Neil Howe On The Fourth Turning: How Bad Will It Get, How Long Will It Last & What Comes Next? (Part 1)

33:29
i mean actually a good example of that
33:31
would be
33:32
boomeranging back home
33:34
boomers did not boomerang okay
33:37
and i remember uh the the great
33:40
recession of of uh 8283 you know when
33:43
you went into the reagan administration
33:45
volcker was tightening rates and so on
33:47
it was a really pretty bad recession
33:49
boomers would do anything rather than
33:51
return they would like sleep under a
33:53
bridge or something right but they would
33:55
not go back home right
33:57
that boomerang stuff started with gen
34:00
xers in the 90s
34:02
and with millennials they don’t return
34:04
home they just never leave
34:06
they just keep their bedroom there and
34:08
you know they’re always
34:09
and you understand what i mean just a
34:11
very different kind of relationship
34:14
uh where i think there’s a little bit of
34:16
inversion is when it came to actually
34:19
major structural substantive reforms and
34:22
how the system worked and how it
34:23
actually you know allocated income and
34:25
rewards and how we actually built for
34:28
our future
34:29
pumas had no problem with the gis were
34:31
doing i mean they obviously ran things
34:33
really well in fact the whole problem
34:35
with the gi generation is they ran
34:36
things too well they invested too much
34:38
right it’s too much repression you know
34:40
we need to enjoy yourself more for today
34:43
the millennial problem with boomers is
34:46
just the opposite right
34:48
boomers can’t run anything
34:50
they can’t exercise authority they can’t
34:53
invest in anything they can’t do
34:55
anything for the long term right they
34:57
don’t know how to run the system at all
34:59
and this is why i say that the
35:01
fundamental problem in an awakening
35:03
is that the public senses that
35:05
institutions are supplying too much
35:07
order
35:08
but the fundamental problem of a crisis
35:10
the fourth journey
35:12
is that the public be particularly the
35:14
younger public begins to sense that
35:16
institutions aren’t supplying enough
35:18
order and that is always the context for
35:21
a crisis right
35:23
and by the way i mean just just
35:25
mentioning you know you said where might
35:26
this lead
35:27
every fourth turning in american history
35:30
has featured a total war
35:33
um
35:34
and all total wars in american history
35:37
have come in a fourth turn right you
35:38
don’t want to think about that you know
35:40
this goes all the way back to the
35:41
anglo-american
35:43
circular you know going back in the
35:44
early modern era you know in the british
35:47
history
35:48
but this is a pattern now sometimes it’s
35:50
um
35:51
it’s so it is
35:53
we don’t say that war is necessary
35:56
for a fourth turning but that sense of
35:58
total public urgency and the need to
36:01
band together and create a new sense of
36:03
community
36:04
is always required at some point before
36:06
the fourth turning is over okay
36:09
so this is something that’s just simply
36:11
i just observe historically now
36:14
sometimes this struggle
36:16
this conflict
36:18
is we think of it mostly in terms of you
36:20
know america taking on enemies abroad
36:22
right and i think that’s the idea that
36:24
good war and we we all think of world
36:26
war ii you know we took on the axis
36:28
powers and we conquered half the world
36:30
right uh you know fascism and yeah
36:33
exactly yeah you know germany and italy
36:35
and japan
36:37
uh but we forget that that era started
36:39
out with the new deal which was
36:42
not exactly a civil war but it was a
36:44
highly contentious ideological conflict
36:47
in america right which deeply divided
36:49
americans about the new role of
36:51
government and you know it had its court
36:54
packing threats and you know everything
36:56
else that happened uh in the first new
36:58
deal and the second new deal and and fdr
37:01
finally getting this incredible victory
37:03
in 1936 right finally just becoming
37:06
absolutely dominant politically
37:08
and pushing through these new
37:11
this whole new role for government and
37:12
the economy right
37:15
um but ultimately we all remember how it
37:17
all came together in world war ii which
37:19
is more kind of you know america versus
37:20
the world but it’s useful to go back in
37:23
earlier conflicts and many of these
37:25
actually had a very major
37:27
a civil dimension of conflict obviously
