Generational Dynamics Forum - New Site

Lily wrote:I haven't been able to find much data on this topic; do Strauss and Howe claim that there's a catalyst event at the boundary between *every* third and fourth turning? If so we should either find them reliably in every society and every cycle, or, if we can't find any in some cycles, we'll have established that they don't always necessarily occur. I'm not sure how much objective data we have on this?

From Strauss and How, p. 256:

Every Fourth Turning starts with a catalyst event that terminates the mood of Unraveling and unleashes one of Crisis.

Lily wrote:When would you say that the 4th turning began in the US last cycle? My guess would be 1929, and about 1850 for the cycle before that. I am not sure if we are agreed on this, but that's probably a first step toward agreeing on when it began this cycle. This is a really fascinating topic but there doesn't seem to be a lot of solid information on it. If you think that the US 4th turning hasn't begun yet, does that mean you think that when it does happen it will run for another 15 or 20 years before we get to the austerity period? My thoughts have been that the constitutional issues in contention in the US will be more or less settled for good by about 2018 or so, at which point the victor will settle in and it will start to feel like the beginning of an austerity period. I can't see how we could possibly continue to operate in the current manner for more than a few more years, let alone another two decades.

I would have to agree with Strauss and Howe again when they say the previous Fourth Turnings began in 1929 and 1860. Once this Fourth Turning begins in earnest, I think it will be short. If it begins this year, it might last 10 or 15 years. I think what we're seeing now goes back to something I said earlier. This is my own theory, but others have discussed similar. I believe a large Unraveling cycle is being completed and the smaller generational Crisis period is overlapping that. As the large Unraveling cycle turns to Crisis with the smaller generational Crisis period, then the Crisis will hit with full force. If/when that happens, it will start to really look like a Crisis era.

Lily wrote:Hasn't that already happened in a lot of ways? The economy has a new structure since 2009-2010, now that unemployment has become endemic and systemic. Surely if the market crashes this year or next the face of the economy will change even more radically and permanently. And if these shifts are new, aren't they nothing more or less than the result of the course we embarked on after Bush 'won' the Culture Wars? Anyway, what conditions would have to be fulfilled before you would feel like we were in a crisis period? It looks to me like the new order is at least 50% here already.

What you're describing might be dissolution of the old structure. As the old structure dissolves, a few people will find other things to do and different ways to live. Just a thought, but to look for some clues it might be worth taking the time to look at what is going on in Michigan. Since Michigan was hit sooner and harder than most other places, a new order may be starting to emerge there.

Lily wrote:

higgenbotham wrote:A body politic utterly riven with schism as you say is third turning.

Or a post-third turning society with deep and fundamental cultural divisions, perhaps?

It could be. Another possibility might be, and I've brought this up, that if no Fourth Turning catalyst is capable of occurring, then America has lost its ability to function as a cohesive society and will break up into something else.

Lily wrote:

higgenbotham wrote:However, when the new social order arrives, it will out of necessity be eventually embraced by everyone (if the US survives as a homogeneous social and politicial unit, as it has in the past). Once the new social order can gain enough of a foothold to begin to destroy the old social order, then the crisis catalysts will occur and the phase transition will move forward. Our leaders are trying to stop this, are doing absolutely nothing to enable a new social order (as leaders in the past have), but there is nothing they can do to permanently put it off because it doesn't come from them, it comes from the people and their vision of how they want to live.

I am not so sure that the new order will necessarily come from the people and our vision of how we want to live. I am afraid that it might instead come from powerful, colluding state and corporate interests and their vision of how they want us to live. If an awakening is when an idea is germinated and the crisis is when it is either established for all time or else extirpated, I'd say that the counterculture that emerged during the last US awakening is now either going to be established in some manner as the real governing paradigm, or else it will be extirpated from the idea pool more or less for good. This certainly does seem in danger of happening, given how completely the government is dominated by plutocratic and imperial interests, and how evidently little concern it has for the fates of its citizens.

