Neil Howe On The Fourth Turning: How Bad Will It Get, How Long Will It Last & What Comes Next? (PT1)

looking at the challenges we face ahead how does history suggest that things will play out from here we asked a leading historian and demographer and his advice is to prepare for a prolonged period of disruption ahead one that will be exacerbated by a lack of good leaders well what happens is finally you enter the the fourth turning and with this lack of direction lack of regulation lack of cohesion everything runs aground eventually right you become very vulnerable to crisis um and everyone has forgotten the habits of what you do to actually counteract christ this is the whole problem every time you go into a fourth turning is that every generation at that time by the time you're entering a new fourth turning every generation who has had any adult experience handling a crisis is too old to serve welcome to wealthyon i'm adam taggart founder of wealththeon welcoming you back for another week of making sense of money and the markets so that you can make better informed decisions about building your wealth now they say that history rhymes that civilizations and societies they tend to follow cycles boom bust feast famine war peace cultural experimentation a retrenchment back to the old ways of doing things today's guest expert is the author of the best-selling book the fourth turning which lays out his prediction that today's society has entered the best part of our current cycle that's where the status quo falls apart often chaotically to be replaced by a new hopefully better order what should we expect from this period of disruption and other steps we can be taking today to improve our odds for persevering i'm very pleased to welcome researcher neil howe to the program today he is one of the most requested experts that wealthion's audience has been asking me to bring on the channel today neil thanks so much for joining us uh wonderful to be here with you adam well neil for viewers who are unfamiliar with your work can we just start with a quick summary of your generational theory um and its archetypes and turnings um can you just offer us a quick synopsis of exactly what it is well it it's a work that i've been doing now for you know well on 20 years really dating back to the mid-1980s and it started really it's more than one book uh we did bill strauss and i who passed away about 10 years ago with the two of us worked together on it for many years we did a book in 1991 called generations uh the history of america's future was really a generational biography of america looking at all of american history as a sequence of collective generational biographies and uh it's it's kind of it's a great history read uh but it also shows an implicit in the generational story is a certain cyclicality and that actually was a surprise to us it's sort of uh uh serendipitous you might say uh but it was something we we we certainly highlighted in the book and we talked about these uh these cycles and and basically uh uh if this is something we did uh later on in the early 90s we wrote a book about generation x uh and then uh shortly after doug coupland published uh gen x you know remember the generation x the novel and then in 1997 we did a book called the fourth turning which was really uh looking at the cyclicality of american history not focusing primarily on generations but focusing on the cycle itself and looking at generations generational changes drivers and then later on we we published a book in 2000 called millennials rising uh one of the features of our original book was the millennial generation which is a label i guess you're all familiar with now uh but we've been credited for uh for better for worse for for naming a bunch of generations uh which are you know who's who's whose names are now in common parliaments like the gi's and the silent uh at least either naming them or bringing a label to greater popularity um so i've been heavily involved in thinking about generational change not only in america but around the world and i should point out that that's something we i will be spending more attention to in the future is not just looking at how this works out in america but how does it work out globally right and that's something we might want to talk about a little bit on the on the show um but in general uh the the thesis is is that it really starts from a remarkable uh many would say a coincidence in american history which is that we have these periods of uh vast civic uh crises and recoveries right uh uh at intervals of roughly a long human lifetime right so if you go back and look during the american colonial era we had what was known as the uh the glorious revolution in britain and it was an enormous period of of uh upheaval and the american colonies actually participated in that revolution which is sort of the birth of parliamentary democracy in britain it was also the birth of a new colonial system in america right around the 1690s or early 1700s and then of course we have the american revolution which was about you know 80 90 years later and then we had the american civil war right another long human life and then we had world war ii in the new deal right another long human life right another 80 to 90 years and um and guess what adam there we are today again right we're at that interval right we also noticed that roughly halfway in between these great civic upheavals which which occur in our outer world right in in the world of of politics the economy infrastructure um you know the the big public world uh we have these intervals roughly halfway in between of what we call the great awakenings of american history these are the these are the cultural revolutions you might say and we actually name them in american history we talk about the first