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Winners and Losers of this 4T - Printable Version

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RE: Winners and Losers of this 4T - sbarrera - 09-07-2020

(09-06-2020, 03:11 AM)Eric the Green Wrote: What is Neo-liberalism?




This is a great video. What I am getting out of it is: neoliberalism is really the mind-set of the Third Turning- focus on market behavior, the rights and needs of the individual over the collective, and deregulating economic activity. Both major U.S. parties subscribe to it.

So my next question is- how is Biden not a representative of the neoliberal wing of the Democrats? It seems to me that the opposition - Sanders/Warren, basically - was displaced in the primary.


RE: Winners and Losers of this 4T - David Horn - 09-07-2020

(09-05-2020, 01:12 PM)sbarrera Wrote:
(09-05-2020, 10:01 AM)David Horn Wrote:
(09-04-2020, 02:05 PM)Eric the Green Wrote: First of all, though, Democrats are not neo-liberals. That is the Republican program, completely. The worst you can say about Democrats in that regard is that they were humbled by Republican neo-liberal (aka Reaganomics, free-market fundamentalist) power, and compromised with it too much (e.g. repeal of Glass-Steagall). But they didn't go all the way. Wages were raised and many regulations were still in place. By the way, calling Democrats "neo-liberals" is as inaccurate as calling any Republican a "populist."...

Sorry, but the original neoliberals were the Clintonites responding to the excessive rightward drift of the Reaganites.  Credit Robert Rubin and Lawrence Summers as the progenitors of this DINO economic policy.  Essentially, to maintain power they sided with the big banks and big business on economics, while advocating progressive policies in the social sphere.  For the poor, especially people of color, it was smile, shake their hands and steal their wallets.

That was my understanding too. That's why I call Biden a neoliberal. Primary voters rejected the more progressive alternative represented by Sanders and Warren.

What this portends is hard to see at this point.  Are the Dems ready to dump this anti-worker paradigm, or is the big money just too much to pass up?  I'll guess: the 4T will be a muddle, and the 1T will see more theft by the 1%.  The 2T will be the change period.  

I've waited for this for most of life, and I'm afraid I might miss it.


RE: Winners and Losers of this 4T - Eric the Green - 09-07-2020

It is obvious that Donald Trump applies the neo-liberal trickle-down theory MUCH more than Democratic presidents have, or would. The Donald has slashed many regulations that protect the environment and workers and lowered taxes on the rich in times of economic recovery when it was not needed. So WHY oh why do polls still give Trump 1% higher approval on how he manages the economy? What fools Americans are!!!


RE: Winners and Losers of this 4T - beechnut79 - 09-07-2020

(09-07-2020, 07:27 PM)Eric the Green Wrote: It is obvious that Donald Trump applies the neo-liberal trickle-down theory MUCH more than Democratic presidents have, or would. The Donald has slashed many regulations that protect the environment and workers and lowered taxes on the rich in times of economic recovery when it was not needed. So WHY oh why do polls still give Trump 1% higher approval on how he manages the economy? What fools Americans are!!!

Wasn’t this what Pogo described all too well?  We have met the enemy and they are us.


RE: Winners and Losers of this 4T - David Horn - 09-08-2020

(09-07-2020, 07:27 PM)Eric the Green Wrote: It is obvious that Donald Trump applies the neo-liberal trickle-down theory MUCH more than Democratic presidents have, or would. The Donald has slashed many regulations that protect the environment and workers and lowered taxes on the rich in times of economic recovery when it was not needed. So WHY oh why do polls still give Trump 1% higher approval on how he manages the economy? What fools Americans are!!!

The GOPpers have sold themselves as the adults in the room, and changing that impression is far from simple.  When Kinser noted that Dems are lousy at memes, this is one of many important examples.  Dems shoot for the brain, and Republicans shoot for the gut.  Emotions always win that fight.


RE: Winners and Losers of this 4T - pbrower2a - 09-08-2020

(09-07-2020, 10:22 AM)sbarrera Wrote:
(09-06-2020, 03:11 AM)Eric the Green Wrote: What is Neo-liberalism?




This is a great video. What I am getting out of it is: neoliberalism is really the mind-set of the Third Turning- focus on market behavior, the rights and needs of the individual over the collective, and deregulating economic activity. Both major U.S. parties subscribe to it.

So my next question is- how is Biden not a representative of the neoliberal wing of the Democrats? It seems to me that the opposition - Sanders/Warren, basically - was displaced in the primary.

Neoliberalism is based on turning profits and rewarding capital more than on targeting investment to create productive capital  or to make people more competent. It may have the opposite effect in rewarding people for already being rich and powerful. Very low taxes on the super-rich do not help small businesses that have typically created more jobs than monopolized, vertically-integrated entities that have an incentaive to create shortages that allow them to gouge.

