"A Great New Book" —Larry Kudlow, CNBCGet it on AmazonExplore the Book
THE SECOND COMING
–William Butler Yeats
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: a waste of desert sand;
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Wind shadows of the indignant desert birds.
The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
You probably know that I believe in the cyclical history. So did Yeats.
Cycles of History
In The Second Coming Yeats sees the old order in Europe dying as the gyre (2000 years) that began with Christ ends. The beast is Europe’s ruling class moving slowly as scavenger birds wait for the beast to drop.
America has a ruling class–a cabal of political, business, and media elite. On the surface, their factions war and clash, but when the lights and cameras and microphones power down, they plot together to keep the rabble in its place.
The rabble are awakened.
The End of the Old Establishment
Maybe it was one too-many hot mic accidents. Maybe it was the hubris of power and the ascension of elites less skilled in masking their contempt of the rank and file.
In the end, the reason won’t matter much. The Establishment beast is old and weary. Its parasites look for new, healthier hosts.
The Democrat Establishment candidate has a socialist nipping at her cankles. The Republicans have no clear Establishment leading candidate, but a muddle of pretenders and wannabes sitting miles behind a populist and a conservative evangelist.
The centre is gone. Not only is there political center between the two major parties, there’s no firm center within the parties. The New York Times article linked above explains it all in two short paragraphs:
Rank-and-file conservatives, after decades of deferring to party elites, are trying to stage what is effectively a people’s coup by selecting a standard-bearer who is not the preferred candidate of wealthy donors and elected officials.
And many of those traditional power brokers, in turn, are deeply uncomfortable and even hostile to Mr. Trump and Mr. Cruz: Between them, the leading candidates do not have the backing of a single senator or governor.
Yet this isn’t just about electoral politics. Look what’s happening in the finance world.Asian markets continue free-fall on Monday]
Wall Street and Central Bankers were key to the old Establishment order. The Establishment of both parties gave Wall Street a veto on their candidates long ago. Right now, the financial world is too distracted with its own problems to pay more than scant attention to the election. Besides, they have ways of making eventual winners see things their way, and they count on their financial threats to keep any new president in line.
The Trough of the Crisis
The Fourth Turning, published in 1997, predicted that America would enter a Crisis period within the decade.
A spark will ignite a new mood. Today, the same spark would flame briefly but then extinguish, its last flicker merely confirming and deepening the Unraveling-era mind-set. This time, though, it will catalyze a Crisis. In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. It could be a rapid succession of small events in which the ominous, the ordinary, and the trivial are commingled.
Recall that a Crisis catalyst involves scenarios distinctly imaginable eight or ten years in advance. Based on recent Unraveling-era trends, the following circa-2005 scenarios might seem plausible:
- Beset by a fiscal crisis, a state lays claim to its residents’ federal tax monies. Declaring this an act of secession, the president obtains a federal injunction. The governor refuses to back down. Federal marshals enforce the court order. Similar tax rebellions spring up in other states. Treasury bill auctions are suspended. Militia violence breaks out. Cyberterrorists destroy IRS databases. U.S. special forces are put on alert. Demands issue for a new Constitutional Convention.
- A global terrorist group blows up an aircraft and announces it possesses portable nuclear weapons. The United States and its allies launch a preemptive strike. The terrorists threaten to retaliate against an American city. Congress declares war and authorizes unlimited house-to-house searches. Opponents charge that the president concocted the emergency for political purposes. A nationwide strike is declared. Foreign capital flees the U.S.
- An impasse over the federal budget reaches a stalemate. The president and Congress both refuse to back down, triggering a near-total government shutdown. The president declares emergency powers. Congress rescinds his authority. Dollar and bond prices plummet. The president threatens to stop Social Security checks. Congress refuses to raise the debt ceiling. Default looms. Wall Street panics.
- The Centers for Disease Control and Prevention announce the spread of a new communicable virus. The disease reaches densely populated areas, killing some. Congress enacts mandatory quarantine measures. The president orders the National Guard to throw prophylactic cordons around unsafe neighborhoods. Mayors resist. Urban gangs battle suburban militias. Calls mount for the president to declare martial law.
- Growing anarchy throughout the former Soviet republics prompts Russia to conduct training exercises around its borders. Lithuania erupts in civil war. Negotiations break down. U.S. diplomats are captured and publicly taunted. The president airlifts troops to rescue them and orders ships into the Black Sea. Iran declares its alliance with Russia. Gold and oil prices soar. Congress debates restoring the draft.
Howe, Neil; Strauss, William (2009-01-16). The Fourth Turning (Kindle Locations 5645-5647). Random House, Inc.. Kindle Edition.
Am I the only one who sees that, not one but ALL of those possible scenarios has played out or nearly played out since the financial crisis struck in 2007?
That Crisis era, they predicted, will last about 15 to 20 years, after which a new social order will emerge in America. From The Fourth Turning:
Before long, America’s old civic order will seem ruined beyond repair. People will feel like a magnet has passed over society’s disk drive, blanking out the social contract, wiping out old deals, clearing the books of vast unpayable promises to which people had once felt entitled. The economy could reach a trough that may look to be the start of a depression. With American weaknesses newly exposed, foreign dangers could erupt.
But before we get to the High, we will go through a climax according to The Fourth Turning:
Eventually, all of America’s lesser problems will combine into one giant problem. The very survival of the society will feel at stake, as leaders lead and people follow. Public issues will be newly simple, fitting within the contours of crisp yes-no choices. People will leave niches to join interlocking teams, each team dependent on (and trusting of) work done by other teams. People will share similar hopes and sacrifices—and a new sense of social equality. The splinterings, complexities, and cynicisms of the Unraveling will be but distant memories. The first glimpses of a new golden age will appear beyond: if only this one big problem can be fixed.
It’s been nine years since the Crisis began with the fall of Bear-Stearn. Eight years if you believe the Crisis started with Lehman Brothers.
Either way, we are inching closer to the climax. With Trump and Cruz running as much against the Republican Establishment as they are against the Democrats, the pieces are in place for the climax to emerge.
It’s very likely that the 2016 election will bring about the long term realignment of the social contract as Howe and Strauss predicted in The Fourth Turning:
Soon after the catalyst, a national election will produce a sweeping political realignment, as one faction or coalition capitalizes on a new public demand for decisive action. Republicans, Democrats, or perhaps a new party will decisively win the long partisan tug-of-war, ending the era of split government that had lasted through four decades of Awakening and Unraveling. The winners will now have the power to pursue the more potent, less incre-mentalist agenda about which they had long dreamed and against which their adversaries had darkly warned. This new regime will enthrone itself for the duration of the Crisis. Regardless of its ideology, that new leadership will assert public authority and demand private sacrifice. Where leaders had once been inclined to alleviate societal pressures, they will now aggravate them to command the nation’s attention. The regeneracy will be solidly under way.
When I read theories that attempt to explain Trump and Cruz, I’m surprised no one else stumbled onto this one.
Like it or not, we’re in the trough of the Crisis. And the worst is yet to come. Be ready to influence the new social contract. With or without a convention of states, America’s social contract has been digitized and opened for editing by anyone.