The creative destruction of the Fourth Turning – the latest from Neil Howe (The Fourth Turning)
From Erico Taveres’ just published interview of Neil Howe (Sinclair & Co, 7-2-2015)
“Well, look at it this way! If the S&P500 were to come down by 50% – and, my God, if we have a reversion to the mean in corporate earnings as well as a decline in some of these lofty PE valuations this might actually happen – look at the bright side. The Millennial generation can finally buy into America’s future at a good price. Look at what they are facing right now: very little return on their savings and very lofty prices that they have to pay to invest in their future.
So we often forget that these wrenching dislocating financial events, particularly for older generations, can create opportunities for the young, and often create space for something more durable for the times to be built.
I think we are going to see a lot of creative destruction both politically and socially. In fact we are seeing it this week with Grexit becoming widely recognized as more probable than not. I think this will lead to an unravelling of Southern Europe from the Euro and I think that the heightened tensions – from the Middle East to Putin’s Russia to the Far East – and again the fact that nobody is in charge, not even pretends to be in charge, will create problems.
For those of us remembering earlier times, this is disquieting, disorienting… I think better things will grow out of it, in fact they have to. Right now the youth of the world in the midst of these tensions are not happy. Their needs are not being met from the systems that are in place.”
So I’ll just summarize it with Schumpeter’s phrase: creating destruction. That’s how I prefer to see what happens in a Fourth Turning.
MK note: Neil Howe is the author with William Strauss of “The Fourth Turning” (1997). Those of you who have followed my writings over the years know that I consider that book one of the most important published over the past two decades. “The next Fourth Turning,” predicted Strauss and Howe, “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.” That prediction, eleven years before the event, turned out to be on the money. Howe now proclaims that the Fourth Turning indeed began with the financial meltdown in 2008 and is not likely to end until 2028.
FROM AN INTERVIEW WITH CHRIS MARTENSON (6/23/2013) –
“I am nervous. I am nervous about the future right now. I think we have a lot more deep issues, deep crises, to save in the economy. I am also very nervous about what I see geopolitically.
We cannot possibly afford the government we have promised ourselves. And, that will be a painful process of deleveraging, and it is not just deleveraging the explicit debt that we have already actually formally borrowed, it is all the implicit debt. And, I think we will deal with it, because we have no other choice.
But, my point is this: No one simply solves a terrible problem on a sunny day when they can afford, at least for the time being, to look the other way. Problems like that are faced when people have no other choice, and it is a really grim day. And, it is white-knuckle time, and horrible things are happening with markets around the world, or horrible things are happening, at least historically; we have seen that geopolitically around the world. And, that is when people are forced to act.”
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Neil Howe’s website: Saeculum Research
