CRISIS OF THE ELITES

Interesting that you have to go to papers like the Asian Times for solid analysis of our ongoing crisis. I wonder if Friedman has read The Fourth Turning. He details how this worldwide crisis is playing out. As with every Fourth Turning, the existing social order and the elites that have been in control will be swept away. It will be bloody, violent and unexpected for the linear thinkers of the world. They didn’t see this crisis coming and they think they can manage their way through it. They are so wrong.

The evolution of crisis

By George Friedman

Classical political economists like Adam Smith or David Ricardo never used the term ”economy” by itself. They always used the term ”political economy.” For classical economists, it was impossible to understand politics without economics or economics without politics. The two fields are certainly different but they are also intimately linked.

The use of the term ”economy” by itself did not begin until the late 19th century. Smith understood that while an efficient market would emerge from individual choices, those choices were framed by the political system in which they were made, just as the political system was shaped by economic realities. For classical economists, the political and economic systems were intertwined, each dependent on the other for its existence.

The current economic crisis is best understood as a crisis of political economy. Moreover, it has to be understood as a global crisis enveloping the United States, Europe and China that has different details but one overriding theme: the relationship between the political order and economic life. On a global scale, or at least for most of the world’s major economies, there is a crisis of political economy. Let’s consider how it evolved.

Origin of the crisis
As we all know, the origin of the current financial crisis was the subprime mortgage meltdown in the United States. To be more precise, it originated in a financial system generating paper assets whose value depended on the price of housing. It assumed that the price of homes would always rise and, at the very least, if the price fluctuated the value of the paper could still be determined. Neither proved to be true. The price of housing declined and, worse, the value of the paper assets became indeterminate. This placed the entire American financial system in a state of gridlock and the crisis spilled over into Europe, where many financial institutions had purchased the paper as well.

From the standpoint of economics, this was essentially a financial crisis: who made or lost money and how much. From the standpoint of political economy it raised a different question: the legitimacy of the financial elite. Think of a national system as a series of subsystems – political, economic, military and so on. Then think of the economic system as being divisible into subsystems – various corporate verticals with their own elites, with one of the verticals being the financial system. Obviously, this oversimplifies the situation, but I’m doing that to make a point.

One of the systems, the financial system, failed, and this failure was due to decisions made by the financial elite. This created a massive political problem centered not so much on confidence in any particular financial instrument but on the competence and honesty of the financial elite itself. A sense emerged that the financial elite was either stupid or dishonest or both. The idea was that the financial elite had violated all principles of fiduciary, social and moral responsibility in seeking its own personal gain at the expense of society as a whole.

Fair or not, this perception created a massive political crisis. This was the true systemic crisis, compared to which the crisis of the financial institutions was trivial. The question was whether the political system was capable not merely of fixing the crisis but also of holding the perpetrators responsible. Alternatively, if the financial crisis did not involve criminality, how could the political system not have created laws to render such actions criminal? Was the political elite in collusion with the financial elite?

There was a crisis of confidence in the financial system and a crisis of confidence in the political system. The US government’s actions in September 2008 were designed first to deal with the failures of the financial system. Many expected this would be followed by dealing with the failures of the financial elite, but this is perceived not to have happened. Indeed, the perception is that having spent large sums of money to stabilize the financial system, the political elite allowed the financial elite to manage the system to its benefit.

This generated the second crisis – the crisis of the political elite. The Tea Party movement emerged in part as critics of the political elite, focusing on the measures taken to stabilize the system and arguing that it had created a new financial crisis, this time in excessive sovereign debt.

The Tea Party’s perception was extreme, but the idea was that the political elite had solved the financial problem both by generating massive debt and by accumulating excessive state power. Its argument was that the political elite used the financial crisis to dramatically increase the power of the state (health care reform was the poster child for this) while mismanaging the financial system through excessive sovereign debt.

The crisis in Europe
The sovereign debt question also created both a financial crisis and then a political crisis in Europe. While the American financial crisis certainly affected Europe, the European political crisis was deepened by the resulting recession. There had long been a minority in Europe who felt that the European Union had been constructed either to support the financial elite at the expense of the broader population or to strengthen Northern Europe, particularly France and Germany, at the expense of the periphery – or both. What had been a minority view was strengthened by the recession.

The European crisis paralleled the American crisis in that financial institutions were bailed out. But the deeper crisis was that Europe did not act as a single unit to deal with all European banks but instead worked on a national basis, with each nation focused on its own banks and the European Central Bank seeming to favor Northern Europe in general and Germany in particular. This became the theme particularly when the recession generated disproportionate crises in peripheral countries like Greece.

There are two narratives to the story. One is the German version, which has become the common explanation. It holds that Greece wound up in a sovereign debt crisis because of the irresponsibility of the Greek government in maintaining social welfare programs in excess of what it could fund, and now the Greeks were expecting others, particularly the Germans, to bail them out.

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The Greek narrative, which is less noted, was that the Germans rigged the European Union in their favor. Germany is the world’s third-largest exporter, after China and the United States (and closing rapidly on the number two spot). By forming a free trade zone, the Germans created captive markets for their goods. During the prosperity of the first 20 years or so, this was hidden beneath general growth. But once a crisis hit, the inability of Greece to devalue its money – which, as the euro, was controlled by the European Central Bank – and the ability of Germany to continue exporting without any ability of Greece to control those exports exacerbated Greece’s recession, leading to a sovereign debt crisis. Moreover, the regulations generated by Brussels so enhanced the German position that Greece was helpless.

Which narrative is true is not the point. The point is that Europe is facing two political crises generated by economics. One crisis is similar to the American one, which is the belief that Europe’s political elite protected the financial elite. The other is a distinctly European one, a regional crisis in which parts of Europe have come to distrust each other rather vocally. This could become an existential crisis for the European Union.

The crisis in China
The American and European crises struck hard at China, which, as the world’s largest export economy, is a hostage to external demand, particularly from the United States and Europe. When the United States and Europe went into recession, the Chinese government faced an unemployment crisis. If factories closed, workers would be unemployed, and unemployment in China could lead to massive social instability.

The Chinese government had two responses. The first was to keep factories going by encouraging price reductions to the point where profit margins on exports evaporated. The second was to provide unprecedented amounts of credit to enterprises facing default on debts in order to keep them in business.

The strategy worked, of course, but only at the cost of substantial inflation. This led to a second crisis, where workers faced the contraction of already small incomes. The response was to increase incomes, which in turn increased the cost of goods exported once again, making China’s wage rates less competitive, for example, than Mexico’s.

China had previously encouraged entrepreneurs. This was easy when Europe and the United States were booming. Now, the rational move by entrepreneurs was to go offshore or lay off workers, or both. The Chinese government couldn’t afford this, so it began to intrude more and more into the economy. The political elite sought to stabilize the situation – and their own positions – by increasing controls on the financial and other corporate elites.

In different ways, that is what happened in all three places – the United States, Europe and China – at least as first steps. In the United States, the first impulse was to regulate the financial sector, stimulate the economy and increase control over sectors of the economy. In Europe, where there were already substantial controls over the economy, the political elite started to parse how those controls would work and who would benefit more. In China, where the political elite always retained implicit power over the economy, that power was increased. In all three cases, the first impulse was to use political controls.

In all three, this generated resistance. In the United States, the Tea Party was simply the most active and effective manifestation of that resistance. It went beyond them. In Europe, the resistance came from anti-Europeanists (and anti-immigration forces that blamed the European Union’s open border policies for uncontrolled immigration). It also came from political elites of countries like Ireland who were confronting the political elites of other countries. In China, the resistance has come from those being hurt by inflation, both consumers and business interests whose exports are less competitive and profitable.

Not every significant economy is caught in this crisis. Russia went through this crisis years ago and had already tilted toward the political elite’s control over the economy. Brazil and India have not experienced the extremes of China, but then they haven’t had the extreme growth rates of China. But when the United States, Europe and China go into a crisis of this sort, it can reasonably be said that the center of gravity of the world’s economy and most of its military power is in crisis. It is not a trivial moment.

Crisis does not mean collapse. The United States has substantial political legitimacy to draw on. Europe has less but its constituent nations are strong. China’s Communist Party is a formidable entity but it is no longer dealing with a financial crisis. It is dealing with a political crisis over the manner in which the political elite has managed the financial crisis. It is this political crisis that is most dangerous, because as the political elite weakens it loses the ability to manage and control other elites.

It is vital to understand that this is not an ideological challenge. Left-wingers opposing globalization and right-wingers opposing immigration are engaged in the same process – challenging the legitimacy of the elites. Nor is it simply a class issue. The challenge emanates from many areas. The challengers are not yet the majority, but they are not so far away from it as to be discounted. The real problem is that, while the challenge to the elites goes on, the profound differences in the challengers make an alternative political elite difficult to imagine.

The crisis of legitimacy
This, then, is the third crisis that can emerge: that the elites become delegitimized and all that there is to replace them is a deeply divided and hostile force, united in hostility to the elites but without any coherent ideology of its own. In the United States this would lead to paralysis. In Europe it would lead to a devolution to the nation-state. In China it would lead to regional fragmentation and conflict.

These are all extreme outcomes and there are many arrestors. But we cannot understand what is going on without understanding two things. The first is that the political economic crisis, if not global, is at least widespread, and uprisings elsewhere have their own roots but are linked in some ways to this crisis. The second is that the crisis is an economic problem that has triggered a political problem, which in turn is making the economic problem worse.

The followers of Adam Smith may believe in an autonomous economic sphere disengaged from politics, but Adam Smith was far more subtle. That’s why he called his greatest book the Wealth of Nations. It was about wealth, but it was also about nations. It was a work of political economy that teaches us a great deal about the moment we are in.

MILLENIALS GET IT

As I perused my local paper this morning I glanced at the story about the North Penn graduation yesterday. Approximately 1,200 Millenials graduated and are moving on to their next step in life. I was about to skip to the next story when I saw the name Neil Howe in the story. The valedictorian’s speech to his class referenced our current Crisis as laid out by Strauss & Howe in The Fourth Turning. This 18 year old kid gets it. He understands these are dangerous times. He told his fellow classmates they are the new Hero Generation, as he referenced the last Hero Generation that did the heavy lifting and dying during the last Fourth Turning.

I know the old farts on this site do the usual bashing of the youth of today, but they are wrong. This country will only get through this Fourth Turning with a positive result if the Millenials are successful in handling the terrible ordeals that await them. I have three Millenials at home. I know their friends. These are good kids. Their eyes are open. They see how badly their elders have fucked things up. They have no choice but to fix it. They have no choice but to meet the immense challenges ahead. While the Boomers scream at each other and threaten to shut down the government and issue more debt to paper over a debt crisis, the Millenials are preparing for the next 15 years. They are faced with modern distractions (iPods, computers, TV, social media), but human nature does not change. They have not been properly educated by the Boomer run education system, but they understand crushing debt, no jobs, stagnant income, and rising food and energy costs. They know the country cannot run $1.5 trillion deficits for infinity without destroying the country. They are our last best hope.

We’ve been here before. The GI Generation has virtually died off, but the new Hero Generation is getting ready to step up. The old fogies who shit on this generation need to step back and understand history. This generation will step up, because they have to.

North Penn grads hailed as next greatest generation

By Linda Stein
Staff Writer

North Penn High School seniors celebrate as they take the fieldfor the Fifty-Sixth Commencement ceremony at the school on Wednesday evening June 15,2011. Photo by Mark C Psoras

TOWAMENCIN — A sea of newly minted North Penn High School graduates in blue caps and gowns marched into Crawford Stadium Wednesday under a softer blue sky.

Cheering and applauding family and friends clutched balloons and flowers. Some took pictures. Others smiled, waved and blew kisses as the 2011 graduates–more than one thousand strong–took their places on the field, ready to begin a new stage in their young lives.

In an inspiring speech, class Valedictorian Julian Pei spoke of the challenges that his generation faces with economic uncertainties and war abroad.

“Sometimes it feels as if our country is unraveling,” Pei said. “But we cannot fear these times, rather, we must embrace them. The word ‘crisis’ in Chinese is made up of two parts. The first character means ‘danger.’ Clearly we are facing some uncertain and possibly dangerous times ahead. But the second character means ‘opportunity.’

“I believe our generation faces some enormous opportunities in the face of crisis,” he said. Citing historians William Strauss and Neil Howe, Pei said that American history has 80 to 100 year cycles.

Current circumstances comprise a moment of crisis but “we are the ‘Hero Generation,’ mirroring the ‘Greatest Generation’ from about 80 years ago.

“In order for us to properly seize life’s opportunities and become unbeatable…we must be prepared to take on any challenge,” Pei said.

“Go out into the world knowing that the time is now to take the fist step in sculpting a new generation.”

Pei, who plans to go to the University of Pennsylvania, will study biology and finance.

The Lifecycle of the HERO Archetype

We remember Heroes best for their collective coming-of-age triumphs (Glorious Revolution, Yorktown, D-Day) and for their hubristic elder achievements (the Peace of Utrecht and slave codes, the Louisiana Purchase and steamboats, the Apollo moon launches and interstate highways). Increasingly protected as children, they become increasingly indulgent as parents. Their principal endowment activities are in the domain of community, affluence, and technology. Their best-known leaders include: Gurdon Saltonstall and “King” Carter; Thomas Jefferson and James Madison; John Kennedy and Ronald Reagan. They have been vigorous and rational institution builders. All have been aggressive advocates of economic prosperity and public optimism in midlife; and all have maintained a reputation for civic energy and competence even deep into old age.A lifecycle outline:

As HEROES replace Nomads in childhood during an Unraveling, they are nurtured with increasing protection by pessimistic adults in an insecure environment.
As teamworking HEROES replace Nomads in young adulthood during a Crisis, they challenge the political failure of elder-led crusades, fueling a society-wide secular crisis.
As powerful HEROES replace Nomads in midlife during a High, they establish an upbeat, constructive ethic of social discipline.
As expansive HEROES replace Nomads in elderhood during an Awakening, they orchestrate ever-grander secular constructions, setting the stage for the spiritual goals of the young.

The G.I. Generation (Hero, born 1901-1924) developed a special and “good kid” reputation as the beneficiaries of new playgrounds, scouting clubs, vitamins, and child-labor restrictions. They came of age with the sharpest rise in schooling ever recorded. As young adults, their uniformed corps patiently endured depression and heroically conquered foreign enemies. In a midlife subsidized by the G.I. Bill, they built gleaming suburbs, invented miracle vaccines, plugged “missile gaps,” and launched moon rockets. Their unprecedented grip on the Presidency began with a New Frontier, a Great Society, and Model Cities, but wore down through Vietnam, Watergate, deficits, and problems with “the vision thing.” As “senior citizens,” they safeguarded their own “entitlements” but had little influence over culture and values.

The Millennial Generation (Hero?, born 1982-?) first arrived when “Babies on Board” signs appeared. As abortion and divorce rates ebbed, the popular culture began stigmatizing hands-off parental styles and recasting babies as special. Child abuse and child safety became hot topics, while books teaching virtues and values became best-sellers. Today, politicians define adult issues (from tax cuts to deficits) in terms of their effects on children. Hollywood is replacing cinematic child devils with child angels, and cable TV and the internet are cordoning off “child-friendly” havens. While educators speak of “standards” and “cooperative learning,” school uniforms are surging in popularity.

BOOMERS – YOUR CRISIS HAS ARRIVED (Oldie but Goodie)

I wrote this article at the depths of the economic downturn in February 2009. The stock market was in freefall and bottomed in March 2009, down 50% from its high. Obama had just assumed power. Oil was selling at $40 per barrel. I made a number of predictions. You can judge how well I did. I took a few shots at Boomers, but I was pretty easy on them. Anyone left on the site who doesn’t understand the Fourth Turning theory, will get a good education at the beginning of the article.

“There is a mysterious cycle in human events. To some generations, much is given. Of other generations, much is expected. This Generation has a rendezvous with destiny.” Franklin Roosevelt – 1936

President Roosevelt was correct. The generation he was speaking to was already dealing with the worst financial crisis in the history of the United States, the Great Depression. By 1945, over 400,000 of this generation had lost their lives. Another 600,000 men were wounded. Much was expected and much was sacrificed. Every generation has a rendezvous with destiny. The generation that won World War II passed the ultimate test and proceeded to produce the next generation, the Baby Boom Generation. Their rendezvous with destiny is underway. Will it be a rendezvous with history that results in World War III, the collapse of the Great American Republic, dictatorship, or a return to the original Constitutional principles upon which this country was founded? Many of you are probably thinking the idea of WW III, collapse or dictatorship is crazy. I’d respond with the wisdom of Kramer from the classic Seinfeld show.

