Our decade from hell will get worse in 2012
Commentary: Market crash, political gridlock, revolution, new class wars
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Fasten your seat belts: 2011 was far worse than expected. Our earlier predictions for America’s Worst Decade just got worse.
As financial historian Niall Ferguson writes in Newsweek: “Double-Dip Depression … We forget that the Great Depression was like a soccer match, there were two halves.” The 1929 crash kicked off the first half. But what “made the depression truly ‘great’ …began with the European banking crisis of 1931.” Sound familiar?
Yes, huge warnings: But America’s deaf. In denial. When we predicted the 2011-2020 “decade from hell” we didn’t see the big macro events dead ahead: Arab Spring virus that’s now Occupy Wall Street, promising to explode into an even more powerful force in 2012 … war on the middle class … widening inequality gap. … Washington gridlock … the Super Rich’s blind resistance to all new taxes.
As Ferguson puts it: “To understand what has been happening in our own borderline depression, you need to know this history. But hardly anyone does.” Get it? America’s already in a “borderline depression,” and virtually nobody gets it. American leaders are dummies about history. Worse, nobody may be able to stop our depression from turning “great.”
Investors beware: Please, protect your assets: “Those who don’t remember history are doomed to repeat it.” We’ve already forgotten the lessons of the 2008 disaster. No wonder we’re doomed to repeat the mistakes of the 1930’s triggering the Second Great Depression. Soccer anyone?
More bad news for 2012: from Gross, Grantham, Shilling and Stiglitz
Ferguson’s in good company with his dark forecast. Pimco’s Bill Gross asks rhetorically: “Where is the euro headed? More than likely down, perhaps significantly.” Gross warns of a “terrifying situation” where “the euro may fall … and take the U.S. recovery with it.”
Then there’s Jeremy Grantham, whose GMO firm manages $100 billion. He predicted the 2008 crash a couple years in advance. Predicts ‘Seven Lean Years” ahead, till 2016, the end of the next presidential term. Now, in his latest newsletter he feels “sadly … vindicated by my ‘seven lean years’ forecast.” The world “will not easily recover from the current level of debt,” as our self-destructive American and European leaders have “permanently slowed their GDP growth.”
More bad news: As we close out the first year of the “Worst Decade in American History,” economist and long-time Forbes columnist Gary Shilling just issued his semi-annual outlook: “Global Recession Likely” in 2012. OK, the best he can say is that this one “will be milder than the 2007-2008 nosedive.” Of course, you’ve already forgotten those pains, right?
And over at Vanity Fair, Nobel Economist Joseph Stiglitz also reexamines the dark history of the Great Depression, warning that in our ignorance of history we’re missing a fundamental economic “shift in the ‘real’ economy,” missing what will generate future jobs, just as we did back in the ‘30s. Yes, we “risk a tragic replay” of the Great Depression.
10 predictions for America’s Worst Decade Ever
Over the past decade we predicted the 2000 crash, the 2008 meltdown, the short-lived 2009 rally. Future historians will look back on the 2011-2020 decade as America’s Worst Decade. Worse than the 1930s Great Depression. Totally predictable. Totally denied.
So here’s an update of the 10 predictions of a chain reaction of events that are building to a critical mass, will consume America in what economist Joseph Shumpeter called “creative destruction” that will eventually, after cleansing the greed from America’s toxic capitalism, trigger a renewal of the American Spirit, as happened in the Great Depression.
Here’s how all this will generally unfold in the coming decade:
2011. Super Rich keep spending billions to control Washington
The conservative takeover of America’s democracy the past three decades became total and complete last year when an activist Supreme Court overturned long-established legal precedent giving soulless corporations — whose sole allegiance is to wealthy shareholders — the same inalienable rights as humans, accelerating their quest for absolute power. Hopefully Senator Bernie Sander’s proposed 28th Amendment will change that, but doubtful.
2012. Super Rich solidifies absolute power over our political system
That Supreme Court decision legalized political bribery. Now, billions pass through lobbyists to politicians with one goal: A promise that politicians vote for their special interests. Our middle class is in a rapid trickle-down into third-world status. The inequality gap steadily widens. Doesn’t matter who wins the 2012 race. Democracy is systemically corrupt by money. Obama, Mitt, Newt, all pawns of the system.
