[subscribe2]In every time and every place there have been those predicting doom just over the horizon. Eventually, one of them is right and is often remembered long after by future prophets of doom. No one remembers the millions who were wrong, unless they flamed out in a particularly spectacular fashion or a psychologist wrote a book about them. I’ve often drawn on the later to harass liberals by comparing them to a cult. If you read the book, the comparisons hold up to a frightening degree, but that’s for another day. Today I’m reading JayMan’s treatise on why we are doomed. I’m sure the Zero Hedge types will be memorizing passages from it all week. After all, if you don’t like the current arrangements, they must not be sustainable and therefore must be on the verge of collapse. The classic in this genre is Marx, whose alienation drove him to create a worldwide suicide cult that eventually snuffed out millions. L. Ron Hubbard was a piker by comparison.

I have not read the whole thing or had much time to mull over his arguments, but what jumps out to me immediately is the Great Depression Syndrome. This is a cognitive bias I just made up to describe the myopic view of economics history. The economics profession is hobbled by it. I suspect it is because it is the big economic event that gave birth to their profession. That and they don’t have reliable data for prior events. Still, you would think someone would notice that the world was buggering along for a few thousand years before Keynes. The other issue is the cultural overhang. America the super power starts with World War II. The Boomers grew up hearing tales about their parents making it through the Depression to then beat the Nazis. This era that is headed for its denouement should be known as the Boomer Era as it has been defined by the quirks of that generation.

Anyway, the point of that last bit is the Great Depression is not the standard we should be applying today. Further, the Great Depression was not as great as the romantics claim. Previous depressions were as unpleasant and some worse. The Long Depression was worse, which is why it was known as the Great Depression, until the next collapse came along and that generation decided to celebrate itself after the war. It is probably fair to say that it is a better analogue to today than the Great Depression. Instead of one dive over the cliff, followed by a period of adjustment, there were a variety of shocks around the world that fed on one another. Today, Europe has different troubles than the US, which has different problems than Japan. Even so, it is not a great analogue. There are lessons to be drawn, but policy makers never learn from the past so it is left to history buffs. Read Currency Wars and you can get a nice easy to read history of the Long Depression as well as the Great Depression. Draw whatever lessons you like.

Then we have the Kitten of the Blogosphere’s take. I’ve long thought that reality would eventually beat the smug out of his generation, but he keeps proving me wrong. I guess that’s why I read his blog. Anyway, he too suffers from Great Depression Syndrome. In his case, no pics of bread lines today means it is better than the 30′s, because he remembers seeing all of those pics of breadlines back in school. The 1930′s did not have sprawling black ghettos either. They did not have trailer parks full of meth labs. My grandparents lived through the depression and never stopped yapping about it. The main take away for me is it was not that bad for the hard working and ambitious. After all, 80% of the population did have a job.  The poor were still poor, the rich were still rich and the working class was still working class. The middle class, however, was reminded that they are not upper class and never will be. That’s the lesson all the old people in my family took away from the Great Depression. The rich are always at war with the middle and they use the poor as a weapon.

Anyway, plenty of good stuff for the doom and gloom types. My view is we are going to experience shocks and adjustments for the next decade as the Boomer Era comes to a close. The political class will try every option to stave off the mathematical reality facing the nation until they are forced to do that which is necessary. Riots and revolution are unlikely. Instead it will be a slow winding down of Empire that will go through fits and starts. The next decade will see a contraction of US involvement in the world’s dung heaps. Domestically taxes will be raised, but real cuts will happen for the first time as it becomes clear we cannot have it all.