Neil Howe: We May Suffer A Collision of Financial, Social & Geo-Political Crises All At Once

I guess one one question you might ask Adam, and this might interest people, and it's a question I asked myself, is that I talk about three kinds of crises. You know, in uh, whatever chapter it is, we kind of walk through them. One of them is internal, one of them is external, the other is financial, right? Um, and the question I often ask myself is, will we have some sort of financial reckoning begin to break before we have one of the other? Or will they be all kind of together, right? I mean, in other words, if, if you see what I mean. In other words, if that's exactly what you mean, to answer this problem, I, you know, and I see, as do many other people looking at the economy, I see uh, a higher rate of inflation combined with financial repression as being virtually locked into the cards right now.

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Welcome to Thoughtful Money. I'm its founder and your host, Adam Tagert. The fault lines that divide our society are widening. The K-shaped recovery that we've seen since COVID has rewarded asset owners at the expense of everyone else. And Millennials and Gen Z, who are losing faith in being able to achieve a middle-class lifestyle, look with increasing bitterness at the relative prosperity of the Boomer generation. These simmering grudges are only getting inflamed further by the divisive rhetoric of November's approaching US presidential election. Are we at risk of a class war, a generational war, an ideological civil war, or a combination of all of these? Or will we find a way to bridge our differences and come together? For perspective, we've got the privilege of speaking today with demographer Neil Howe, co-author of the seminal book *The Fourth Turning* and its sequel. *The Fourth Turning* is here. Neil, thanks so much for joining us today.

Great to be here, Adam.

All right, Neil, um, always wonderful to talk with you. And I've got to tell you, you're one of those guys that the longer it goes between your appearances on the show, the louder the clamor from the viewers to say, "Hey, when is Neil coming back on?" So, very happy we're going to get a chance to scratch that itch here. Um, I did, I should preface this, I did make the mistake of asking my followers on Twitter what questions they would like me to ask you, and I lost count after like 153. Um, so we're going to get through as many of those as we can here, but it's, it's probably going to be in the single digits, folks, not, not in the hundreds.

To kick things off, Neil, I'm going to ask you a variant of the general, intentionally broad question I like to start these interviews with: What's your current assessment of, uh, the state of American society?

Unchanged, you know, from what it was before. Um, I'm, uh, I think like a lot of people, worried. Not so much about the election, but what comes after the election, right? Um, we're going to have enormous, uh, uh, collapse of, of expectations by whoever loses, right? How will they deal with that? Uh, and, you know, now, I think everyone's kind of on their best behavior. Uh, we have two very different candidates, but more importantly, they're leading very different social, cultural, political perspectives. I would say so different that they are mutually, utterly mutually exclusive, right? And that creates a problem in democracy. Uh, as I, you know, tried to point out in my last book, uh, democracy really doesn't work when you have two communities which just don't agree on anything. I think I, I, uh, uh, quoted a famous essay, uh, by one of my favorite intellectual historians, written back in 1940, uh, on the travails of democracy, uh, who, who basically said, uh, democracy works best when there's really nothing much to talk about. Um, and, uh, and this, by the way, he wrote this in the wake of, uh, fascist and left-wing takeovers of democracies all over the world in the 1930s, right? I mean, this was a decline, as we would say today, you know, Freedom House would say, a decline in the democratic sphere of the world. We're seeing, seeing today, but we saw that in the 1930s, and that was his sort of summary or his, uh, his, uh, his analysis of what was going wrong. He said, the problem is democracy does not work when you have two populations that would rather fight than to give up what's essential to them. Then, you know, what difference does it make, who cares about 51% of the vote? You know, you're not going to submit to that, right? In the end, you're not, you might put up with it for a while. Uh, so that's, that does worry me because I think we are there in this country. Um, uh, and I'm also worried. Um, you know, that's the internal part, as readers know, that's kind of the internal conflict part. And the external conflict, which we seem to have many of around the world, right, today? So these two things and how they interact is really the center of my focus because I do think they feed on each other. That is to say, external opponents take a look at what's happening internally within America. Um, and, uh, and, and I think external pressure is also influencing internal politics here. But so, if you want to know, that's what worries me. Not so much the election itself, what happens immediately afterward. Um, I, and I think we're ignoring that right now. I think that's sly being suppressed. We just don't like to talk about that, right? But I think that's in the back of everyone's mind. Uh, whether it's, if, if, if Kamala Harris loses, is there going to be another huge resistance? You know, and a big resistance movement, like in France, you know, when the Nazis, you know, drove in? I mean, that's, that's their model, right? The resistance, a new popular front. Or if, um, if, if, if Donald Trump loses, or will there be serious nullification movements, which ultimately could lead to, uh, outright defiance of federal authority? And I, I think, you know, that's, that's also possible. I think it's also interesting, Adam, not to go on too much about the election, but how much people don't really care too much about the candidates anymore. You know, I mean, Kamala Harris, the first presidential candidate we've had, at least in my lifetime, that never received a single primary vote. But, but no one really cares. I mean, it's like, and I don't think anyone would have cared if it had been Joe Biden in a coma. Everyone knows that there's a team behind her. They trust that team. It's a reliably blue zone team, you know what I mean? That's what matters. I don't think anyone really cares too much what Kamala Harris thinks. She's gonna say whatever she says to sort of bring over the, the moderates, you know, the, what few there are left, you know, I may be talking about six, seven, 8% of voters in the middle, uh, who, who aren't, you know, completely, um, committed at this point. Um, but, but that's, that's kind of where we are. And I think similarly on the case of Donald Trump, I know there are a lot of people in the red zone who really don't like it at all, but they'll vote for him anyway because this is a fear-driven election. It's driven by the fear of the other side taking over. And, and we've seen that before. Uh, and believe me, nothing motivates like fear. I mean, I hate to, I hate to say it, this is an old truism, um, but I think we're seeing it here. And that's why, by the way, we're seeing voter participation rates that are 100-year highs. I mean, whatever else you may think about what's happened in politics over the last eight years, uh, uh, uh, voter disengagement is no longer one of our problems. Problems. Um, it's interesting. I was just talking with an analyst, uh, the other day, who was saying, yeah, this, this, because it's so tight, this, this election's going to be won by who can mobilize their base the most, the most successfully here. Um, yeah, actually, I took a bet with someone who said that, well, RFK Jr. is going to get, you know, over X percent of the vote in various states. This was several months ago. And I said, are you kidding? All of these primary candidates are going to get pushed into the gutter. And look, I mean, we've seen that, right? And this is the rule: you're not going to throw away your vote when Armageddon is at hand, you know what I mean?