It has been a powerful current, and it has ravaged much of America. Real pay is lower for American workers than it ws in the 1970's. Neoliberalism tends to concentrate economic activity in fewer places, and such implies even that more regions of the country get burned. Neoliberalism has hurt so many people that people have often been willing to vote for "outsiders" with demagogic appeals, like... well, you know who.Bad ideas, bad practices, and bad behavior that appeared rather recently are more likely to vanish than more distant, more entrenched realities. 

Should this Crisis culminate in a war, then neoliberalism gives people something more shaky for which to fight. What soldier would put his life on the line to protect the lavish compensation of executives or the profits of monopolists? Why die for war profiteers? Why die for small cadres of big shareholders and over-compensated executives? Maybe the greedy bastards who treat us badly know that most of us would prefer a better America to a bigger one. At least things were getting better in America as the Japanese bombed Pearl Harbor. 

As for the ravaging of places: consider Rochester, New York. Thirty years ago it was a good place to live because it had plenty of industrial work that required nothing more than a high-school diploma.  Maybe it does not help that Kodak and Polaroid stumbled, and that Xerox lost a huge part of its copying-machine business to expendable copiers that cost less to replace than for a service call to fix a giant copying machine.  OK. It is now an economic wreck. But that is how much of "flyover country" is now.  On the other hand, to live where the opportunities are implies that landlords will gouge you.


RE: Winners and Losers of this 4T - pbrower2a - 09-08-2020

A 1T promotes conformity, including in results. Most people want much the same thing, and that may be the source of the conformity. The only people who do not get conforming results are those deemed pariahs or near-pariahs (think of Southern blacks or First Peoples on the Reservations in the 1950's) or self-exiling beatniks, mystics, and their kind. For neoliberal results to continue into the 1T, Americans would need a consensus in which the vast majority of people insist upon near-equality (if at a low level) among the proles with a culture of mind-numbing awfulness to which borderline-retarded people can relate. People would have to accept that their sole purpose in life is to enrich and indulge economic elites while obeying their demands.

Such is neither egalitarian, collectivistic, not rational. Such implies a social order in which anyone not part of the elite is broken, as if subjects in a harshly-run colonial empire. In culture, anyone who wants anything other than what the elites dictate is right for the masses is all that is available. It would well fit the stupid (just look at popular music: Top-40 hits are made for people with short attention spans.

The poverty which results from such an economic order would itself constitute child abuse. An educational system that fits such an order could resemble that to which the Apartheid regime in South Africa relegated non-whites: much of the emphasis was on cleaning and serving. Neoliberalism is not racist in itself, but it would intensify any disparities that already exist.

It would need to distort democracy into an image that one sees in a fun-house mirror in which a ballerina who has no excess fat looks grotesquely obese or in which a Santa Claus looks wiry. Systems that treat people badly are infamous for waging wars for profit and glory On the other hand a well-connected perv might get boys or girls of any desired age and get away with it.

Nothing says that the generational cycle continues operating quite as it used to. However unsettling it may be at any given time, the generational cycle may be all that keeps things from settling into a nightmare that nobody can shake. What is often seen as stability hides rot underneath.


RE: Winners and Losers of this 4T - Eric the Green - 09-08-2020

(09-07-2020, 10:22 AM)sbarrera Wrote:
(09-06-2020, 03:11 AM)Eric the Green Wrote: What is Neo-liberalism?




This is a great video. What I am getting out of it is: neoliberalism is really the mind-set of the Third Turning- focus on market behavior, the rights and needs of the individual over the collective, and deregulating economic activity. Both major U.S. parties subscribe to it.

So my next question is- how is Biden not a representative of the neoliberal wing of the Democrats? It seems to me that the opposition - Sanders/Warren, basically - was displaced in the primary.

It's a matter of considerable difference in degree. Biden is getting lots of advice from Warren and has adopted platform planks from Sanders. It was not a total displacement. And I also posted the data on Bill Clinton's accomplishments that were against the grain of neo-liberalism.
https://www.americanprogress.org/issues/...ton-years/
(posted already)

So although a lot of critics of neo-liberalism say both parties subscribe to it, I disagree that there is no difference. There is quite a bit. Especially since the Republicans have now become fascists. But I also keep in mind that, the USA being a conservative country in which today's generations have grown up with the assumption that the market is sacrosanct, it is not easy for the USA to jump to democratic socialism in one election. So, gradual change is the best we can hope for in a country that recently voted to re-elect a neo-liberal president who started a deadly war for no reason, and in which 44% or more are prepared to re-elect yet another neo-liberal president who is totally corrupt and unfit.