great awakening the second great awakening the third and many many social historians call the the consciousness revolution of the late 60s and 70s america's you know fourth or fifth great awakening depending on what you want you uh start to count and all of these this rhythm right uh is associated with the coming of age of a different kind of generation right and and we call them market we give them archetypal names so you think about um first of all the rhythm of of these eras themselves we call each era which lasts about a length of a generation we call it turning okay so that gives the the title of the book you know the fourth turning so each one of these long human lifetime spans can be divided into about you know 20 to 25 year periods about the length of who we colloquial call a generation when you think about you know once in a generation you're thinking about a length of time about that long and uh and there are four different turnings right there is the turning of the of the post crisis era this is uh we call that the first turning uh and and we also call it a high like the american high you remember after world war ii this would be the presidencies of of truman and eisenhower and john kennedy a period of great collective confidence not much individuality not much a lot of cultural creativity but america felt like it was more than the sum of its parts social disorder was certainly at a very low ebb during that time in general i mean record low you know crime rates for example murder rates you know we had we had a lot of social discipline uh and and a great sense of collective cohesion um then of course we that was followed by the second turning and this always happens the same way in every cycle right the second turning was the consciousness revolution anyone who remembers the late 60s and 70s a lot of actors out there in the audience remember that as kids so they remember that family breakup and you know judy bloom books and you just told all the chaos and dysfunction of that era and that was typical that's typical of an awakening era now this is a time of rampant idealism reform utopianism self-discovery the whole emphasis is now on self right and a certain individualism breaks out a new kind of fragmenting of the old social consensus um and in in the 60s it started out really as more of a cultural revolution on college campuses but it ended up really as more of an economic revolution you think of the tax revolt and deregulation right as you moved into the reagan's morning in america we were a newly individualized society we become more lightly governed we were comfortable right you know in a in a less some a less regimented order you know let everyone just be free to do whatever they want different strokes for different folks right i mean and then of course you had a new generation coming of age the generation came of age during the awakening was boomers and we call that the profit archetype right uh and they have a distinctive life cycle the generation coming of age in this post-awakening era is uh generation x right uh so they they saw the awakening as kids and they were young adults during the during the third turning right and that's that that's the turning that comes after we call that an unraveling and most recently that would have been the period really starting from the early 80s to the late 2000s so we dated kind of 1984 morning in america with reagan to the gfc right the the 2008 2009 crash which really brought an end you know to the um to the uh uh you know the movable feasts and all the celebrity you know uh uh culture and celebration and uh um and that was a period in which public history nothing seemed to change right i mean nothing really happened publicly i mean aside from the very beginning it really didn't happen in america the the fall of the soviet union right um and we had 911 which turned out to not have a hugely permanent imprint um uh and and of course now we're in this new era so that was that was a gen x coming of age we call that the nomad archetype they're very similar by the way and every we have lots of examples of the nomad archetype in american history these tend to be kids who are left alone as right and they become very resourceful and pragmatic and resilient and they they manage well as individuals they're very good at handling risk and then of course you have the generation coming after exers that's the new millennial generation in they're coming of age really in this new era right uh and they got hit early on the first wave got hit early on by the gfc right is just as they were coming out of high school and so on just as they were getting their first uh coming out of college and the later part of that generation has been hit by the by the pandemic right so that's kind of the you know early end bash you know hammering that this generation has taken early on and we notice very different traits about millennials right this new emphasis on community uh niceness on risk aversion closeness to family interestingly these are also traits we've seen in what we call the hero archetype in history who eventually comes of age during the crisis and as young adults plays a very important part in rebuilding right the order before they have moved on to midlife right so that said this this this project starts before they enter you know they're before most of them enter their mid-40s so they are the ones who really participate collectively and sort of the establishment of the new order and i think you can already see signs of that and in the very new tribalism in america right everyone is grouping around these enormous groups and the the political participation is hugely risen right everyone knows that politics is really important now i think that's a real difference between the 1990s you know the clinton era and the