Jerry: “Oh you’re crazy”

Kramer: “Am I? Or am I so sane that you just blew your mind?”

Jerry: “It’s impossible”

Kramer: “Is it? Or is it so possible your head is spinning like a top?”

Jerry: “It can’t be”

Kramer: “Can’t it? Or is your entire world just crashing down all around you?”

As a student of history I’m drawn to the concept of cycles. It is comforting to think that history has recurring patterns and a natural rhythm. Trying to figure out why the major events in history occurred is complex, challenging and fascinating. When I read an updated 1997 article by Doug Casey in December on John Mauldin’s site called Foundations of Crisis, I was blown away. Mr. Casey had read the book The Fourth Turning by William Strauss and Neil Howe and made some forecasts of what would happen in the next few years. They were eerily accurate, including an airliner being purposefully crashed into a government building to trigger a crisis. After reading this article I’ve been trying to wrap my arms around the implications of their theory and the possible consequences for the United States. I know that an individual can learn from the past. I’ve always thought that poet George Santayana’s quote, “Those who cannot remember the past are condemned to repeat it”, is profound and worth studying.

The crucial issue is whether societies as a whole are capable of learning from the past or are they condemned to the inevitable cycle of history. Can an individual change the course of history? Was World War II inevitable, even if Adolph Hitler had been killed during World War I? Is there anything that can be done to avert the cyclical crisis that seems to arrive on a consistent basis throughout history? Is our destiny already preordained? Mr. Strauss and Mr. Howe wrote the following words in 1997:

Based on historical patterns, America will hit a once-in-a-century national crisis within the decade…’like winter,’ the crisis or ‘fourth turning’ cannot be averted. It will last 20 years or so and bring hardship and upheavals similar to previous fourth turnings, such as the American Revolution, the Civil War, the Great Depression and World War II. The fourth turning is a perilous time because the result could be a new ‘golden age’ for America or the beginning of the end. It all will begin with a ‘sudden spark’ that catalyzes a crisis mood around the year 2005.

I don’t have a preconceived notion of our country’s destiny, but I’m getting a bad feeling about the track we are on. The last thing in the world I want to see is my three boys being forced into a war caused by a bunch of clueless 60 year old political hack morons in Washington DC fulfilling their destiny to cause the once in a century national crisis. Based on the foolish actions of most politicians in Washington over the last thirty years, I fear for the future of our country. I don’t think the politicians in Washington comprehend the state of affairs. I sense the mood of the country turning. Fear, anger and disillusionment are the prevalent themes. Change is coming, but it is not the change that Barack Obama campaigned for. It will be forced upon us by circumstances beyond any one person’s control. While we are hurtling towards our summit with destiny, Congress continues its path of pork barrel spending, short term solutions, party politics, and condemning our children and grandchildren to a lower standard of living. The “leaders” of this country are using the tried and true method of using fear to ram through their $900 billion tax on future generations. President Bush used the same fear tactics to launch his invasion of Iraq. I see a similar success story with the coming stimulus package. Maybe the coming crisis will ultimately lead to Great Leaders rising to the occasion.

THE FOURTH TURNING

Strauss and Howe believe that history is marked by 80 to 100 year cycles which match the lifespan of most human beings. These cycles are discernible by four generations of 20 to 25 years that show remarkable consistency over history. I’m sure this theory will anger the individualists out there. They are not saying that everyone within a generation acts alike, but are shaped by joint experiences and time period in history. According to Strauss and Howe:

Turnings last about 20 years and always arrive in the same order. Four of them make up the cycle of history, which is about the length of a long human life. The first turning is a High, a period of confident expansion as a new order becomes established after the old has been dismantled. Next comes an Awakening, a time of rebellion against the now-established order, when spiritual exploration becomes the norm. Then comes an Unraveling, an increasingly troubled era of strong individualism that surmounts increasingly fragmented institutions. Last comes the Fourth Turning, an era of upheaval, a Crisis in which society redefines its very nature and purpose.

They are able to trace these turnings back to 1500 with remarkable consistency. They have broken U.S. history into the following cycles of history: Revolutionary Cycle (1701-1791), Civil War Cycle (1792-1859), Great Power Cycle (1860-1942), and the Millennial Cycle (1943-2???). Within these cycles are four distinct generations, that have a consistent persona because their parents had similar views, they listened to the same music, read the same books, were taught the same curriculum, were bombarded with the same marketing messages, and experienced the same set of unique experiences. Even though every Baby Boomer is not alike, the sheer size of this generation of 76 million people has left a dramatic imprint on history. The shared experiences of this cohort are clearly visible as they have marched through the cycle of history. The four typical generations within a cycle as described by Strauss and Howe are:

Prophet/Idealist

A Prophet (or Idealist) generation is born during a High, spends its rising adult years during an Awakening, spends midlife during an Unraveling, and spends old age in a Crisis. Prophetic leaders have been cerebral and principled, summoners of human sacrifice, wagers of righteous wars. Early in life, few saw combat in uniform. Late in life, most prophets come to be revered as much for their words as for their deeds.

Nomad/Reactive

A Nomad (or Reactive) generation is born during an Awakening, spends its rising adult years during an Unraveling, spends midlife during a Crisis, and spends old age in a new High. Nomadic leaders have been cunning, hard-to-fool realists, taciturn warriors who prefer to meet problems and adversaries one-on-one.

Hero/Civic

A Hero (or Civic) generation is born during an Unraveling, spends its rising adult years during a Crisis, spends midlife during a High, and spends old age in an Awakening. Heroic leaders are considered to have been vigorous and rational institution-builders, busy and competent in old age. All of them entering midlife were aggressive advocates of technological progress, economic prosperity, social harmony, and public optimism.

Artist/Adaptive

An Artist (or Adaptive) generation is born during a Crisis, spends its rising adult years in a new High, spends midlife in an Awakening, and spends old age in an Unraveling. Artistic leaders have been advocates of fairness and the politics of inclusion, irrepressible in the wake of failure.

This concept of 100 year cycles consisting of four generations is very logical to me. It all seems so theoretical and quaint until you realize that if they are right, we have just entered The Fourth Turning, a period of upheaval, crisis and enormous societal and possibly worldwide change. This is not a normal cyclical recession and bear market. There are much larger forces at work. Washington politicians are so consumed with their short-term election politics, power plays, enrichment of supporters, and letting lobbyists write our laws, they are incapable of seeing the real gathering storm that is about to engulf them. They go about their day to day horse trading and fooling the public with rhetoric, while a crisis of epic proportions is looming just over the horizon.

100 YEARS TO LIVE

The recent song by the group Five for Fighting called 100 Years reflects the 100 year cycle that all humans live through.

15 there’s still time for you
Time to buy and time to lose
15, there’s never a wish better than this
When you only got 100 years to live
I’m 33 for a moment
Still the man, but you see I’m a they
A kid on the way
A family on my mind
I’m 45 for a moment
The sea is high
And I’m heading into a crisis
Chasing the years of my life

The lyrics heading into a crisis couldn’t be truer today. We are only on this earth for 100 years. Why shouldn’t every person want to leave the earth a better place than they were born into? Instead, the world has periods of advancement and periods of regression, periods of peace and periods of war, periods of awakening and periods of crisis.

The last 150 years in American history as segmented by Strauss and Howe is charted below. Each generation experiences the four turnings at a different time in their lives. An appreciation of past turnings may give us clues to what will befall our country in the next 20 years.

Great Power Saeculum
Missionary Generation	Prophet (Idealist)	1860–1882	The indulged home-and-hearth children of the post-Civil War era. They came of age as labor anarchists, and campus rioters. In the 1930s and ‘40s, their elder elite became the “Wise Old Men” who enacted a “New Deal” (and Social Security) for the benefit of youth, led the global war against fascism, and reaffirmed America’s highest ideals during a transformative era in world history.
Lost Generation	Nomad (Reactive)	1883–1900	The Third Great Awakening was a period of religious activism in American history from the late 1850s to the 1900s. It affected pietistic Protestant denominations and had a strong sense of social activism. It gathered strength from the postmillennial theology that the Second Coming of Christ would come after mankind had reformed the entire earth.
G.I. Generation (aka Greatest Generation)	Hero (Civic)	1901–1924	As young adults, their uniformed corps patiently endured depression and heroically conquered foreign enemies. In a midlife subsidized by the G.I. Bill, they built gleaming suburbs, invented miracle vaccines, plugged “missile gaps,” and launched moon rockets.
Silent Generation	Artist (Adaptive)	1925–1942	Grew up as the suffocated children of war and depression. They came of age just too late to be war heroes and just too early to be youthful free spirits. Instead, this early-marrying Lonely Crowd became the risk-averse technicians and professionals—as well as the sensitive rock ‘n rollers and civil-rights advocates—of a post-crisis era in which conformity seemed to be a sure ticket to success.
Millennial Saeculum
Baby Boom Generation	Prophet (Idealist)	1943–1960	Basked as children in Dr. Spock permissiveness, suburban conformism, Sputnik-era schooling, Beaver Cleaver friendliness, and Father Knows Best family order. They came of age rebelling against the worldly blueprints of their parents. Youth pathologies worsened—and SAT scores began a 17-year slide. In the early 1980s, many young adults became self-absorbed “yuppies” with mainstream careers but perfectionist lifestyles. Entering midlife (and national power), they are trumpeting values, touting a “politics of meaning,” and waging scorched-earth Culture Wars.
13th Generation (aka Generation X)	Nomad (Reactive)	1961–1981	Survived a “hurried” childhood of divorce, latchkeys, open classrooms, devil-child movies, and a shift from G to R ratings. They came of age curtailing the earlier rise in youth crime and fall in test scores—yet heard themselves denounced as so wild and stupid as to put The Nation At Risk. In jobs, they embrace risk and prefer free agency over loyal corporatism. Politically, they lean toward pragmatism and non-affiliation, and would rather volunteer than vote.
Millennial Generation	Hero (Civic)	1982–200?	As abortion and divorce rates ebbed, the popular culture began stigmatizing hands-off parental styles and recasting babies as special. Child abuse and child safety became hot topics, while books teaching virtues and values became best-sellers. Today, politicians define adult issues (from tax cuts to deficits) in terms of their effects on children.
New Silent Generation	Artist (Adaptive)	200?–	This generation is the first to be born in a digital world and is currently in grade school. This new generation is being molded from the outset to be unique, with a focus on advanced second-hand interactive learning techniques. The result being Gen Z children are exposed to an environment that is heavy on stimuli, and weaker in interpersonal relationships.

Sources: Wikipedia & The Fourth Turning

THE FIRST TURNING – THE HIGH (Spring)

The American High in the 20th century began in1946 with unconditional victory in World War II. According to Strauss and Howe:

A HIGH brings a renaissance to community life. With the new civic order in place, people want to put the Crisis behind them and feel content about what they have collectively achieved. Any social issues left unresolved by the Crisis must now remain so. The need for dutiful sacrifice has ebbed, yet the society continues to demand order and consensus. The recent fear for group survival transmutes into a desire for investment, growth, and strength–which in turn produces an era of commercial prosperity, institutional solidarity, and political stability. The big public arguments are over means, not ends.

The mood of the country after World War II was joyous. America was left as the sole global power. Its industrial power was unsurpassed. Europe, Japan and the Soviet Union lay in shambles. The country settled into a period of prosperity and conformity. America was brimming with confidence.

We were confident that our democratic principles could be spread throughout the world. The American High lasted from the Truman presidency through the Kennedy presidency. As the youthful President Kennedy took office in 1961, anything was possible. We could put a man on the moon, defeat communism, and eradicate poverty. The symbol of this period would be the Disney World ride Carousel of Progress, a sterile world inhabited by animatronic people. This time period also gave life to the Baby Boom Generation. Their mouseketeers ears and Leave it to Beaver lives of the 1950’s were brought to an abrupt confidence shattering end with the assassination of John F. Kennedy in 1963.

THE SECOND TURNING – THE AWAKENING (Summer)

The Fourth Awakening of the great American Republic began in 1964. This episode is known as the Conscious Revolution. Strauss and Howe describe these phases in history:

An AWAKENING arrives with a dramatic challenge against the High’s assumptions about benevolent reason and congenial institutions. The outer world now feels trivial compared to the inner world. New spiritual agendas and social ideals burst forth, along with utopian experiments seeking to reconcile total fellowship with total autonomy. The prosperity and security of a High are overtly disdained though covertly taken for granted. A society searches for soul over science, meanings over things. Youth-fired attacks break out against the established institutional order. As these attacks take their toll, society has difficulty coalescing around common goals. People stop believing that social progress requires social discipline. Public order deteriorates, and crime and substance abuse rise.

The upheaval of the 1960’s took the country by surprise. The Vietnam War, assassination of Bobby Kennedy and Martin Luther King, campus riots, Kent State massacre, drug use, and promiscuous sex marked a vivid departure from the High. The older establishment was outraged by the personal liberation youth culture. Baby Boomers rebelled against everything their parents stood for. The Cultural Revolution was shocking to the older generation. Previous Awakenings in U.S. History were religiously based. The 1960’s and 1970’s were a tumultuous period that tore the fabric of American life apart. Instead of being led by mainstream religions, this Awakening was led by a Baby Boom generation that had been coddled and spoiled by their parents. Instead of turning to religion, they turned to self actualization. They became the self absorbed “Me Generation”.

The New Age teenage hippies of the 1960’s grew into selfish adults, more concerned by their professional careers, obtaining a Harvard MBA, acquiring the biggest McMansion, and graduating from a 200 Series BMW to a 300 Series BMW. As the country moved out of the 1970’s into a new era, individualism and ego enrichment became the dominant themes. The end of this Awakening period in 1984 was marked by the classification of the then 25 to 35 year old Baby Boom Generation as Yuppies. Young upwardly mobile professionals were characterized accurately in the movie The Big Chill, the novel Bonfire of the Vanities by Tom Wolfe and the TV show Thirtysomething. These were not flattering portrayals.

THE THIRD TURNING – THE UNRAVELING (Fall)

The latest Unraveling period in U.S. history began during the presidency of Ronald Reagan. His theme of “Morning in America” convinced most of the country that a new era of prosperity would lead to all boats rising. Strauss and Howe describe the traits during these periods:

An UNRAVELING begins as a society-wide embrace of the liberating cultural forces set loose by the Awakening. People have had their fill of spiritual rebirth, moral protest, and lifestyle experimentation. Content with what they have become individually, they vigorously assert an ethos of pragmatism, self-reliance, laissez faire, and national (or sectional or ethnic) chauvinism. While personal satisfaction is high, public trust ebbs amid a fragmenting culture, harsh debates over values, and weakening civic habits. The sense of guilt (which rewards principle and individuality) reaches its zenith. As moral debates brew, the big public arguments are over ends, not means. Decisive public action becomes very difficult, as community problems are deferred. Eventually, cynical alienation hardens into a brooding pessimism. The approaching specter of public disaster ultimately elicits a mix of paralysis and apathy.

The period between 1984 and 2001 was a period of peace and prosperity. President Reagan cut taxes, Paul Volcker defeated inflation, the Soviet Union collapsed, the stock market went up 1,000%, and MBA yuppies elevated to senior management positions on Wall Street. This interlude echoed the High of 1946 to 1964. The self involved Baby Boom Generation kept busy accumulating stuff. Their personal satisfaction is what mattered most. Gordon Gekko, the John Thain of his generation, uttered the words in the movie Wall Street that reflect the mood of the 1980’s. “Greed, for lack of a better word, is good.”

The 1990’s were dominated by cultural wars. The Republican Party and Democratic Party debate become extremely partisan. Public deliberations became harsh. Moral certitude was exuded by all sides of every issue. Hard driving overachieving narcissistic yuppies wearing Brooks Brothers suits and Rolex watches dominated corporate America. As twenty-eight-year-old Rob Lewis, a yuppie profiled in Newsweek, noted, yuppies were often willing to sacrifice “marriage, families, free time, relaxation.” He added, “Our marriages seem like mergers, our divorces like divestitures.”