I'd say the turnings of history are always the periods of greatest uncertainty. I think other people here or at the Fourth Turning Forums (if they are still active) may have better ideas as to how to answer this.

Lily wrote:And if there was indeed a period of terrible social chaos and unrest in the US for a few years, which then ended with a newly complete seizure of power by the System, it's conceivable that they could institute a system of tyranny so complete and inexorable that it would be almost impossible to break it.

I thought this through years ago and don't think this is possible with the new technologies.

Lily wrote:Does the UN count as a reliable source?
http://www.nytimes.com/2011/02/09/busin ... 9food.html

The article makes it sound like the problem is pretty well under control, but I have to wonder how much of that is the Chinese government doing spin control. The situation seems pretty grave.

If they're having a wheat shortage due to overwhelming climate-change induced drought, how could that fail to harm the other crops, too?

Note that the Chinese have 55 million tons of wheat stocks in storage, so if they're 15 million tons short in a severe drought there is no immediate problem. Other crops like corn are dependent on different seasonal precipitation patterns, as the article points out. Also, as the article points out, nobody has more buying power in the world market than the Chinese. It won't be the Chinese who don't get enough food if there are worldwide grain shortages; it will be the marginal buyers. If the world financial system breaks down to the point that's not true, there will be other problems first.

Corporate income tax collections crashing again

One of the most bizarre stories have been that the Afghan/Iraq wars
and the Bush tax cuts were the cause of the federal budget deficit in
the last decade.

** Alan Greenspan blames the Republicans for the financial crisis
** http://www.generationaldynamics.com/cgi ... 16#e070916

Everyone seems to believe this, even though it couldn't possibly
be true, since the deficit began to increase in 2000, but the
wars didn't begin until 2002, and the tax cuts didn't begin until
2003.

Here's a chart from Calculated Risk in 2005 that I've posted
several times:



(Income vs Outlay as %-age of GDP for Federal Government,
1971-2005, not including Social Security
http://calculatedrisk.blogspot.com/2005 ... ficit.html)

This graph shows that the huge deficit, which was supposedly caused
by the Iraq war, actually began in 2000, the last year of the Clinton
administration, with the Nasdaq crash. The outlays caused by the
Iraq war were not particularly large by the standards of the
preceding three decades. What mattered was the collapse of tax
revenues, starting in 2000.

In fact, tax revenues depend on the state of the economy, and have
almost nothing to do with anything else. Tax revenues went up in
2006 because of the credit bubble, and in 2009 they crashed
dramatically.

** US tax revenues fall sharply, the most since 1932
** http://www.generationaldynamics.com/cgi ... 04#e090804

Now Higgenbotham has called my attention to a Seeking Alpha article
claiming that corporate income tax collections are falling sharply
again.
http://seekingalpha.com/article/260106- ... s-baked-in

In order to do some further analysis, I found the daily Treasury
statements for 12/31/2009, 3/31/2010, 12/31/2010 and 3/31/2011:

https://www.fms.treas.gov/fmsweb/viewDT ... 123101.txt
https://www.fms.treas.gov/fmsweb/viewDT ... 033101.txt
https://www.fms.treas.gov/fmsweb/viewDT ... 123100.txt
https://www.fms.treas.gov/fmsweb/viewDT ... 033100.txt

In each case, I took the data from "Table IV - Federal Tax Deposits" -
"Fiscal year to date" - to get the following table (all amounts in
millions of dollars):

