pretend that an epic crisis does not beckon at our doorstep. Propaganda and media spin cannot avert the brutally hard choices that must be made over the next fifteen years. The existing system is unsustainable. It can either be changed by choice or after a complete collapse. We haven’t reached the point of regeneracy yet when civic purpose begins to strengthen. The outcome of this presidential election will determine the next phase of this Crisis. Strauss & Howe described the normal course of a crisis in 1997:
“A CRISIS arises in response to
sudden threats that previously would have been ignored or deferred, but
which are now perceived as dire. Great worldly perils boil off the
clutter and complexity of life, leaving behind one simple imperative:
The society must prevail. This requires a solid public consensus,
aggressive institutions, and personal sacrifice. People support new
efforts to wield public authority, whose perceived successes soon
justify more of the same. Government governs, community obstacles are
removed, and laws and customs that resisted change for decades are
swiftly shunted aside. A grim preoccupation with civic peril causes
spiritual curiosity to decline. Public order tightens, private
risk-taking abates, and crime and substance abuse decline. Families
strengthen, gender distinctions widen, and child-rearing reaches a
smothering degree of protection and structure. The young focus their
energy on worldly achievements, leaving values in the hands of the old.
Wars are fought with fury and for maximum result.” - The Fourth Turning – Strauss & Howe
Clearly this country has not reached a common consensus and is split
50%/50% on most important issues. Debates about the role of government
are waged with vitriolic passion, but the reality is that, as in past
Fourth Turnings, the government has already assumed a greater level of
power and control over our lives. The majority believe that government
can protect them, provide for them, and pay their way. This is a
delusion which will be revealed as fraudulent and mathematically
impossible. The incompetent government preparation prior to Superstorm
Sandy and the dysfunctional, bureaucratic and painfully slow response
afterward are opening the eyes of many people. The decisions which are
yet to be made are what kind of society shall we be and who will be
required to sacrifice to achieve a positive outcome at the end of this
Crisis. Turnings are driven by a mood change in the country and the
constellation of generations at that point in time. The generations are
now aligned as they always are during a Crisis:- Boomers entering elderhood
- Gen-Xers entering midlife
- Millennials entering young adulthood
- Homelanders entering childhood
“What will propel these events? As
the saeculum turns, each of today’s generations will enter a new phase
of life, producing a Crisis constellation of Boomer elders, midlife
13ers, young adult Millennials, and children from the new Silent
Generation. As each archetype asserts its new social role, American
society will reach its peak of potency. The natural order givers will be
elder Prophets, the natural order takers young Heroes. The no-nonsense
bosses will be midlife Nomads, the sensitive souls the child Artists. No
archetypal constellation can match the gravitational of this one – nor
its power to congeal the natural dynamic of human history into new civic
purposes. And none can match its potential power to condense countless
arguments, anxieties, cynicisms, and pessimisms into one apocalyptic
storm.” - The Fourth Turning – Strauss & Howe
The mood of the country continues to blacken. A simmering anger boils
beneath the surface of an everyday façade of normalcy. The middle class
majority is being squeezed in a vice, with the rich powerful plutocrats
on Wall Street and in Washington DC stealing their hard earned net
worth through financial scams, the gutting of our industrial base and a
tax system designed to benefit those who write the laws on one side and
the parasitic willfully ignorant underclass that is sustained only
through the extraction of taxes from the working middle class on the
other side. Our society has become a hunger games tournament, with the
few benefitting while the many scramble to survive. The stench of class
warfare is in the air. The generational resentment and rage is palatable
as the Millenial generation has taken on a trillion dollars of student
loan debt at the behest of the Federal government, Wall Street and older
generations, only to graduate into a jobless economy. The generational
contract has been broken, as the older generations will not or cannot
leave the workforce due to their own financial missteps. Younger
generations are being denied entry level positions, even as the older
generations expect them to fund their retirements and healthcare. This
presidential election will only exacerbate the anger, disappointment,
bitterness and fury among the populace, no matter who wins.Prophets & Nomads
Can generational theory predict who will win the presidential election? Probably not, but based upon historical precedent, during times of Crisis the country usually turns to a Prophet generation leader who provides a new vision and summons the moral authority to lead. This leader may not have the right vision or have the backing of the entire population, but he is not afraid to take bold action. Franklin Delano Roosevelt was despised by many, but he boldly led the country during the last Crisis. Abraham Lincoln won the 1860 election with only 39.8% of the popular vote, but he unflinchingly did whatever he thought was necessary to achieve victory and preserve the union. Prophet leaders like Samuel Adams and Benjamin Franklin offered the sense of moral urgency required to sustain the American Revolution. Strauss & Howe give a historical perspective on Prophet generations.