What kind of country do you think we live in, Steve? Can a country full of stubborn Classic Xers who think they are the real Americans be swayed to give up their dear delusions overnight?

What I notice is that Biden's record is less liberal, and more neo-liberal, than Hillary's, although Biden may be shifting left. So, if the Republicans keep winning, and doing horrible things and getting away with them, then the fear of the greater of two evils gets ever-sharper, and the need to compromise with neo-liberals ever greater. So, the one hope is for neo-liberal and fascist Republicans to start to lose. 2020 would be a great place to start, and this is by no means certain. Biden's lead in Florida has dipped under 2 points, and in PA it is now only 4 points. But then, for the first time in three turnings or more, this loss needs to continue indefinitely until the Republicans fall apart, and the Democrats split into a more progressive or green wing and a more-conservative wing that is more like the Republicans used to be under Ike or under TR.

For this to happen, though, Kamala Harris must never succeed Biden as the Democratic standard bearer. The choice of a candidate skillful at WINNING is more important than what the ideology is. Democrats don't usually remember this. Harris is a loser.


RE: Winners and Losers of this 4T - Eric the Green - 09-08-2020

(09-08-2020, 04:54 AM)David Horn Wrote:
(09-07-2020, 07:27 PM)Eric the Green Wrote: It is obvious that Donald Trump applies the neo-liberal trickle-down theory MUCH more than Democratic presidents have, or would. The Donald has slashed many regulations that protect the environment and workers and lowered taxes on the rich in times of economic recovery when it was not needed. So WHY oh why do polls still give Trump 1% higher approval on how he manages the economy? What fools Americans are!!!

The GOPpers have sold themselves as the adults in the room, and changing that impression is far from simple.  When Kinser noted that Dems are lousy at memes, this is one of many important examples.  Dems shoot for the brain, and Republicans shoot for the gut.  Emotions always win that fight.

Yes, I agree with those points. The actual nominees make a lot of difference. Trump is totally a gut man, but Biden is more from the heart than Hillary was. At least, so is my hopeful impression, and verified by my scoring method.


RE: Winners and Losers of this 4T - sbarrera - 09-09-2020

(09-08-2020, 05:34 PM)Eric the Green Wrote:
(09-07-2020, 10:22 AM)sbarrera Wrote:
(09-06-2020, 03:11 AM)Eric the Green Wrote: What is Neo-liberalism?




This is a great video. What I am getting out of it is: neoliberalism is really the mind-set of the Third Turning- focus on market behavior, the rights and needs of the individual over the collective, and deregulating economic activity. Both major U.S. parties subscribe to it.

So my next question is- how is Biden not a representative of the neoliberal wing of the Democrats? It seems to me that the opposition - Sanders/Warren, basically - was displaced in the primary.

It's a matter of considerable difference in degree. Biden is getting lots of advice from Warren and has adopted platform planks from Sanders. It was not a total displacement. And I also posted the data on Bill Clinton's accomplishments that were against the grain of neo-liberalism.
https://www.americanprogress.org/issues/...ton-years/
(posted already)

So although a lot of critics of neo-liberalism say both parties subscribe to it, I disagree that there is no difference. There is quite a bit. Especially since the Republicans have now become fascists. But I also keep in mind that, the USA being a conservative country in which today's generations have grown up with the assumption that the market is sacrosanct, it is not easy for the USA to jump to democratic socialism in one election. So, gradual change is the best we can hope for in a country that recently voted to re-elect a neo-liberal president who started a deadly war for no reason, and in which 44% or more are prepared to re-elect yet another neo-liberal president who is totally corrupt and unfit.

What kind of country do you think we live in, Steve? Can a country full of stubborn Classic Xers who think they are the real Americans be swayed to give up their dear delusions overnight?

What I notice is that Biden's record is less liberal, and more neo-liberal, than Hillary's, although Biden may be shifting left. So, if the Republicans keep winning, and doing horrible things and getting away with them, then the fear of the greater of two evils gets ever-sharper, and the need to compromise with neo-liberals ever greater. So, the one hope is for neo-liberal and fascist Republicans to start to lose. 2020 would be a great place to start, and this is by no means certain. Biden's lead in Florida has dipped under 2 points, and in PA it is now only 4 points. But then, for the first time in three turnings or more, this loss needs to continue indefinitely until the Republicans fall apart, and the Democrats split into a more progressive or green wing and a more-conservative wing that is more like the Republicans used to be under Ike or under TR.