The internet was going to change the world. Fraudulent IPOs were rolled out to the unsuspecting public. Day traders could get rich without working. Government did what it does best, spend money and defer all tough decisions to the distant future. A tough unpopular decision deferred is the path to reelection for a professional politician. The unwillingness to work together towards solutions that would insure that future generations weren’t left with the debts of the Baby Boom Generation, led to the current crisis being worse than it needed to be. As yuppies dashed down the streets of New York City, beating away on their crack-berries, on a sunny cool Fall morning, little did they know that their materialistic egotistical frenzied lives were about to change forever. With the tragic murder of 3,000 Americans in the Saudi led terrorist attacks of September 11, 2001, the Fourth Turning had arrived.

THE FOURTH TURNING – THE CRISIS (Winter)

We know how this Crisis period in our history began. We don’t know how it will end. Previous crisis periods in American history included The American Revolution (1773-1794), The Civil War (1860-1865), and the twin crisis of The Great Depression and World War II (1929-1945). All three period included wrenching highly destructive total wars. Will our current crisis period result in World War III?

Strauss and Howe describe the commonalities of most crisis periods:

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.

Every crisis period has been initiated by a catalyst. The passage of the Stamp Acts started the American Revolution, the election of Abraham Lincoln sparked the Civil War and the Stock Market Crash of 1929 initiated the Depression/WW II crisis. If history is our guide, the Iraq and Afghan Wars will not be the only wars during this crisis epoch. Many challenges lie ahead. I don’t think the majority of Americans are ready to meet these challenges.

Winter Has Arrived

Strauss & Howe wrote the following words in 1997:

America feels like it’s unraveling. Though we live in an era of relative peace and comfort, we have settled into a mood of pessimism about the long-term future, fearful that our superpower nation is somehow rotting from within. The America of today feels worse, in its fundamentals, than the one many of us remember from youth, a society presided over by those of supposedly lesser consciousness. We yearn for civic character but satisfy ourselves with symbolic gestures and celebrity circuses. We perceive no greatness in our leaders, a new meanness in ourselves. Each new election brings a new jolt, its aftermath a new disappointment.

The Prophet Generation is the elder statesmen as we begin this secular crisis. George W. Bush was born in 1946. He is the eldest of the Prophet/Baby Boom Generation. Barack Obama was born in 1961 at the very end of the Baby Boom Generation. These two men have or will lead the United States through most of this crisis stage. George Bush and his cohort of neo-conservatives and their drastic overreaction to the terrorist attacks of 9/11, have set the stage for the most dangerous crisis in U.S. history. A Crisis always results in the appearance of strong leaders. George Washington, Abraham Lincoln, and Franklin Roosevelt rose to the occasion during our previous Crisis episodes. Strong does not always mean wise, thoughtful or right. George Bush exhibited strong leadership during his tenure. Wisdom and thoughtfulness were not two of his better traits. Barack Obama is a smart man and has exhibited some strong leadership skills in his initial weeks in office. He has also exhibited an ability to exaggerate threats to get what he wants. Will he rise to the level of Washington, Lincoln or Roosevelt?

On the day George Bush took office, he inherited an annual budget surplus that was the result of gridlock in Washington and PAYGO restrictions on Congressional spending. The National Debt stood at $5.7 trillion and our unfunded future liabilities for Social Security, Medicare and Medicaid stood at $20 trillion. We had not been at war for nine years. Today, our National Debt is $10.7 trillion, poised to rocket above $13 trillion in the next year. Our unfunded liabilities now total $53 trillion as President Bush signed a prescription benefit plan expansion that added $8 trillion to our grandchildren’s burden. Since 9/11 almost 5,000 Americans have died in battle, with 50,000 Americans wounded. We’ve spent $800 billion, so far, on a war that didn’t need to be fought. Untold thousands of Iraqi and Afghan civilians have been killed or wounded, despite the fact that none of the 9/11 terrorists were from Iraq or Afghanistan. Fifteen of the nineteen hijackers were from our “staunch ally”, Saudi Arabia. The acts of a terrorist organization consisting of less than 2,000 members resulted in actions by an American President that resulted in declining American moral influence throughout the world, increased terrorism around the world, budget deficits that threaten the very existence of our capitalistic system, and an American public that is angry, disillusioned and confused. Doug Casey in 1997 described the future actions of George Bush to a tee. “The Boomers in Elderhood will be dogmatic, harsh, puritanical, and quite willing to burn down the barn in order to destroy whatever rats they see.”

Domestically, the period from 2001 to 2008 could be described as “Boomers Gone Wild”. Boomers in their 40’s and 50’s now dominate society, as they have assumed the positions of power in government and business. Based on what they have accomplished so far, I truly fear for what comes next. After 9/11, President Bush urged Americans to spend to defeat terrorism, while Alan Greenspan lowered interest rates to historically low levels. This was like waving a red cape in front of a bull. The materialistic, self actualizing, individualistic Boomers went on the grandest borrowing and spending spree in the history of the world. Their mission: Save the world from terrorism by buying a 6,000 sq ft McMansion, the largest HDTV, the biggest Hummer, and most expensive Rolex. Boomers running Wall Street were happy to oblige with loans and complex derivatives to finance the Mardi Gras like celebration of capitalism.

The aftermath of the eight years of partying is, not surprisingly to some, the greatest hangover in the history of the world. There are 19 million vacant homes, 10% of all homes in the U.S. are in foreclosure, 20 million homeowners are underwater with their mortgage, $30 trillion of consumer wealth has be obliterated, the savings rate dropped below zero, consumer debt levels are at historic levels, and the banking system is insolvent. The Boomer economists, like Paul Krugman, are sure they have the answers (they don’t) and the current bank bailout tab has already reached $9.7 trillion. You have to hand it to Americans, we truly believe bigger is better. If this is the easy part of the twenty year crisis, I’m not looking forward to the hard part.

Winter of Our Discontent

We enter 2009 and the Presidency of Barack Obama with citizens pessimistic about the future of our country. The public has lost faith in government, financial institutions, and religious institutions. Distrust of politicians, bankers, CEO’s, financial advisors, and moral leadership is well founded. The popular culture of over hyping public figures and then tearing them down has led to everyone and everything being discredited. The personal and public choices that will be required in the next few years will be harsh. Moral courage and leadership is what is needed. As I watch the likes of Barney Frank, Nancy Pelosi, Rush Limbaugh, and Sean Hannity work their rhetorical magic, it is clear that we have a major deficit in wisdom, courage and leadership. Instead of analyzing how we got here and how we want the country to be in ten years, when this crisis has past, we are focused only on specific right wing or left wing agendas and how to position ourselves for the next election cycle. The short sightedness of our current leadership will lead to the next more dangerous phase of this crisis.

Congress will pass a stimulus bill with wave pools, Frisbee golf courses, digital TV coupons, tax incentives to borrow money and buy houses and cars, and billions more of pork in the next week. The bill is being sold as an infrastructure bill despite the fact that only 5% of the bill is for infrastructure. President Obama will sign it. The second helping of TARP will be dished out to banks, insurance companies, automakers, and people who bought more house than they could afford. It is tough to predict what will happen in the next week, let alone the next decade. Here is my best guess:

The stimulus bill will grow to $900 billion (this is how Senators & Representatives compromise) and be passed on party lines, with virtual Democratic Senators Specter and Collins showing their true colors and providing the deciding votes. President Obama will use fear tactics, convincing the non-thinkers that inhabit most of America that not passing this bloated pig of a bill will result in a permanent Depression. I’d love to find out which economists told him this would happen. Every dime of this stimulus package will be borrowed from foreign countries and be paid for by increased taxes on future generations. An unfunded tax decrease or spending increase is a tax increase for our children and grandchildren.
Timothy Geithner, our TurboTax expert Treasury Secretary, will introduce the sixth variation of the TARP program since we were told it had to be done to save the world from collapse. It will not do what needs to be done. Smoke and mirrors will not pay off debt. The bankrupt financial institutions and corporations (Citigroup, Bank of America, General Motors, Chrysler) must be put into receivership and their shareholders wiped out. Good banks should take over from bad banks. Corporations with sound management and viable business plans should prosper. Corporations that sell every product at a loss, financed by its subsidiary at a further loss, must go out of business.
We are in the midst of a Global recession. Every country in the world is decreasing their interest rates, trying to devalue their currency, protecting domestic businesses, and subsidizing domestic employment. Every politician on the planet is playing to their constituents with protectionist rhetoric and actions. There are Buy American clauses in the stimulus package. French President Sarkozy has been ratcheting up protectionist ideas. Calling your biggest lender a currency manipulator months before you will need to borrow an additional $2 trillion is probably not a bright idea. Our new Treasury Secretary did just that last week. Protectionist measures will lead to retaliation and a worsening global economy.
The Federal Reserve has doubled their balance sheet in the last year. They’ve done this by printing $1 trillion. They will double their balance sheet again if that is what it takes to generate inflation. They have bought toxic assets from banks but will not reveal the banks or assets they’ve bought, to the public. They work for taxpayers, not vice versa. Pundits on CNBC casually say that the Fed can just print money and everything will be OK. Their words prove that the Federal Reserve System is just the BIGGEST PONZI SCHEME ever perpetrated on the U.S. public by bankers in conspiracy with government. The Federal Reserve chairman Bernanke did not see this crisis coming. He thought we had a strong housing market, when any impartial observer, such as Robert Shiller, proved that we were three standard deviations too high. Mr. Bernanke will succeed in igniting inflation. He will not see it coming and as a political animal, will not pull the punch bowl away before the party gets going. Inflation will get out of control within three years.
The annual deficit for 2009 will exceed $2 trillion. The government bean counters haven’t realized that people without jobs don’t pay taxes and companies with no profits don’t pay taxes. When you bring in less tax income, increase spending, and send out tax rebates to all Americans, deficits tend to rise. In the next two years the National Debt will exceed $15 trillion. GDP is headed in the opposite direction and will drop below $14 trillion in 2009. At this rate of increase, we’ll be approaching the debt to GDP ratio of 120% reached during WW II by the end of the Obama Presidency. This increase in debt combined with the enormous printing of dollars by the Federal Reserve will drive the value of the dollar down. The only question is whether it will go down slowly or violently.
The U.S. has been dependent on Japan, China, and the Oil exporting countries to purchase our debt in the last ten years. Japan has entered recession and will need to stimulate their economy. Social unrest is growing as factories shut down in China. The government has begun domestic stimulus programs and will need more. Oil revenues have dropped 70% in the last year for the oil exporting countries. With their own domestic issues and U.S. Treasuries yielding 3% to 3.5% and U.S. annual funding needs of $2 trillion, demand is likely to wane. The only possibility is dramatically higher rates. High interest rates devastate a heavily indebted country.
Oil prices below $40 a barrel will lead to a deepening of this crisis in the not too distant future. At these prices it is no longer profitable to develop alternative fuels and search for new supply. Rigs are being shutdown, deepwater projects cancelled, shale and oil sands projects being delayed, and natural gas exploration dramatically scaled back. The fact remains that the world has reached peak oil supply. The Saudi wells are 50 years old and are depleting rapidly. Mexico’s Cantarall oil field is in rapid decline and Mexico, the supplier of 12% of U.S. supply, will become a net importer in five years. The drastic decline in oil revenue will further exacerbate social unrest in a country on our border. The complete lack of a comprehensive energy plan will result in oil prices exceeding $200 a barrel in the next five years. Politicians will blame oil companies and the Arab countries, further alienating us from the world.
The Military Industrial Complex will grow stronger. We have no intentions of leaving Iraq and we will double our presence in Afghanistan. The Defense (should be called Offense) budget will increase. We will be told that the Russian threat is growing. We will be told that China has aggressive intentions and that Iran threatens the Middle East. The public will go along because they don’t think for themselves. We will be told that the Defense industry generates American jobs. As the government identifies false threats, they will take away more rights and liberties in the name of protecting us. It will be gradual and almost unnoticeable to the Average American, but it is happening. A stronger more powerful Military will want to prove itself. They will be itching for action. When you are a hammer, everything looks like a nail.
Boomer leaders are always sure, and often wrong. They are dogmatic and cocky. They utter the words catastrophe, without specifying what will happen if you don’t follow their plan. They say that we will enter a permanent decline if we don’t spend our way out of a situation that was caused by spending too much. Boomer followers are so shallow and self involved that they will put reason aside and believe that we can spend our way out of this. The easy sound bite solution is what they are looking for. The word sacrifice does not exist in their vocabulary. The well being of future generations is of no interest to them. The day trading, house flipping, BMW driving Boomers are looking for the next big thing. The danger is that the next big thing could be a major war. They are too old to fight, but they are not too old to send others to their death.
The stimulus package and TARP 6 plan will be implemented. The economy will not improve. By the Fall, Obama and the Democratic led Congress will push through trillions more in spending. The dollar will continue to fall versus gold. As the deficits grow and foreigners buy less and less of our debt, interest rates will rise. Oil will gradually rise as long as no external event causes it to spike. Protectionism will increase, leading to declining world trade. When we have not pulled out of this downturn in 2010, people will realize we are in a Depression and politicians have lied to them again. Social unrest will grow. Riots are likely to break out in poor urban areas. Governments always react to internal strife by seeking an external threat.
The external threat could be anything. Russia could invade Ukraine. Israel could attack Iran. When oil reaches $200 a barrel, disputes over drilling rights in the Arctic with Russia or China could cause a confrontation. Oil is the lifeblood of our society. If major shortages occur in the U.S. it would bring the country to a grinding halt. The panic would be so drastic that our Leaders will use every means at their disposal to get more oil. With the most powerful military on the planet at their disposal, and itching for a fight, our Leaders will manufacture a reason to go to war in order to secure oil supplies. The problem with waging a major war is that you need troops to sacrifice. The volunteer army will not do. When the government tries to reinstitute the draft, the fabric of this country will be torn to shreds. This will be where I get off this merry-go-round ride.
In ten years my sons will be 25, 22, and 20. They will not be sacrificing their lives for oil, bankers, corrupt politicians, and Defense industry CEOs. If I see the future developing as I fear, I will move my family out of this country to a place where individual liberties are respected, sound fiscal policy is practiced, and people can live in peace. I don’t know if that place exists, but I’ll be looking.

The good news is that every modern Crisis has been followed by a new High. Of course, in every modern U.S. Crisis we had a strong leader. Will Barack Obama be that strong leader? If no strong wise leader emerges, could we follow the path of the Roman Empire? Can we as individuals change the course of history? I don’t know the answers to these questions. It is up to each of us to analyze the facts and act accordingly. A recent song by The Fray, You Found Me, asks the question we will all need to answer.

Where were you?

When everything was falling apart

ALL YOU ZOMBIES (Oldie but Goodie)

With the events of the last week pushing the world further into Crisis, I thought this November 2009 article would be appropriate to rerun. I’m finalizing an article that I hope will be a bookend to this piece.

The LORD saw how great man’s wickedness on the earth had become, and that every inclination of the thoughts of his heart was only evil all the time. The LORD was grieved that he had made man on the earth, and his heart was filled with pain. So the LORD said, “I will wipe mankind, whom I have created, from the face of the earth—men and animals, and creatures that move along the ground, and birds of the air—for I am grieved that I have made them.” But Noah found favor in the eyes of the LORD. – Genesis 6

Everyone is familiar with the story of Noah. God was angry at the evil and wickedness of mankind. God instructed Noah to build an ark in order to save his family and two of each animal on earth from the coming flood. Noah could have ignored God’s warning and continued to live his life as before. By heeding God’s warning and building the ark, Noah was able to save himself, his family, and two of every animal from death and destruction. The warning signs regarding the current American Crisis have been discernible since the 1990’s. The un-sustainability of the government’s fiscal social guarantees, the inevitability of peak cheap oil, and the policing of a far flung empire with troops in 130 countries, were all known during the 1990’s. Americans had swelled their use of debt since 1980 and had not saved enough for their looming retirement years. The culture wars fractured the country. Just like a squirrel prepares for winter by collecting acorns and storing them in his nest, Americans had an opportunity to prepare for the coming winter. Instead we squandered the remaining days of autumn, ignoring our monetary problems, buying $45,000 SUVs, borrowing at 125% of the value of overpriced McMansions, initiating wars of choice, expanding our empire and enlarging our police state.

We had the power to influence history in a positive manner. Appropriate preparation could have lessened the impact of the long cold hard days ahead. Some winters are bitter and deadly. Others are mild and harmless. Since most Americans, including our leaders, think linearly they never see the turning of the seasons of history until it is too late. We are currently in the midst of a Fourth Turning, and most people have no clue. With winter approaching, it is always wise to get the heater checked, buy some firewood, make sure the snow plow has gas, store some food and water in case of a blizzard, buy some salt in case of ice, and tune up the car.

