The Fourth Turning - Generational Cycles

FAlley,

I read the Fourth Turning in mid 2001. It was one of those seminal books that changed the way I thought about life. History was suddenly more than a collection of names, dates, and events. It had context and structure. The actors responded to events based on their unique generational experiences.

It was an easy step for me to take to see the outlook for the future, particulary after 9/11 occurred. That event (although early) could have been the catalyst for this 4th turning. Rather than marshal the troops to prosecute a war against the perpetrators of that dastardly deed, Bush, Greenspan, and Co. lowered interest rates and convinced the consumers to shop till they drop. Bush argued that al Qaeda hates us because we're free and bin Laden will win if we abandon our profligate ways. It wasn't a difficult message to sell to the Boomers.

Lowering interest rates caused people to borrow like crazy and buy stocks, improve their homes, go on vacations, buy new cars, etc., etc. Stocks and housing prices went up, which caused bankers to lower their lending standards, which allowed more and more people to join the party. Eventually, prices got too high and the bubble popped.

Bush was able to delay the onset of the 4th turning until mid 2008. The financial crisis changed the country's mindset. As we get further from that event, it becomes obvious to more people that the good old days aren't coming back - regardless of how much we pine for them.

I find it mildly amusing to see posts saying that we need a leader with guts to show the way - a gray champion. Read the comments on http://www.peakprosperity.com/insider/79997/four-more-years-what-it-means and you'll see what I mean.

The near term future (decade or 2) will not be as pleasant as the last few decades. Each of us will have an opportunity to play a part based on our station in life. Your generation's outcome will rhyme with the GI generation. Mine will be more like the Missionary's role (FDR was a missionary.)

If you have questions, let me know. Have you read the book yet?

Grover

I didn't say it was. I said the Fourth Turning was one of those seminal books that changed my view of life. You were correct to call out my speculation of 2008 being the trigger. We won't know until much later, and then people will argue about what to consider the trigger.

We currently have the generational constellation in place and we've got potential triggering events available - financial crisis, war on terror, global warming, resource depletion, starvation, insolent regimes, etc. The key isn't what causes the mood to change (permanently for those currently alive) but that it has changed (or will soon change.)

I argue that 2008 was the trigger because of the general change in attitude concerning financial issues. Before then, Boomers were sure that their houses would continue to appreciate, that the stock market would go to the moon, that there would always be plenty of job opportunity ... that they could easily afford to keep borrowing to get the good life.

Look at the way things have changed. Being a Boomer, I can tell you that the future is downright scary now. My cohorts still splurge occasionally, but not like they used to do. They are more likely to save rather than borrow before splurging. Now, they talk about having to work at least a few more years before retiring. Most don't really expect the crisis to end any time soon.

Were it not for the federal government increasing borrowing and spending, we'd be locked in a major depression - just like the last 4T. All they are doing is making the situation worse and delaying the inevitable a bit. They're finding that it takes more and more new debt to generate additional GDP. I'm sure you can read Chris' articles and come to the same conclusion.

So, where does this leave you, me, and the rest of the planet's inhabitants? There will be different challenges for each generation. Mine will transition to being the wise elders who accept austerity and make it a defining generational characteristic - because there won't be other options and we always make the trend our own. Yours will suffer the slings and arrows of the coming war and you'll do it through team work - because you want to listen to Boomer's advice and you have always worked in teams.

The Gen-Xers will get stuck with the bill. They will become pragmatic leaders and suffer through low wages and high taxes quietly - because their generation always gets screwed and they're used to it. The new Homelander generation will stay out of the way of important decisions and learn to hate austerity - because important decisions will have to be made and there won't be options like you and I grew up with.

I didn't read the zerohedge article. The big money in politics makes me think the demise is greatly exaggerated. Political parties do change over time to attract enough individuals to make themselves relevant. In that way, the current parties will all die. It wouldn't matter if Romney had gotten elected instead of Obama. The current/future conditions would have defined either man's administration. Many of the promises would simply not be honored.

I consider Obama to be a very intelligent, egotistical man. (Just so you know, this next part is speculation:) This combination will make him want to fulfill the obligations of the office the way the great presidents have done. He wants everyone to think of him as a great president. I have hope that he'll actually do the right thing when it matters the most.

Grover