“Prophet generations are born after a great war or other crisis,
during a time of rejuvenated community life and consensus around a new
societal order. Prophets grow up as the increasingly indulged children
of this post-crisis era, come of age as narcissistic young crusaders of a
spiritual awakening, cultivate principle as moralistic mid-lifers, and
emerge as wise elders guiding another historical crisis. By virtue of
this location in history, such generations tend to be remembered for
their coming-of-age passion and their principled elder stewardship.
Their principle endowments are often in the domain of vision, values, and religion.
Their best-known historical leaders include John Winthrop, William
Berkeley, Samuel Adams, Benjamin Franklin, James Polk, Abraham Lincoln,
Herbert Hoover, and Franklin Roosevelt. These were principled moralists,
summoners of human sacrifice, and wagers of righteous wars. Early in
life, few saw combat in uniform; later in life, most came to be revered
more for their inspiring words than for their grand deeds.” - The Fourth Turning – Strauss & Howe
Barack Obama was born in 1961. According to the Strauss & Howe generational distinctions, this makes him an early Gen-Xer. His life story matches that of the Nomad archetype. His chaotic early life, confused upbringing by an array of elders, frenetic alienated early adulthood as a community organizer, and his rise to power through his public speaking talent and pragmatic ability to achieve his agenda is a blueprint for a Nomad. Mitt Romney was born in 1947 and grew up during the American High. His childhood was idyllic and privileged. His moral Mormon youth as a missionary eventually devolved into his yuppie “greed is good” career at Bain Capital acquiring companies, making them more efficient (firing Americans & hiring Asians), and spinning them off, while siphoning millions in fees. He has tried to convince Americans to vote for him, based upon his business acumen and moral lifestyle, as the cure for what ails America. With the continued downward spiral of societal mood, record low trust in Congress and 60% of Americans thinking the country is on the wrong track, the odds should favor the Prophet candidate. The 40% of Americans who think the country is on the right track are a tribute to our awful government run public education system or are smoking crack.
The Barack Obama presidency has many similarities to the one-term presidencies of Herbert Hoover and James Buchanan. Both men were overwhelmed by rapidly deteriorating events, an inability to understand the true nature of the Crisis, and failure to inspire the American people to rally behind a common cause. Both men drifted off into obscurity and are overwhelmingly acknowledged as two of the least successful presidents. The men who succeeded them are ranked by historians at the top of the list, even though they are both despised by more libertarian minded citizens as proponents of big government solutions and control. Libertarians will not be happy with developments over the next fifteen years. This Crisis is an era in which America’s corrupt social order will be torn down and reconstructed from the ground as a reaction to the unsustainable financial pyramid scheme which is an existential threat to the nation’s very survival. Civic authority will revive, cultural manifestation will find a community resolution, and citizens will begin to associate themselves as adherents of a larger cluster.
Barack Obama has fallen short as a Crisis leader, just as Buchanan and Hoover fell short. Buchanan also tried to maintain the status quo and not address the key issues of the day – secession and slavery. His handling of the financial Panic of 1857 led to annual deficits that exceeded 13% of GDP during his entire presidency. His legacy is one of failure and hesitation. Hoover was a technocrat with an engineering background who failed to recognize the extent of the suffering by the American people during the early stages of the Great Depression. It is a false storyline that he did not attempt to use the power of the Federal government to address the economic crisis. Federal spending increased by over 20% during his term and he was running a deficit when Roosevelt assumed power. Hoover was an activist president who began the public works programs that FDR expanded and dramatically increased taxes on the rich and corporations in 1932.
Obama inherited a plunging economic situation and proceeded to make choices that will make this Crisis far worse than it needed to be. He has failed miserably in addressing the core elements of this Crisis that were foreseen by Strauss and Howe over a decade before the initial spark in 2008. Debt, civic decay, rising wealth inequality due to the rise of our plutocracy, and global disorder are the underlying basis for this Crisis. Obama’s response was to run record deficits driving the national debt skyward, failing to address the unfunded entitlement liabilities that loom on the horizon, bowing down before the Wall Street mobsters and paying their ransom demands, layering on more complexity and unfunded healthcare liabilities to an already teetering government system, and extending our policing the world foreign policy at a cost of $1 trillion per year. A Crisis requires a bold leader who makes tough choices and leads. Obama has proven to not be that leader. Based on historical precedent and the rapidly deteriorating mood of the country, it would be logical for the country to select Romney, a Prophet generation leader.