For this to happen, though, Kamala Harris must never succeed Biden as the Democratic standard bearer. The choice of a candidate skillful at WINNING is more important than what the ideology is. Democrats don't usually remember this. Harris is a loser.

As for what kind of country we live in, I would have to say we do live in a country in deep denial. I'm not sure about turning around the Xers but there are plenty of Boomers too in that state.

I do think the COVID pandemic will force us away from neoliberalism - I mean, it already has with the "stimulus" which would be more accurately named if it were called "relief". But I'm not sure how progressive or green we will emerge from the other side; there are other scenarios and we seem to lack collective will. Eric, I know you are very hopeful for the New Age vision coming to be but I detect a more Gilded Age future coming since Americans seem to prefer corporate solutions and favoring the rich.


RE: Winners and Losers of this 4T - David Horn - 09-09-2020

(09-09-2020, 10:16 AM)sbarrera Wrote: As for what kind of country we live in, I would have to say we do live in a country in deep denial. I'm not sure about turning around the Xers but there are plenty of Boomers too in that state.[/quote

Tell me about it. Big Grin

I live near so many of those folks it's sickening. At some point, the Kool-Aid has to run out, and then maybe There's a shot. But it will have to come from them. Outside persuasion isn't going to work.

[quote='sbarrera']
]I do think the COVID pandemic will force us away from neoliberalism - I mean, it already has with the "stimulus" which would be more accurately named if it were called "relief". But I'm not sure how progressive or green we will emerge from the other side; there are other scenarios and we seem to lack collective will. Eric, I know you are very hopeful for the New Age vision coming to be but I detect a more Gilded Age future coming since Americans seem to prefer corporate solutions and favoring the rich.

This may happen, at least for a while, but those solutions don't actually solve anything. AGW doesn't care. COVID doesn't care either. And reverse Robin Hood has a defined end point that can't be breached. If there is no viable resolution now, then the 2T will be explosive.


RE: Winners and Losers of this 4T - Bob Butler 54 - 09-09-2020

(09-09-2020, 12:45 PM)David Horn Wrote:
(09-09-2020, 10:16 AM)sbarrera Wrote: As for what kind of country we live in, I would have to say we do live in a country in deep denial. I'm not sure about turning around the Xers but there are plenty of Boomers too in that state.[/quote

Tell me about it.  Big Grin

I live near so many of those folks it's sickening.  At some point, the Kool-Aid has to run out, and then maybe There's a shot.  But it will have to come from them.  Outside persuasion isn't going to work.

sbarrera Wrote:]I do think the COVID pandemic will force us away from neoliberalism - I mean, it already has with the "stimulus" which would be more accurately named if it were called "relief". But I'm not sure how progressive or green we will emerge from the other side; there are other scenarios and we seem to lack collective will. Eric, I know you are very hopeful for the New Age vision coming to be but I detect a more Gilded Age future coming since Americans seem to prefer corporate solutions and favoring the rich.

This may happen, at least for a while, but those solutions don't actually solve anything.  AGW doesn't care.  COVID doesn't care either. And reverse Robin Hood has a defined end point that can't be breached. If there is no viable resolution now, then the 2T will be explosive.

Last time around the high was about the right length, but the awakening ran short and the crisis triggered late during the generational alignment.  We saw the progressive era come to an end with the Chicago Democratic convention and the election of Nixon.  We saw the sick seventy failures start to roll in after that, Watergate, the Fall of Saigon, Stagflation, the Oil Crisis, the Hostage Crisis. The crisis trigger came late.  The result was a very long 3T.  It wouldn't shock me if the awakening came fairly early this time.  We can solve CIVID and racist violent policing fairly quickly.  If there are no further crisis triggers, and they have been rare for major powers, a lot of people will want to get mercenary kind of quick.

But as you say global warming will not wait for the culture.  I anticipate a next prophet generation with green values and this generation is not apt to wait patiently.  In this case the 2T may be early as well as explosive.

The idea of a reverse Robin Hood might make progress in a post racist environment.  The dominant Republicans had elitist and racist tendencies.  Both worked to take wealth away from the working poor and the minorities, which stifled reverse Robin Hood.  We are not ready for all to be equal, but having a right to food, shelter, health care and a retirement plan is viable.  With productivity much greater, resources scarcer, less drive for luxuries and the elites not able to grab a super share of the wealth, we could see a very different economy.  Maybe not in the crisis.  Rethinking the economy is looking like it won't happen under Biden, in spite of the supposedly radical Democrats being accepted into the main line.  Perhaps in your explosive 2T?


