Host: Mike Ippolito
Guest: Neil Howe, author of The Fourth Turning, works at Hedgeye
Generational theory wasn’t popular after WW2
Rebounded in 1960s-70s – generational gap caused by Baby Boomers, who had very different values from the war generation
Boomers wanted to take over and challenge their parents
Boomers aren’t builders, but they’re very expressive
Co-wrote Fourth Turning w/ Bill Strauss
Both authors had written already about generational issues
Fourth Turning wanted to look at series of generational changes in American history
Didn’t expect cycles – it was an epiphany as they researched
Certain kinds of generations always follow others
Interdisciplinary approach, sociocultural cycles
“Gen X” wasn’t coined until 1992 – Material Girl, hip hop culture, didn’t like Boomers’ hypocrisy, jaundiced and cynical views
Major civic revolutions / upheavals once every ~80 years (average lifespan, called a “saeculum”)
Each generation is ~22 years, 4 of them = ~80-90 years
Every turning tends to end in a crisis
1770s American Revolution > 1860s Civil War > 1940s WW2 > 2020s
Mike:
“Want to rebel against our parents”
Ray Dalio’s long-term debt cycle (every 80 years, great deleveraging in financial markets)
Fourth Turning has lots of linkages with cycles in other fields – economics, culture
Re-aligning political elections occur in sync with these cycles
“It doesn’t look good at the moment”
Every time you have a crisis, every one who had a living memory of the last crisis is already gone – eg, WW2 forgot Civil War, today we forget WW2 and Great Depression
Every turning is a generation – ~20 years
Each turning is when you’re moving from childhood > young adulthood > mid life > elder
The whole social mood changes as each generation shifts
Fourth Turning is final phase, the “crisis phase”
A civic / reconstruction phase
Associated with scarcity, the Depression, the great wars, the revolutions
Periods of great disorder
Institutions have become sclerotic / dysfunctional
Need rejuvenation / forest fires to clear out the brush
Allow new resources and new institutions to flourish
Periods of tremendous social growth
“We always make our biggest changes during times of crisis” – after WW2 we established Social Security, Bretton Woods + IMF + World Bank
Same after Civil War – national currency system, transcontinental railroad, etc
Lots of tribalization today – red vs blue zones, extreme political opinions
More people think a civil war is likely
Fascism vs socialism
Participation in politics has skyrocketed – voter turnout, “Trump solved that problem”
Rapid deterioration of growth prospects for young Americans
Book “Big Sort” shows how Americans are geographically dividing by culture and politics
Now likelihood of a great power confrontation caused by Russia invasion of Ukraine
Our current Fourth Turning started in 2008 with Great Financial Crisis
This phase will extend to 2030
Very low GDP growth, inflated markets with QE and low rates, driven by Central Bank policies and MMT
Long-term inflation expectations are exploding
Powell wants to be Volcker now, must fight inflation
America has enormous deficits today – no more stimmy, higher interest rates, Ukraine conflict, China struggling – bleak picture
Fed can’t really intervene now to protect markets
After mid-term, likely both Houses will be Republican
Both parties don’t really have consensus leadership
Mike: “something eventually has to give” – but then there will be genuine improvement
Realized other great powers aren’t democracies – China, Russia
On youth:
They invented the word “millennial” – high school class of 2000 was initial cohort
Did book “Millennial Rising” – they’re special, risk averse, attached to parents, less crime, collective teamwork / organizing
Greatest distrust with democracy is among younger people – believe it empowers older / richer people – thus the move to collectivism