Table IV - Federal Tax Deposits - fiscal year to date
Fiscal year 2010 Fiscal year 2011
------------------- --------------------
Classification Q1 Q1+Q2 Q1 Q1+Q2
------------------------------------- -------- ---------- ------- ------------
Withheld Income and Employment Taxes 407,327 852,175 440,065 899,957
Individual Income Taxes 1,305 4,232 1,708 5,734
Railroad Retirement Taxes 1,082 2,319 1,135 2,448
Excise Taxes 15,937 32,002 16,393 32,956
Corporation Income Taxes 57,167 109,509 60,017 96,079
Federal Unemployment Taxes 667 1,950 739 2,169
Estate and Gift Taxes & Misc IRS Rcpt 203 1,907 133 314
Change in Balance of Unclassified
Taxes 425 -42 62 -245
Total 484,114 1,004,051 520,252 1,039,412
These Receipts were deposited in:
Federal Reserve Account:
Directly 9,941 19,768 9,407 19,503
Collector Depositaries 120,143 256,217 149,240 286,580
Tax and Loan Accounts 335,513 690,958 341,487 694,362
Inter-agency Transfers 18,517 37,108 20,117 38,966


Subtracting adjacent columns gives us the comparisons of Q2 FY2010 and
Q2 FY2011, which is the first three months of the calendar years 2010
and 2011:

Classification 2QFY2010 2QFY2011
------------------------------------ -------- --------
Withheld Income and Employment Taxes 444,848 459,892
Corporation Income Taxes 52,342 36,062

Thus, payroll tax collections have increased $15 billion, while
corporate tax collections have fallen $16 billion. It's hard not to
notice the seeming equivalence of these two figures.

If crashing corporate tax collections mean that Q1 calendar year
corporate earnings are crashing, then this is highly significant.

It means that even the fantasy stock valuations promulgated by the
stock brokers are going to rise sharply. (Maybe I'm speaking too
soon. Expect to hear: "This is a one-time thing. Corporate earnings
will surge again next quarter, and P/E ratios based on surging fantasy
future corporate earnings are at historical lows, so you're crazy if
you don't throw all your cash into buying stocks.")

The other thing it means is that corporations are going to stop
hiring, once again. They will blame lower earnings on new hiring, and
that will be cut back pretty quickly.

Addendum: It just occurred to me that I think I've heard that most
new hiring was from small businesses, not corporations, so this may be
even worse news for corporations.

John

John wrote:Corporate income tax collections crashing again

Going to the current monthly treasury statement:

https://www.fms.treas.gov/mts/mts0211.txt

Table 3 lists corporate tax receipts (-1,397 for the month of Feb).

The same number in Table 4 is derived in detail by subtracting refunds from gross receipts to yield net receipts (4,555 less 5,953 to yield -1,397 for the month of Feb).

It appears to me the numbers that you are taking from the daily treasury statement are gross receipts. I would guess that gross receipts are based on estimated tax payments, but I have no experience to say that's right except for what individuals do. It would seem that's correct, though, because the refunds are not insignificant.

On the monthly treasury statements, the corporate tax receipts listed in Table 3 were lower in Feb 2011 vs Feb 2010.

However, near as I can guess based on gross receipts and refunds, the March 2011 monthly treasury statement will show that corporate tax receipts listed in Table 3 were higher in Mar 2011 vs Mar 2010.

Dear Higgie,

Higgenbotham wrote: > It appears to me the numbers that you are taking from the daily
> treasury statement are gross receipts. I would guess that gross
> receipts are based on estimated tax payments, but I have no
> experience to say that's right except for what individuals do. It
> would seem that's correct, though, because the refunds are not
> insignificant.

We're talking about a really huge difference though - a 30% fall in
estimated tax payments.

Can you think of any reason why refunds a year ago would be several
times larger than refunds this year?

John

From CNBC Earnings Central:

CNBC wrote: > As of Wednesday, March 23rd:

> The blended earnings growth rate for the S&P 500 for Q4 2010,
> combining actual numbers for companies that have reported, and
> estimates for companies yet to report is currently at 37.1%. As of
> October 1st, the earnings growth rate was at 31%. Of the 496 (99%)
> S&P 500 companies who have reported Q4, 70% beat estimates, and
> 21% were below estimates. The estimated earnings growth rate for
> the S&P 500 for Q1 2011 is currently at 13.7%. (Data provided by
> Thomson Reuters)
> http://www.cnbc.com/id/15839135/site/14081545/

Apparently analysts are also predicting that corporate earnings
growth is sharply lower in Q1, though they aren't predicting
an earnings reduction.