RE: Winners and Losers of this 4T - David Horn - 09-09-2020

(09-09-2020, 02:11 PM)Bob Butler 54 Wrote:
(09-09-2020, 12:45 PM)David Horn Wrote:
(09-09-2020, 10:16 AM)sbarrera Wrote: As for what kind of country we live in, I would have to say we do live in a country in deep denial. I'm not sure about turning around the Xers but there are plenty of Boomers too in that state.

Tell me about it.  Big Grin

I live near so many of those folks it's sickening.  At some point, the Kool-Aid has to run out, and then maybe There's a shot.  But it will have to come from them.  Outside persuasion isn't going to work.

David Horn Wrote:
sbarrera Wrote:I do think the COVID pandemic will force us away from neoliberalism - I mean, it already has with the "stimulus" which would be more accurately named if it were called "relief". But I'm not sure how progressive or green we will emerge from the other side; there are other scenarios and we seem to lack collective will. Eric, I know you are very hopeful for the New Age vision coming to be but I detect a more Gilded Age future coming since Americans seem to prefer corporate solutions and favoring the rich.

This may happen, at least for a while, but those solutions don't actually solve anything.  AGW doesn't care.  COVID doesn't care either. And reverse Robin Hood has a defined end point that can't be breached. If there is no viable resolution now, then the 2T will be explosive.

Last time around the high was about the right length, but the awakening ran short and the crisis triggered late during the generational alignment.  We saw the progressive era come to an end with the Chicago Democratic convention and the election of Nixon.  We saw the sick seventy failures start to roll in after that, Watergate, the Fall of Saigon, Stagflation, the Oil Crisis, the Hostage Crisis. The crisis trigger came late.  The result was a very long 3T.  It wouldn't shock me if the awakening came fairly early this time.  We can solve CIVID and racist violent policing fairly quickly.  If there are no further crisis triggers, and they have been rare for major powers, a lot of people will want to get mercenary kind of quick.

But as you say global warming will not wait for the culture.  I anticipate a next prophet generation with green values and this generation is not apt to wait patiently.  In this case the 2T may be early as well as explosive.

The idea of a reverse Robin Hood might make progress in a post racist environment.  The dominant Republicans had elitist and racist tendencies.  Both worked to take wealth away from the working poor and the minorities, which stifled reverse Robin Hood.  We are not ready for all to be equal, but having a right to food, shelter, health care and a retirement plan is viable.  With productivity much greater, resources scarcer, less drive for luxuries and the elites not able to grab a super share of the wealth, we could see a very different economy.  Maybe not in the crisis.  Rethinking the economy is looking like it won't happen under Biden, in spite of the supposedly radical Democrats being accepted into the main line.  Perhaps in your explosive 2T?

Unlike Eric, I don't have a magic system to say how this will go down, but we're still hell-and-gone from enough voting power to push through real solutions.  The youth are getting disenchanted and angry at everyone.  This is not going to get resolved through politics any time soon. I'm not sure the perpetually screwed are willing to wait. Where that goes is hard to say, but the most angry are also the most tech-savvy segments of the populace.


RE: Winners and Losers of this 4T - sbarrera - 09-09-2020

This article from Neil Howe's demography unplugged is relevant:

https://app.hedgeye.com/insights/88810-millennials-hit-by-back-to-back-recessions?type=stock-and-policy%2Cmarket-insights

 09/09/20 11:07 AM EDT
Millennials Hit By Back-To-Back Recessions
[Image: headshot_nhowe.png?1583454776]
Neil Howe
@howegeneration

Below is a [i][i]complimentary[/i] [/i]Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. [b]Click here [/b]to learn more and subscribe.
[Image: 9_9_2020_11_00_58_AM.png]
Millennials hit by a second financial crisis may never have a chance to accumulate the wealth of older generations. Already a step behind thanks to the Great Recession and now hit the hardest by COVID-19’s economic fallout, young people are at risk of permanently falling behind. (The Wall Street Journal)


NH: History may end up defining Millennials as a generation bracketed by massive back-to-back economic hits: the Great Financial Crisis (2008-09) and the Pandemic Recession (2020-?).


The first hit first-wave Millennials in their early to mid-20s, and the second is hitting last-wave Millennials at roughly the same age.


WSJ reporter Janet Adamy summarizes some of the economic evidence suggesting that high employment and scarce job openings for young workers have a negative impact on future life prospects that lasts long after--sometimes decades after--the crisis itself has passed.
Since we've covered this topic often, I will simply refer here to NewsWire items we have already written. On the long-term impact of economic downturns on future employment rates and earnings, by age and birth cohort, see "The Bad Luck Class of 2020."


