Wednesday, April 29, 2009

Springtime ruminations

For the really big picture it’s helpful to think in terms of “Finite-time singularity in the dynamics of the world population, economic and financial indices” (arXiv:cond-mat/0002075), Sornette and Johansen’s exploration of the idea that humanity is at “the end of the growth era.”  The implication of their analysis is that “this crisis” will go on for decades until a “phase change” of human behavior is accomplished to a new attractor, which could be benign or nasty, brutish and short, depending on how humanity decides to conduct itself.

Strauss and Howe’s imaginative and weirdly prophetic The Fourth Turning (1997) explores the present crisis as the latest in a series of crises in Anglo-American history.  I’ve posted about their theories and their prophesies from the mid-1990s that caught so much of what has happened since.  In a narrative sense they were truly uncanny.  See The Crisis at the End of the Saeculum and Onward to Ekpyrosis, Death and Rebirth of American….  A site that nicely summarizes the nature of the crisis and the authors’ prescriptions for behavior going into this crisis is found here and here.  A few snippets from the latter:

How does America Prepare? 1

Prepare Values

The goal is to forge values that uplift the culture.  Leaders need to look to unite and not divide based on stark ideologies.   If we move towards the later it can cause a lot of damage.  The goal is to generate a values structure that can be bought into by the majority of Americans so that we can pull together as a country and not get pulled a part.

Prepare Institutions
Public institutions may be challenged to support us during the crisis.  Therefore, it is important to cut out and simplify the government structures without threatening their infrastructure.  The authors state we should look at state and local governments as policy testers - that can test new solutions quickly to see if they have impact on emerging problems.

Prepare Politics
Bottom line - come together!  We do not have the luxury of partisanship - Republicans and Democrats must forge a partnership that bluntly defines the problems we face and works together to forge solutions.

Prepare Society
If this turning comes to pass it will require a level of public sacrifice as well as teamwork.  Start now to get involved on a local level and encourage your children to get involved in their communities.  Ultimately we must refocus on becoming involved citizens in a positive way.

Prepare Youth
As with World War II - the brunt of this crisis will fall on the shoulders of those born from 1982 on (the Millennial Generation).  We need to invest in our youth and ensure even the most needy are prepared to take on their role to be the muscle behind our emergence from the Fourth Turning.

Prepare Elders
Except for the very old - it will be likely that we will need to cut back on elder care and create the expectation that elders will have to be more self-sufficient.  If the economy continues to sour and is a central outcome of the turning - then we will likely not be able to rely on social security.  The key is to up our savings and be prepared to live far more simply.

Prepare the Economy
It is likely during the Fourth Turning that we will face “extreme shocks” to our economy.  Asset values are likely to drop, unemployment will likely grow, the industrial structure will be strained and we may deal with issues of inflation or deflation.  Therefore, we must work on correcting certain fundamentals without pushing for performance levels we might have come accustomed to during the good times.  Again, we need to encourage citizens to save.

Prepare Defense
We must be prepared for anything!  Expect the worst and be flexible enough to mobilize where and when we have to.

Ultimately - the authors say these are modest steps yet they indicate that during the Third Turning  we can only do some things to prepare because there is no way of knowing what we will turn on.

Preparing As Individuals 2

Rectify classic Virtues
During a time of crisis people will look to those in their communities they can count on.  This is because communities are drawn together more and are more active about supporting each other to get through difficult times.  Your reputation will be key to being included in this support.  This means people will be more attentive to how you keep your word, how you roll up your sleeves and how much they feel you can be counted on.

Converge with Your Community
This relates to the item above.  Yet, the point is to get involved and to stay plugged in to your local community.  At the depth of the crisis you might have to actually chose whether you are more aligned to your local community versus the national one.  It would be good to start now so that the structure of support is in place.

Bond by Strengthening Personal Relationships of all Kinds
Having a strong network will be critical.  Your personal relationships will be harbors for support, giving, and receiving encouragement.  Face to face contact will also be more important - with your family, employees, friends, and others who can provide support.

Prepare Yourself and Your Children for Teamwork
The time hibernating in our homes will be over.  The goal will be to get out and get involved in community projects that support the whole’s well being - not just your own.  Expect and encourage your children to get more involved in community service.

Look to Your Family For Support
Your ultimate safety net will be your extended family.  If you do not have strong connections or have lost them due to the hustle and bustle of life - make an effort to reconnect and strengthen those ties.

Prepare for the Weakening of Public Support
Today’s level of public support could be weakened during “The Fourth Turning.”  The two things to focus on are making sure you are saving plenty of extra money (even if it means reducing your lifestyle) and ensuring you are vital and healthy. Being financially and physically healthy will reduce your stress during this time.

Diversify Everything You Do
The people who will do best during a time of crisis are the generalists.  Many businesses will be challenged to remain relevant so consider the skills you have an  how they can be applied in other ways.  Assume that safety nets (medicare, social security and pensions) could totally be shredded.  Look at your investments and make sure they are diversified as well.  “Enter the turning understanding your cash flow, diversified savings and some liquid assets.  Really know where your money is.”


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