Yeah. Well, well, let me ask you this. Um, so I'm sure we will weave the election thread through the rest of this discussion. Um, but, um, since it's something that, that very clearly is at the forefront of your mind, does this particular set of conditions we have right now, where you said it's a, it's a fear-based election, and it's one where, you know, the country is, is, uh, we're, we're almost perfectly divided here. I mean, this is, this is a, you know, probably going to be a 51% result that determines the election here. Does this remind you of any other periods in American elections that you can draw a parable to and say, yeah, it's, it's like it was back during this specific election?

Well, this is, to me, I think readers will understand this is the Fourth Turning pattern. It is a little bit like when America experienced during the 1930s, when we had, you know, the basic choices between fascism and socialism. That's the way people felt. Um, it was thought that sort of moderate liberal democracy was dead, right, in the depths of the Great Depression. Um, and I think the most obvious parallel is to the, is to the 1850s, right? When you had a, ultimately, a third party which sprung up from nowhere, basically stole mostly from the Whigs, some from the northern Democrats, and rendered political campaigns in America in 1856 and then in 1860, virtually a regional plebiscite on where America was going. Uh, and that led directly to secession and Civil War, right? I mean, that's the most disturbing parallel. Okay. I think, you know, what I mean? I mean, that's obviously the most disturbing parallel. Um, and, and let's not forget that the American Revolution, although we like to think of it as a revolution against Britain, I think that is the, the, the way Americans like to think of it, it was in reality a civil war, right? A large share of Americans sided with the, with the, uh, with the Crown, with the Crown, with Parliament, particularly middle America, particularly the non-English-speaking America. It's interesting, liberal regimes, which definitely, uh, you know, parliamentary-run colonies were sort of a liberal regime, it protected rights of people, were particularly, uh, the loyalty of non-English-speaking people because they realized that if America suddenly became this new populous set of English-speaking colonies, no one would really respect their rights as much, and they certainly wouldn't respect the rights of former Tories at all, right, which turned out to be the case. So, uh, a large, a large share of, of the colonists, uh, were Tories. They, they weren't as well organized, and they certainly did not have the cohesive ideology of the patriots who, who, you know, quickly dominated. But let's not forget, it was a civil war. And by the way, just like the American Civil War, um, uh, it, it also, um, you know, involved promises by the British for emancipation of the slaves would come over to the Tory side. Other, it was exactly what Abraham Lincoln did. I mean, the, the governor of Virginia, Governor Dunmore, actually issued the call, and it was issued much later, and you did have a larger number of African-Americans ultimately leaving with the Tories. Many of them died from smallpox, actually. One thing the Tories did not do, they did not do what George Washington did, was inoculate against smallpox. He did that to his own army. That helped, uh, the, the, um, the British didn't. But look, you do see these parallels. We could go back further, but that sense of polarization and that sense that the country goes one way or the other is, um, is typical of these, of these eras.

Okay. And, and the eras you're, you're talking about are eras of, of real simmering societal friction that, that did eventually reach some sort of flashpoint. And of course, that's the hallmark generally of a Fourth Turning. That's one of the reasons why everyone's so focused on this Fourth Turning we're in right now. Which is, yeah, and I, I should emphasize, they're Fourth Turnings in, in our sense, which is a certain kind of generational constellation, a certain period has to pass. Between the earlier Fourth Turning, there are other eras which are times of extreme anxiety and instability. Um, the, the late 1970s was a good example. Late 1960s and then late 1970s, during the Awakening, was a time of, of, of extraordinary tumult in America, and, um, uh, disor, you know, violence. But it was not, it was not going to lead to regime change, right? Because the regime actually was working pretty well. But, and the solution to the Awakening was to simply relax all the rules of the regime, right? So that is a, that is a typical pattern. We see the Awakening is a time when you relax the rules of the regime because the regime is trying to do too much, and so you let people sort of, you know, go their own way. The Fourth Turning is when you need a new regime with much stronger rules, and that, of course, is, it's much more likely to to involve large-scale conflict.

Great. And, you know, we've been talking about the Fourth Turning, and, and I realize I've probably done a disservice to what are likely a minority of viewers here, but I'm not sure every single viewer knows exactly what we mean when we talk about Fourth Turning. Can you just give the 60-second elevator pitch of, of the framework that you use?

Well, it's, it's the idea that, uh, modern societies, um, modern societies enter eras, generation-long eras, in which they fundamentally reorganize themselves in terms of their, their political and civic constitutions, their infrastructure, this, the, really the structure of their outer world, community life, about once every long human lifetime. Um, and, and we've seen that obviously in American history, Anglo-American history, really going way back. We see that same pattern more approximately in, you know, in, in Western Europe, more recently in Asia, in Southeast Asia, South Asia. Um, and, and that is part of a, of a, of a broader pattern, actually, of turnings, which are distinct social moods which prevail over a generation. Four of these turnings sort of constitute, it's a long human life. So we go from the First Turning, Second Turning, Third Turning, Fourth Turning, like seasons of a year. And in our most recent, uh, secular season, we've moved from the American High, which is strong community, to the Awakening, which was attacked community and weakening community, rising individualism, the Me generation, yeah, to, to the Unraveling, which is really the era of the late 80s, 90s, and early 2000s, and that's a period of, of, of strong individualism. And then now we've entered, since the GFC, the Fourth Turning, which typically climaxes late, and we still have, you know, another decade to go.

Okay. And when you say climaxes late, I kind of think of these turnings, especially the Fourth Turning, as almost sort of like an exponential curve, at least in terms of of change. Meaning, the more you go into it, the higher the degree of change is going on around you. So it's not like when you hit the halfway point, you're like, oh, okay, we've seen half of the change. You've probably seen less than a quarter of it so far, correct?