On how Millennials may be affected financially--in their future net worth and in their acquisition of wealth and housing--see "Millennials Face Net Worth Shortfall," "Early-Wave Millennials: Educated, Employed, But in Woeful Financial Shape," and "Tiny House Nation: The Millennial Share of U.S. Real Estate Wealth." The last three pieces BTW were written before the 2020 lockdown hit.


Adamy quotes me in the article for pointing out the obvious parallels between the Millennials and the G.I. Generation (born 1901-24). They have had a similar location in history. The first wave of G.I.s were hit by the Spanish Influenza of 1918-19 and the twin recessions of 1918-19 and 1920-21. And later on, of course, both the first and last wave of the G.I.s were hit by the Great Depression.


As young adults, the G.I.s fell way behind earlier generations in employment, income, and net worth. But later on they were able to make up the loss--and more--with the help of a major "New Deal" political and social transformation that they helped usher in as voters, workers, and soldiers.


Economists often refer to the long-lasting and path-dependent impact of an economic crisis on future employment and earnings as "hysteresis." The word has an interesting (and sexist) origin: In ancient Greek, the word for womb or (in Latin) uterus was "hystera," and it is a synonym for lack or absence. The only recognizable English cognate is hysterectomy.


Anyway, what social scientists are aiming at is the idea that a "lack" of some critical life experience has enduring consequences.


Another often-used word for this is "scarring." For a generation, as for an individual, a bad wound does not heal without changing people in lasting ways. Perhaps the first use of the word in this sense appeared in the title of Caroline Bird's book: The Invisible Scar: The Great Depression, and what it did to American life, from then until now. Her account, written in 1965 when everyone over age 30 recalled the trauma, is wonderfully generational. She explained how the collective personality of America's emerging generation of midlife leaders at that time, beginning with Jack Kennedy and LBJ, had been shaped young by economic scarcity and adversity. And already she foresaw how it was destined to clash with a younger generation, accustomed to affluence, born after World War II.


The opening of her book is worth quoting here at some length:


"It is a curious fact that the Great Depression is in danger of disappearing altogether from the collective consciousness. Already it seems unreal, even to those who lived through it. Did those things really happen? We pinch ourselves. Wasn't it a bad dream?"


"In spite of this tendency, the Great Depression was real, it was awful, and more to the point, it packed a bigger wallop than anything else that happened to America between the Civil War and the Atom Bomb. It had more far-reaching consequences, I happen to think, than either of the World Wars. Nobody escaped. Every individual in every walk of life was hit. What is overlooked and frequently forgotten is this: when the stock market crashed in October 1929, America stopped growing and did not really get moving again until the attack on Pearl Harbor in December 1941 mobilized our resources."


Small-scale economic downturns show up as life cycle blips that can be linked by economists to specific birth cohorts. Large-scale economic downturns shape entire generations in a manner which can subsequently move the entire society in a new direction.



RE: Winners and Losers of this 4T - pbrower2a - 09-09-2020

(09-09-2020, 05:24 PM)sbarrera Wrote: This article from Neil Howe's demography unplugged is relevant:

https://app.hedgeye.com/insights/88810-millennials-hit-by-back-to-back-recessions?type=stock-and-policy%2Cmarket-insights

 09/09/20 11:07 AM EDT
Millennials Hit By Back-To-Back Recessions
[Image: headshot_nhowe.png?1583454776]
Neil Howe
@howegeneration

Below is a [i][i]complimentary[/i] [/i]Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. [b]Click here [/b]to learn more and subscribe.
[Image: 9_9_2020_11_00_58_AM.png]
Millennials hit by a second financial crisis may never have a chance to accumulate the wealth of older generations. Already a step behind thanks to the Great Recession and now hit the hardest by COVID-19’s economic fallout, young people are at risk of permanently falling behind. (The Wall Street Journal)


NH: History may end up defining Millennials as a generation bracketed by massive back-to-back economic hits: the Great Financial Crisis (2008-09) and the Pandemic Recession (2020-?).


The first hit first-wave Millennials in their early to mid-20s, and the second is hitting last-wave Millennials at roughly the same age.


WSJ reporter Janet Adamy summarizes some of the economic evidence suggesting that high employment and scarce job openings for young workers have a negative impact on future life prospects that lasts long after--sometimes decades after--the crisis itself has passed.
Since we've covered this topic often, I will simply refer here to NewsWire items we have already written. On the long-term impact of economic downturns on future employment rates and earnings, by age and birth cohort, see "The Bad Luck Class of 2020."


On how Millennials may be affected financially--in their future net worth and in their acquisition of wealth and housing--see "Millennials Face Net Worth Shortfall," "Early-Wave Millennials: Educated, Employed, But in Woeful Financial Shape," and "Tiny House Nation: The Millennial Share of U.S. Real Estate Wealth." The last three pieces BTW were written before the 2020 lockdown hit.


