Year 2000 economics http://www.angelfire.com/or/truthfinder

False Dawn 1999: Mass Denial ?

The summer of 1999 will be remembered as one of hubristic euphoria; the ultimate calm before the storm.

Recognizing this "sheeple" phenomenon of mass delusion, and the cyclical swing to and from pessimism, is a fascinating pursuit of interest. Throughout history the mood of any given population repeatedly shifts in unison, often with abrupt turning points. It is the reward of social historians and futurists to first capture and identify this sentiment after objective observation, then through worldly events and other forces, cycles or evidence, determine when the next shift in mood will occur.

On the long cycle front Howe & Strauss, in their book The Fourth Turning , have identified the era of unraveling (characterized by deep pessimism) America has witnessed for two decades will soon be consolidated in a period of crisis and upheaval where the nation's current mindset is swept away.

The flaw with such long-term projections is determining--with any degree of accuracy--the precise year such a turning really begins. Fortunately there are shorter cycles that can be found within the larger saeculum.

Using recent history as an example, we observed a brief period from 1983 to 1985 where the national mood of America shifted from one of deep pessimism (Remember 1980 when the consensus forecasters expected inflation to skyrocket? Disinflation became the reality.) to that of a pseudo re-birth coinciding with President Reagan's "Morning in America." The prevailing mood for the remainder of the eighties was that of a hallow optimism with an underlying sense of a foreboding future as the nation's fundamentals worsened (fiscal, trade deficits, relative social/economic decline..)

The last hurrah of this epoch (in a sense it is not over yet, merely interupted) was the 1991 gulf war and the burst of patriotism it produced. The following prolonged economic decline and recession plunged the national mood into another period of despair that lasted until roughly 1994/1995.Economists and forecasters at the time were making all sorts of dire predictions, such as $500+ billion budget deficits and government bankruptcy by 1996 etc. It turned out, of course, that these extrapolations--based on the status quo consensus of the time--were once again dead wrong. Remember how Japan was supposed to take over the world? It is now near collapse and is running government deficits equal to 10% of GDP!

1994 marked the turning point into another short-term turning point in public sentiment--though few recognized it at the time. Ever since the economy has been growing at a brisk pace, the stock market tripled and deficits became surpluses. The previous consensus forecasts were wrong. These conditions have accelerated to the point of hubris, which we are now in. There have been short-lived times within this period when bursts of pessimism reigned. The Asian crisis began in the fall of 1997 whence the Dow crashed 500 points and confidence (temporarily) receded. While the crisis continued to worsen overseas, the US economy continued to advance when yet another short-lived mood of despair took hold in the fall of 1998 and stocks dropped 19%. However, the bubble wasn't ready to burst yet; there was still more momentum to carry through 1999 when it rebounded sharply to its recent July 1999 record high of over 11,200. The concerns of 1998 have been all but forgotten.

Coinciding, and indeed interrelating with these sentiment shifts inherent within a rising (or falling) market is the public's reaction and level of concern with y2k.

Before the summer of 1998 and associated fear was mostly relegated to a small minority on the internet (where 90% of y2k discussion still takes place). At this point it began to filter through to the mainstream press. With exponentially rising interest and awareness reaching a crescendo in January 1999, y2k suddenly began to almost entirely drop off the radar screen by March.

On the y2k front, aided by feel-good happy-talk issued by corporate and government elite, most of the public (the sheeple) has decided--at least temporarily--that there is nothing to worry about. It's under control," is the dominant theme observed since early spring.

Before the summer of 1998 y2k and associated interest was mostly relegated to a small minority on the internet. it then began to filter to the mainstream press with exponentially rising concern and awareness reaching a crescendo in Jan 1999. What happened was quite confusing indeed...y2k suddenly dropped off the radar screen almost entirely. This, I may warn you, is a temporary phenomenon. A panic cannot be sustained...nor can complacency in the face of a rapidly approaching known disaster with a known date. This procrastination and denial works well for the wise who are willing prepare before hand.

As in previous eras, the mainstream is extrapolating present trends into the future which, as time will tell to prove not only wrong, but recklessly way off base.

The Clinton administration is presently predicting never-ending budget surpluses until 2010 amounting to over a trillion dollars. These projections assume the current boom and business cycle (already a record-breaking 9 years) will continue with absolutely no set-backs such as a recession!

The mainstream consensus (that is, those in authority) also projects a bump-in-a-road outcome for y2k that will surely prove wrong. Even respected economist Ed Yardeni (and somewhat mainstream, until he took up y2k) who is predicting a recession due to y2k, is making the mistake of extrapolating current trends: He figures the "New Economy" will resume unchanged after a sharp recession and the Dow climbs to 15,000 by 2005.

Such forecasts disregard and conflict with what various well-identified short and long cycles and forces--all seemingly merging together in the early 2000's--tell us what our destiny will be.