You know, it, it varies. And, uh, it's the, the order of change within a Fourth Turning doesn't admit to a lot of easy patterns. And anyone who's, who's read our book will know that there is a sequence of events in a Fourth Turning. Things have to act in a certain order, right? There is the, um, you know, there is the catalyst, there are the various, uh, civic regenerations, the climax, and the resolution. But whether some of the most violent moments or most scary moments hit early or late, kind of depends upon history. But clearly, what happens late is the consolidation, climax, and resolution. That happens late. For instance, during the American Revolution, that was really the, uh, the Constitutional Convention, the referendum on it, and then the establishment of the new government was actually not a terribly violent period. The violence was actually much earlier during the actual Revolution itself. But the total uncertainty about whether America would fall apart or not, where it was going, was certainly there all the way up to the end, right? And, and in fact, I'm, I'm one of those who believe that the Republic never would have survived had it not been for a new Constitution. I, I think it was on the verge of, of, you know, disintegrating. The, the 1780s was one of the most horrible decades economically in American history, probably worse than than the 1930s. And in the book, I kind of walk people through and describe, you know, how, how awful it was.

So, um, let me just clarify for folks here, then. So it's, it, it sounds like, um, the writing of the new playbook happens in the Fourth Turning at the end, during resolution. And then the First Turning kind of takes the football and says, okay, we're going to use this playbook. So, so the actual, the actual creation of the new, the vision of the new system, that's an end-of-Fourth Turning event, huh?

Right, right. So we still have a, we still have a lot of wood to chop, then, before we get to that.

Well, we do. But, you know, it sort of happens quickly, and it sort of just sets into place because it just seems inevitable. I will say that one of the things that that worries me a little bit is that is that, um, there is so much that has to happen in terms of our political economy, you know, in the sense of, you know, we talk about, uh, the composition of public spending, the level of debt. I mean, all of these things, if, if the entire society moves to a more survivalistic footing, I mean, just imagine the magnitude of changes we have to see, and how that's going to impact the economy, how that's going to impact families. And this is something actually we did not see going into earlier Fourth Turnings. Right? Typically, government has been very small. Government always grows by the end of a, that's what happens in emergencies, right? I mean, you have committees of public safety, you have govern, you know, someone jumps in to sort of, uh, uh, requisition resources, you know, from where.

I know you've said that the, the populists themselves demand more centralized control during a Fourth Turning.

Oh, yeah. But it becomes obvious once you have an emergency, once the survival of the regime's at stake, either internally or externally, you're going to, you're going to mobilize everybody, and you're going to take wealth from everywhere, you know what I mean? That's, that's that's kind of the law of nature at that point, right? And so, but it, what I mean to say is, is that, uh, previously in Fourth Turnings, the, the size of government in terms of its material reach was relatively small. You mean, you think of how large the federal government was going into the Great Depression? It was tiny, right? It, budgets, I think the, the bureaucracies of major corporations in America were much larger than what the federal government was doing. Um, so when it came time to grow, to some extent during the New Deal programs, but obviously much more so during World War II, um, you didn't have to take away anything, you just had to grow it, right? Right. And there was an open playing field.

Yeah, yeah. It was an open playing field. And, and, and then, but typically earlier, and, and this same happened with the Civil War. And typically earlier, one thing you do after the Fourth Turning is over is you have this huge stream of benefits to all the veterans. So that's a constant. You know, and typically those payments to the veterans are just about reaching zero by the time you start going into the next, you know, Fourth Turning. Uh, it's interesting. In fact, I believe only about two or three years ago, our last Civil War payment ended. I don't know if you're aware.

Me? Yeah. So it turned out it was a, uh, a Civil War veteran who, very late in his life, married a very young woman. Right? I mean, you can see how that works, right? Yeah. You know, you're doing that in the 1930s. You know, the last Civil War veterans were dying in the 1930s. Actually, there's a lot of talk about the Civil War, interestingly, and about Lincoln, um, during the New Deal. That was sort of a, this rising profile of Lincoln again in the 1930s. It's when we built the Lincoln Memorial, for example, right? Right. There on the Mall. But so you can imagine if someone marrying then, how long that person, yeah, you, you can kind of, right? And that person as a dependent continued. Yeah. F-believe it or not. Yeah. Totally orthogonal, but, yeah, I think I heard like, I think President Tyler still has like a grandchild who's still alive, something like that. Like there's just, there are some amazing elements like that.

All right. So, look, let's dive into exactly what you just mentioned there, where you said, hey, you know, it's, um, uh, government's bigger this time, and, you know, we're going to have all this, uh, change that's going to be forced upon our institutions, and it's going to impact the economy, and it's going to have to redraw the political landscape. And again, we're going to have to get through all that to get to restitution by the time this is over. And if this does take only 10 more years, which sounds like a long time, but is a blink of an eye historically, um, there's an awful lot that's got to happen between now and then. Um, as you project forward, and, and I know it's imperfect, and you'll have plenty of times to keep coming back on this program and calling audibles as you see things unfolding on the ground, but what are the things that you, uh, most expect to see, given the current set of circumstances we have today? And maybe wrapped in that, you know, what are the things that you're most, maybe excited about, the changes you're most excited about, and the changes that you're most concerned about?

I think the thing I'm most concerned about is the thing that we just talked about, right? And that is, I'm not so much concerned about who is in power, because I think whoever is in power, they will have to act the same way. You know what I mean? In a sudden crisis situation with another great power, you know, a nuclear-armed power, I don't care if you're talking about, you know, Iran, North Korea, Russia, you know what I mean, China. I, I think how a leader will act is, is relatively constrained. You know, I think that isn't so much the issue, believe it or not. And I think actually the culture will follow in its Fourth Turning path, uh, toward, toward convention and authority, you know, what, you know, as I mapped out in the book, kind of these, these cultural changes we always see in a Fourth Turning, uh, toward community and toward equality. Those things always happen, right? Authority, convention, equality, community, as well as a new focus on the future. So I think those are the five big things. I point out, I can't remember, I believe it's chapter, don't quote me on this, I think it's chapter eight, okay? But I, but I go through those things, right? And those always happen. And I actually think, and people will think I'm crazy, but it doesn't entirely matter who the leader is. They have to go in that direction. That's the only way. That's how the turning itself, in the social mood, just constrains the choices leaders are to some extent, um, you know, made by circumstances, right? Um, and, and their paths are determined by circumstances. And I, I, I've often articulated this thesis before. I don't think anyone would have said that Abraham Lincoln and Franklin Roosevelt, you know, at early in their career, anyone would have said that they were going to be great leaders. I mean, destined for greatness.