37:29
the civil war was literally
37:32
a civil war right no need to explain
37:34
there the american revolution however is
37:37
interesting for people to know that the
37:39
american revolution at the time was
37:42
referred to by most more americans as a
37:45
civil conflict as a civil war rather
37:47
than as a revolution it had a very
37:50
strong element of patriot-on-tory
37:52
conflict within the united states
37:54
particularly within the southern states
37:56
the backwoods regulators actually
37:58
supported the british because they hated
38:00
these big plantation owners near the
38:02
coast who were always lording it over
38:04
them right in other words it exploited
38:07
and the british at one point did what
38:08
abraham lincoln did he promised freedom
38:11
to the blacks
38:12
and one of the things the british
38:14
couldn’t understand as well these
38:15
planters were you know constantly
38:17
talking about liberty
38:19
you know and and yet they had all these
38:21
things so the british said well we’re
38:22
gonna use that as a weapon we’re gonna
38:24
we’re gonna promise freedom to anyone
38:26
who wants to help that’s exactly what
38:28
abraham lincoln did right with his
38:30
emancipation proclamation about 80 90
38:32
years later
38:34
um
38:36
in dittos you go back in earlier crisis
38:38
in other words very often there’s a very
38:40
strong internal component
38:42
to the crisis even while it also has an
38:44
ex i mean obviously there’s an external
38:46
component the american revolution we had
38:48
to fight
38:49
you know fight the british and uh you
38:51
know defeat them finally at yorktown and
38:54
and you know they all evacuated by uh
38:56
1783 they were gone
38:59
but then again we were in chaos after
39:01
that right and then we had to actually
39:03
forge a new constitution and in some
39:05
ways that was the real climax of the era
39:08
as being able to actually then agree on
39:10
a powerful central government
39:13
and to some extent i would say that
39:14
there was the miracle of of 1788 which
39:17
is even more amazing than the miracle of
39:20
you know 1781 which is the the defeating
39:24
of uh
39:25
of uh you know clinton and cornwallis so
39:29
so anyway that’s i i think that but it
39:31
probably illustrates your point that
39:32
there is an important
39:34
internal dimension i think it’s no
39:36
be no surprise today
39:39
looking in america that people are going
39:40
to say yeah i get the internal component
39:44
right now right red zone versus blue
39:46
zone i mean my god the two sides don’t
39:48
even talk to each other you know i live
39:50
in dc i mean i’ve been sort of a dc guy
39:54
uh they don’t even talk to each other
39:55
now i mean there’s literally practically
39:57
no communication there’s nothing to say
39:59
at this point adam
40:01
you know
40:02
right so when you have mutually
40:04
exclusive ideas
40:06
of what the country’s future is
40:09
how does democracy work right are you
40:12
going to completely forfeit your future
40:14
just because the other guy gets i don’t
40:16
know half a percent more votes
40:18
no it doesn’t work that way does it and
40:21
here’s the irony and this has been
40:22
pointed out by some you know brilliant
40:25
uh carl becker pointed that out in 1940
40:28
just as we were going into world war two
40:29
he said one of the problems with
40:31
democracy
40:33
this democracy only works
40:35
really well
40:36
when the problems you’re trying to solve
40:38
are pretty trivial
40:42
i mean think about it if it’s a
40:44
fundamental problem how does democracy
40:46
work
40:48
right and and i think
40:50
kovid may have even sort of reinforced
40:51
that argument where you looked at some
40:53
of the more totalitarian governments and
40:55
you can say whether it’s right or wrong
40:57
uh but they certainly took measures to
40:59
clamp down uh
41:01
and and really stop the virus spreading
41:03
its tracks in a way that a democracy
41:05
just couldn’t i agree and there’s a
41:07
there’s a great uh a wonderful
41:10
compendium of worldwide polls done run
41:12
by the cambridge institute for for a
41:15
democracy
41:16
uh by a guy named roberto fowa and he
41:18
and
41:19
have written a lot on this issue of
41:20
growing inequality but particularly
41:23
in the turning away of younger
41:25
generations in america
41:27
particularly millennials
41:29
not just in america but around the world
41:31
from the whole idea of liberal democracy
41:34