Instead of having their heater tuned up, Americans decided a new kitchen with granite counters and stainless steel appliances paid for with a home equity loan was a better idea. Instead of buying firewood, Americans bought a 52 inch HDTV using their platinum credit card. Instead of making sure the snow plow had gas, Americans outsourced their lawn care and snow removal to illegal immigrants. Instead of storing food and water, Americans decided to spend their money eating out four times per week. Instead of buying salt for an icy winter, Americans bought salt for the rims of their margarita glasses. Instead of tuning up their cars, they leased a new BMW every two years. Bitter winds have begun to blow, dark clouds are on the horizon, and winter has arrived. The country is completely and utterly unprepared.

Only Noah Saw It Coming

All you zombies hide your faces
All you people in the street
All you sittin’ in high places
The pieces gonna fall on you
No one ever spoke to Noah
They all laughed at him instead
Working on his ark, working all by himself
Only Noah saw it coming
Forty days and forty nights
Took his sons and daughters with him
Yeah they were the Israelites – Hooters – All You Zombies

The Hooters were a Philadelphia rock group from the 1980’s. The first concert I attended was a Hooters performance at the Spectrum. Their music still rings true today. The American zombies had a chance to prepare for the coming Crisis. They instead laughed at Noah. Now the pieces will fall on them. The pieces will fall on the average American and the elitist rulers in Washington and on Wall Street. When Strauss and Howe wrote their book The Fourth Turning in 1997 there was approximately a decade to prepare for the coming Crisis. They warned that the two parties needed to change their messages to prepare the country for the coming winter:

“Yet both parties are also harmfully post-seasonal. In their quest for an ever bigger harvest, Democrats want to remove sacrifice ever further from the public lexicon. They seek entitlements for every victim, including the entire middle class, without caring whether all this guaranteed consumption is sustainable. If Democrats get their way, they would impose huge debts and future taxes on Millennial children. In their quest for ever more individualism, Republicans want to make public authority ever more dysfunctional. They seek to starve all government of revenue and are willing to shut down whole federal agencies to make their point. If Republicans get their way, they would prevent Millennials from forging a positive bond with government and limit the public resources directed toward the care and schooling of the neediest children.”

The Fourth Turning requires personal sacrifice by all Americans and the government must be seen as a high functioning authority that protects its citizens and successfully accomplishes big missions. In the last twelve years, we have done the exact opposite of what was needed to prepare for the Crisis. The two Parties reached a consensus by increasing entitlements for everyone with passage of Medicare Part D, creating a new $15 trillion unfunded liability. George Bush provided rich people with entitlements of lower taxes and middle class entitlements with rebate checks. The banking industry was given free rein to rape the American public and the rest of the world with the repeal of the Glass-Steagall Act. Rather than killing or reducing governmental agencies, George Bush used 9/11 as an excuse to greatly expand government by creating the Department of Homeland Security and increasing Defense Spending by 200%. Democratic politicians, with the wholehearted support of George Bush, used their authority over Fannie Mae, Freddie Mac and threats against banks to open the mortgage market to people who had no means to actually make a mortgage payment. The two wars of choice in Iraq and Afghanistan have cost $934 billion since 2003.

In 1997, the United States spent approximately $300 billion annually on Defense related areas. Today, we are spending in excess of $900 billion in those same areas. At the end of 1997, the National Debt was $5.4 trillion. If Congress and the Presidents had chosen to prepare the country for the unavoidable Crisis period of twenty years, they would have scaled back government spending, tackled the Social Security and Medicare train wreck, developed a multi-pronged energy plan, and asked Americans to save. Instead, they pressed their foot to the accelerator as they approached a curve on a mountain road.

Today, the National Debt stands at $12.1 trillion. Our politicians proceeded to saddle us with an additional $6.7 trillion of debt in the space of 12 years, after taking 208 years to accumulate $5.4 trillion of debt. Based on current projections, the National Debt will exceed $25 trillion by 2019. These reckless actions were akin to entering winter by not paying your utility bill for a year, having your windows wide open, not having the oil changed in your car for 10,000 miles, and being two quarts low with your anti-freeze.

Strauss & Howe recommended that the country prepare in the following ways:

Prepare values: Forge the consensus and uplift the culture, but don’t expect near-term results.
Prepare institutions: Clear the debris and find out what works, but don’t try building anything big.
Prepare politics: Define challenges bluntly and stress duties over rights, but don’t attempt reforms that can’t now be accomplished.
Prepare society: Require community teamwork to solve local problems, but don’t try this on a national scale.
Prepare youth: Treat children as the nation’s highest priority, but don’t do their work for them.
Prepare elders: Tell future elders they will need to be more self-sufficient, but don’t attempt deep cuts in benefits to current elders.
Prepare the economy: Correct fundamentals, but don’t try to fine tune current performance.
Prepare the defense: Expect the worst and prepare to mobilize, but don’t pre-commit to any one response.

Rather than finding common ground and forging alliances, Baby boomer culture warriors upped the ante. The extreme wings of the Democratic and Republican parties gained control of the dialogue. Neo-conservatism has dominated the thinking in the Republican Party while ultra-liberals have dominated the Democratic Party. The culture has deteriorated, with the media perpetuating a nihilistic, selfish, materialistic attitude among the citizens. TV and movies have portrayed lives of the dregs and lowlifes of society as desirable and normal. The lives of washed up rock stars, drugged out TV personalities, vapid housewives, and brainless house flippers passes for entertainment in today’s society. Getting rich by any means necessary has been glorified.

The best and brightest MBA students graduated and trooped off to Wall Street. Working at real companies that produced something became passé. The degeneration of moral, ethical, and cultural standards has made it more likely that a fascist government could gain control during the Crisis. The dysfunction of both the Federal government and state and local governments have dramatically reduced the trust level of the American public in these institutions. During a Crisis, public faith in government is necessary for swift decisive action. With an approval rating of 26%, Congress is more despised than Osama bin Laden.

The politicians who have chosen to lie to the American people and not face up to the national problems of deficits, unfunded promises, and peak oil, have set the country up for a cataclysmic Crisis. The only statesmen who have spoken candidly about the coming Crisis have been David Walker and Ron Paul.

“Washington has charged everything to the nation’s credit card – engaging in tax cuts and spending increases without paying for them. Washington’s imprudent, unethical and even immoral behavior is facilitated by a lack of transparency. While the US government is too big to fail, continuing on our current path will have adverse implications for our economy and international standing. The sooner Washington acts, the better. Our country, children and grandchildren deserve no less.” David Walker – 9/2008

“We’re indeed stuck between a rock and a hard place, and we don’t talk about how we got here; we talk about how we are going to patch it up. The solutions proposed so far – stimulus packages, bailouts and interest rate cuts – just amount to printing more money, which will lead to greater currency devaluation, contribute to the rising cost of living, and further squeeze the middle class and our senior citizens.” Ron Paul – 8/2008

A candid discussion of these issues has been avoided at all costs by the cowards who crawl around the halls of Congress. Politicians had a chance to stem the downward slide of cynicism, apathy, and disgust with government. They failed miserably. As the Crisis deepens, Americans will turn to those who told the truth. It is a small list.

Society needed to prepare our youth for the test that awaited them during the Crisis. Civic duty, teamwork, and a sense of community needed to be encouraged by adults in our youth. The Millenials (Hero generation) will be the generation on the front lines during this Crisis. The youth of today have been coddled, protected, and have not been required to participate in community efforts. Government efforts such as No Child Left Behind have been failures, as school districts concern themselves with bureaucratic test results and bringing the poor students up to average rather than giving added support to the truly outstanding students. Overall performance of students has continued to decline. Selfish narcissistic Boomer parents have concerned themselves with materialistic trinkets and their own self actualization rather than sacrifice for their children’s future. Our youth are entering the Crisis unprepared for the harsh winter.

The youngest Boomers reached the 50’s in 1997. Government leaders needed to prepare the Boomers for less benefits in the future, which would have pushed Boomers to save more for their retirement. The 50 year average national savings rate has been 6.5%. In 1997, the national savings rate was already below average at 4%. Government leaders urged Americans to buy houses, buy cars, and spend, spend, spend. The American zombies heeded the call and drove down the savings rate to below 0% in 2005. It has subsequently risen to 3% as the Crisis has unfolded. The Baby Boomers are completely unprepared for their old age and will fight all efforts to cut their benefits. Rather than accepting cuts in benefits to secure the future well being of their children and grandchildren, Boomers continue to push for more healthcare benefits. A bitter generational war is now a certainty.

“During the Crisis, the American economy will experience the most extreme shocks to asset values, production, employment, price levels, and industrial structure in living memory. The economy may also, at some point be pushed to the breaking point in order to produce the tools necessary to save the nation and, later the infrastructure that will underlie the next saeculum.” – Strauss & Howe – The Fourth Turning

What was required was a build out of our energy infrastructure, with natural gas, nuclear, geothermal, wind, and solar all playing a part in weaning us off Middle Eastern oil. Instead, the myopic government bureaucrats, NIMBY crowd and green extremists have succeeded in driving our usage of Middle Eastern oil to new heights as we now import 67% of all our needs. Peak oil will hit the United States like a sledgehammer. Americans needed to increase the national savings rate so we would have the ability to invest in new dynamic technologies. Instead we chose a debt fueled frat party, driving the national savings rate below 0%. The government needed to run budget surpluses as we entered the Crisis period. Accepting a recession during the Third Turning would have mitigated the chances of a Depression in the Fourth Turning. A recession was unacceptable to George Bush and Alan Greenspan. Tax rebate checks and 1% interest rates, along with Bush urging Americans to defeat terrorism by shopping, buying cars and buying houses, resulted in immense deficits. Obama has since added $1.8 trillion to the national debt in one year. Tax policy should have shifted toward taxing consumption and not taxing investment. The economic path chosen by our politician leaders has ensured a 2nd Great Depression.

From a foreign policy and military preparation standpoint, our leaders have squandered an opportunity to strengthen alliances and form new alliances in advance of the coming battles. Every prior Fourth Turning has resulted in all-out war for survival. Strauss & Howe provided the roadmap to our future:

“But before the Fourth Turning catalyzes, America should gird for something else: a possible war whose scale, cost, manpower, armaments, casualties, and home-front sacrifices far exceed anything the nation would tolerate now.”

Instead of conserving our strength for the coming epic challenges, our leaders have engaged in two wars which have depleted our Treasury, stretched our manpower beyond the breaking point, used up valuable military equipment, strained our alliances, and diminished our moral standing in the world. These wars have revealed our weakness and have made it more likely that potential foreign adversaries will contest our super power status. These foreign ventures have failed to secure democracy in the Middle East or secure future supplies of oil. They have succeeded in inflaming the Muslim world and creating more terrorists than existed on September 10, 2001. The loss of credibility and moral high ground will make it more difficult for Crisis Saeculum leaders to rally the American people to a higher cause.

As I watch ancient doddering Congressmen parade and bluster while debating the Obama healthcare bill, I can’t help but think that these are the wrong people, at the wrong time, fighting the wrong war, for the wrong cause. The country is in the midst of a Crisis and our leaders have decided to expand the welfare state, bailout failures with our grandchildren’s money, expand our wars of choice, and stifle the ingenuity of the American people. This will surely not end well.

Stupid Is As Stupid Does

We know with certainty that our leaders have not prepared the country for this Crisis. As individuals, we also had the opportunity to prepare. Did you harvest the crops, fatten the livestock, cut the firewood, stockpile the propane, hoard ammunition and batten down your farmstead? Did you deepen your relationships with family and neighbors who would support you during a Crisis? With a potentially devastating howling blizzard forecast in the near future, delay could be fatal. What if the blizzard lasted five years? There is no way to avoid this blizzard. The snow has begun to fall and Americans are concerned with Michael Jackson’s corpse, the breakup of Jon and Kate, Oprah’s future plans, Britney Spears’ weight, and whether President Obama should be bowing to the Japanese emperor. Talking heads on the Sunday morning talk shows distract the public with meaningless drivel regarding polls and minor differences between the corrupt political parties. The bitter winds have begun to howl.

During a Crisis the virtues of faith, trust, reliability, endurance, perseverance, frugality and self-sacrifice are essential. These virtues were indispensible during the Great Depression and World War Two. Strauss and Howe recommended preparation by individuals in the following areas:

Rectify: Return to the classic virtues.
Converge: Heed emerging community norms.
Bond: Build personal relationships of all kinds.
Gather: Prepare yourself (and your children) for teamwork.
Root: Look to your family for support.
Brace: Gird for the weakening or collapse of public support mechanisms.
Hedge: Diversify everything you do.

Your reputation will be crucial during the Crisis. Are you a man or woman of your word? Can your family and neighbors count on you? Your honor and word will be judged by others during the Crisis. If you are seen as an outcast, loner, or opponent of the majority, you risk personal harm. The materialistic investment banker swine who have feasted off the carcasses of the American middle class and senior citizens are at extreme risk. Their gated McMansion communities and their BMW getaway cars will not save them from the angry lynch mobs. The community will require your acquiescence to their norms. A more authoritarian government will punish those who do not fall into line. It will be important that your personal relationships with authority figures be in good order. The lone wolf will not survive the deep snows of a Crisis.

The final resolution of this Crisis will depend upon the youth of today. Their ability to function in teams and use technology to overcome their opponents will be critical. Boomer parents who have smothered their children, fought their battles, did their class projects for them, and generally coddled them, have not done them any favors. If they are unprepared or unwilling to take the mantle of the GI Generation, our society may be in its final stages. Social outcasts will not fare well during the Crisis. Strong families will be essential to survival, with multigenerational households providing support and safety in dangerous times. The continued disintegration of the family unit, especially in the inner cities, will make it more difficult for many in the Crisis. Divorce rates have declined to 40% of all marriages, but marriage rates have declined to a greater degree. Children living in one parent households have increased, as millions of men have shirked their fatherhood duties.

The un-sustainability of Social Security, Medicare, Medicaid, and government employee pension plans was clear in 1997 and it is clearer today. Americans with half a brain should have seen that the government could never deliver on the social fiscal pledges they’ve made. The $100 trillion unfunded liability will never be paid. The government is going to stiff the elderly. Americans should have increased their personal economic security by saving for emergencies, saving for retirement, cutting back on their excessive lifestyle choices, distinguishing between needs and wants and ratcheting their lifestyles down to a sustainable level in an effort to prepare for hard times. Instead, millions or morons proved that stupid is as stupid does.

The average 401k balance for those over 60 years old is only $93,000. This is skewed higher by a few high savers. The median balance is in the range of $60,000. The Boomer generation has proven to be the most spendthrift, irrational, delusional generation in history. The life expectancy of a 60 year old is twenty years. How do these people expect to live twenty years on $60,000 to $100,000? A rational human being approaching 50 years old in 1997 with $50,000 in retirement savings should have realized their dire predicament and maxed out their savings for the next fifteen years.

Average 401(k) Balance by Age Group

Age 2007 Balance        2008 Balance
20s          $9,190 $6,690
30s $40,990                $27,360
40s          $93,350                $62,580
50s          $138,660              $99,420
60+          $115,700              $93,470

Source: Hewitt Associates

Instead of acting rationally, the Boomers went on a glutton-like spending spree, buying McMansions, beach houses, Mercedes, 60 inch HDTVs, electronic gadgets, and taking exotic vacations to the Far East. Household debt as a percentage of GDP soared from 90% in 1997 to over 135% today. Over this same time, personal savings plummeted. The delusional Boomers convinced themselves that 10% annual gains in the value of their houses for eternity would fund their every material desire and pay for their comfortable retirement.

Option ARM loans, home equity withdrawals, auto loans, and credit card debt were the weapons of choice. In the last two years zombie Americans have learned a brutal lesson they should never forget. Home prices can drop 30%, but the debt remains like an anchor around their necks. Consumers increased their debt from $5 trillion in 1997 to over $13 trillion today. Most Americans are completely unprepared financially for a harsh winter.