Perhaps the earnings bubble caused to quantitative easing has
run its course.

John

John wrote:Dear Higgie,

We're talking about a really huge difference though - a 30% fall in
estimated tax payments.

Can you think of any reason why refunds a year ago would be several
times larger than refunds this year?

John

I can't, but it seems to me there would have to be someone who can give us an interpretation. There's a blogger named Bondad who has mentioned receipts but I don't read him enough to know if he's gone into this kind of detail interpreting the treasury statements.

I'm not surprised to see variations in tax refunds the year before a large change in tax policy is expected, that's common for those with the money and accounting power to shift things to take advantage of breaks/credits set to expire. The company I work for cashed in a large number that were set to expire a few years back, they not only paid zero tax, they got a big check from the treasury. That's the system, and yes, it needs to be reformed. Even just a statement that refunds paid in the case of zero tax paid in would never be allowed to exceed a million dollars would help check the abuses. John, I'm going to have to look up comparisions between data before and after the Bush tax cuts went into effect. I think the cuts had more effect that you are seeing.

Lily, you need to set your sarcasm detector a bit higher on my posts, when I said nobody needed unemployment, I was being sarcastic, though the extensions have gotten out of hand. However, Social Security isn't part of the general fund, I know a lot of pundits like to claim it is, but you'll have to show me something from either the treasury or SSA that says it is for me to think I'm that far in error.

As for oil and agriculture - yes, it's a risk, big money and big politics are both against doing anything about it, and I just don't see any purpose to beating a dead horse over and over. I have things I've done in case of trouble in that area, I don't see much point in discussing these items, everyone has different skills and abilities, we all live in different areas with different circumstances, and there is no "one size fits all" for emergency preparations. The preparation for someone in rural Kansas has little relation to the preparations for someone in Louisville, KY, and neither relates well to LA or NYC. Example of this, I'm a skilled bee keeper, have kept bees for decades, and know their habits and entomology intimately. I was the first to identify the invasion of small hive beetle into Tennessese, with samples sent to both the lab at UT East and the State Apiarist and confirmation from both. Few people have that skill, it's uncommon and I've found it fairly difficult to teach. Of course that factors into what and how I'd do things, and it's utterly irrelevant to discussions here, except when colony collapse and the subsequent effect on agriculture and financial matters is under discussion. Length of emergency is something you seldom hear discussed, and that's critical to planning - there's this assumption that "it's forever" and that is unlikely.

A very important thing to keep in mind when reading any paper based on forecasts is dating. Forecasting is always inexact and refinements make anything based on obsolete forecasts irrelevant. The paper you cited for extreme cycles was dated 2003, the forecasts for wetter weather were shown to be inadequate in 2006, and the models have been adjusted to show damper climate. Plus, it admits in the beginning of that paper that it's taking the extreme and unlikely case from the older, drier forecasts. So it's dated to the point of being irrelevant. General Semantics makes an especial point of dating in relation to refinements of science and other data, and studying GS is a major aid in filtering information, a necessity in this age of information overload. While I did enjoy "Science and Sanity: An Introduction to Non-Aristotelian Systems and General Semantics by Alfred Korzybski", it's a bit much for many as it's the basis for a science that was new in the early half of the last century, "Drive yourself Sane" by Kodish and Kodish or "Language in Thought and Action: Fifth Edition by S. I. Hayakawa, Alan R. Hayakawa and Robert MacNeil" might be an easier introduction. And yes, that last was by Senator Hayakawa, his degree was in GS.