it’s it’s becoming less popular less
41:36
interesting and important
41:38
amazingly enough there are a lot more
41:40
younger people today
41:41
who are willing to say yeah let a
41:43
dictator you know handle things for a
41:45
while right
41:47
meaning that
41:48
this liberal democracy that all these
41:51
boomers and silent talk about
41:53
has done nothing for us
41:56
it just feathers the bed of all these
41:59
older people and all these in you know
42:01
uh dysfunctional institutions which
42:04
aren’t doing anything for our future
42:06
right
42:07
and that sense of that sense of being
42:09
turned off
42:11
uh and being much more willing and open
42:14
to a more autocratic it doesn’t really
42:17
matter too much whether it’s on the left
42:18
or the right you understand what i mean
42:20
or it could be some crossbreed between
42:22
them
42:23
well in in you know in some ways um
42:27
you know
42:28
can you blame the younger generation um
42:30
in the sense that it’s seeing all the
42:32
spoils go to the older generations as
42:34
we’ve talked about
42:35
um and you know you get
42:38
somebody that’s promising them for
42:40
education free health care whatever you
42:42
know the the platforms of those more
42:45
progressive uh you know political
42:47
parties sound pretty appealing right hey
42:49
look if i’m if i’m going to struggle i
42:50
may as well you know struggle and get
42:52
something so you said you know part of
42:53
the fourth turning is
42:55
is basically seeing the rise of a
42:57
recentralization of power
42:59
and i think that that’s probably one of
43:01
the drivers that will will drive you
43:04
know the um
43:05
resumption of central state power and
43:07
here in the states i mean we’re we’re
43:09
seeing this state get involved in ways
43:11
that it hasn’t been a long time
43:13
right no you’re right well i mean think
43:15
about it for for uh most of the year in
43:17
2020
43:19
uh the state took over everything i mean
43:21
we all became words of the state right
43:24
businesses households everyone i mean
43:26
nothing
43:27
remotely close to that has happened in
43:29
american history
43:31
now that example won’t go away quickly
43:34
you know what i mean people will
43:35
remember that yeah that you can do that
43:38
right
43:39
every window is dependent on the state
43:41
even major corporations you know to
43:44
renew their turnover their loans i mean
43:46
everything right the combination of
43:48
huge fiscal largesse plus the fed policy
43:52
right yeah the stimulus has been i mean
43:54
unprecedented yeah and and it and it by
43:57
the way it rewrites the rules of the
43:59
regime
44:01
um and you know i’ve pointed that out i
44:03
mean if you look at the six quarters of
44:06
the pandemic
44:08
and compare them to the quarter before
44:10
the pandemic you know the last quarter
44:12
of 2019
44:14
we’ve had something like a
44:16
seven percent growth in real disposable
44:19
personal income
44:20
at the same time we’ve had a two percent
44:22
decline or nearly three percent decline
44:25
actually in real gdp
44:28
that is unprecedented right a 10
44:31
percentage point gap between what we’re
44:34
earning to be able to spend
44:36
and what our economy is producing i’ve
44:38
gone back and look at all the earlier
44:40
recessions that gap is never more than
44:42
like one and a half percent
44:44
so where did all that free money come
44:46
from
44:47
it came from
44:48
borrowing it came from borrowing and it
44:52
came from
44:53
first of all borrowing by the federal
44:55
government
44:56
which we’ve seen it ramped up we went
44:58
into the recession by the way already
45:00
under trump at a
45:02
federal deficit of nearly five percent
45:04
of gdp that was already a record for a
45:07
non-recession year before the panda we
45:10
were 4.8 percent of gdp
45:13
um and you know everyone was fine with
45:15
that
45:16
uh
45:18
uh jerome powell is fine with that you
45:19
know donald trump is obviously fine with
45:21
that
45:23
and then
45:24
the next two years are at 12.5 percent
45:27
of gdp right so that was an extra five
45:30
and a half percent of gdp kicker in two
45:32
years well that translates into about 10
45:35
of dpi right disposable personal income
45:37
so that’s how you get there right
45:40
this changes the rules of the regime and
45:44
the reason why so many people have been
45:46
faked out in the market
45:48
and i mean if you had told if you had
45:50
told people back in the worst days of
45:52
march
45:53