The American financial system’s near disintegration in 2008, initiated by the housing crash, revealed who was swimming naked. If Americans had diversified their portfolios with foreign stocks, bonds, gold, and commodities they would have survived the stock market crash with minimal losses. We sit here late in 2009 with thousands of Boomers reaching the age of 60 every day. They are racked with immense debts, have saved little for their retirement, and have trillions of government IOUs in their pockets. The only way the government can pay these obligations is to double taxes on the children and grandchildren of Boomers. Will Boomers be selfish and egotistical enough to rob their kids because they chose not to prepare for winter?

Ten Years Have Got Behind You

Ticking away the moments that make up a dull day
You fritter and waste the hours in an offhand way
Kicking around on a piece of ground in your home town
Waiting for someone or something to show you the way
Tired of lying in the sunshine
Staying home to watch the rain
And you are young and life is long
And there is time to kill today
And then one day you find
Ten years have got behind you
No one told you when to run
You missed the starting gun
And you run, and you run to catch up with the sun, but it’s sinking
Racing around to come up behind you again
The sun is the same in a relative way, but you’re older
Shorter of breath and one day closer to death – Pink Floyd – Time

America has frittered away ten years. Americans missed the starting gun. If you had prepared for the Crisis and it hadn’t touched you personally, the loss of material satisfaction would have been a minor inconvenience. Strauss & Howe describe the implications of not preparing:

“If you haven’t prepared, you will have put much at risk. History warns that saecular winters can be searing times for everyone, especially for those who are caught entirely by surprise. No matter what your age, sex, income, race, family status, or line of work, sensible choices today could help you avoid truly desperate choices in the Fourth Turning.”

The sad truth is that the nation and most of its citizens did the exact opposite of what Strauss and Howe recommended in 1997. The nation and its people are now destined to experience a terrible winter on par with the Civil War and World War II, with no safety net. The politicians driving the country into this Crisis period continue to think linearly and will be blindsided as the Crisis deepens. Politicians in Washington continue to do business as usual, passing laws and programs that will only worsen the Crisis. Every prior Fourth Turning has seen a Grey Champion Prophet figure appear on the scene to lead the country through the storm. Washington, Lincoln, and FDR proved their mettle in times of extreme danger. Barack Obama is not today’s Grey Champion. He will be cast aside in 2012. A Boomer leader must arise to lead the country through the difficult days ahead.

With a National Debt projected to reach $25 trillion by 2019, a government that has promised Boomers $100 trillion more than it can deliver, the end of the cheap oil age, looming resource wars, and nuclear proliferation, it is hard to fathom a happy ending to this Crisis. We appear to be hurtling towards the abyss and no one in charge seems capable of averting disaster. Americans need to understand the danger that is approaching. The final outcomes of this Crisis range from Armageddon to a restoration of the American Republic. The final pages of the Fourth Turning are truly frightening. The possibilities according to Strauss & Howe are:

The next Fourth Turning could mark the end of man. It could be an omnicidal Armageddon, destroying everything, leaving nothing.
The Fourth Turning could mark the end of modernity.
The Fourth Turning could spare modernity but mark the end of our nation.
Or the Fourth Turning could simply mark the end of the Millennial Saeculum. Mankind, modernity, and America would all persevere. Afterward, there would be a new High.

Several months ago my University repaved the walkway leading to my building. Along with the new bricks they placed stones within the walkway with words of wisdom from Ben Franklin. Every morning I walk across the same words and ponder their significance. “Lost Time, is never found again.”

The nation and its citizens have not made good use of our time. We have entered this Crisis severely weakened and vulnerable. Our appalling fiscal choices and failure to address the coming energy crisis have set us up for a calamity of epic proportions. The linear status quo statists argue that our ingenuity and technological prowess will save the day. They ignore the fact that our best and brightest have spent the last three decades focused on creating financial weapons of mass destruction, pilotless drones that make war as easy as playing on your PS3, improving the distribution chain for aerosol cheese, and inventing the drive thru fast food window. The corporate fascists who have Congress in their back pockets, supported by the Federal Reserve and the banking cartel, have raped and pillaged America to the point that there is nothing left for the middle class. The ruling elite have no intentions of relinquishing their wealth or control without a fight.

I’m just an average guy who has lived his whole life in suburban America. I’m the guy at the little league baseball field and the local ice hockey rink cheering my sons on. I shop at Wal-Mart and I take my family to the Jersey shore on vacation. I decorate my house with multitudes of Christmas lights every year after I untangle the ball from the previous year. I’m an average guy who is also a wide eyed realist. My heart and my mind tell me that our leaders have failed us mightily. The next 15 years will be full of pain, suffering and angst. In the previous two Crisis periods, America entered with the moral high ground. The Civil War was ultimately seen as a moral war to free the slaves. World War II was fought against evil Nazis and Fascists. I fear that America’s next Great War will be fought for oil. The shortsighted narrow-minded morons who have controlled our nation will try to cover-up their epic failures by falsifying the reasons for war. I have said this once in a previous article. I will not sacrifice my sons for oil. That is not a cause worth fighting for. Hell no, they won’t go.

I do not believe Americans will fall into line behind a leader whose cause is fighting to secure some other country’s oil. I do believe that the credibility and honesty of our politician leaders has been destroyed through their own corrupt immoral actions. A splintering of the country into competing factions and/or regions is a distinct possibility. There is precious little time left, as the howling blizzard gains strength. You will need to hunker down for a long hard winter. Build close relationships, protect your family at all costs, don’t trust government officials, don’t expect the government to honor any fiscal promises, don’t trust the mainstream media, learn to live locally, buy a gun, buy some gold and silver, and be prepared to fight for the truth.

THE FOURTH AMERICAN REVOLUTION (Featured Article)

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. – The Fourth Turning – Strauss & Howe -1997

Harpers Ferry – 1859 Tucson – 2011

The mass murder in Tucson is another brick in the wall of this Fourth Turning Crisis. The importance of this tragic event is not what happened in that Safeway parking lot, but the reaction in the aftermath of the shooting. Turnings are not about specific events, but how generations react to the events based on their stages of life. A turning is an era with a characteristic social mood, a new twist on how people feel about themselves and their nation. It results from the aging of the generational constellation. A society enters a turning once every twenty years or so, when all living generations begin to enter their next phases of life. We entered this Fourth Turning between 2005 and 2008, with the collapse of the housing market and subsequent financial system implosion.

We have crossed the threshold into a decisive era of secular upheaval, when the values regime will propel the replacement of the old civic order with a new one. The Silent Generation (1925-1942) is dying off, Baby Boomers (1943-1960) are entering elder hood, Generation X is entering midlife, Millenials are entering young adulthood—and a new generation of child Artists are being born. Strauss & Howe have documented that a long human life of 80 to 100 years makes up a social cycle of growth, maturation, entropy, and death (and rebirth) known as a Saeculum. Within each cycle, four generations proceed through their four stages of life. Every 15 to 25 years a new Turning surprises those who only think of history in a linear way. Strauss & Howe are historians who have been able to document this generational cycle going back to the 1400s.

The Anglo-American saeculum dates back to the waning of the Middle Ages in the middle of the fifteenth century. In this lineage, there have been seven saecula:

Late Medieval (1435-1487)
Reformation (1487-1594)
New World (1594-1704)
Revolutionary (1704-1794)
Civil War (1794-1865)
Great Power (1866-1946)
Millennial (1946-2026?)

The Turnings of history are like the seasons of nature. Seasons cannot be rearranged, seasons cannot be avoided, but humans and nations can prepare for the challenges presented by each season. Winter has descended upon our nation.

We are still in the early stages of this Fourth Turning and the mood of the country continues to darken like the sky before an approaching blizzard. Generational theory does not predict the specific events that will happen during a Turning. The events, personalities, and policies that become the chapters in history books are not what drive a Turning, it is how each generation reacts to the events, personalities and policies. Someone who is 60 years old will react differently to an event than they would have reacted at 20 years old. The issues that are driving this Fourth Turning (un-payable entitlement obligations, Wall Street greed & power, globalization gutting the middle class, increasing government control, wealth distribution) were all known and understood in 1997. It took the spark of a housing market collapse and the generations being in proper alignment to catalyze the mood of the country.

Chapter one of this Fourth Turning is approaching its end. Chapter two guarantees to be more intense, with more violence, and periods of great danger. Strauss & Howe envisioned this chapter based upon their analysis of the issues looming back in 1997:

The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it. 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. – The Fourth Turning – Strauss & Howe -1997

American Revolutions

“A Fourth Turning is a solstice era of maximum darkness, in which the supply of social order is still falling but the demand for order is now rising. As the community instinct regenerates, people resolve to do more than just relieve the symptoms of pending traumas. Intent on addressing root causes, they rediscover the value of unity, teamwork, and social discipline. Far more than before, people comply with authority, accept the need for public sacrifice, and shed anything extraneous to the survival needs of their community. This is a critical threshold: People either coalesce as a nation and culture – or rip hopelessly and permanently apart.” – The Fourth Turning – Strauss & Howe -1997

“Photo credit: ComfortBetrays.com”

There have been three prior Fourth Turnings in U.S. history: the American Revolution, Civil War and Great Depression/World War II. The American Revolution preceded the Civil War by 87 years. The Great Depression followed the Civil War by 69 years and this Millenial Crisis arrived 76 years after the Great Stock Market Crash of 1929. Essentially, each prior Fourth Turning has represented a Revolution in American history.

The First American Revolution began in 1773 when Parliament’s response to the Boston Tea Party ignited a colonial tinderbox—leading directly to the first Continental Congress, the battle of Concord, and the Declaration of Independence. History always seems easy to predict in retrospect. This is another of the many faults in human thinking. There was very little talk or thought of the colonies breaking away from the mother country during the 1760s. Up until the Boston Tea Party catalyst event, no one could have predicted the events which would occur in a chain reaction over the next 21 years. There were dark cold bitter days during this Crisis winter. In the end, George Washington’s honor, courage and fortitude symbolized the character of a new nation.

Historians Charles and Mary Beard described the Civil War as the Second American Revolution. The Civil War Crisis began with a presidential election that southerners interpreted as an invitation to secede. The attack on Fort Sumter triggered the most violent conflict ever fought on New World soil. The war reached its climax with the Emancipation Proclamation and Battle of Gettysburg (in 1863). The epic conflagration redefined America. The slavery issue was settled for good, signed in the blood of 600,000 men. The industrial might of the North was rechanneled toward progress as a world industrial powerhouse. In retrospect many will say the Civil War was entirely predictable, but that is completely untrue.

The great compromise generation (Henry Clay, John C. Calhoun, Daniel Webster) of the 1850s passed from the scene, leaving the country in the hands of firebrands on both sides. John Brown’s raid on Harper’s Ferry and subsequent execution served to increase the brooding mood of the country. The bloodiest war in the history of mankind was not predictable even one year before it began. The aristocracy of Washington DC actually took carriages in their Sunday best to watch the First Battle of Bull Run. Shortly thereafter Lincoln mobilized 500,000 men and unleashed a catastrophic spiral of butchery over the next four years that exhausted itself with the assassination of Lincoln and the surrender at Appomattox in the same week. The resolution of this Crisis felt more like defeat than victory.

Renowned American historian Carl Degler called FDR’s New Deal the “Third American Revolution”. The Crisis began suddenly with the Black Tuesday stock-market crash in 1929. After a three-year economic free fall, the Great Depression triggered the New Deal Revolution, a vast expansion of government, and hopes for a renewal of national community. After Pearl Harbor, America planned, mobilized, and produced for world war on a scale never seen in the history of mankind, making possible complete victory over the Nazis and Fascists. In 1928 did anyone foresee an 89% stock market crash, worldwide depression, vast expansion of government power, a world war more devastating than the prior war, and the usage of an atomic weapon of mass destruction? Not a chance. Only in retrospect do people convince themselves that it was predictable.

Black Tuesday, October 29, 1929 marked the abrupt unforeseen end of the Roaring Twenties. The bewilderingly rapid collapse of the worldwide financial system in the space of three years left the American people shaken and desperate. With their wealth destroyed and unemployment exceeding 20%, the American public turned to Franklin Delano Roosevelt and his New Deal promises of government social and work programs. He declared “nationwide thinking, nationwide planning, and nationwide action, the three essentials of public life”. This was truly a Third American Revolution. FDR’s policies changed the course of American history. The renewed spirit of American youth during the 1930s was essential in preparing them for the trials that awaited from 1941 through 1945. It is somewhat ironic that FDR’s revolutionary social programs, begun during the last Crisis, will be a major factor in the current Crisis – the Fourth American Revolution.

Fourth American Revolution

“The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon.” – David M. Walker

No one knows exactly what events will transpire over the next 15 to 20 years as this Fourth Turning morphs from regeneracy to climax and finally to resolution. The mainstream media, most politicians, and self proclaimed progressives are blind to the cyclicality of history. They believe history proceeds in a linear upwards path. These are the people you see on TV talking about toning down the rhetoric, false gestures of bipartisanship, and soothing words about the financial crisis being a thing of the past. They fail to understand that once the mood of the country is catalyzed by a trigger event or events, there is no turning back the clock. Winter must be dealt with head on. Very few, if any, “financial experts” anticipated a housing collapse, followed by a deep recession, a 50% stock market crash, and a financial system which came within hours of total implosion on September 18, 2008 (as detailed in the documentary Generation Zero). Absolutely no one anticipated the extreme measures taken by the U.S. government and Federal Reserve to “Save” the country from a 2nd Great Depression. These measures have added $5 trillion to the National Debt in the last 40 months. It took 205 years to accumulate the 1st $5 trillion of debt.

While it is impossible to predict the exact trials and tribulations that will confront America over the next decade, the issues that will drive this Fourth Turning were clearly visible to anyone with their eyes open, many years in advance of the Crisis. Strauss & Howe clearly detailed the easily observable issues that led to the current Crisis back in 1997. Their book is not prophecy, but historically provable interactions between generations based upon the circumstances confronting society at the time.

“Sometime around the year 2005, perhaps a few years before or after, America will enter the Fourth Turning. A spark will ignite a new mood. It will catalyze a Crisis. In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. It could be a rapid succession of small events in which the ominous, the ordinary, and the trivial are commingled.” – The Fourth Turning – Strauss & Howe -1997

The authors use their common sense, based upon known trends, to posit potential catalyst scenarios such as:

A global terrorist group blows up an aircraft and announces it possesses nuclear weapons.
Beset by a fiscal crisis, states begin to balk at Federal mandates leading to secession actions, militia violence, cyber attacks on the IRS, and demands for a new Constitutional Convention.
An impasse over the federal budget reaches a stalemate. The government shuts down. The President declares emergency powers. Congress rescinds his authority. Financial markets spiral out of control. Default looms.

These “theoretical” scenarios were put forth in 1997. The authors concluded that these were unlikely, but that no matter what the catalyst, the response by the generations would be predictable. It seems this Fourth Turning is being driven by a succession of smaller triggers, rather than one large trigger. The housing collapse, which began in 2005, ultimately led to the world financial system collapse in 2008. The overreach by government in attempting to repair the damage done by Wall Street and K Street led to the Rick Santelli Tea Party Rant heard round the world in February 2009. The Tea Party movement has since taken the country by storm, surprising the linear thinkers and stunning the ruling elite. Last week a congresswoman and a dozen bystanders were gunned down, further darkening the mood of the country and inflaming passions among competing political ideologies. So what happens next?

Strauss & Howe postulated on the possible path of this Crisis and I see nothing to doubt their analysis:

“An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. It is unlikely that the catalyst will worsen into a full fledged catastrophe, since the nation will probably find a way to avert the initial danger and stabilize the situation for a while.” – The Fourth Turning – Strauss & Howe -1997

The CNBC talking heads, mainstream media pundits, clueless Washington politicians, corrupt Wall Street shysters, and non-thinking robotic masses have been convinced that the actions taken by Ben Bernanke, Barack Obama, Tim Geithner and Congress have averted a financial disaster and saved the world. One hundred years from now when Chinese historians look back on the period from 2000 until 2025 they will ask themselves, “what the hell were they thinking?” The causes of this Crisis are as clear as day to anyone willing to see. A small group of Wall Street bankers and corporate interests through their proxy, the Federal Reserve, created the largest housing bubble in the history of the world generating hundreds of billions in obscene undeserved profits, while destroying the wealth and futures of millions of middle class Americans. Once the fraudulent nature of the bankers’ pillaging of the nation’s wealth came to light, the entire ponzi scheme collapsed, as they always do. On a parallel track, the Federal government, knowing full well that its un-payable social welfare commitments could never be fulfilled, decided to engage in two wars of choice, made additional un-payable social welfare commitments, and created new bloated bureaucratic agencies in the name of security and safety.