No Escape
“Don’t think you can escape the
Fourth Turning the way you might today distance yourself from news,
national politics, or even taxes you don’t feel like paying. History
warns that a Crisis will reshape the basic social and economic
environment that you now take for granted. The Fourth Turning
necessitates the death and rebirth of the social order. It is the
ultimate rite of passage for an entire people, requiring a luminal state
of sheer chaos whose nature and duration no one can predict in
advance.” – Strauss & Howe - The Fourth Turning
No matter who wins the election, there will be no turning back. It
isn’t Morning in America anymore. It is more like Midnight in America on
a bitterly cold dark February night as the gale force winds begin to
gust, foretelling the approach of an epic winter blizzard. There are no
easy solutions. The opportunity to alleviate the impact of this Crisis
was during the late 1990’s and early 2000’s, and we made all the wrong
choices. Now we will pay the price. An era of depression and violence
will be ushered in by an economic calamity that will make 2008 look like
a minor blip. The next president will still be presiding over a country
divided 50%/50%, with little or no common ground on most of the key
issues that must be confronted. But, as we’ve seen in previous Crisis
periods, bold leadership and history making decisions did not require
consensus or even majority support. Only 10% of the colonial population
drove the American Revolution. Lincoln was despised by half the country
and not exactly loved by everyone in the North. FDR’s popular support
progressively declined during his four terms in office. It is the Fourth
Turning events, not the nation, which elevates the person to the apex
of power. The regeneracy of the nation will occur during the next
presidential term.
“Soon after the catalyst, a national
election will produce a sweeping political realignment, as one faction
or coalition capitalizes on a new public demand for decisive action.
Republicans, Democrats, or perhaps a new party will decisively win the
long partisan tug of war. This new regime will enthrone itself for the
duration of the Crisis. Regardless of its ideology, that new leadership
will assert public authority and demand private sacrifice. Regardless of
its ideology, that new leadership will assert public authority and
demand private sacrifice. Where leaders had once been inclined to
alleviate societal pressures, they will now aggravate them to command
the nation’s attention. The regeneracy will be solidly under way.” – Strauss & Howe - The Fourth Turning
The Millenial generation is coming of age faced with the burdens of
$1 trillion of student loan debt, a stagnant job market clogged by the
Boomer generation that can’t afford to retire because they never got
around to saving, ever increasing taxes to fund the promises made to
their elders by politicians, and an unfunded entitlement liability of
$100 trillion for healthcare and pension benefits they will never see.
The mathematical impossibility of sustaining our economic system is
absolute. It will require courage, sacrifice, fortitude and a dramatic
shift of our egocentric selfish culture to a culture of sustainability
and caring about future generations. We’ve made many bad choices over
the last few decades. Choices matter. These are the times that will try
men’s souls. The choices we make as a nation over the next few years
will determine whether this Fourth Turning ends in a renewal of our
founding principles or tragedy. Glory or ruin – the choice is ours.
“Thus might the next Fourth Turning
end in apocalypse – or glory. The nation could be ruined, its democracy
destroyed, and millions of people scattered or killed. Or America could
enter a new golden age, triumphantly applying shared values to improve
the human condition. The rhythms of history do not reveal the outcome of
the coming Crisis; all they suggest is the timing and dimension.” – Strauss & Howe - The Fourth Turning
The next stage of this Crisis is likely to be ignited by a downward
spiral of societal trust caused by the next financial implosion, which
is certain to occur. A world built upon debt, false promises,
interconnected webs of deceitful derivatives, fiat currency backed only
by the promises of lying politicians and captured central bankers, and a
diminishing supply of easy to access natural resources, is hopelessly
dependent upon the willful ignorance of the masses. As long as people
want to be lied to rather than facing the truth, those in power can
maintain the status quo. Once the jarring realization of reality
overwhelms the propaganda and lies of the oligarchs, the battle for
middle earth will begin. What will trigger the next phase of this
Crisis? No one knows for sure, but based on the fault lines already
evident, these are a possibility:- The inevitable breakup of the European Union with the consequences of massive bank defaults in Europe triggering worldwide bank defaults as the interconnected trillions of derivatives are lit like a string of firecrackers.