gw bush era whenever you're just tuned out on politics you know none of it matters uh investors don't have to care about what congress is doing or or the president is doing i'm telling you adam now they gotta care because what's coming out of washington not just the fed i mean that you know the markets have always said you know you can't you know you know never fight the fed right so that has always been taken for granted uh but now it's congress now it's going to be presidential elections now it's going to be fundamental issues of of power top-down change that could come very quickly particularly as america increasingly feels that everything is out of control and we really need to move toward more radical solutions i i do find it very interesting that both parties are kind of drifting toward their rat toward their populist fringes right see the populists really running the show now uh and among the democrats pushing through their enormous new you know super you know quote-unquote infrastructure package the social infrastructure package as they call it um uh and then you see on the on the on the red zone you know popula is also running the show but you think about all the things they have in common right uh i think they're both pro-inflationary i think they're both um uh uh populist in the sense of wanting to upset the you know reorient the system away from the haves to the have-nots that has really important implications by the way for what's now going on right in in the bond markets you we can actually talk about that a little bit longer term as to how this fourth turning is going to play out but you know that's a that's a quick overview and i will just say overall that there's a seasonality here we talk about seasons of history right well literally when you think about a long human lifetime as as being in four seasons right sort of spring summer fall winter those are a little bit like the seasons of the sacrum and the sacrum really is this 80 to 90 year span this lifetime span the only thing that makes it really interesting is that everyone typically if you live a long human life you will experience all four seasons at some time in your life but the difference is depending on your generational membership you will see each season at a different age in your life right so some some some generations get to see uh you know the the the awakening uh as uh as any adults some get to see it as elders some get to see it as kids some get to see it as midlife but we all get to see each period once and that's what makes it fascinating because our interaction is very different depending on our age um well that's the word i was thinking during the whole time you were talking there neil which is it's just fascinating and uh this is not the first time that that you know i've been familiar with your work and having been exposed to it many years ago it is such a really effective framework for understanding the world around you you know once you sort of understand that the cyclicality that you're talking about and what to expect from each archetype and and what to expect from each turning it really does have huge explanatory factors for events that that might seem otherwise maybe not as interconnected as they probably truly are so uh so many questions here uh both from me and from our audience um but let's let's hang on to the seasonality aspect that you just talked about so um i think what you're saying is hey you know we we are entering winter we're probably actually in you know the first you know a third of it or something like that at this point if if this current fourth turning started with the great global financial crisis um and i think most people particularly those watching that maybe haven't been familiar with your work and are just hearing this for the first time are thinking okay how do i make it through the winter how bad is this winner going to be how cold is it going to get and how do i make sure that i come out of the other end of it alive so you talked a little bit about this but if you can quickly just what do generally what defines a fourth turning like what what kind of progression should we be expecting here as we get deeper into it and then i'll ask this question after you answer that but but then specifically what are you expecting from this particular fourth turning so in general what a fourth turning you know you think about the supply and demand for social order that's one fundamental way of thinking about all of the turnings right so you come out of a crisis in the first turning say the american high say we're living in under you know a truman or eisenhower well what's the lesson of the recent crisis right uh it is that you know america is fragile uh you know our place in the world is and is is is fragile and that we have to band together right big ins big institutions have to be powerful and there has to be a total consensus and there is a lot of consensus demanded of people but interestingly during these areas people are willing to give that consensus right in other words that in other words the the the supply of of order is very high uh and it's and it's and it's uh and it's uh it's very high but the the demand for order is is very high as well right so we want a lot of order and we get a lot of order and uh uh what happens during an awakening is all those institutions start out being as strong as ever but suddenly the public no longer want demands order anymore right it wants freedom it wants to be authentic again a lot of this has to do with the generational turnover you have a whole new generation of kids who remember nothing about the crisis right you have boomers they have by definition they have no memory of world war ii so they're thinking wait a second you know we need more freedom we got to loosen this up we need to start