What will truly amaze future historians is the “solutions” that our leaders chose to save the country. Despite already being the largest debtor the planet has ever seen, with a National Debt of $8 trillion in 2005, the President and Congress have added an additional $6 trillion of debt, with plans to increase that debt at a rate of $1.5 trillion per year for the foreseeable future. Despite the fact that the housing boom was created by loose monetary policy and non-enforcement of existing laws and regulations by the Federal Reserve, our leaders have allowed this bank owned entity to reduce interest rates to 0%, buy $1.5 trillion of toxic mortgages from the Wall Street banks that caused the crisis, suspend requirements for banks to report their assets at their FMV, monetize the debt spending by the Federal Government, and create inflation through the printing of money out of this air. The Federal government’s response to the crisis was to create a mandated healthcare benefit for 35 million more Americans with no means to pay the untold trillions in future costs. Our leaders’ solution to a crisis caused by excessive debt has been to create twice as much debt. A passage from the Book of Matthew which Abraham Lincoln utilized during a prior Fourth Turning Crisis is a fitting description of where we stand today:

“Every kingdom divided against itself is brought to desolation; and every city or house divided against itself shall not stand.” – Matthew 12:25

The country is deeply divided. There is a vast swath of America that has chosen ignorance over knowledge. With 50% of Americans paying no income taxes, they will vote for anyone who promises them more. The rest of America is split between those who believe the answer lies in increased Federal government coordination and control and those who want a return to liberty, individual responsibility and a vastly reduced Federal government footprint. As I have tried to figure out the most likely path of this Fourth Turning I was focused on an external conflict in the Middle East or an incident on the Korean Peninsula providing the next spark. After the shooting in Tucson, this Fourth Turning is beginning to crystallize.

What I realized was that the three previous American Revolutions all occurred on U.S. soil. The First American Revolution was fought on American soil by a loose confederation of autonomous states against the overbearing control of a great European empire. The Second American Revolution was fought by Americans against Americans and resulted in a vast expansion of Federal government power and diminishment of state power. The Third American Revolution took place under the auspices of saving America from the depths of Depression with government social programs and the birth of the Nanny State. Each Revolution has further expanded the power and control of the Federal government. I believe the Fourth American Revolution will ultimately come down to a battle between the Liberty movement and the ruling oligarchy of Wall Street, Mega-corporations and supporters of the Military Nanny State.

I trust that Strauss & Howe correctly assessed the main factor that will drive the next phase of this Crisis – the Great Devaluation:

“It could be a series of downward ratchets linked to political events that sequentially knock the supports out from under the residual popular trust in the system. As assets devalue, trust will further disintegrate, which will cause assets to devalue further, and so on. Every slide in asset prices, employment, and production will give every generation cause to grow more alarmed. With savings worth less, the new elders will become more dependent on government, just as government becomes less able to pay benefits to them. Before long, America’s old civic order will seem ruined beyond repair.” – The Fourth Turning – Strauss & Howe -1997

There is no doubt in my mind that the next downward ratchet in this Crisis will be caused by Ben Bernanke and his attempt to generate just enough inflation to make our un-payable debt load less burdensome. His track record regarding economic forecasting, assessment of housing prices and anticipation of economic distress is flawless. He hasn’t been right once. With the top 1% richest Americans controlling 42% of the financial wealth in the country, an all-time high, the next leg down will boil over into class warfare. The middle class has been devastated thus far. Another stock market collapse and more job losses would push them over the edge. The evident failure of government solutions will invigorate the Liberty Movement to become even more strident in their anti-government message. The subsequent battle between the Haves and Have Nots is likely to flair into protests, riots and increasing violence. There will be no compromises. The 2012 Presidential election could incite reactions on par with the election of Lincoln in 1860. While the country convulsively flails about, foreign adversaries will take advantage of our weakness. Peak oil will throw a further wrench into the downward spiral. Out of this tempest, the country will either turn to a strong leader and more government control or move back toward a smaller Federal government footprint and a return to rule by the people and for the people. The outcome is unknown, but the path is foreseeable. Let’s hope that Ben Franklin was right.

All of us who were engaged in the struggle must have observed frequent instances of superintending providence in our favor. To that kind providence we owe this happy opportunity of consulting in peace on the means of establishing our future national felicity. And have we now forgotten that powerful friend? Or do we imagine that we no longer need his assistance? I have lived, Sir, a long time, and the longer I live, the more convincing proofs I see of this truth-that God governs in the affairs of men. And if a sparrow cannot fall to the Ground without his Notice, is it probable that an Empire can rise without his Aid?” – Benjamin Franklin, To Colleagues at the Constitutional Convention

“History offers no guarantees. If America plunges into an era of depression or violence which by then has not lifted, we will likely look back on the 1990s as the decade when we valued all the wrong things and made all the wrong choices.” – The Fourth Turning – Strauss & Howe -1997

WILL 2012 BE AS CRITICAL AS 1860? (Featured Article)

“We are not enemies, but friends. We must not be enemies. Though passion may have strained, it must not break our bonds of affection. The mystic chords of memory will swell when again touched, as surely they will be, by the better angels of our nature.” – Abraham Lincoln

We are approximately five years into The Fourth Turning Crisis. Every previous Fourth Turning had an economic dimension that eventually led to a do or die all out war. The mainstream linear thinkers see a recovery and a return to their concept of normality. They will be shocked and flabbergasted when they realize that this is only the beginning of a 20 year period of turmoil, chaos and war. It seems that some study of history would benefit the mainstream talking media heads pretending to know what is happening and political hacks in Washington D.C. who pretend to administer the affairs of state. The cycles of history are not identical, but the alignment of generations is always the same. The cycles are consistent because a long human life is always between 80 and 100 years. The previous Fourth Turnings in U.S. history were the American Revolution, the Civil War and the Great Depression/World War II. The descriptions are as follows:

American Revolution (Fourth Turning, 1773-1794) began when Parliament’s response to the Boston Tea Party ignited a colonial tinderbox—leading directly to the first Continental Congress, the battle of Concord, and the Declaration of Independence. The war climaxed with the colonial triumph at Yorktown (in 1781). Seven years later, the new “states” ratified a nation-forging Constitution. The crisis mood eased once President Washington weathered the Jacobins, put down the Whiskey Rebels, and settled on a final treaty with England.

The Civil War (Fourth Turning, 1860-1865) began with a presidential election that many southerners interpreted as an invitation to secede. The attack on Fort Sumter triggered the most violent conflict ever fought on New World soil. The war reached its climax in the Emancipation Proclamation and Battle of Gettysburg (in 1863). Two years later, the Confederacy was beaten into bloody submission and Lincoln was assassinated–a grim end to a crusade many had hoped would “trample out the vintage where the grapes of wrath are stored.”

The Great Depression & World War II (Fourth Turning, 1929-1946) began suddenly with the Black Tuesday stock-market crash. After a three-year economic free fall, the Great Depression triggered the New Deal revolution, a vast expansion of government, and hopes for a renewal of national community. After Pearl Harbor, America planned, mobilized, and produced for war on a scale that made possible the massive D-Day invasion (in 1944). Two years later, the crisis mood eased with America’s surprisingly trouble-free demobilization.

There is a consistent tempo to all Fourth Turnings. An event or series of events leads to the initial Crisis. As the Fourth Turning progresses it becomes more intense, chaotic, dire and bloody. It eventually exhausts itself as a victor is left in control of the battlefield. Picture George Washington at Yorktown, Ulysses S. Grant at Appomattox, and Douglass McArthur on the Battleship Missouri. The events during a Fourth Turning will always be different. The consistent aspect of all Fourth Turnings is the mood of the country, the same generational dynamics, and the reactions of the generations to events. Strauss & Howe describe this Crisis period as follows:

“The spirit of America comes once a saeculum, only through what the ancients called ekpyrosis, nature’s fiery moment of death and discontinuity. History’s periodic eras of Crisis combust the old social order and give birth to a new. A Fourth Turning is a solstice era of maximum darkness, in which the supply of social order is still falling but the demand for order is now rising.”

The turnings of history are like the seasons. It is impossible to go directly from Fall to Spring. You must withstand the bitter harshness of Winter in order to get to the revitalizing warmth of Spring. The intensity and depth of Winters will vary. Those who prepare for a potentially harsh Winter in advance will be more likely to survive. The morphology of Fourth Turnings as described by Strauss & Howe is:

A Crisis era begins with a catalyst – a startling event (or sequence of events) that produces a sudden shift in mood.
Once catalyzed, a society achieves regeneracy – a new counterentropy that reunifies and reenergizes civic life.
The regenerated society propels toward a climax – a crucial moment that confirms the death of the old order and birth of the new.
The climax culminates in a resolution – a triumphant or tragic conclusion that separates the winners from losers, resolves the big public questions, and establishes the new order.

An honest assessment of where we sit in this cycle shows that we are still in stage one. The housing collapse brought about the near destruction of the worldwide financial system. The sudden shift in mood has been borne out by the angry rise of the Tea Party and the startling result from the recent election. Society is on the verge of stage two. There has yet to be the reunification and reenergizing of society. It still feels like things are falling apart. The sun is slowly setting on this stage and a dark brutal Winter night beckons.

1860 Election – Spark that Ignited an Epic Conflagration

Turnings throughout history have consistently lasted between 15 and 25 years, except one. The Civil War Crisis Turning lasted only 5 years and seems to not fit the standard definition of a Turning. Strauss & Howe reflected that:

“By the usual pattern of history, the Civil War Crisis catalyst occurred four or five years ahead of schedule and its resolution nearly a generation too soon.”

The truth is that instead of a drawn out Crisis over 15 to 20 years that would have had undulations of pain and suffering, the U.S. experienced the most savage 5 years in our history, with 620,000 Americans killed and 400,000 wounded. Ten percent of all Northern males 20–45 years of age died, as did 30 percent of all Southern white males aged 18–40. Strauss and Howe conclude that there are two lessons from the Civil War Crisis:

The Fourth Turning morphology admits to acceleration.
That acceleration can add to the tragedy of the outcome.

The catalyst for the Crisis was the election of Abraham Lincoln as President of the United States. After the Compromise of 1850, who would have envisioned the election of an unknown Congressman from an abolitionist party that didn’t even exist in 1850. Beyond that, could anyone have predicted the carnage from the bloodiest war in the history of mankind being the result of that election? Many people do not know that there were four candidates for President in 1860 and that Lincoln won the election with only 39.8% of the popular vote. Lincoln won the Presidency and he wasn’t even on the ballot in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Tennessee, or Texas.

The Republican Party realized they had a tremendous opportunity to win the Presidency as the Democrats were in disarray. Since it was essential to carry the West, and because Lincoln had a national reputation from his debates and speeches as the most articulate moderate, he won the party’s nomination on the third ballot on May 18, 1860. The Republican platform stated that slavery would not be allowed to spread any further, and it also promised that tariffs protecting industry would be imposed, a Homestead Act granting free farmland in the West to settlers, and the funding of a transcontinental railroad. All of these provisions were highly unpopular in the South.

The Democratic Party split into two factions due to the issue of slavery. Stephen A. Douglass became the Northern Democrat candidate. He was a moderate on the slavery issue. John C. Breckinridge was selected by the Fireaters from the Deep South. Breckinridge supported extending slavery into territories whose voters did not want it. A fourth party called the Constitutional Union Party made up of die-hard former Southern Whigs and Know Nothings who felt they could support neither the Democratic Party nor the Republican Party was formed. They nominated John Bell of Tennessee for President. The party platform advocated compromise to save the Union, with the slogan “the Union as it is, and the Constitution as it is.”

The voter turnout rate in 1860 was the second-highest on record (81.2%, second only to 1876, with 81.8%). The voter turnout in 2008 of 56.8% was the highest for a Presidential election since 1968.

Nominee: Abraham Lincoln Nominee: John C. Breckinridge

Party: Republican Party: Southern Democrat

% of Vote: 39.8% % of Vote: 18.1%

Electoral Votes: 180 Electoral Votes: 72

Nominee: John Bell Nominee: Stephen A. Douglass

Party: Constitutional Union Party: Northern Democrat

% of Vote: 12.6% % of Vote: 29.5%

Electoral Votes: 39 Electoral Votes: 12

As the 1850s progressed the firebrands in the North and South became more entrenched in their dogmatic positions. The Transcendental Generation Prophets came to power and compromise was no longer an option. Both Lincoln and Jefferson Davis were from this Prophet generation. Aging Prophets are always the moralistic drivers of Fourth Turnings. Strauss & Howe stress the importance of the Prophet Generation during a Fourth Turning:

A Crisis catalyst occurs shortly after the old Prophet archetype reaches its apex of societal leadership, when its inclinations are least checked by others. A regeneracy comes as the Prophet abandons any idea of deferral or retreat and binds the society to a Crisis course. A climax occurs when the Prophet expends its last burst of passion, just before descending rapidly from power.

The election of Abraham Lincoln proved to be the catalyst for the Crisis. Seven southern states seceded from the Union before Lincoln took office. The attack on Fort Sumter started a spiral of carnage and butchery that could not be reversed. The Crisis reached regeneracy after the Union debacle during the First Battle of Bull Run. Lincoln realized winning this war would require full mobilization and all out war. He ordered the enlistment of 500,000 soldiers, suspension of habeas corpus, taxation, and expansion of government power. The next four years were a swirl of savagery and unprecedented tragedy. It convulsed to a chaotic conclusion with the surrender at Appomattox and assassination of Lincoln in the same week. The Crisis exhausted itself with the climax seeming more like a defeat than a victory.

Are the actions of politicians 150 years ago worth understanding in order to determine how our current Crisis will develop? Since every Crisis period has the exact same generational configuration and generations react to events in similar manner, I believe it is worthwhile to examine the Civil War dynamics. Historian Gordon Leidner’s conclusions about the Civil War period are revealing:

Although the majority of the American people– including many moderate politicians like Abraham Lincoln–wanted to avoid Civil War and were content to allow slavery to die a slow, inevitable death, the most influential political leaders of the day were not.
On the southern side, “fire-eaters” like Robert Rhett and William Yancey were willing to make war to guarantee the propagation of their “right” to own slaves.
On the northern side, abolitionists like John Brown and Henry Ward Beecher of Connecticut were willing to make war in order to put an immediate end to the institution of slavery.
Southern politicians convinced their majority that the North was threatening their way of life and their culture. Northern politicians convinced their majority that the South, if allowed to secede, was really striking a serious blow at democratic government. In these arguments, both southern and northern politicians were speaking the truth–but not “the whole truth.”
It was also about the constitutional argument over whether or not a state had a right to leave the Union, and–of primary concern to most southern soldiers–the continuation of antebellum southern culture. Although the majority of Southerners had little interest in slaves, slavery was a primary interest of Southern politicians–and consequently the underlying cause of the South’s desire to seek independence and state rights.

The insights gained from the Civil War Crisis are that compromise and moderation are discarded. The firebrands control the field. The Prophets push for an all out war to settle the pressing issues of the day. They are willing to sacrifice the young in their moralistic fervor to satisfy their vision of the future. The final verdict will depend on the strength, judgment, and wisdom of the Prophet leaders during a Crisis.

2012 Election – Crisis Leader Sets Stage for Dark Days Ahead

Nomad (Gen X) Prophet (Boomer) Prophet (Boomer)

Prophet (Boomer) Nomad (Gen X) Prophet (Boomer)

Artist (Silent)

By 2012 we will have reached the 7th year of this Crisis. The linear thinking media and supposed “thought leaders” are convinced that the worst days of this Crisis have passed. They believe that the Federal Reserve and Government leaders have taken the proper actions to avert a Great Depression. They will be shocked when the Crisis deepens and gets far worse than today. Every action taken by our leaders since 2005 has worsened the Crisis. Rather than letting the culprits of the financial crisis fail, they have propped up these criminal institutions with taxpayer funds. By not accepting the pain early in this Crisis, these leaders have ensured that this Crisis will be more tragic, brutal and wrenching. The mood of the country continues to darken, even as the mainstream media and government cheerleaders falsely insist that things are getting better.