It is likely this apathy of 1999 will continue into this fall at which point interest in y2k will once again skyrocket--this time into a panic. Independently exclusive of y2k is the scheduled market collapse that should occur by late October. These two forces-- bursting bubble along with and before a looming disaster--essentially guarantees a dramatic, possibly unprecedented shift in psychology; from one of complacency and euphorically high expectations to one of complete societal panic that will feed upon itself, ultimately leading to total collapse. Maybe there was something we could have done to avoid such a situation. It's now too late...it will happen.

"Owing to past neglect, in the face of plainest warnings, we have now entered upon a period of danger. The era of procrastination, of half measures, of delays is coming to a close. In it?s place we are entering a period of consequences; we can not avoid this period, we are in it now. Unless this house resolves to find out the truth for itself, it will have committed an act of abdication of duty without parallel." Winston Churchill, Testimony to the House of Commons, Debate on National Defense Posture (12 November 1936)

So what do the previously mentioned long cycles ( Kondratieff wave , Elliott wave , solar sunspot cycle , Fourth Turning) dictate what to expect? An extended era of genuine economic depression, price and asset devaluation, social upheaval on a global scale including (Yes, this sounds extreme, but...) World War Three where the very survival of America itself will be challenged.

It will be in this up and coming "global war" period when the nuclear weapons question will answered. Whether this resolution is achieved peacefully remains to be seen. The odds are, of course, they will be used.

To the casual observer--particularly the average American who has never experienced the trauma of global war--such dark visions are difficult to comprehend or emotionally accept. Even more so when taken in the context of our current era of prosperity and general optimism. Unfortunately, we have begun the journey and past the point of no return.

One can take consolance in the inevitable return of stability after the up-coming times of trauma consolidates into resolution beyond 2010 or 2015.. Such evolution from birth, maturity, decay , death the rebirth of humans, societies and nations is not only natural and (in a sense) desirable, but unavoidable. how we emerge from these crises ultimately depends on how we prepared for and reacted to its consequences within the larger framework of human destiny.

-- dan fisher (dfisher@angelfire.com), July 28, 1999

Answers

Very thoughtful post - thanks. Yes, I think this is the calm before the storm - but also look for the "eye" of the hurrican to pass through in the spring of 2000 when things will seem calm. I'll be looking for y2k yardsales then. . . Then the tail will sweep through as more fundamental economic and technological problems begin to manifest due to continued cascading exponential consequences. . . bankrupcies in the fall, etc. Military action? Sure. Why not? Always a great diversion.

-- Karl (valleycable@earthlink.net), July 28, 1999.

This is sheer construct and not very impressive in terms of being clear or authoritative. The mood of the country is optimistic? I don't think so. I feel that the underlying emotion for at least a decade or more has been fear and increasing paranoia in which every little thing (germs and minor disruptions) have loomed large.

The sense of the end times and disaster has been deeply held and felt for some time--as reflected in the media and in film. There is a long- standing, prevelant sense that humans have run amok, that nothing is sacred, that we have scorched the earth, are subject to terrible diseases, monstrous storms, and that the only thing left is the end of society. Which turns out to be essentially correct.

The given analysis is muddled so far as I can see and based primarily on the model of the stock market, which is irrelevant to most people. Also, that model itself, seen in another light, is of people run wild, hysterical, without a foundation in values or value added. If anything, the movement of the stock market has at its roots a deep cynicism not life-affirming renewal.

I think we will plunge into a kind of darkness and rebuilding that will more or less keep us busy at home without recourse to global conflict at all. I do foresee wars, only not global in nature as the mechanisms of these would have to first be remediated--and they haven't been. There will be local-area conflicts between traditional rivals.

-- Mara Wayne (MaraWayne@aol.com), July 28, 1999.

sounds like=prophecy.---well here,s another thoght=the darkest hour is right before the dawn.

-- wowee. (dogs@zianet.com), July 29, 1999.

>>>"Such evolution from birth, maturity, decay , death the rebirth of humans, societies and nations is not only natural and (in a sense) desirable, but unavoidable. how we emerge from these crises ultimately depends on how we prepared for and reacted to its consequences within the larger framework of human destiny. "<<<

What emerges from the chaos will be a quasi-global fascist conglomeration wherin this nation ceases to exist as a sovereign entity...and our remnant in chains.

All because the complacency and spin of the pollyannas (Y2K and otherwise) has lulled our people to sleep.

God help us all.

-- INVAR (gundark@sw.net), July 29, 1999.

Beg to differ, Mara.

It's interesting that those who follow market behavior based on patterns are beginning to extrapolate such behavior to social behavior. Robert Prechter -- noted for adherence to Elliott Wave theory -- has much to say on this subject. There appears to be a strong correlation. Briefly: in bull markets people are optimistic, in bear markets they are pessimistic. Their market behavior (buy,sell) is based on this feeling. In bull markets their social behavior is inclusive, in bear markets it's exclusive.