discovering us i look at you guys you know you're you're automatons got to get the man out of my life what got to get the man out of my life well exactly and and you need to rediscover something much more authentic so that became really the the new orientation of the awakening so the supply of order remained high but the demand hugely fell right and that gave rise to the chaos of the 60s you couldn't get a public consensus anymore behind any of these issues now some of them we we managed to accomplish like sending a man to the moon almost in the same month as woodstock right so we were doing some of this stuff on top of each other right we were both blowing up the system and actually showcasing some of the citizens last and magnificent achievements at the same time i mean wasn't that amazing by the way on the same month you know ted kennedy ran his car up chappaquiddick which actually illustrated yet another aspect of the awakening the breakup of family life so you see all of these things happening at the same time but by the end of that era um uh we were a newly liberated society in terms of the me generation greed is good all that and then the new narcissism and you know all the stuff that tom wolf would talk about in his novels and so forth so so finally then we entered the third turning and the third turning is a is an era when both the supply of order is is is uh both the the supply of order is low but the demand for order is also low so there's a new kind of equilibrium we become a lightly governed country and we become very much likely we're in the 1920s or the 1850s or the 1760s um a kind of a rowdy rebellious fragmented country uh not much that unified us but we're all kind of happy with it you know we're all sort of individually prospering we feel good about ourselves and all the the new generation the nomad archetype uh delights in becoming free agents you know my my favorite uh exer slogan is uh it works for me i love that you know i don't care if it was for anyone else who works for me that's good enough so uh now to older generations that was kind of a shocking motto well you know i mean how selfish is that right so but anyway we were all comfortable with that uh and you remember even bill clinton uh the head of the democratic party the era of big government is over right so just a capitulation across the board and we saw this by the way in britain with tony blair we said we saw that with this whole you know uh kind of neo-liberalism as we kind of call it sort of the third way that all of these uh social democratic parties were taking around the world right acknowledging markets right yeah i guess it is okay we just open everything up you don't have to regulate anything anymore well what happens is finally you enter the the the fourth turning and with this lack of direction lack of regulation lack of cohesion everything runs aground eventually right you become very vulnerable to crisis um and everyone has forgotten the habits of what you do to actually counteract christ this is the whole problem every time you go into a fourth turning is that every generation at that time by the time you're entering a new fourth turning every generation who has had any adult experience handling a crisis is too old to serve or they've already passed away right so that's the problem right no one is left to handle it the only person we have left the very eldest of our leaders now and they're still around nancy pelosi and joe biden and uh you know uh uh gee bernie sanders a bunch of them are kind of late wave silent right they actually remember world war ii as kids but these kids as tiny kids you know maybe his babies right but the greatest generation is gone right i mean it's now in its 90s uh it's mostly gone we only have a few million left uh and uh they're the last ones who actually have any really degree of competence so we have to learn it all over again right isn't that the lesson of history yeah and you know i'm just curious is it fair to say that that at the end of a turning going into the next one you have a generation that sort of in the prime of its life running the show that kind of has almost the exact wrong musculature that you need for what's demanded going forward right they've been training for a completely different race than than what's going to be needed going forward well it is true except i would say it's it's not quite that bad in the sense that you're talking about boomers i guess uh you know i think in any generation you got right now we got a bunch of you know kind of lone wolves out there you're talking about but we're going to go through a time that's going to need us to come together socially well that's true but but what happens is that it does happen but it doesn't happen in a necessarily very pretty way a very easy way but i think what does happen is that each generation ultimately when a crisis works out well each generation in its phase of life actually uh contributes something essential to the resolution of the fourth turning and that is what what the profit archetype contributes is that sense of vision right the big picture right because you know the the profit archetype has always been a big picture generation so they're the ones thinking about you know in earlier centuries they're thinking about the millennial era the second coming you know they're phrasing it in these wonderful huge ideas and boomers will be talking about you know when the the new age of aquarius or i mean you know you only imagine how boomers would be but anyway boomers would in the new fourth train we actually call this the role of the so-called gray champion you know it comes back again in history the elder leader who reminds people of the larger picture right generation x who will be of the age of um of george patton or ulysses grant or george