By year 7 of the American Revolution Crisis, George Washington was on the verge of defeating the British at Yorktown and bringing that Crisis to a positive conclusion. The Civil War Crisis had concluded with Union victory by year 5. The Great Depression/WWII Crisis was in a lull period, with GDP growing by 13% in 1936 as government spending and personal consumption surged. The economy gave the appearance of recovery because FDR’s New Deal programs created make work schemes using government funds. Americans know the 1930s as the Great Depression. As proof of how meaningless GDP calculations are versus how real Americans are affected, the GDP increased by 63% in the four year period between 1934 and 1937. Despite this phenomenal growth, the unemployment rate remained at 17%. In comparison, GDP has advanced by only 5.1% from the bottom in the 2nd quarter of 2009 until today and the unemployment rate on a comparable basis is 23%. Franklin Delano Roosevelt won the 1936 election over Alfred Landon in one of the greatest landslides in history, with 523 electoral votes to Landon’s 8.

The current Crisis appears to be in a lull similar to the 1930s. Government actions can mask deeper problems for awhile, but pressure continue to build. The problems did not go away. The bad debts did not disappear. The Wall Street criminals are still free to loot the American middle class. No one has been prosecuted for the greatest financial fraud in history. The National Debt continues to balloon by $4 billion per day. The USD is slowly being replaced as the worldwide reserve currency. Political ideologues have taken control of both parties. Worldwide trade tensions and social contract broken promises are leading to riots and chaos across the Europe. The onset of peak cheap oil is raising prices for fuel and food and setting the stage for coming resource wars. Fundamentalist religious leaders are pushing for a religious war between Christianity and Islam. The extremists are gaining control of the agenda.

The sudden shift in mood has occurred. The hard working middle class of this country are frustrated, angry and feel betrayed by their leaders. The American people are fed up with all politicians. The liberal ideologues and conservative ideologues have staked out immovable positions on social, financial, and foreign trade issues. Compromise is as likely as it was in 1860. The Tea Party will not compromise. Their agenda is to change politics in Washington DC. They will be a thorn in both party’s side. The possibility of the Tea Party becoming a 3rd party is quite possible. This brings us to the 2012 Presidential election. The current configuration of Congress guarantees that absolutely nothing will get done in the next two years. Both parties will ignore the looming disaster of debt, devaluation, and depression as they position themselves for the 2012 election. The Crisis has not yet entered the regeneracy stage. This is the stage where the country unifies behind a leader and deals with the sudden threats that previously have been ignored or deferred, but which are now perceived as dire. The likely threats are the National Debt, a currency collapse, the Christian/Muslim conflict, Peak Oil, the rise of China, or more likely a combination of some of these issues.

Strauss & Howe‘s words regarding the approaching Crisis, written in 1997, are eerie and haunting:

“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.”

As I try to assess the next phase of this Crisis, I have been seeking guidance from previous Fourth Turnings. At this juncture, the Crisis seems to have aspects of the Great Depression/World War II and Civil War Fourth Turnings. A financial crisis morphed into recession, much like the 1929 Crash and subsequent recession. Like the Great Depression, government borrowing and spending has given the false hope of recovery. The difference is that government actions have failed to generate a strong rebound in GDP and unemployment continues to ratchet higher. A landslide election victory by Barack Obama in 2012 is not only impossible; he may not even be the Democratic nominee. The 2012 Presidential election is already destined to be a defining moment in our country’s history. The future path, intensity and pain of this Crisis will be greatly impacted by the outcome of this election. The darkening skies of Crisis are likely to become more threatening by 2012.

A recent Gallup poll gives an early indication of the likely Republican nominee in 2012. The front runners (Mitt Romney, Sarah Palin) have remained static, while the firebrands (Newt Gingrich, Mike Huckabee) have gained ground. The move towards a moralistic Prophet summoner of human sacrifice is not a surprise. The financial and world events that lead up to the 2012 election will determine which candidate is selected from the Republican field. The firebrands are likely to push to resolve ever-deepening moral choices through military force.

Usually an incumbent President can be sure of re-nomination as the Democratic candidate, but Obama’s popularity is so low and his effectiveness as President has been so wanting that a challenge from Hillary Clinton is a distinct possibility. Clinton has the Prophet persona and would command the respect of Americans looking for foreign relations expertise. A failed challenge to Obama’s nomination would likely weaken Obama and allow the Republican candidate an easy victory. A potential wildcard would be an insurgent independent campaign by billionaire Michael Bloomberg. His financial background and moderate positions on social issues could attract moderate Republican and Democratic voters. Another possibility is that the Tea Party is unable to assimilate within the Republican Party and decides to nominate its own candidate. This could lead to an 1860 like situation, with four candidates vying for the Presidency. The victor in this scenario might need to be selected by the Electoral College. The next President could be elected with less than 40% of the popular vote. Could this election result lead to secession movement? Will large segments of the population not accept the election verdict?

Will America Survive this Fourth Turning?

We are poised on the brink of the regeneracy phase of this Fourth Turning. The open question is what incident or events will lead to Americans rallying around a Prophet leader. Regeneracy during the American Revolution occurred in 1776 with the Declaration of Independence. It occurred during the Civil War when Lincoln demanded full mobilization and total war after the Battle of Bull Run. The election of FDR in 1932 produced a regeneracy based upon his New Deal policies. The issues confronting our nation appear intractable. The government “solutions” to the initial phase of this Crisis have been to paper over bad debts, prop up insolvent financial institutions, defer hard entitlement choices, debase the currency in an effort to alleviate overwhelming levels of government debt, ignore the imminent implications of cheap peak oil, and waging never ending lifeblood draining wars on terror. Ben Bernanke, a self described “expert” on the Great Depression, and his Federal Reserve, which has inflated away 96% of the USD purchasing power since 1913, will be the likely culprit in the next phase of this Crisis. Countries around the world are scrambling to reduce their exposure to the USD. Ben Bernanke has proven unable to comprehend the most basic economic signals (housing collapse, derivatives, Wall Street fraud). He will be blindsided by the sudden collapse of the US currency.

It is likely that phase two of this financial Crisis will lead to the election of a dogmatic Republican Prophet Boomer in 2012. This person will take office in January, 2013, eight years into this Fourth Turning. They will be faced with the realization that peak cheap oil is a fact, as even the linearist thinkers realize that technology and green energy will not provide the bumper sticker solution for our oil dependent society. The devastating combination of a currency collapse, oil supply shortages, and the draining war on terror will either unify the country behind the Prophet leader in their effort to save the country or it could result in the country’s fabric tearing apart with the Federal government losing control of sections of the country. A World War over dwindling natural resources is easily foreseeable. The actual denouement of events remain a mystery. Much will depend on the leader we choose. Much will depend on the strength, fortitude, and sacrifice of the American people.

Strauss & Howe provide four possible outcomes to our current Crisis:

This Fourth Turning could mark the end of man. It could be an omnicidal Armageddon, destroying everything, leaving nothing. If mankind ever extinguishes itself, this will probably happen when its dominant civilization triggers a Fourth Turning that ends horribly. For this Fourth Turning to put an end to all this would require an extremely unlikely blend of social disaster, human malevolence, technological perfection and bad luck.
The Fourth Turning could mark the end of modernity. The Western saecular rythm – which began in the mid-fifteenth century with the Renaissance – could come to an abrupt terminus. The seventh modern saeculum would be the last. This too could come from total war, terrible but not final. There could be a complete collapse of science, culture, politics, and society. Such a dire result would probably happen only when a dominant nation (like today’s America) lets a Fourth Turning ekpyrosis engulf the planet. But this outcome is well within the reach of foreseeable technology and malevolence.
The Fourth Turning could spare modernity but mark the end of our nation. It could close the book on the political constitution, popular culture, and moral standing that the word America has come to signify. The nation has endured for three saecula; Rome lasted twelve, the Soviet Union only one. Fourth Turnings are critical thresholds for national survival. Each of the last three American Crises produced moments of extreme danger: In the Revolution, the very birth of the republic hung by a thread in more than one battle. In the Civil War, the union barely survived a four-year slaughter that in its own time was regarded as the most lethal war in history. In World War II, the nation destroyed an enemy of democracy that for a time was winning; had the enemy won, America might have itself been destroyed. In all likelihood, the next Crisis will present the nation with a threat and a consequence on a similar scale.
Or the Fourth Turning could simply mark the end of the Millennial Saeculum. Mankind, modernity, and America would all persevere. Afterward, there would be a new mood, a new High, and a new saeculum. America would be reborn. But, reborn, it would not be the same.

The Fourth Turning is not a prophecy of doom. It is not some sort of Nostradamus like prediction of what will happen on a certain date. The Fourth Turning is part of a cycle of history tied to a long human life that has happened before and hopefully will happen again. Our trials await. Will America respond with strength of character, wise choices, and a willingness to sacrifice for future unborn generations? It is time to find out.

For everything there is a season, and a time for every matter under heaven: A time to be born, and a time to die;
a time to plant, and a time to pluck up what is planted;

A time to kill, and a time to heal;
a time to break down, and a time to build up;

A time to weep, and a time to laugh;
a time to mourn, and a time to dance;

A time to throw away stones, and a time to gather stones together;
a time to embrace, and a time to refrain from embracing;

A time to seek, and a time to lose;
a time to keep, and a time to throw away;

A time to tear, and a time to sew;
a time to keep silence, and a time to speak;

A time to love, and a time to hate;
a time for war, and a time for peace.

Ecclesiastes 3: 1-8

AS THINGS FELL APART, NOBODY PAID MUCH ATTENTION

The American way of life – which is now virtually synonymous with suburbia – can run only on reliable supplies of dependably cheap oil and gas. Even mild to moderate deviations in either price or supply will crush our economy and make the logistics of daily life impossible. – Jim Kunstler – The Long Emergency

Here we stand
Like an Adam and an Eve
Waterfalls
The Garden of Eden

Two fools in love
So beautiful and strong
The birds in the trees
Are smiling upon them

From the age of the dinosaurs
Cars have run on gasoline
Where, where have they gone?
Now, it’s nothing but flowers

Talking Heads – Nothing but Flowers

America was a Garden of Eden with nothing but flowers, trees and vegetation. We bit into the forbidden fruit of oil over a century ago. It has been a deal with the Devil. Oil brought immense wealth, rapid industrialization, 2.7 million miles of paved roads, and enormous power to America. But, now the SUV is running on empty. In the not too distant future the downside of the deal with the Devil will reveal itself. America was the land of the free and home of the brave. Now it is the land of the Range Rover and home of the BMW. In a few years it could be the land of the forlorn and home of the broken down. Our entire society has been built upon a foundation of cheap oil. The discovery of oil in Titusville, PA in 1859 turbo charged the Industrial Revolution in the U.S. The development of our sprawling suburban culture was dependent upon cheap oil. Americans could not survive for a week without oil. Commerce in the U.S. depends upon long haul truckers. Food is transported thousands of miles to grocery stores. The cheap Wal-Mart crap is transported thousands of miles across the seas from China. Americans believe it is our God given right to cheap oil. We are the chosen people. Kevin Phillips, in his brilliant book American Theocracy describes our love affair with cheap oil:

Americans constitute the world’s most intensive motoring culture. For reasons of history and past abundance, no other national population has clumped so complacently around so fuelish a lifestyle. For many citizens the century of oil has brought surfeit: gas-guzzling mobile fortresses, family excursions on twenty thousand-thousand-gallons-per-hour jet aircraft, and lavishly lit McMansions in glittering, mall packed exurbs along outer beltways. Against a backdrop of declining national oil and gas output, Americans consume 25% of world energy while holding just 5% of its energy resources. As the new century began, Americans enjoyed a lifestyle roughly twice as energy intensive as those in Europe and Japan, some ten times the global average. Of the world’s 520 million automobiles, unsurprisingly, more than 200 million were driven in the United States, and the U.S. car population was increasing at five times the rate of the human population. How long that could continue was not clear.

John and Jane Q. Citizen mostly ignore these trends and details, and know nothing of geologist Hubbert’s bell-shaped charts of peak oil. Senior oil executives sometimes discuss them in industry conferences, but elected officials – many with decades of energy platitudes under their belts – typically shrink from opening what would be a Pandora’s Box of political consequences. Oil was there for our grandfathers, they insist, and it will be there for our grandchildren; it is part of the American way.

Ignoring the facts and pretending that we can count on cheap oil for eternity is delusional. It is also the American way. The age of oil is coming to an end.

There are consequences to every action. There are also consequences to every inaction. Over the next decade Americans will experience the dire consequences of inaction. The implications of peak cheap oil have been apparent for decades. The Department of Energy was created in 1977. The Department of Energy’s overarching mission was to advance the national, economic, and energy security of the United States. In 1970, the U.S. imported only 24% of its oil. There were 108 million motor vehicles in the U.S., or .53 vehicles per person in the U.S. Today, the U.S. imports 70% of its oil and there are 260 million vehicles, or .84 vehicles per person. Jim Kunstler describes our bleak future in The Long Emergency:

“American people are sleepwalking into a future of hardship and turbulence. The Long Emergency will change everything. Globalism will wither. Life will become profoundly and intensely local. The consumer economy will be a strange memory. Suburbia – considered a birthright and a reality by millions of Americans – will become untenable. We will struggle to feed ourselves. We may exhaust and bankrupt ourselves in the effort to prop up the unsustainable. And finally, the United States may not hold together as a nation. We are entering an uncharted territory of history.”

The land of the delusional has no inkling that their lives of happy motoring are winding down. The vast majority of Americans believe that oil is abundant and limitless. Their leaders have lied to them. They will be completely blindsided by the coming age of hardship.

Factories & Shopping Malls

There was a factory
Now there are mountains and rivers
you got it, you got it

We caught a rattlesnake
Now we got something for dinner
we got it, we got it

There was a shopping mall
Now it’s all covered with flowers
you’ve got it, you’ve got it

If this is paradise
I wish I had a lawnmower
you’ve got it, you’ve got it

Talking Heads – Nothing but Flowers

If Americans had any sense of history longer than last week’s episode of Dancing with the Stars (how about that Bristol Palin!), they may have noticed that the modern age has lasted a mere 150 years and has been completely dependent upon cheap plentiful oil. This is a mere eye blink in the history of mankind. American exceptionalism refers to the opinion that the United States is qualitatively different from other nations. Its exceptionalism is claimed to stem from its emergence from a revolution, becoming “the first new nation” and developing “a unique American ideology, based on liberty, egalitarianism, individualism, populism and laissez-faire”. This feeling of superiority stems from the belief that we have a moral superiority and God has chosen our country to be a shining symbol for the rest of the world. It is the ultimate in hubris to think that we are the chosen ones. An enormous amount of credit for the American Century (1900 – 2000) must be given to pure and simple luck.

Everything characteristic about the condition we call modern life has been a direct result of our access to abundant supplies of cheap fossil fuels. Fossil fuels have permitted us to fly, to go where we want to go rapidly, and move things easily from place to place. Fossil fuels rescued us from the despotic darkness of the night. They have made the pharaonic scale of building commonplace everywhere. They have allowed a fractionally tiny percentage of our swollen populations to produce massive amounts of food. All of the marvels and miracles of the twentieth century were enabled by our access to abundant supplies of cheap fossil fuels. The age of fossil fuels is about to end. There is no replacement for them at hand. These facts are poorly understood by the global population preoccupied with the thrum of daily life, but tragically, too, by the educated classes in the United States, who continue to be by far the greatest squanderers of fossil fuels. – Jim Kunstler – The Long Emergency

Every accomplishment, invention, and discovery of the 20^th Century was due to cheap accessible fossil fuels. The American industrial age was powered by cheap plentiful oil. One hundred and ten years after the discovery of oil in Titusville, PA an American walked on the moon. We harnessed the immense power of oil and rode it hard. An empire was born and grew to the greatest in history through the utilization of oil and oil byproducts. It is no coincidence that U.S. GDP has been dependent upon the growth in fossil fuel consumption over the last 150 years.

The self centered delusional myopic American citizenry see no parallel between the American Empire built on a foundation of oil and the Dutch Empire built upon wind and water or the British Empire established on the discovery of vast quantities of coal. The Dutch Empire of the 1600s had 6,000 ships and 1,000 windmills generating power. The British Empire used coal to power steam engines, pumps, locomotives and ships and forged a great empire in the 1700s and 1800s. Today, the Netherlands has a GDP lower than Mexico. The U.K. has a GDP on par with Italy. You can be sure you are no longer an empire when your GDP is on par with Mexico and Italy. The United States has grown its GDP to $14.7 trillion by exploiting fossil fuels. The American Empire is clearly waning as its dependence on foreign oil slowly bankrupts the country. We consume 140 billion gallons of gasoline every year keeping our suburban sprawl mall based lifestyle viable.