Yeah, yeah. Exactly. And, and some, some people you could say, Teddy Roosevelt, yeah, you could have said as a young, that guy was a dynamo. I mean, he was brilliant, he was full of energy, I mean, that guy was amazing, right? No one would have said that about Franklin Roosevelt. And in fact, people, people pointedly said they did not think much of him, you know, back when he was in college and as a young man. But he grew into his role, the role that was handed him by history. That's my point. What worries me, Adam, is, is not that. What worries me is the amount of reconstruction we have to do around public priorities. Right? We have a very large public sector today, which is overwhelmingly oriented toward redistributing income, um, to, to old people. I mean, let's face it. Um, half of the federal budget, excluding interest payments, 10 years from now, according to the CBO, will be going to Americans age 65 and older. And of course, a lot of, a lot of those interest payments will also be going to people, I mean, who holds bonds? I mean, exactly. So I, but I'm just saying, that is the amount of skew. And that means everything else, you know, I'm talking about defense, you're talking about national parks, oceanographic institutes, NASA, you know, throw in every, and throw in the cost of all the bureaucracy, all of the rest of it, is all in the remaining part of the budget, right? And, and I don't think people are remotely aware of that, right? Um, and how much, when, you know, in a crisis, you actually have to look at the numbers. You know, we all know what happens in a crisis. You know, it's like, suddenly you lose your job, suddenly you have to look at the numbers. Where are we spending money? Dear, we gotta move, you know what I mean? It's like that, and it's overnight, right? So people don't realize that we're going to have to use huge restructuring of that. I think we're going to move toward a, um, you know, one-size-fits-all capitated healthcare system, where I think, you know, the only good thing is, is that we overspend so massively on healthcare in, in, you know, inefficient, even unhealthy ways, that that might actually be something that we could economize on fairly easily, right? Um, but how about cash benefits? You know, how about, um, all the other programs? That's going to be paired back in order to make room for what? In order to make room, well, first of all, to maybe to allay the fears of creditors that we'll never be able to pay back our debt, and to be able to afford resources to meet whatever wolf is at our door, right? Do you see what I mean? Whether internal or external, resources will be needed for that. It's all going to hit at the same time. And you understand what worries me, Adam, is that before government was small, it was an open, right? It, it was, we could just raise without cutting. Today, it's different. We're going to have to cut at the same time, hugely, right? And that's going to be a massive wrenching, a reorientation of our lives. And, and it will seem so obvious when it's necessary, right? And you get everyone in Congress because say, well, it's time to break the glass. You know what I mean? They use all those metaphors, you know, for what we have to got to do, what we have to do. Um, so everyone thinks today it's unthinkable. No, won't be unthinkable.

Right. And I'm so glad you say so. I talk about this a lot, which is how, um, quickly once it does shift, sentiment can shift. And, you know, there are things, as you said, they're just unimaginable when the status quo is, is, is raging. They're just topics, you, they're third rail topics. Of course, we could never do that, right? Whatever. And then you get to the crisis, and all of a sudden you're like, all right, it's obvious.

Yeah. You know, what's amazing, in fact, I, I commented on this at the time, even in 2013, do you remember the time of the, uh, the Tea Party and the, and the budget crisis and so on? We shut down government for a while. And, um, but it was amazing. There was enough of a crisis atmosphere at that time that plans actually to do a haircut on Social Security were actually there. I mean, they were being considered bipartisan by the, you know, and today, of course, no, they're, they're nowhere in sight, right? Um, and when people tell me, well, it's impossible to to imagine a time when people would actually, you know, trust a strong leader again, you know, those times are forever behind. And I, some, my response to that, because I get that a lot, you know, what are you talking about? This Fourth Turning, we're all going to have to, you know, trust someone to actually make these huge decisions. And then I ask people to recall six months after 9/11. Do you know what GW Bush's approval rating was in, in February of 2002? It was like 96%.

It's going to say super high. Yeah. I mean, it was. And you think, how did that happen? You know? Well, it's obvious how it happened, you know what I mean? People were scared, right? You rally around your leaders.

Yeah. I mean, that's why they always sort of accuse unpopular leaders of wanting to start a war just to try to rally the country. Yeah. And actually do talk about that in the book, a little bit, the "Wag the Dog." You know, this is of the Wag the Dog. And, and interesting, um, um, the, um, uh, Secretary of State Seward under Lincoln, that was his response to the secession of the South. And this was, this was his famous April 1 memorandum that he sent to, um, to Lincoln. And, uh, Seward was condescending to Lincoln. He thought he should have been the Republican pres, you know, he should have been the Republican candidate, but he made a few impolitic speeches and so on. Everyone went with Lincoln. But he thought he knew government really well. This Lincoln was a, you know, a newbie, really didn't understand. So, so he wrote this famous April 1 memorandum to Lincoln. And he said, you know what you should do? Start a war with either Britain, France, or Spain. And he gave all the reasons why. And there were actually some things going on in the Caribbean that would give us a casus belli, you know, to start a war. He said, yeah, well, the war, you know, people were, well, Lincoln understood that this was far too little and too late, you know, to use that. And, and very tactfully, as Lincoln always was, right? He was a master tact. Just politely never responded to the memo and continued to treat Seward with all courtesy. And Lincoln was a, was a fascinating individual.

Well, I mean, the whole term "Team of Rivals" you know, was sort of coined around how he managed and how what it says about Lincoln about being such a strong person that he didn't mind that, right? He didn't mind these prats all around him, often threatening to undermine him, but he sort of, you know, he harnessed that energy without ever feeling threatened himself. And I think that's one of his most remarkable traits.

Well, so, so we've talked about this in the past, which is, you know, I've asked you point blank, like, look, um, I'm looking at at the leaders of, of these past moments of extreme adversity in America, and, you know, they're phenomenal leaders that came out of this, and they, they constructed the platforms that kind of carried society further. And I'm looking around, and I'm, I'm not seeing any great candidates right now. And you said, not worried about that, that history has a way of just putting enough pressure in the system that finally it creates the diamonds, and they get thrust forward, even if, even if that's not what they're shooting for initially, right? Almost like a Roosevelt.