washington they will be the midlife commanders the leaders right they will be the ones who actually are most responsible for actually getting things done right it won't be the big picture generation i mean good god knows right gen x her attitude toward that is you know die yeppy scum you know so gen x is a beginning step done and they're actually very well suited to that role you know just as um the lost generation turned out to be perfectly suited to the role of the midlife uh you know two-star three-star generals in world war ii right the the likes of omar bradley or dwight eisenhower or even george patton talking about a real nomad kind of a but but these were guys who would get it done you know tough talking no-nonsense guys the doers yeah the doers uh and uh generally tended to be taciturn or kind of electronic in their person they just you know focused on the bottom line getting stuff done and then the new generation coming of age needs to be a generation with a more open cooperative community-minded ethos right of one of being able to band together to whatever needs to be done and actually um participating in an enormous team and making sure that everyone's on board right exactly the opposite of boomers right i mean boomers you can never get you know the old expression hurting cats right was always true about boomers even when they were young and they were always defiant and they're always raging against authority one thing that's amazing about millennials they're never defiant they never rage against authority i mean it's very hard to see it i mean they're living with their parents at an unprecedented rate uh and they are generally very close to older generations on a personal level now i think millennials do have a big agenda they have some big differences with their parents about how the overall rewards of the system are being handed out right namely that liberal democracy no longer works for them i mean that's all biased toward older people now it's all bias toward market incumbents i mean let's face it right it's all piled up toward the silent and the boomers today and this generation um you know raj chetty at harvard has some wonderful slides on this he just shows that by the time and actually not just millennials but even most exers most of them are not out earning their parents at age 30 or 40 right and particularly males are actually under earning their parents by a significant extent at age 30 or 40. well that is a real crisis in america right we were founded on the premise of um of the american dream which meant generational advancement and older generations experienced that right the gi generation experienced it hugely over their own parents the the silent generation experience that most boomers particularly the early wave of boomers you know the al gore bill clinton boomers kind of born toward the earlier end did much better than their parents at age 30 or 40. but you start getting the light wave boomers kind of more you're you know madonna michael jackson cohorts born in the late late 50s and then going on into your exercise they are not right uh so that kind of generational progress has completely stalled and i actually do believe this is an essential ingredient ben friedman wrote a classic book about this about 10 or 15 years ago liberal democracy requires progress it requires material progress if you do not have that then we start regressing into a reactionary social mode right everyone just wants to draw up the moats right bring up the the drawbridges and and we become truly that incumbent economy we talked about and everyone will like you know warren buffett will be talking about investing in something with big moats just make sure you have a position which some monopoly market position which can't be assailed and that becomes a very uncompetitive uninnovative society right and i think that's that is what we that's the nightmare fourth turning that is the fourth turning with a bad outcome that we want to avoid uh interesting well let's dig into that because you're putting your finger on a wound that we actually talk about a lot on this program week after week which is the growing and really accelerating wealth inequality uh certainly here in the us but but also elsewhere in the world um right now i'll just be honest it's sort of hard for me to see that resolving uh well and and without much conflict um but you're the generational expert here i mean how how worried are you in this fourth turning that it it sort of turns the different archetypes against each other because you know the the actors feel like they've just been seeing the brass ring move further and further away from them as as they've aged and the millennials and youngers are saying it's not even realistic for me to be able to grab that thing and those boomers and silent generations they're just just holding on to it with you know tight claws yeah i think i think they you know we we see almost no instances historically where you actually have an age war you know i mean that just doesn't happen um and one thing that would argue against it is the fact that as i as i mentioned earlier when it comes to actually their personal lives and the culture i would argue that millennials are much closer to their boomer parents than boomers were as young adults to their own parents right boomers were extraordinarily distant from their own parents and uh none of them lived at home once they left home i mean it was and when they were dropped off at college it's like yeah i'll call you in six months you know or something like that at a pay phone down at the corner or something uh millennials are on their texting and they're calling their their parents every day practically i mean it's a completely different relationship a record share of young people are living with their parents