Adamy quotes me in the article for pointing out the obvious parallels between the Millennials and the G.I. Generation (born 1901-24). They have had a similar location in history. The first wave of G.I.s were hit by the Spanish Influenza of 1918-19 and the twin recessions of 1918-19 and 1920-21. And later on, of course, both the first and last wave of the G.I.s were hit by the Great Depression.


As young adults, the G.I.s fell way behind earlier generations in employment, income, and net worth. But later on they were able to make up the loss--and more--with the help of a major "New Deal" political and social transformation that they helped usher in as voters, workers, and soldiers.


Economists often refer to the long-lasting and path-dependent impact of an economic crisis on future employment and earnings as "hysteresis." The word has an interesting (and sexist) origin: In ancient Greek, the word for womb or (in Latin) uterus was "hysteria," and it is a synonym for lack or absence. The only recognizable English cognate is hysterectomy.


Anyway, what social scientists are aiming at is the idea that a "lack" of some critical life experience has enduring consequences.


Another often-used word for this is "scarring." For a generation, as for an individual, a bad wound does not heal without changing people in lasting ways. Perhaps the first use of the word in this sense appeared in the title of Caroline Bird's book: The Invisible Scar: The Great Depression, and what it did to American life, from then until now. Her account, written in 1965 when everyone over age 30 recalled the trauma, is wonderfully generational. She explained how the collective personality of America's emerging generation of midlife leaders at that time, beginning with Jack Kennedy and LBJ, had been shaped young by economic scarcity and adversity. And already she foresaw how it was destined to clash with a younger generation, accustomed to affluence, born after World War II.


The opening of her book is worth quoting here at some length:


"It is a curious fact that the Great Depression is in danger of disappearing altogether from the collective consciousness. Already it seems unreal, even to those who lived through it. Did those things really happen? We pinch ourselves. Wasn't it a bad dream?"


"In spite of this tendency, the Great Depression was real, it was awful, and more to the point, it packed a bigger wallop than anything else that happened to America between the Civil War and the Atom Bomb. It had more far-reaching consequences, I happen to think, than either of the World Wars. Nobody escaped. Every individual in every walk of life was hit. What is overlooked and frequently forgotten is this: when the stock market crashed in October 1929, America stopped growing and did not really get moving again until the attack on Pearl Harbor in December 1941 mobilized our resources."


Small-scale economic downturns show up as life cycle blips that can be linked by economists to specific birth cohorts. Large-scale economic downturns shape entire generations in a manner which can subsequently move the entire society in a new direction.


1. The high-school Class of 2020 is probably not Millennial. The 9/11 attack may have created a very early divide between Millennial and Homelander youth. The disruptions of 2020 of many rites of passage (from First Communions to Bar Mitzvahs and quinceaneras, sports seasons from Pop Warner football and Little League baseball to high-school championship seasons to senior proms and formal graduations and first days of college) is a far bigger shock; I see the latter interruption of rites of passage certain to divide Homelander from GI generations.  Rites of passage commonly define people.   

2. People who knew the GI's only after World War II may think that in contrast to themselves that GI's had it good. If they did have things good after WWII it is because they made America a much better place than it was when they were children (if late wave) or approaching midlife (if early wave). Although GI's got far better protection and guidance from parents than did the Lost, GI life was hardscrabble for all but the elites and the tiny middle class. A large middle class is largely a GI self-creation. If others 'gave' them better educational opportunities during the Depression, then that was to keep children out of the workforce so that they would not compete with (then largely Lost "breadwinners". If they got the GI Bill, they certainly earned it for ensuring that an American who learns German or Japanese does so for some reason other than being able to obey some brutal boss or turn a trick as a prostitute (for lack of better ways of making a living) for a member of the local Master Race as determined by the administrative division between those who treat Hitler as a god and those who see the Emperor of Japan as a descendant of a god. 

3. Neoliberalism, a clever way of dressing up exploitative plutocracy as if the only way to do things, has been the norm in America since Ronald Reagan. It will be the Millennial generation that takes it down, whether transforming America  into a social-market state or into some revolutionary consequence (which could be an all-American revision of Marxism)... or nobody until at least the next Crisis Era. Should neoliberalism prevail, then Americans will endure the unprecedented situation of being exploited by every classic and novel elite (big rural landowners, tycoons, financiers, urban landlords, corporate and private-sector bureaucrats, religious hucksters, and organized crime) who ensure grinding poverty for all but themselves. Even the French before 1789 didn;t have so many rapacious exploiters as we Americans now know.