There are, uh, it was interesting when, uh, when Hoover was, you know, kind of a lame duck, the election had happened. I think that was the last election where we still, um, uh, inaugurated people, you know, in late March, I believe it was, you know, and then we moved toward this much earlier, you know, inauguration. Yeah. But there was this long period where, you know, Hoover was presiding over this, over this collapsed husk of an economy. And, and, and the whole country was holding its breath. I mean, banks were out of business everywhere, stock market, many weeks, it had been completely shut down. And, uh, Hoover wanted Roosevelt to sort of join with him to do something. And actually invited Roosevelt and his team into his office. And people have reported on that meeting, and it's fascinating because Hoover gave this huge analysis of the economy right now, of the world. And it was, by everyone who was there, it was a masterpiece. I mean, Hoover was, uh, a giant, you know, intellectually. I mean, the guy understood the economy, understood everything that was going off in the world. And apparently, Franklin Roosevelt had the slightest clue of what he was talking about, you know, and basically just said a few kind of mild pleasantries, uh, and, and basically, you know, suggested that some of his aides reply. Uh, and, and however, Roosevelt's political instinct was correct, which is obviously not to join with him and collaborate with him in any way, anything. And that is the pattern. Lincoln did the same with Buchanan. Buchanan wanted Lincoln to sort of help him in these last gasping moments when the, when the South was seceding and so on. And Lincoln basically said, no, no, I want everything, the bad that happens to be on your watch.

Yeah. All right. So, you know, and I take some comfort in that, which, and I might, I might just say, Adam, just to bring this up to date, there might have been a little bit of that in the Republicans' refusal to go along, uh, with a bipartisan immigration reform bill, you know, earlier this year. I think it was the same instinct. This basically was Trump saying, you know what, you've sat on your hands all your administration about doing anything about the border. Now you want our party to provide you with cover? No, thank you. We'll wait until after the election. And, and interestingly enough, now that, you know, now that you have the Kamala Harris presidency, Joe Biden is saying, well, we put into these, uh, new border patrol procedures which have brought down illegal entries 50% in, in July. And there's headlines now, right, right. And I think, I think the Republicans are saying, you know, this is what we always said. They did have it within their means to do this by regulatory, you know, do this by executive order. They didn't need new legislation.

No, I'm sure that that's the case. And, and I think Republicans are even further consternated right now because it seems like from some recent, uh, campaign ads that the Harris campaign has put out, that they are now sort of, uh, seemingly portraying that that Kamala is for rebuilding the wall and, you know, basically, you know, to trying to absorb some of these, these Republican, you know, key differences. Right? She doesn't want to tax tips, you know, she doesn't want to, whatever Trump does, she's saying, yeah, me too. Yeah. Which may be, you know, may be a pretty good strategy, which is like, let's just try to chip away at all the biggest points of difference, and then I'll win on some other dimension.

Yeah. And, and I, I think it's what we started by talking about. There's kind of an esoteric and exoteric strategy, right? The esoteric is to everyone who are committed followers, you know, on the left. And I think same, by the way, for Trump on the right, you know, you know who I really am, you know, how I'm going to really govern. But, you know, for now, we're going to do, you know, this is what I'm going to say. Uh, and, and I think there's that, uh, one, one thing, your point earlier too, nobody's going to shift from Team Blue. Exactly. That's my point. So it's like Kabuki theater. No one really cares too much what they're saying right now, right? You know, you know what you're getting. And, and I, but I do think what bothers me, to come back again to my issue of kind of the fiscal revolution that we're going to face. And let's dig into the implications of it. Yeah, because what everyone is saying is, yeah, I'm not gonna, I'm not gonna tax tips. You know, first of all, what's the rationale for that? You know, so, so then I'm gonna get my pay. And so we're all gonna start getting, you know, what's, what's the incentive of that? We're all gonna get our half of our paying tips. I mean, does anyone think this through a little bit? You know, I mean, Adam, it's kind of like, does anyone think about what they're saying, right? And you're not gonna attack Social Security benefits. I mean, are you kidding? Uh, this is basically, uh, you know, it's basically the one stream of payment that, you know, that just goes to wealthier old people. I mean, what are you gaining by that? And I, and I, I, I sometimes wonder, when you're constantly giving things, what are you paying for them with?

Well, you're, you're increasing the deficit, right? Adam. So basically, what you're doing is, and the same thing, by the way, I did a big piece recently on, you know, cat ladies and the fertility rate, you know, and, and really looking at JD Vance. Well, you know, I'm a demographer, so I like to think a lot about demography and about fertility rates and so on. And I thought a lot of the arguments that that JD Vance makes are are good ones. I mean, it is true, the Republican party is naturally the party of higher birth rates. And we see that in the data. No matter how you divide up the population, no matter what subgroup you're looking at, by age or anything else, you know, Republicans tend to have more kids. They tend to be less likely to be single. On Republicans care more about family life and about, you know, uh, uh, policies that, uh, foster having kids and, and forming families. What he doesn't quite get is how massively you need to spend in order to move the needle on fertility. We see that in Hungary, we see that in Poland. You got to talk about several points of GDP. Why? Because one of the reasons why people have kids historically, traditionally, is to take care of them in old age. But what we've done in all of the high-income societies around the world with pay-as-you-go social insurance systems is we basically subsidize the cost of growing old, right, but leave entirely private the cost of raising young people. So if you don't have any kids, everyone else's kids are going to support you. Well, what does that mean, right? And, and so you need to have a subsidy to raising kids that's as strong as the subsidy to grow old. You, you see what I'm talking about? This is why you're going to need $5,000 or maybe even $7,500 per child every year to move the needle on this, right? If you are not going to pare back on the generosity of the subsidies to seniors, or pare back on the deficit, which is also a payment to old people, because you're basically telling old people, you're not going to have to bear higher taxes, now someone else's kids are going to bear them, right? So if you're not going to do that, if you're simply going to add on by doing new programs, they're going to have to be big programs, but in addition, you're going to have to actually fund them. And this is what I don't see on any either side. Harris or Trump, who's going to fund any of these initiatives, these tax cuts and this stuff? We're already running five to 6% of GDP deficit when GDP is actually above its potential. I mean, look at the CBO on that. We're, we're at the peak of the business cycle now, and we're running these enormous deficits. In what world is this rational? But no one calls on it, right? No, no, neither side. It gets called on this. Not, not yet. But it seems like we are, we are barreling towards, you know, a moment of reckoning with this, right? Where at some point, the funds are not going to be there, or creditors aren't going to want to buy the debt, or whatever, where we're just not going to be able to keep doing this. Because I love how you put it, and I talk about all these issues all the time here on this channel, but, you know, deficit spending, we're basically, how are we funding things? If we deficit spend, we're stealing from the future, right?