right so that on a personal level their lives are highly intertwined and um and and and and kind of mutually dependent um where where where although boomers had huge personal problems with their gi generation parents particularly on cultural issues you know like what can you what can i do in terms of i don't know sex drugs and rock and roll and you know just everything else right you just don't get it mom i don't know if you any you know readers are old enough to recall all in the family right uh i'm sure we have viewers who remember our truth the sitcom but it's literally people the entire episode young people and archie bunker and edith screaming at each other the entire show is just screaming right you don't see that today right you see things like even weird shows like modern family and i mean just all kinds of but generally you see much more cohesion a much different tenor now being showed now here's where though it inverts adam and that is that even though millennials got like personally very low with their parents and and boomers did not i mean actually a good example of that would be boomeranging back home boomers did not boomerang okay and i remember uh the the great recession of of uh 8283 you know when you went into the reagan administration volcker was tightening rates and so on it was a really pretty bad recession boomers would do anything rather than return they would like sleep under a bridge or something right but they would not go back home right that boomerang stuff started with gen xers in the 90s and with millennials they don't return home they just never leave they just keep their bedroom there and you know they're always and you understand what i mean just a very different kind of relationship uh where i think there's a little bit of inversion is when it came to actually major structural substantive reforms and how the system worked and how it actually you know allocated income and rewards and how we actually built for our future pumas had no problem with the gis were doing i mean they obviously ran things really well in fact the whole problem with the gi generation is they ran things too well they invested too much right it's too much repression you know we need to enjoy yourself more for today the millennial problem with boomers is just the opposite right boomers can't run anything they can't exercise authority they can't invest in anything they can't do anything for the long term right they don't know how to run the system at all and this is why i say that the fundamental problem in an awakening is that the public senses that institutions are supplying too much order but the fundamental problem of a crisis the fourth journey is that the public be particularly the younger public begins to sense that institutions aren't supplying enough order and that is always the context for a crisis right and by the way i mean just just mentioning you know you said where might this lead every fourth turning in american history has featured a total war um and all total wars in american history have come in a fourth turn right you don't want to think about that you know this goes all the way back to the anglo-american circular you know going back in the early modern era you know in the british history but this is a pattern now sometimes it's um it's so it is we don't say that war is necessary for a fourth turning but that sense of total public urgency and the need to band together and create a new sense of community is always required at some point before the fourth turning is over okay so this is something that's just simply i just observe historically now sometimes this struggle this conflict is we think of it mostly in terms of you know america taking on enemies abroad right and i think that's the idea that good war and we we all think of world war ii you know we took on the axis powers and we conquered half the world right uh you know fascism and yeah exactly yeah you know germany and italy and japan uh but we forget that that era started out with the new deal which was not exactly a civil war but it was a highly contentious ideological conflict in america right which deeply divided americans about the new role of government and you know it had its court packing threats and you know everything else that happened uh in the first new deal and the second new deal and and fdr finally getting this incredible victory in 1936 right finally just becoming absolutely dominant politically and pushing through these new this whole new role for government and the economy right um but ultimately we all remember how it all came together in world war ii which is more kind of you know america versus the world but it's useful to go back in earlier conflicts and many of these actually had a very major a civil dimension of conflict obviously the civil war was literally a civil war right no need to explain there the american revolution however is interesting for people to know that the american revolution at the time was referred to by most more americans as a civil conflict as a civil war rather than as a revolution it had a very strong element of patriot-on-tory conflict within the united states particularly within the southern states the backwoods regulators actually supported the british because they hated these big plantation owners near the coast who were always lording it over them right in other words it exploited and the british at one point did what abraham lincoln did he promised freedom to the blacks and one of the things the british couldn't understand as well these planters were you know constantly talking about liberty you know and and yet they had all these things so the british said well we're gonna use that as a weapon we're gonna we're gonna promise freedom to anyone who wants to help that's exactly what abraham lincoln did right with