Yes, it sounds odd to say that only 18% of the land in the US is "arable", but it's pretty accurate. A lot of land area is in rivers or lakes or impoundments, a lot is mountains, and a good bit is desert. Some of that 18% they count I'd call marginal, as that includes some dry land farms in Colorado that aren't always productive without irrigation. Now I have been tinkering with a design for a indoor grower, that would essentially put 24 or 36 of those square foot gardening plots into a carefully lighted and possibly warmed box much like a large bureau with slide out drawers for harvest and gathering - three or so of those would allow an apartment dweller to grow much of their own food, depending on design details. Somebody (maybe here) mentioned that such a thing had been designed but never put into production, and that started me thinking about it. If you aren't familiar with the square foot system : http://www.mygardenguide.net/square-foot-gardening.html Just imagine a two plot wide by 3 long a foot or foot and a half high drawer, with really good steel rollers on the sides for slide out, correct spectrum high efficiency diode lighting with the corrected spectrum for rapid plant growth and misting sprayers connected to small pumps and all on timers, you'll have the idea. 15 watts per sq ft seems to be in the right range for LOW light plants, 30 is right for HIGH light plants, generally. And flowering plants need red spectrum as well, you'll note that most LED lights have that included because most grow plants in apartments for pretty, not food. With increasing food costs, a box that uses the same amount of power as a refrigerator but produces your salads and perhaps other veggies (turnips, beets, collards, kohlrabi - the shorter plants) would be a popular gimmick, IMHO. Yes, it's possible to face the back to a window for natural light by using a windowed back, but how many ppl will put something like that in front of a window? It would beat the dickens out of pots or window boxes.

I really don't think the US will invade Iran sans harsh provocation, but that's just opinion, always subject to check by reality.

Hussman has a very good post showing that the idea of a tradeoff between inflation and unemployment, the "Phillips Curve", is very flawed.

http://www.hussmanfunds.com/wmc/wmc110404.htm

Dear Vince,

vincecate wrote: > You are predicting 30% deflation, like back then, when this has
> never happened with a pure fiat currency. Hyperinflation has
> happened over 100 times in pure fiat currencies. How can you be so
> certain you are right on this? How can you think hyperinflation is
> such a foolish prediction? It seems like history is on the
> hyperinflation side. Is this deflation a "generational dynamics
> prediction" or is this just your own prediction?

There was 30% inflation from 1977-80 during the 1970s, so 30%
deflation in three years is not exactly far fetched.

No, it's not just guesswork. The 30% deflation prediction is obtained
by applying the Law of Mean Reversion to the CPI curve. Inflation is
mostly an Awakening/Unraveling era phenomenon. Deflation is mostly a
Crisis era phenomenon, after a big bubble has burst.

You talk about hyperinflation happening over 100 times, and yet you
only give feeble excuses and can't give even one example out of those
hundreds that occurred during the Great Depression. You would think
that at least one of those 100 examples would have happened, if only
by accident. The fact that it didn't should tell you something.

vincecate wrote: > Vince comments: If China has inflation, and China is sort of
> pegged to the dollar, and most the stuff in American stores comes
> from China, how could America not get inflation? If China lets
> their currency appreciate compared to the dollar, then it will
> make inflation even higher. If China sees 5% inflation and their
> currency appreciates by 5% then America will see 10% inflation in
> all the stuff from China, which is lots of stuff.

This is backwards reasoning. If China's currency loses value, then
it won't be pegged to the dollar anymore. Also, if the velocity
of money is different in the two countries, then your whole argument
is completely wrong.

You always talk about the Fed printing money if China stops buying
Treasuries. If China stops buying Treasuries, it would be considered
an act of war. In fact, a threatened default would most likely only
occur during hostilities. Why would the Fed "print money" to pay
people we're at war with? The U.S. could simply cancel China's debt,
cutting our national debt in half.

John

Just for fun:
http://www.bbc.co.uk/news/world-us-canada-12949637
I think I'm going to ask for a job in this kind of company: You build a disaster and then you decide to give yourself a reward.
World is fun... who will stop these crooks.

Regards