So, when you say, ""The given analysis is muddled so far as I can see and based primarily on the model of the stock market, which is irrelevant to most people, you're flying in the face of this recent evidence, and presenting your own opinion without thinking of all of the ramifications. Moreover the stock market is no longer irrelvant to most people, with (as memory serves) over 40% of the American population invested in some manner, e.g., 401Ks

"Also, that model itself, seen in another light, is of people run wild, hysterical, without a foundation in values or value added."

Yes it is, that is a mania, which is why the social impact of the following market crash should be of interest.

If anything, the movement of the stock market has at its roots a deep cynicism not life-affirming renewal."

Huh? Frenzy and unbridled speculation are based on cynicism?

-- de (delewis@Xinetone.net), July 29, 1999.

Invar,

It will only end in a nazi like conglomerate if "we" the people let them get into power. Power is in numbers. Convince and educate the masses, one person at a time. There is *hope*.

Remember the Rebellion over the Empire...??? No matter how long, no matter how hard... people will fight until they are *free*.

I for one never believed the Berlin Wall was coming down in my lifetime.....

-- STFrancis (STFrancis@heaven.com), July 29, 1999.

STFrancis,

Interesting that I would find myself responding to you. *chuckle*

But your optomism is unfounded given the beaurecratic blunders our political, leadership system has made. This is further compounded by a lack of PARTICIPATION IN GOVERNMENT that has characterized the last 40-50 years of American Politics. (Did you say the voter turnout at election time was less than 50%?) No, you didn't. You probably didn't know Or understand the greater impact that has on the representation of individuals in government.

It is further exacerbated by the fact that Congress through a legislative MISTAKE ended the growth of the The House of Representatives by Ending it's Tie to the 10 YEAR CENSUS!!!! It has been 435 Representatives for nearly 90 years now. Hmmm. I wonder what the population of the States were then? NOT 250+ MILLION I'd imagine. There was ONE Congressman for every 50,000-75,000 People in a congresional District FOR A REASON! Sheesh.

Now its at the LEAST 500,000!!!! And is some states it's MORE.

To say nothing of what the Executive Branch has done to remove the SPINE from our Legislators in Congress. Executive Orders? Baloney.

Take a look at the Federal Court System. They have actually had Federal Judges LEGISLATE to specific Cases telling the plaintifs what they had to do and ENFORCED THEM!!!! Now we have a judicial system that both favors those who have money and takes an inordinate amount of time and effort to settle. As a country we have further disenfranchised the Minorities or Second Class citizens if you will, because they do not VOTE And do not have the MONEY to defend their rights in the court of law. To say nothing of being difficult to properly identify as the Census is inadaquate, undercounting Minorities in America. The ONES who should benefit most from the programs we have in place.

To say nothing of the fact that our population's strength has historically come from imigration. We now limit imigration, pick and choose potential cictizens based upon their "Qualifications" , treating them like a bunch of Cattle. Dehumanizing.

AND you Think that people CARE? That People will come together? You read about WOODSTOCK 99? Public Rape. Who came to their Aid? Huh? No one? The POLICE TOOK PICTURES WITH NAKED GIRLS!!!

End Rant.

Father

-- Thomas G. Hale (hale.tg@att.net), July 29, 1999.

Excellent post...I read in 1988 about the Kondratieff wave theory...interesting...The thing we all know is the inevitableness of a market crash. Is the country really headed down a dark road. Certainly...Abraham Lincoln wrote..."The greatest gift God has given to man is the Bible." You can be sure few are concerned with it....and hence, you can be doubly sure that they will continue to meander and bop from one crisis to another. The 2000 date, the stock market correction that is overdue, the Y2K crisis, the moral decay, and the fear of the people should wake people up...but it won't. The majority of mankind will concern themselves with today...and why not? Sufficient for each day is it's own badness. There is so much pressure on people, few have time or energy to concern themselves with what might happen. It is interesting reading...nothing more. We are deep in the last days of this system of things...as the Bible prophesied...and a knowledge of God is the only intelligent and safe course....a course most will not take....

-- Rick Shade (Rickoshade@aol.com), July 29, 1999.

This post reminds me of a book I read in the late eighties called "The great reckoning" by Rees-moog,- I think. He wrote an excellent discourse back then as to how the financial market would crash severly due to numerous factors i.e. cyclical natures,debt load, deflation,middle class wealth being in their home equities which would be wiped out. The book had some strong arguments for severe financial reckonings back then and that was before Y2K.

-- David Butts (dciinc@aol.com), July 29, 1999.

Lord William Reece-Mogg or summit like that - looks like his theories are about to come to fruition...

-- Andy (2000EOD@prodigy.net), July 30, 1999.