back in 2020
45:55
that we were going to
45:57
you know the s p 500 was gonna double
45:59
again
46:01
in three well i think if you told them
46:02
first the global economy is you know
46:04
gonna shrink in in the next one yeah but
46:06
eight months what do you think’s gonna
46:07
happen the s p nobody would guess it
46:09
would double
46:10
well exactly that it was gonna double
46:12
and oh by the way and they would have
46:14
already disbelieved you but if you told
46:16
them that in addition to doubling
46:19
uh the
46:20
employment level in america would still
46:22
be would still be lingering about five
46:24
percent below where it was at the
46:27
beginning and that we’d be having close
46:29
to 2 000 deaths per day
46:31
after 18 months and yet we’d see this
46:34
and picked up they would have thrown you
46:35
out of the room right
46:37
and and meanwhile we’ve had the the 40th
46:39
anniversary of the of the you know bond
46:42
uh bull market right we we we saw
46:45
september 30 1980 we had bonds 10-year
46:49
yield at 15.8 something i think 15.84
46:54
what’s going on with that at a time now
46:56
when the economy is recovering the
46:58
the s p 500 doubled
47:01
i mean how do you see bonds so low well
47:03
turns out now they’re they’re not quite
47:04
so low
47:06
maybe they’re
47:07
maybe they’re shifting in a slightly
47:08
different direction now
47:10
but here’s the point why do the old
47:12
rules don’t work why do the all those
47:15
all those valuation rules you know that
47:17
we talked about like like you know
47:19
schiller’s pe
47:21
you know
47:23
you know earnings to sales ratios or or
47:25
uh right they just haven’t mattered for
47:28
the past half decade yeah
47:30
so they’ve all you know they’re they’re
47:32
off the charts they’ve all been
47:33
screaming
47:34
sell but if you had sold recently you
47:37
would have been killed right
47:39
so i this is a really important question
47:41
for investors
47:42
why are all these rules not working and
47:44
i would submit that we’re changing
47:46
regimes now
47:48
we’re going from an old regime which we
47:50
we call you know sort of the neoliberal
47:52
regime the fed just you know buys and
47:55
sells the short end influence interest
47:57
rates over the business cycle and they
47:59
and the federal government keeps the
48:01
budget reasonably balanced because they
48:02
can’t expect the fed to bail it out
48:04
right and then you know a little bit
48:06
maybe uh in a crisis the fed will
48:10
offer credit at penalty rates kind of
48:12
the old budget rule
48:14
in the new regime which you could call
48:16
the mmt regime right
48:20
well what what what what is it now the
48:22
fed can buy any asset
48:24
at any maturity it can flatten the
48:26
entire year curve down it can also go
48:29
after high risk credit it can do
48:30
anything it wants and the federal
48:32
government can basically cut taxes or
48:36
expand benefits any way it wants to and
48:38
the fed will just monetize right
48:40
monetize the difference right yeah so
48:43
sorry interrupt but this is such an
48:44
important um question that so many of
48:47
the viewers have been asking themselves
48:48
of late which is um
48:51
are we going to see in this fourth
48:53
turning kind of will reality re-express
48:55
itself and it certainly may amongst
48:58
things like you know physical resource
48:59
limitations and stuff like that because
49:01
you can’t necessarily print those up
49:03
overnight
49:04
um
49:05
but well sort of economically here will
49:07
will reality re-express itself and all
49:10
those old fundamentals of investing and
49:12
whatnot begin to matter again
49:14
or have we crossed a rubicon where the
49:18
fed is just going to be intervening in
49:19
any and all cases going forward and it’s
49:21
not we’re not going to return to that
49:23
because they require very different
49:25
investing strategies we hope you’ve been
49:27
enjoying this discussion with researcher
49:29
neil howe
49:30
the interview continues in part two
49:32
where neil details the economic and
49:34
market dynamics that he foresees will
49:36
play out during this current fourth
49:38
turning to watch part two just click on
49:41
the link provided in the description of
49:43
this video below
49:44
or go to youtube.com
49:47
wealthyon but before you go please don’t
49:49
forget to support this channel by
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okay i’ll see you over at part two of
50:27
our interview with neil howe