- A sudden Greece like surge in interest rates on Japanese bonds results in a collapse of their debt ridden economic system, with reverberations throughout the world.
- The Middle East tinderbox explodes as Israel attacks Iran and the law of unintended consequences takes hold. Alliances and treaties would draw Turkey into war with Syria and Iran. Russia and China could side against the U.S. Iran and their vassals would unleash terrorist attacks and disruption of Middle Eastern oil would drive prices over $200 per barrel, crushing the American economy.
- A showdown on the debt ceiling and/or fiscal cliff results in a stock market crash, derailing the pitiful fledgling recovery created by Ben Bernanke’s QE to infinity measures.
- A tipping point is reached with regards to the amount of debt that can be accumulated by our Federal, State and Local governments. A cascade of defaults could lead to a loss of faith in the U.S. dollar and a surge in interest rates. The defaults and increased interest on the national debt could lead to mass depression or in a worst case scenario – hyperinflation.
- A large terrorist attack in one or more American cities would cause chaos, panic and fear, leading to more government control over our daily lives. This could trigger a counter response by those fed up with an overbearing government presence.
- A catastrophic natural disaster or series of natural disasters would reveal the fragile nature of our just in time economic system. A breakdown of our logistical and infrastructure systems would lead to chaos and mass hysteria as the citizens who believed their government leaders would keep them safe, secure, warm, and fed realized it was all a sham. Their leaders were in it for the power and riches, not looking out for the best interests of the common folk.
“History offers no guarantees.
Obviously, things could go horribly wrong – the possibilities ranging
from a nuclear exchange to incurable plagues, from terrorist anarchy to
high-tech dictatorship. We should not assume that Providence will always
exempt our nation from the irreversible tragedies that have overtaken
so many others: not just temporary hardship, but debasement and total
ruin. Losing in the next Fourth Turning could mean something
incomparably worse. It could mean a lasting defeat from which our
national innocence – perhaps even our nation – might never recover.” – Strauss & Howe - The Fourth Turning
For those who doubt generational theory and believe history is a
linear path of human progress, I would point to the last week of chaos,
disarray, government dysfunction, and misery of those who didn’t prepare
for Superstorm Sandy, as a prelude to the worst of this Crisis. The
lack of preparation by government officials and citizens, death,
destruction, panic, anger, helplessness and realization of how fragile
our system has become is a perfect analogy to our preparation for this
Fourth Turning. The brittleness of our infrastructure and lack of
redundancy in our systems has left us vulnerable to any large storm.
Building mansions yards from a dangerous unpredictable sea is akin to
allowing Wall Street bankers to create interconnected financial
derivatives which will ultimately result in a great worldwide flood that
will obliterate billions of wealth. Going decades without upgrading our
power grid, transportation systems, or storm protection is akin to
allowing our unfunded entitlement liabilities to accumulate to such an
extreme level that it will be impossible to honor and the coming storm
will swamp those depending on those promises. The lack of foresight by
citizens in having food, water, and backup sources of power and heat in
case of an emergency is akin to the millions of people that have lived
the good life in debt up to their eyeballs while never saving for a
rainy day or their retirement. When the rainy day arrives they panic and
demand to be saved by an inept bureaucratic government.Winter has arrived. The gathering storm is about to strike. Are you prepared?
“Reflect on what happens when a
terrible winter blizzard strikes. You hear the weather warning but
probably fail to act on it. The sky darkens. Then the storm hits with
full fury, and the air is a howling whiteness. One by one, your links to
the machine age break down. Electricity flickers out, cutting off the
TV. Batteries fade, cutting off the radio. Phones go dead. Roads become
impossible, and cars get stuck. Food supplies dwindle. Day to day
vestiges of modern civilization – bank machines, mutual funds, mass
retailers, computers, satellites, airplanes, governments – all recede
into irrelevance. Picture yourself and your loved ones in the midst of a
howling blizzard that lasts several years. Think about what you would
need, who could help you, and why your fate might matter to anybody
other than yourself. That is how to plan for a saecular winter. Don’t
think you can escape the Fourth Turning. History warns that a Crisis
will reshape the basic social and economic environment that you now take
for granted.” – Strauss & Howe - The Fourth Turning
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