Yeah. If you do, for instance, do this bonus to, uh, Kamala Harris now. Kamala Harris does the same thing. Right now, she's in favor of a $6,000 baby bonus, a one-time bonus, right, for babies. And I'm just thinking, if you're going to do that through deficit spending, then send a note along with the payment to the parent and said, dear parent, thank your kids and treat them very well, because they're going to have to pay all this back plus interest, right? That's what we should include in the note. And then have the parents, you know, then tell them to go out and have a good time on that check, right?

Well, and that's, I mean, and we aren't even doing that yet, and we still, I think, have a, have a solvency crisis, right? Because we're stealing from the future. And your point, we're largely giving it to the aging, right? Um, and we have, you know, um, an increasing percentage of, of the population that is struggling and suffering because they're left over to basically be the ones to try to keep the engine going from here. Which makes total sense why people aren't forming families. Right? And if you want the current economic model to continue, it actually is dependent upon a growing population of working-age people. So we're heading in the wrong direction on that. So we, we actually do need to solve the population growth issue, the family formation issue, if we want to keep the model we have. I think you would say, look, long before, long before we even get to that point, the model we have is probably going to break anyway from the solvency issues that we have going on here. So as we get into this Fourth Turning, you know, what are the, the, what, what are the, the economic, uh, shoes that you can, you feel you can predict with some degree of confidence are going to drop? I know one of the ones we've talked about in the past has been, you know, you mentioned equality as one of the key elements of a Fourth Turning. You know, I presumably there's going to be some sort of wealthy wealth redistribution that goes on here. I don't think we're probably, I don't think you think we're going to get out of this without some sort of attempt to even the, you know, the wealth disparity.

So you have to understand why equality becomes a priority. And the reason it becomes a priority is when the regime is in danger and requires everyone to help save it, right? You need to give everyone an incentive, incentive, yeah, to be on board, right? So that's why you need to do it. Now, you, you know, you can, you can take, you can take wealth from the wealthy, but from, from the non-wealthy, you're going to need them to serve, you know, right? You're going to require sacrifices from them. And the only way you can recapture their loyalty, you know, is to, is to give them a reason to feel that they're part of the new regime. It's not altruism, you see what I mean? It's, it's survival. Survival. This is why FDR, at the height of World War II, started his kind of New Deal for the middle class. I mean, he sort of went, you know, he, he talked about this new GI Bill of Rights, which was basically this incredible new sort of socialization of life for the returning veterans, right? I mean, you're doing all of this dying and sacrificing, conquering half the world to save the world.

From fascism, this is what we're going to do for you, right? We're going to pay for your education, pay for your vocational schooling, pay for your homes. We're gonna build highways for you. We're gonna, I mean, all of this stuff, right? Um, and it's all going to be for you. We're going to focus on the future because we know that that's what you care about.

FDR didn't care about the people receiving Social Security, which, by the way, with enormous inflation during World War II, was not COVID, remember that? Yeah, there was no COLA and Social Security back then, so and not a lot of people receiving it yet. But my point is, is that no one cared about the older people at that point. FDR was firmly focused on the rising generation of young adults. And do you, do you see that the pendulum swinging in that direction? But it's gonna have to, it's gonna have to because you're going to need to motivate them to come to the defense of the regime, right? Yet, that's what you need. You need those people to be incentivized, to be enthusiastic, to see that this is the key to our future. Um, that's, that's when you, when you come down to motivating large numbers of people to truly throw their lives into something, you need to give them reasons to do it. Okay?

So, um, so that's going to be a very big change from the status quo, and again, maybe a very necessary one to, to achieve the sort of sustainability and renewal that we need going forward from here. Um, you know, we are, um, we're, we're, you know, I mean, I guess, I guess one, one question you might ask, Adam, and this might interest people, and it's a question I asked myself, is that I talk about three kinds of crises, you know, in, uh, whatever chapter it is, we kind of walk through them. One of them is internal, one of them is external, the other is financial, right? Um, and the question I often ask is myself is, will we have some sort of financial reckoning begin to break before we have one of the other two, or will they be all kind of together, right? I mean, in other words, if, if you see what I mean, in other words, if I see exactly what you answer this problem, I, you know, and I see, as do many other people looking at the economy, I see, uh, a higher rate of inflation combined with financial repression as being virtually locked into the cards right now, right?

Right, um, uh, basically, if you, if you inflate the economy, right, you deflate the claims, uh, the creditors have, and then you basically require a lot of people to hold bonds. Uh, you can do that. You can require banks, you can require a lot of pension funds, right, to just hold them. France already does this. Japan already, a lot of other countries already do this. Uh, we start doing that in this country, you know, those, you'll eat those negative returns. Um, and I think it's important that people understand this process, right? Um, if we start having to run, imagine if we just suddenly enter another serious recession and maybe deficits start going up to 10% again, maybe you compound that with international difficulties, maybe a run on the dollar, what if the exchange rate starts? In other words, what is the, what are we going to do at that point? You need to start reassuring people that bonds are a good investment again. And one of the ways you can do that is, you know, the Fed can start buying a lot of bonds, obviously, which they'll have to do. But the other thing is, you gotta force a lot of people to keep holding them. So, and we can do that here domestically.

Let me flag this because I, this is, you're taking this exactly where I wanted to go. And one of the questions I wanted to insert in here is the playbook to date has been money printing. You know, we're going to borrow, we're going to print money to do it. And, and the casualty of that is the purchasing power of the currency, right? Um, if we get into the situation you're talking about, do you think that we're going to do even more of that, right? Or do you think, to make people trust the US and trust the bond market more, we actually let bondholders start taking losses? Will we let defaults happen in the system the way that we're just, there's just anathema to us right now?