his emancipation proclamation about 80 90 years later um in dittos you go back in earlier crisis in other words very often there's a very strong internal component to the crisis even while it also has an ex i mean obviously there's an external component the american revolution we had to fight you know fight the british and uh you know defeat them finally at yorktown and and you know they all evacuated by uh 1783 they were gone but then again we were in chaos after that right and then we had to actually forge a new constitution and in some ways that was the real climax of the era as being able to actually then agree on a powerful central government and to some extent i would say that there was the miracle of of 1788 which is even more amazing than the miracle of you know 1781 which is the the defeating of uh of uh you know clinton and cornwallis so so anyway that's i i think that but it probably illustrates your point that there is an important internal dimension i think it's no be no surprise today looking in america that people are going to say yeah i get the internal component right now right red zone versus blue zone i mean my god the two sides don't even talk to each other you know i live in dc i mean i've been sort of a dc guy uh they don't even talk to each other now i mean there's literally practically no communication there's nothing to say at this point adam you know right so when you have mutually exclusive ideas of what the country's future is how does democracy work right are you going to completely forfeit your future just because the other guy gets i don't know half a percent more votes no it doesn't work that way does it and here's the irony and this has been pointed out by some you know brilliant uh carl becker pointed that out in 1940 just as we were going into world war two he said one of the problems with democracy this democracy only works really well when the problems you're trying to solve are pretty trivial i mean think about it if it's a fundamental problem how does democracy work right and and i think kovid may have even sort of reinforced that argument where you looked at some of the more totalitarian governments and you can say whether it's right or wrong uh but they certainly took measures to clamp down uh and and really stop the virus spreading its tracks in a way that a democracy just couldn't i agree and there's a there's a great uh a wonderful compendium of worldwide polls done run by the cambridge institute for for a democracy uh by a guy named roberto fowa and he and have written a lot on this issue of growing inequality but particularly in the turning away of younger generations in america particularly millennials not just in america but around the world from the whole idea of liberal democracy it's it's becoming less popular less interesting and important amazingly enough there are a lot more younger people today who are willing to say yeah let a dictator you know handle things for a while right meaning that this liberal democracy that all these boomers and silent talk about has done nothing for us it just feathers the bed of all these older people and all these in you know uh dysfunctional institutions which aren't doing anything for our future right and that sense of that sense of being turned off uh and being much more willing and open to a more autocratic it doesn't really matter too much whether it's on the left or the right you understand what i mean or it could be some crossbreed between them well in in you know in some ways um you know can you blame the younger generation um in the sense that it's seeing all the spoils go to the older generations as we've talked about um and you know you get somebody that's promising them for education free health care whatever you know the the platforms of those more progressive uh you know political parties sound pretty appealing right hey look if i'm if i'm going to struggle i may as well you know struggle and get something so you said you know part of the fourth turning is is basically seeing the rise of a recentralization of power and i think that that's probably one of the drivers that will will drive you know the um resumption of central state power and here in the states i mean we're we're seeing this state get involved in ways that it hasn't been a long time right no you're right well i mean think about it for for uh most of the year in 2020 uh the state took over everything i mean we all became words of the state right businesses households everyone i mean nothing remotely close to that has happened in american history now that example won't go away quickly you know what i mean people will remember that yeah that you can do that right every window is dependent on the state even major corporations you know to renew their turnover their loans i mean everything right the combination of huge fiscal largesse plus the fed policy right yeah the stimulus has been i mean unprecedented yeah and and it and it by the way it rewrites the rules of the regime um and you know i've pointed that out i mean if you look at the six quarters of the pandemic and compare them to the quarter before the pandemic you know the last quarter of 2019 we've had something like a seven percent growth in real disposable personal income at the same time we've had a two percent decline or nearly three percent decline actually in real gdp that is unprecedented right a 10 percentage point gap between what we're earning to be able to spend and what our economy is producing i've gone back and look at all the earlier recessions that gap is never more than like one and a half percent so where did all that free money come from it came from borrowing it came from borrowing and it came from first of all borrowing by the federal government which we've seen it ramped up we went into the recession by the way