2013. Global population bubble exploding, rapidly wasting resources
America’s Conspiracy of the Super Rich drains trillions from middle-class taxpayers. They see the global population growth explosion of 100 million annually not as exhausting the world’s scarce resources, but as a tool to get richer through free-market capitalism and globalization. They ignore the tragedies as global population climbs to 10 billion, fail to hear the warnings of environmentalists like Bill McKibben that it may “be too late. The science is settled, the damage has already begun,” we can’t save the planet.
2014. Pentagon’s global commodity wars accelerate toward 2020 peak
At the outset of the Iraq War, Fortune analyzed a classified Pentagon report predicting “climate could change radically and fast. That would be the mother of all national security issues.” And billions of new people will spread unrest worldwide as “massive droughts turn farmland into dust bowls and forests to ashes.” Another history lesson forgotten: “An old pattern could emerge; warfare defining human life.” Yes, in denial politicians chose war and catastrophes over cooperation.
2015. Gilded Age globalization explodes America’s Global Empire
About the time of the Pentagon’s prediction of WWIII in 2020, Kevin Phillips warned in “Wealth & Democracy:” “Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out.” Similarly, Ferguson, warns in “Colossus: The Rise and Fall of The American Empire,” that we are in denial, thinking “about the political process in seasonal, cyclical terms.”
2016. Reaganomics capitalism self-destructs, crashes, bank bankruptcies
“But what if history is not cyclical and slow-moving but arrhythmic,” asks Ferguson. “What if collapse does not arrive over a number of centuries but comes suddenly,” too rapid to respond in time. True to form, a new conservative president will keep ignoring the lessons of history. And, as Jared Diamond’s warns in “Collapse:” “One of the disturbing facts of history is that so many civilizations share a sharp curve of decline … demise may begin only a decade or two after it reaches its peak in population, wealth and power.”
2017. Class war and revolution: Rich class loses big, surrenders
Warren Buffett saw the revolution long ago: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” But by the 2016 presidential election, political rage explodes into a new American Civil War over inequality. The gaping income gap pops a bubble, causes economic collapse. Riots spread preventing another massive bailout of our too-greedy-to-fail banks. New depression ignites class rebellion.
2018. The Fed and Wall Street banks collapse, Glass-Steagall reinstated
Diamond warned us: Leaders need “the courage to practice long-term thinking, make bold, courageous, anticipatory decisions at a time when problems have become perceptible but before they reach crisis proportions.” Instead, they fail to act boldly, delay. History tells us leaders act in short-term self-interest, not long-term public interests, especially politicians backed by billionaires who see only quarterly earnings, year-end bonuses, next election.
2019. Global commodity wars spread, killing millions, wasting trillions
Over half our federal budget goes to the Pentagon’s war machine, limiting America’s domestic priorities. Predictably, new commodity wars are ignited by an accelerating global population versus a decline in the world’s scarce resources. That also forces a total rethinking of the balance between spending to protect against external enemies and a rapid deterioration of domestic programs: employment, education, health care, retirement.
2020. America’s first woman president, patriarchal dominance is dead
By the end of the decade, it is finally obvious that patriarchy — male dominance of leadership roles in philosophy, economics, politics and culture throughout history — has failed our civilization, bringing the world to the brink of total destruction.
Why do male leaders consistently fail us? Jeremy Grantham brilliantly captured that fundamental flaw in our nation’s character a few years ago: Male leaders are actually quite emotional, myopic and “impatient … management types who focus on what they are doing this quarter or this annual budget.” But true leadership “requires more people with a historical perspective who are more thoughtful and more right-brained.”
Unfortunately, “we end up with an army of left-brained immediate doers.” And that guarantees “every time we get an outlying, obscure event that has never happened before in history, they are always to miss it.”
Worse, today’s male brain is so rigidly hard-wired in short-term myopia, it quickly forgets history’s most recent lessons, like 2008. As a result, our males leaders “collectively miss even totally obvious events that happen over and over in history.”
Class war? Or Gender War? By 2020 we’ll have an answer, but by then it may be too late.