It is possible that Millennial adults who, following the pattern of other Civic generations, will insist upon an indulgent upbringing for their kids, and such is incompatible with grinding poverty. We do not yet see a new Idealist generation forming... yet. Once this Crisis Era comes to an end, children who will not know the Crisis will know a far safer and (for them) a more prosperous world -- unless neoliberalism becomes an indelible practice along with several Master Classes exploiting all wealth not needed for animal-like survival for the proles and their children. That would stall the generational cycle while perhaps not having the same effect elsewhere... Around 2100, the fecal matter will hit the fast-spinning rotor blades as AGW starts inundating heavily-populated prime farmland around the world if it does not desiccate much of it. 

4. The demise of neoliberalism (should such happen, and that will require a huge change in American political life) will undo the extreme inequality in America. High taxes on large "unearned" income will create niches for small businesses -- especially if the Pandemic Recession forces "Too Big to Save" this time instead of "Too Big to Fail" as last time. If Corporate America did not clean up its act when Obama rescued it, then maybe we will have to start over from scratch in heavy industry, chemicals, vehicles, banking, and retail. Those industries came into being far more swiftly. High-cost ways of doing things will die due to a lack of consumer funds for buying their stuff. The new firms will be small businesses at the outset, firms that might operate small-scale stores once highly profitable for (and here I am naming a name) JC Penney. I remember buying lots of stuff from JC Penney in towns of 10,000 or so when the store was largely clothing stores with a catalog shop for hard lines... and preferring such a shop to the shopping-mall store. Those stores were profitable, and JC Penney chose to commit to its high-cost mall anchors* by preventing their smaller stores from 'cannibalizing' the sales in those mall anchors.

5. Depressions have a way of clearing out bad business practices such as overgrown bureaucracies (bureaucracies are good for control of bloated entities, but depressions may make the bloat unsustainable), businesses buying the political system (the difference between FDR and Obama), lack of concern for cost (captive customers will pay for a lack of alternatives), promotion of glamour that people cannot afford, and irrational choices in shopping. The 1930's may not have seemed the ideal time for starting new businesses from the standpoint of having customers flush with cash, but costs were low and so were owners' expectations. Start-up businesses have owners who can relate to the proletariat because the owners are close to being the proletariat; those businesses must create a customer base without lavish budgets for advertising. They can't buy the political process as can the bloated giants of our time through campaign contributions and lobbyists. Starting a small business is not easy, especially in a time of low yields and rewards mostly in the long term. At some point, low-yield and long term are better than no yield and never. Real estate is cheap, supplies and raw materials are available at fire-sale prices without the smell of smoke; good workers with solid work ethics are easy to find and inexpensive, and any employee has an incentive to get relatives to be a customer to help that employee keep a job.

Depressions and severe recessions are times of rapid growth, probably because of small-business formation and cost-containment in extant firms. 

6. Surprisingly, despite their prosperity, Highs are times of slight activity in business formation. It may not be the promise of profits in the long term that induce the formation of small businesses but instead the absence of alternatives. Adaptive generations in the working class had well-paid (by the standard of the time) work in the manufacturing industry and transportation with the aid of union contracts. Well-educated Adaptive young adults may form businesses, but most of those are professional practices which quickly reach saturation and don;t really create many jobs once established. I look at the the Silent Generation and see relatively few founders of new businesses that grew into large-scale employers or as generators of wealth: Frank Thomas and Mike Illich (fast food), T. Boone Pickens (oil wildcatting), Ross Perot (government contracting), Michael Milken and Roger Icahn (somewhat-shady stock investment), Warren Buffett (venture capital, I suppose). There was Don Dixon (banking and real estate, but that proved a fraud). They may have been competent programmers, engineers, physicians, teachers, scientists, administrators, engineers, and creative people, but they generally did not form small businesses with growth potential. They created wealth but did not do enterprise enough. The entrepreneurial void associated with the Silent Generation would contribute to the faltering of the American economy in the 1970's and the "Little Depression " circa 2010.

7. Above all, we are approaching the end of an age in which more production of stuff has such a low return is unlikely to make people happier. This may force more attention to the distribution of the economic output than to making more stuff that people do not want because added stuff is clutter.  .    


*In the retail industry "anchors" are big department stores typically at the ends of those malls, at one time typically Sears (dying), JC Penney (probably moribund), Montgomery-Ward (deceased), Bon Ton (deceased), Mervyn's (deceased), Marshall-Field's (merged into Macy's), Dillard's and such regional chains as Bullock's, Capwell's, Jacobson's, J L Hudson, L S Ayres, Goldwater's, Foley's, etc. ... many of those 'anchors' have taken the leaky ship of the shopping mall down with them.