How Generational Forces Have Set the Stage for a Retirement Crisis (w/ Neil Howe)

Neil Howe, author of “The Fourth Turning: What the Cycles of History Tell Us About America’s Next Rendezvous with Destiny” and managing director of demography at Hedgeye, joins Real Vision’s Ed Harrison to discuss the demographic forces shaping the coming retirement crisis and the future of America. As one of the world’s foremost demographers, Howe breaks down the collective personality of generations – what he calls “generational archetypes” – and explains why he’s optimistic about the future relationship between Baby Boomers and Millennials. Filmed on February 4, 2020 in Washington, D.C.

Violent Social Unrest Ahead? History Suggests So (Podcast w/ Neil Howe)

We’re entering the era when the new violently replaces the old.

Neil Howe, demographer and co-authour of the book The Fourth Turning, returns to the podcast this week. In our prior interviews with him, we’ve explored his study of generational cycles (“turnings”) in America which reveal predictable social trends that recur throughout history and invariably result in transformational crisis (a “fourth turning”).

Fourth turnings are characterized by a growing demand for social order, yet supply of it remains weak. The emergence of the surveillance state, a perpetual war machine, increased intervention in failing markets by the central planners, greater government control of critical systems like health care and the Internet — all of these are classic fourth turning signs of the desperation authorities exert as they lose control.

History shows time and time again that such overreach ends in rejection of the current order, usually via violent revolution.

Now that we’re roughly halfway through the current Fourth Turning and things have really started to unravel here in 2020, we’ve asked Neil back on the program to update us on what to expect next.

The Fourth Turning: Why American ‘Crisis’ May Last Until 2030

Above is a video narrated by Hedgeye Demography Sector Head Neil Howe describing the generational theory put forth in his 1997 classic “The Fourth Turning,” co-authored with William Strauss.

Neil’s work has influenced politicians from Newt Gingrich to Al Gore and all of it culminates in a grand theory advanced in The Fourth Turning. According to Time magazine, President Donald Trump’s influential chief political strategist Steve Bannon was “captivated” by the book.

How Generational Forces Have Set the Stage for a Retirement Crisis (w/ Neil Howe)

Neil Howe, author of “The Fourth Turning: What the Cycles of History Tell Us About America’s Next Rendezvous with Destiny” and managing director of demography at Hedgeye, joins Real Vision’s Ed Harrison to discuss the demographic forces shaping the coming retirement crisis and the future of America. As one of the world’s foremost demographers, Howe breaks down the collective personality of generations – what he calls “generational archetypes” – and explains why he’s optimistic about the future relationship between Baby Boomers and Millennials. Filmed on February 4, 2020 in Washington, D.C.