COVID-19 versus the 1918 Influenza Pandemic

[Increase Mather]

(03-19-2020, 06:00 PM)beechnut79 Wrote:

(03-19-2020, 02:56 PM)Increase Mather Wrote: Thanks for the replies folks.  Since there's a bit of interest, I'll delve down some more.

Who here is familiar with the work of Harry Dent?  His thinking has been greatly influenced by Strauss and Howe.  Admittedly, he isn't as scholarly as S&H are, but then he comes from the finance world.  He used to run a mutual fund back in the day.

His biggest weakness is that he tries to predict the market tops and bottoms with too much specificity, whereas S&H are much more circumspect and allow for anomalies (i.e. the shortened Civil War saeculum).  On the other hand, Dent has some high-profile advocates such as David Stockman, the former Treasury Secretary under Reagan.

His basic premise is something like this: you get economic booms in the 1T and 3T, economic busts in the 2T and 4T.

The springtime 1T boom is fueled by pure raw demand.  It's the point where new household creation is at its peak (1950s USA).  It takes a large dominant Hero generation like G.I.s or Millennials to make this happen.

The summertime 2T bust is characterized by inflation, with the economy overheating and its key inputs becoming scarce.  (Think 1970s USA with stagflation, the energy crisis, Jimmy Carter malaise.)

The autumnal 3T boom is fueled by new technological breakthroughs, and the attendant increases in worker productivity.  (1920s boom or 1990s tech boom.)

The winter 4T bust is characterized by deflation, when new household creation is at its trough and demand is at its weakest.  This is the one elites have a dread fear of.  "Deflation" is is verboten word in the financial media, it's rare that anyone even has the cojones to utter this curse word.

So our deflationary winter may have been bit late, but now has finally found the pretext it needed to assert itself.  If so, this won't just be a "correction" but a "reset", where all the sectors that have been overpriced for awhile now (healthcare, real estate, higher education) will fall back down to Earth.  And contrary to expectations, the middle class will be allowed to preserve its existence for another saeculum.  But there's a fair amount of pain and dislocation to come first.

The one idea from Generations that sticks out to me the most right now is, "It is not the triggering event *itself* that creates the Crisis, but rather, *society's reaction to* the triggering event that creates the Crisis".

Yes Inread one of Harry Dent’s books where he talks about a second Great Depression which never arrived; at least not yet. Could happen if the fallout from COVID-19 lasts a long time.  Which takes me to third from last paragraph as depression is that other evil D word in the minds of economists. Economic blasphemy if you will. Do you believe the virus panic to be the triggering event to usher in the crux of this crisis?

I would be shocked if the 1T that follows ends up being a rerun of the last one. Can’t imagine today’s women being willing to put up with returning to the kitchen to assume June Cleaver-like roles. And modern technology no doubt won’t allow a repeat of the Organization Man ethos either where they were all but guaranteed lifetime security.

For just a moment, let's look at it purely from an econ/finance point of view, while leaving out the political and social aspects:

Imagine a winter that starts off with a fairly severe cold snap at the start of December.  That would be analogous to the 2009 financial crash.  Then you get a strange, anomalous balmy period in early January, which is usually the "dead of winter".  That has been the period from say, 2015 thru early 2020 (anomalies happen!)

But we still have about half of winter to go.  Now we enter that dreary, slogging period of late-January thru end-of-February, where the air is frigid and the snow is dirty, and you wish it would just melt already.  Only then do the saecular deflationary pressures ease up, and create the conditions for a regeneracy.  Dent predicts that the inflection point will happen some time around 2023; that's when the demographic trends begin to turn upward.

Of course, all sorts of political things can happen in the interim.  Who knows what kind of society will finally poke its head of out its Groundhog Hole circa 2028, to see if the coast is clear?  As for the social aspects, a repeat of the 1T doesn't necessarily mean women are back to June Cleaver roles.  I do think that male/female gender roles will diverge from each other, but that could take many different forms.

Hope I answered your question satisfactorily, beechnut79.