Um, I think, I think what we will do is, if we suddenly need to spend a lot more money publicly, right, uh, we will do, we will do all of the above. You'll do whatever it takes, okay? We will do whatever it takes. And, and it's interesting, if you look at, uh, the typical pattern of governments in fourth turnings, it's, it's always a combination of three things, right? How do they fund this extraordinary mobilization of the public, right, right, for, for public purposes? I mean, explosion of public spending and marshalling of resources for some huge public purpose. It's usually three things, and it's often about equally, you know, they raise taxes, they, uh, sell a lot of debt, and they, they use inflation. And it's, uh, it's all three of those, right? It was certainly all three of those for the North during the Civil War. For the Confederacy, it was almost all inflation. Unfortunately, they weren't able to sell a lot of debt. They just printed a lot of money. I, I would say for the Confederacy, it was probably, you know, 80% inflation, not, not much tax raising, not much, uh, not much debt sales. But again, for, for World War II, it was, um, it was a huge amount of debt sold, uh, it was tax raising, clearly, uh, and also just, uh, you know, wage and price controls and various regulatory ways of just pushing people away from spending, right? Um, and then it was, it was inflation. And, um, uh, and it was, it was inflation with combined with financial repression, which forced people to have, uh, interest rates were far, you know, people receiving interest on federal debt far below inflation. And that was the Treasury, uh, Fed Accord, which lasted all the way up until late 1951, when famously William McChesney Martin, who was Truman's guy at Treasury, came over to the Fed, and Truman never forgave him, right, for, for declaring independence of the Fed. And basically, the Fed saying, no, wait a minute, to avert inflation, we need to start hiking interest rates. I'm sorry, Mr. President. And, uh, Truman never forgave that. So as he later, you know, even very late, long after his retirement, Truman never forgave him. And I think blamed him for, uh, uh, not getting elected again.

Look, um, I think William McChesney Martin was a great, uh, Fed chairman. He was chairman, by the way, almost 20 years, right? He was, he was chairman from 1951 all the way until 1970. And by the way, with all of the accolades on the Maestro, you know, back in 1996, you know, Greenspan for, you know, enabling a soft landing, right? William McChesney Martin is the only one who did it after a yield curve inversion. There was no yield curve inversion in 1994 and 1995, right? And there were almost no recession indicators flashing red back then. I actually have a show which I do once a month on, on sort of the monthly economic indicators. But in 1966, there was, we actually had a yield curve inversion. William McChesney Martin avoided a recession. And you go back and look, yield curve inversions have predicted 11 out of the last 10 recessions. That 11th, that false positive was 1966, and that was, uh, that was Martin's doing. So, all right, um, is, well, see if Powell can pull off the, uh, the same. But, uh, I know there's a lot of doubts out there. So let's get down to brass tacks here. So there's going to be a lot of appeal, economically, politically, socially, that is going to, I mean, it's going to require a lot of pain for the current power structure to consider the type of, of, um, of, of, you know, really big measures that you're talking about here. And we should expect an explosion of public spending to come out of this, where we're going to see higher taxes, a lot more debt issues, inflation, and financial repression, like you said.

So for the people who have gotten sufficiently freaked out by hearing you predict all that, Neil, um, like practically and tactically, what are some of the ways people should should look to this future and say, how can I navigate this without just getting financially destroyed along the way?

Well, you know, two, two obvious rules. First up, I think one is, uh, you know, avoid long-term, nominally denominated assets. You know, uh, you know, T-bill and chill is fine, you know, if you're investing in short-term treasury assets. I think at least for now, those are fairly safe. Um, and, you know, probably a good choice, you know, given the rate of return. It'll be different a month from now, it'll be going down fast. I, I've been interested to see that the, the dot plots from the, from the, uh, the, the FOMC board, uh, predicts only a 100 basis point decline of, you know, by the end of next year, uh, whereas the market's predicting over a 200 basis, over 200, yeah, much steeper decline. So you can see how much faith the markets have in the soft landing. But, but, but, but seriously, I think for now, that's safe. But I think long-term, that's very problematic. Now, it may be risky, but, but obviously, if the economy is going down, uh, it's probably not a terrible bet, uh, uh, to, to invest in long-term debt. But it's risky. But I think as a, as a medium or long-term proposition, it's a terrible idea, uh, because these are exactly the assets that are going to have to lose. And when I say they're gonna have to lose, I just mean arithmetically, right? This is where you have to get back some of the value. This is the only way you can get back from under that, uh, publicly held debt, uh, a mountain that's that's hanging over the federal government right now. So, and I think that that will be necessary, even if we don't have, you know, in other words, even if we didn't face, uh, a, a coming recession or another public emergency. That's what really worries me. I think we're so out of whack on the magnitudes right now that I think that that was, that has, by the way, always been a good decision in a fourth turning, you know, not to invest in a, a nominally denominated bond. And of course, back then, that's the only type we ever had. Today, you have TIPS, right? I mean, you do have these, um, inflation adjusted options. Uh, even those might not be good because, you know, the, the real, you know, the real interest rate will also probably go up, would be higher, probably. Yeah.

And, and I would also think about, um, staying away from, uh, investments with a lot of counterparty risk. You know, some of the complex ETFs that are out there, some, you know, I mean, look, they're, they're all kinds of put and call options and weird, there are these weird ETFs now that are these, uh, these ones that are semi-transparent and they invest in real assets. I mean, just bizarre stuff. And I'm just thinking, you know, where your money is, that's the other thing. Know where your money's going. You know, investing in an individual ticker that's pretty safe. Um, investing in the S&P 500 as a whole, well, that's getting riskier. And this is something we haven't talked about, Adam, but this is something I've written about, uh, and others are writing about, and that's the whole problem of passive investing, right? The, the herd impact of passive investing. This also worries me. Um, and I think that's, if you look at Millennials, which are, by the way, investing at a very high rate, right? Uh, they are scared about their future. And now that 401ks are are opt out rather than opt in, the, the Millennials aren't thinking about it. They automatically are are putting their money in these 401ks. Where does their money go? Overwhelmingly into target date funds, right? These are the ones being offered by, you know, BlackRock and State Street and all the right. And it's almost all into equities. And they're all into these equity indexes and ETFs. And so there's, which, sorry, but are heavily, those ETFs are heavily skewed to a small number of stocks too. The, the representation of the Mag 7 in those equity ETFs is, uh, it's outsized relative to the remaining 493 stocks in the S&P. Seven stocks go down, it it ripples through. And as the larger they are, the bigger the share it is. And, and, and also these large, these large firms, these large, uh, firms in terms of market cap are are naturally included in the most ETFs. So if you have people investing a lot of ETFs, they overlap with all the large, you know, the, the large market cap firms, right? So it's, it's a systemic risk, which is, if those few firms get in trouble, everybody goes down with it. Yeah, everyone goes down.