Cars, Highways & Billboards

Years ago
I was an angry young man
I’d pretend
That I was a billboard

Standing tall
By the side of the road

I fell in love
With a beautiful highway

This used to be real estate
Now it’s only fields and trees
Where, where is the town
Now, it’s nothing but flowers

The highways and cars
Were sacrificed for agriculture
I thought that we’d start over
But I guess I was wrong

Talking Heads – Nothing but Flowers

Americans believe our ingenuity, brilliance and blessings from God have led to the elevation of our country to eminence as the greatest empire in history. But, in reality it was due to a black sticky substance that we stumbled across in 1859. Those who believe in American Exceptionalism scoff at the idea that our empire would not exist without oil. They prefer to ignore and downplay the impact of oil on our society. Too bad. Here are the facts from www.lifeaftertheoilcrash.net/.

Approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the US.
Pesticides and agro-chemicals are made from oil.
Commercial fertilizers are made from ammonia, which is made from natural gas.
Most farming implements such as tractors and trailers are constructed and powered using oil-derived fuels.
Food storage systems such as refrigerators are manufactured in oil-powered plants, distributed using oil-powered transportation networks and usually run on electricity, which most often comes from natural gas or coal.
The average piece of food is transported almost 1,500 miles before it gets to your plate.
In addition to transportation, food, water, and modern medicine, mass quantities of oil are required for all plastics, all computers and all high-tech devices.
The construction of an average car consumes the energy equivalent of approximately 20 barrels of oil.
The construction of the average desktop computer consumes ten times its weight in fossil fuels.
According to the American Chemical Society, the construction of single 32 megabyte DRAM chip requires 3.5 pounds of fossil fuels.
Recent estimates indicate the infrastructure necessary to support the internet consumes 10% of all the electricity produced in the United States.
The manufacturing of one ton of cement requires 4.7 million BTUs of energy, which is the amount contained in about 45 gallons of oil.

Our entire civilization will collapse in a week without oil. Try to imagine life if the 159,000 gas stations in the country ran dry. We are running on fumes and refuse to acknowledge that fact. We sooth our psyche with delusions of green energy (solar, wind, ethanol); drill, drill, drill mantras; abiotic oil theories; and vast quantities of shale gas. The concept of energy required to extract an amount of energy completely goes over the head of media pundits and those who prefer not to think. If you expend 2 gallons of gasoline in your effort to extract 1 gallon of gasoline, you’ve hit the wall. We have sacrificed our future in order to maximize our present, as William James concluded in the late 1800s:

“The most significant characteristic of modern civilization is the sacrifice of the future for the present, and all the power of science has been prostituted to this purpose.”

Americans have a fatal character flaw of desiring others to think they are successful because they drive an expensive gas guzzling automobile and reside in an immense energy intensive McMansion in suburbs 30 miles from civilization. Delusional Americans have convinced themselves that the appearance of success is success. Leasing $50,000 BMWs for decades and borrowing $500,000 to live in a $300,000 house has already pushed millions of egotistical to the edge. Of the 250 million passenger vehicles on the road today, 100 million are SUVs or pickup trucks. The average fuel mileage is 17 mpg. Approximately 70% of Americans drive to work every day, with 85% driving alone. They spend 45 minutes on average commuting to and from work and drive 15 miles to work. The average home size increased from 1,400 sq ft in 1970 to 2,300 sq ft today, despite the fact that the average household size decreased from 3.1 to 2.6. The bigger is better fantasy will be devastating on the downward slope of peak oil.

Pizza Huts, Dairy Queens & 7 Elevens

Once there were parking lots
Now it’s a peaceful oasis
you got it, you got it

This was a Pizza Hut
Now it’s all covered with daisies
you got it, you got it

I miss the honky tonks,
Dairy Queens, and 7-Elevens
you got it, you got it

And as things fell apart
Nobody paid much attention
you got it, you got it

Talking Heads – Nothing but Flowers

How will Americans survive without the 7,500 Pizza Huts, 5,000 Dairy Queens, and 8,000 7-11s that dot our highways? The average Joe is so busy tweeting, texting, and face-booking on their iPads, Blackberries, and laptops, watching Dancing With the Stars on their 52 inch HDTV bought on credit, or cruising superhighways in their leased Hummers to one of the 1,100 malls or 46,000 shopping centers, that they haven’t paid much attention as peak oil crept up on them. The globalization miracle of cheap goods produced in China and shipped across the world by cargo ship and then trucked thousands of miles to your local Wal-Mart is wholly reliant upon cheap oil. Our own military has concluded that:

By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. – Joint Operating Environment Report

When worldwide oil demand slightly exceeded worldwide oil supply in 2008, prices surged to $145 per barrel. A 10 million barrel per day shortfall is unfathomable by the purposefully ignorant masses. The sprawling suburbia that now houses the American population will become not viable when oil prices rise above $200 per barrel. Out-of-town shopping and entertainment malls will be deserted. The prosperity borne from the advent of oil is waning. Jim Kunstler explains the end game in The Long Emergency:

The entropic mess that our economy has become is in the final blow-off of late oil-based industrialism. The destructive practices known as “free market globalism” were engendered by our run-up to and arrival at the world oil production peak. It was the logical climax of the oil “story”. It required the breakdown of all previous constraints – logistical, political, moral, cultural – to maximize the present at the expense of the future, and to do so for the benefit of the very few at the expense of the many. Even mild to moderate deviations in either price or supply [of oil and gas] will crush our economy and make the logistics of daily life impossible.

The United States is already tottering, as the oligarchy of the Wall Street banking syndicate, global mega-corporations and corrupt political hacks in Washington DC have pillaged the wealth of the country and left a middle class gasping for air. The mood of the country is already darkening as The Fourth Turning gathers steam. The recognition by the masses that peak cheap oil is a fact will contribute greatly to the next stage of this Crisis. Fourth Turning periods always lead to war. American troops are not in the Middle East to spread democracy. They are the forward vanguard in the coming clash over depleting oil resources. We are entering an era of strife, war, chaos and destruction. The facts of who controls oil supply and who needs oil (U.S. – 25%, China – 10%) are clear. Kunstler bluntly deals with the facts:

Fossil fuel reserves are not scattered equitably around the world. They tend to be concentrated in places where the native peoples don’t like the West in general or America in particular, places physically very remote, places where we realistically can exercise little control (even if we wish to). The decline of fossil fuels is certain to ignite chronic strife between nations contesting the remaining supplies. These resource wars have already begun. There will be more of them. They are very likely to grind on and on for decades. They will only aggravate a situation that, in and of itself, could bring down civilizations. The extent of suffering in our country will certainly depend on how tenaciously we attempt to cling to obsolete habits, customs, and assumptions – for instance, how fiercely Americans decide to fight to maintain suburban lifestyles that simply cannot be rationalized any longer. – Jim Kunstler – The Long Emergency

Mr. Kunstler believes that the U.S. will be forced to downscale, localize and adapt to a new reality. I wholly support his attempt to warn the American people and would urge those who chose to think that preparing for a more agrarian lifestyle that will be forced upon us by circumstances is essential. No technological miracle will save us from our fate. Decades of inaction will have a price. I truly hope that his optimism that hardship will renew the American spirit will reveal itself:

“But I don’t doubt that the hardships of the future will draw even the most secular spirits into an emergent spiritual practice of some kind.”

As I live in the outer suburbs and commute 30 miles per day into the decrepit decaying city of Philadelphia every day, I’m less optimistic that the transition will be smooth or even possible. Kunstler’s view of the suburbs is accurate:

“The state-of-the-art mega suburbs of recent decades have produced horrendous levels of alienation, loneliness, anomie, anxiety, and depression.”

Families stay huddled in their McMansions, protected from phantoms by state of the art security systems. Their interaction with the world is through their electronic gadgets. Neighborhoods of cookie cutter 4,000 sq ft mansions appear deserted. Human interaction is rare. Happiness is in short supply. As I sit in miles of traffic every morning during my soul destroying trek to work I observe the thousands of cars, SUVs, and trucks and wonder how this can possibly work when the peak oil tsunami washes over our society in the next few years. Then I reach the bowels of the inner city and my pessimism grows. This concrete jungle is occupied by hundreds of thousands of uneducated, unmotivated, wards of the state. They live a bleak existence in bleak surroundings and depend upon subsistence payments from the depressed suburbanites to keep them alive. How will they survive in a post peak oil world? They won’t.

The Hirsch Report and Jim Kunstler’s The Long Emergency both were published in 2005. M. King Hubbert warned U.S. leaders decades in advance about the expected timing of peak oil. The warnings have fallen on deaf ears. We were busy with our wars of choice, home price wealth, gays in the military, and the latest episode of Jersey Shore.

And as things fell apart
Nobody paid much attention

NOTHING BUT FLOWERS

THE FOURTH TURNING – SKIES DARKENING

William Strauss and Neil Howe published The Fourth Turning in 1997. This was before the internet bubble, before the housing bubble, before 9/11, before the two wars in the Middle East, and before the financial collapse of 2008. They made a strong case for their generational theory of history. Everything that has happened since 1997 supports their theory. We are currently in the early stages of the Fourth Turning. In the last two chapters of their book, they describe the possibilities during a Fourth Turning. In the last section of the book they provide guidance on how to prepare responsibly for a Fourth Turning. Without preparation, the Fourth Turning is much worse. Below is a description of Fourth Turning possibilities, the preparations that were recommended by Strauss & Howe, and my assessment of how prepared we are as a country.

“What will America be like as it exits the Fourth Turning?

History offers no guarantees. Obviously, things could go horribly wrong – the possibilities ranging from a nuclear exchange to uncurable 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. Since Vietnam, many Americans suppose they know what it means to lose a war. Losing in the next Fourth Turning, however, could mean something incomparably worse. It could mean a lasting defeat from which our national innocence – and perhaps even our nation – might never recover.

If America plunges into an era of depression or violence which by then has not lifted, we will likely look back on the 1990s as the decade when we valued all the wrong things and made all the wrong choices.”

“However sober we must be about the dark possibilities of Crisis, the record of prior Fourth Turnings gives cause for optimism. With five of the past six Crises. it is hard to imagine more uplifting finales. Even after the Civil War, the American faith in progress returned with a new robustness. As a people, we have always done best when challenged. The New World still stands as a beacon of hope and virtue for the Old, and we have every reason to believe this can contine.

By the middle 2020s, the archetypal constellation will change, as each generation begins entering a new phase of life. If the Crisis ends badly, very old Boomers could be truly despised. Generation X might provide the demagogues, authoritarians, even the tribal warlords who try to pick up the pieces.

History is seasonal, but its outcomes are not foreordained. Much will depend on how tall we stand in the trials to come. But there is more to do than just wait for that time to come. The course of our national and personal destinies will depend in large measure on what we do now, as a society and as individuals, to prepare.”

Preparations Needed (1997 – 2006)

In their chapter on preparations for the Fourth Turning, Strauss and Howe essentially tell Americans to grow up. Give up the bad habits that had become part of our life during the Unraveling. We needed to prepare as if a blizzard was headed our way.

“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.”

Their suggested preparations as a country and as individuals were:

America’s Recommended Preparations

Prepare values: Forge the consensus and uplift the culture, but don’t expect near-term results.
Prepare institutions: Clear the debris and find out what works, but don’t try to building anything big.
Prepare politics: Define challenges bluntly and stress duties over rights, but don’t attempts reforms that can’t now be accomplished.
Prepare society: Require community teamwork to solve local problems, but don’t try this on a national scale.
Prepare youth: Treat childrenas the nation’s highest priority, but don’t do their work for them.
Prepare elders: Tell future elders they will need to be more self-sufficient, but don’t attempt deep cuts in benefits to current elders.
Prepare the economy: Correct fundamentals, but don’t try to fine tune current performance.
Prepare the defense: Expect the worst and prepare to mobilize, but don’t precommit to any one response.

How America Prepared

No consensus on values was forged. The culture became more decadent and materialistic between 1997 and 2006. Get rich quick became the rallying cry. Institutions became larger and more unwieldy. Federal and state governments doubled in size between 1997 and 2006. They became addicted to tax revenue from the Internet and housing booms. They enacted thousands of new rules, regulations and laws. The debris has not been cleared. The country failed miserably in preparing politics. Blunt truthfulness about our national problems was needed from our leaders. Public purpose and collective duties should have been preached by our leaders. Instead, personal rights and entitlements were promised to every constituent. Corrupt politicians in Washington DC have fed the slide into cynicism, apathy and malaise with their false rhetoric and spineless inability to own up to the truth about the financial obligations that cannot be honored.

Society has not prepared for the Fourth Turning by stressing teamwork, civic duty, and self sacrifice for the betterment of our country. Local communities have not improved schools, housing, or transportation. People have continued to group themselves along party lines. The Millenial generation who will do the heavy lifting during this Fourth Turning have not been raised to understand how important their efforts will be needed in the next 15 years. We have not educated them properly and they have not been made to understand their importance. The elderly have not become more self sufficient. They have become more dependent. More entitlements have been passed for the elderly, making our fiscal picture much worse than it was in 1997. The elderly are prepared to wage a generational war for their goodies.

The preparation of our economy for the Fourth Turning has been a complete and utter disaster. We needed to raise the national savings rate in preparation for the difficult times ahead. Instead it went to 0%. We needed to reduce debt. We doubled it. We needed to balance the budget. The deficits are beyond comprehension. We needed to under consume. We consumed at hyper speed levels. Lastly, we needed to prepare for the inevitable major war that always accompanies a Fourth Turning. We needed to conserve our resources and build up our forces for the coming test. Instead, we wasted trillions of dollars and thousands of lives on worthless wars of choice in the Middle East. Our military is stretched to the breaking point. We are completely unprepared for a new major conflict.

Recommended Individual Preparations

Rectify: Return to classic virtues.
Converge: Heed emerging comunity norms.
Bond: Build personal relationships of all kinds.
Gather: Prepare yourself (and your children) for teamwork.
Root: Look to your family for support.
Brace: Gird for the weakening or collapse of public support mechanisms
Hedge: Diversify everything you do.

How Individuals Prepared

Only you would know whether you are prepared for the Fourth Turning. Can you be counted on by your neighbors? Do you have a reputation as a person of honor and integrity? Are you a good citizen? Lone wolves will not fare well during a Fourth Turning. Team, brand and standard will be new catchwords. Appearances will matter. Society will deal justice in a brutal way. You need to know people who can help you. Personal relationships will be crucial. Face to face interaction with neighbors, fellow workers, the public, and the police will determine whether you are a good guy or bad guy.

People who work well in teams will more successfully navigate the Crisis. Children will need to be taught to excel in groups. They are likely to be indoctrinated by the government when danger rises. Your family members will be essential to your survival. Being a loner will not bode well for you during the Fourth Turning. Young and old will likely occupy the same household as other supports will disappear. Government benefits are likely to be dramatically cut. Dependence on authority should not be assumed. You will need to protect your wealth. Healthcare services could be limited. Being physically fit will be important. Being a generalist that can do many things well will make you more valuable during the Crisis. Having less debt will allow you more flexibility. The USD is likely to be devalued, so hedging your bets will be important. If the financial markets crash, will you survive?

As a country, we were completely unprepared for the onset of the current Fourth Turning. We were warned in 1997. We had time to prepare. Instead, we did the exact opposite of what needed to be done. We pressed the accelerator to the floor. Our actions have ensured that this Fourth Turning will be more deadly and brutal than it needed to be. Considering the two previous Fourth Turnings were Depression/WWII and the Civil War, the next 15 years will be grim. As Strauss & Howe point out, this test cannot be avoided:

“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 liminal state of sheer chaos whose nature and duration no one can predict in advance.”

The economic news worsens by the day. Worldwide tensions grow. There are fingers of instability throughout the system. All it will take is a grain of sand falling on the wrong part of the pile to initiate an avalanche of pain and suffering. Our Archduke Ferdinand moment awaits.

“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.

A Fourth Turning harnesses the seasons of life to bring about a renewal in the seasons of time. In so doing, it provides passage through the great discontinuities of history and closes the full circle of the saeculum. The Fourth Turning is when the Spirit of America reappears, rousing courage and fortitude from the people. History is seasonal, but its outcomes are not foreordained. Much will depend on how tall we stand in the trials to come.”