already under trump at a federal deficit of nearly five percent of gdp that was already a record for a non-recession year before the panda we were 4.8 percent of gdp um and you know everyone was fine with that uh uh jerome powell is fine with that you know donald trump is obviously fine with that and then the next two years are at 12.5 percent of gdp right so that was an extra five and a half percent of gdp kicker in two years well that translates into about 10 of dpi right disposable personal income so that's how you get there right this changes the rules of the regime and the reason why so many people have been faked out in the market and i mean if you had told if you had told people back in the worst days of march back in 2020 that we were going to you know the s p 500 was gonna double again in three well i think if you told them first the global economy is you know gonna shrink in in the next one yeah but eight months what do you think's gonna happen the s p nobody would guess it would double well exactly that it was gonna double and oh by the way and they would have already disbelieved you but if you told them that in addition to doubling uh the employment level in america would still be would still be lingering about five percent below where it was at the beginning and that we'd be having close to 2 000 deaths per day after 18 months and yet we'd see this and picked up they would have thrown you out of the room right and and meanwhile we've had the the 40th anniversary of the of the you know bond uh bull market right we we we saw september 30 1980 we had bonds 10-year yield at 15.8 something i think 15.84 what's going on with that at a time now when the economy is recovering the the s p 500 doubled i mean how do you see bonds so low well turns out now they're they're not quite so low maybe they're maybe they're shifting in a slightly different direction now but here's the point why do the old rules don't work why do the all those all those valuation rules you know that we talked about like like you know schiller's pe you know you know earnings to sales ratios or or uh right they just haven't mattered for the past half decade yeah so they've all you know they're they're off the charts they've all been screaming sell but if you had sold recently you would have been killed right so i this is a really important question for investors why are all these rules not working and i would submit that we're changing regimes now we're going from an old regime which we we call you know sort of the neoliberal regime the fed just you know buys and sells the short end influence interest rates over the business cycle and they and the federal government keeps the budget reasonably balanced because they can't expect the fed to bail it out right and then you know a little bit maybe uh in a crisis the fed will offer credit at penalty rates kind of the old budget rule in the new regime which you could call the mmt regime right well what what what what is it now the fed can buy any asset at any maturity it can flatten the entire year curve down it can also go after high risk credit it can do anything it wants and the federal government can basically cut taxes or expand benefits any way it wants to and the fed will just monetize right monetize the difference right yeah so sorry interrupt but this is such an important um question that so many of the viewers have been asking themselves of late which is um are we going to see in this fourth turning kind of will reality re-express itself and it certainly may amongst things like you know physical resource limitations and stuff like that because you can't necessarily print those up overnight um but well sort of economically here will will reality re-express itself and all those old fundamentals of investing and whatnot begin to matter again or have we crossed a rubicon where the fed is just going to be intervening in any and all cases going forward and it's not we're not going to return to that because they require very different investing strategies we hope you've been enjoying this discussion with researcher neil howe the interview continues in part two where neil details the economic and market dynamics that he foresees will play out during this current fourth turning to watch part two just click on the link provided in the description of this video below or go to youtube.com wealthyon but before you go please don't forget to support this channel by hitting the like button and then clicking the subscribe button below as well as that little bell icon right next to it if you haven't already it only takes a second and these steps really do help us out as the more subscribers this channel has the more great experts like neil we can attract onto this program in the future and if you'd appreciate a free no strings attached portfolio review by a financial advisor who can help manage your portfolio with the risks and opportunities that neil is highlighted here just go to wealththeon.com and we'll help set one up for you okay i'll see you over at part two of our interview with neil howe

Channel: Wealthion

Views: 95,930

Rating: 4.8962965 out of 5

Keywords: the fourth turning, neil howe, the fourth turning explained, the fourth turning audiobook, SURVIVING THE FOURTH TURNING, The Fourth Turning, fourth turning, neil howe interview, stock market, financial literacy, stock market crash 2021

Id: K8Ndnpfw69w

Length: 50min 39sec (3039 seconds)

Published: Fri Oct 15 2021

Reddit Comments

[u/digdog303]

Martenson and Taggart are good to follow in general for "Bad News". Martenson especially has really evolved in his approach. Years ago he was almost strictly into economics but then got into energy and now he's a full on doomsteader. I appreciate that he is "integrity-driven" rather than devolving into partisanship or politics.