And, and here's the, there is a kind of wisdom in Millennials. And I think they, I think they understand accurately where we are in the politics of this country. Right? Gen Xers, when they invested, they were natural contrarians. You know, Gen X's figured, my generation, we're all going to be wasted, none of us are gonna get anywhere. I'm gonna get ahead by being an exception. So I'm gonna go into this very weird, actively managed fund. I'm gonna go way off here somewhere and I'm gonna be the winner, all my peers are losers, right? And I think that they, many of them have been very successful that way. I think the Millennial attitude is very different. Their attitude is, if I invest in some small stock that's somewhere in the, you know, the Russell 2000, well, if that stock goes down, it's bad. Won't even care. You know, I care. But if Apple goes down, if Nvidia goes down, imagine Nvidia goes down by 50%. You know, they, Jerome Powell will have an emergency meeting, right? He's got my back. And I think Millennials also recognize, if we all invest together, if we all go down together, government's gonna have to bail us all out. What other choice will they have? And I think they're absolutely right. The, the Gen X impulse is, I'm gonna take my lifecraft and I'm gonna swim desperately away from everyone else. Yeah. The Millennial idea is, let's just tie all of our lifecrafts together. And if we all, and if we all rise, great, because we won't envy each other, we'll be rising at the same rate. If we all go down, our, our moms and dads have to bail us out, right? I, I think that's the way it works. Okay. And, and I, I'm not entirely sure they're wrong, you know. Um, I, I think they, they have a pretty good sense of where we are post 2008, post COVID, liquification of the economy by the Fed. I think they have a pretty good instinct about where our policies are at this point.

Well, and that's why I ask the question, is, is, do you expect more of the, you know, bailout playbook to continue, or at some point, because of, of tightening pressures, that the government's going to be forced to let parts of the, the economy that it otherwise would have bailed out have to sink or swim going forward? Sounds like you think still, still going to be the bailout playbook.

It's still going to be the bailout playbook on a vaster scale than ever before. But in suddenly an environment of constrained resources, it will be top-down, um, uh, designation of who wins and who loses, right? You see what I, I mean, it'll be saying, okay, you guys here, you're going to get a haircut, you guys will stay safe, right? I mean, that's how it's going to work. Think about again, what happens in a crisis. I mean, think about, think about World War II and who suffered, who didn't, how the losses were allocated. The problem is this, you get, we get caught up into thinking so much about financial flows, we forget just about the real economy. If you're suddenly taking a large share of the population and you're forcing them to to do some massive task, you know, like, I don't know, fight a war or do something like that, right, um, the, where are you gonna get? You know, who's suddenly those people aren't going to be producing, right? Everyone's going to be employed. Employment's not going to be your problem, right? It certainly wasn't during, during, during the war. Uh, but, but suddenly you're gonna have just a lot less resources being produced. How you gonna allocate that loss? And, and it, and it, it's, it's, it's very simple arithmetic, right? You're, you're just going to have to say, well, all of you people in the army, we're going to pay you a certain amount. We're going to promise you a lot after the war, so you won't feel too bad, right? And, you know, we're going to reshuffle things like that. I think that's the way we have to think. Think more about the real economy. Have you, have to relocate real economic resources, and then the financial resources will simply be a reflection of that top-down reallocation.

Okay, got it. And so I'm going to have you back on in the future to really talk about even more detail on on who you think the haves are going to be in that scenario and who you think the have-nots are increasingly going to be. But we don't have enough time in in this interview. And I do want to, I do want to go back to your thoughts on how to not become collateral damage in this, because you gave us some very good advice on what to avoid. I'm just curious, what makes your list of things to consider here? And I'll just throw out there, I would imagine, given what you see coming, seeing things whose intrinsic value can't be inflated away, hard assets, etcetera. Maybe a Bitcoin. Um, don't know your thoughts on Bitcoin. Um, but maybe those might be appealing. Um, but if there's other assets you like even better, please let's hear whether or not Bitcoin is a hard asset, that's up to everyone's, uh, you know, that's, that's an individual choice, right?

Um, but, uh, yes, uh, you know, commodities, precious metals, those kinds of things. I, I would say that the, that the, the real side of the economy, and by real here, I mean manufacturing and, and, and materials, right? I'd say materials is probably the unsexiest sector of the S&P 500. You, uh, and yet, what do fourth turnings always feature? They always feature reconstruction of our outer world, right? Building of things. And what, what of the aspect of our, of our, of our society which has been most neglected, you know, since the GI generation was in its prime? It's the building of communities, right? I mean, look at the infrastructure we drive on. You know, a lot of our airports, I mean, they're oldest in the world, they're all crumbling, they're falling to pieces. You know, Boomers never invested in that stuff. They hated it. Boomers' idea of of civic revival was to tear down dams, you know, basically tear down stuff. Uh, so we've never done that. But the rebuilding and reimagining of a new public infrastructure is going to be huge. And I think that's going to involve the whole, you know, by real, I mean, sort of concrete side of our economy. And one thing we've already seen, for example, is, um, you, you've looked at some of the global, uh, defense ETFs and manufacturing lately, they've done pretty well, right? And I guarantee you, they're going to be doing well in the future because, uh, the, the, the war gaming scenarios you've seen for a, uh, you know, an explosion of a conflict over, I don't know, the Brately Islands or Taiwan, or, you know, anything in the Western Pacific or anything like that. What they, what they were gaming scenarios typically show is that after about eight or nine days, America runs out of missiles, you know, we run out of, we ran out of munitions. Um, and, and we are nowhere near producing armaments, right? Which is simply, and I'm not, I'm not talking about new technologies, I'm not talking about drone swarms or anything like that. I'm just saying, simply having the munitions to actually conduct a conflict, given our current, you know, our, our current assortment of of hardware out there, uh, we ran out. And that alone will require, uh, that may actually require, you know, executive order, actually emergency, with emergency expansion of, you know, Grumman and Raytheon, a lot of these, you know, companies that traditionally produce this stuff. We have so pared back and so economized on the production of this stuff during the long post-Cold War to Cold War period that we're gonna have to do an enormous expansion here. Um, every country in the high-income world is spending more on defense now. I mean, you know, Japan, South Korea, almost every country in Europe, I mean, everyone's ramping up now. And so bottlenecks are being hit everywhere. I don't think, I don't know about you, Adam, I don't think that's going to be reversed anytime, um, you know, this year, next. Sadly, I can't, I can't disagree with you there.

Um, all right, well, look, Neil, um, I'm looking at the time. I would love to continue this for another hour or two. I did promise you I'd be respectful of your time. I know there's going to be howls of disappointment from the viewers here. Two last questions for you as we wrap up. First one, very important for folks that would, um, like to follow you and your work. They've really enjoyed this conversation. They don't want to wait until your next interview on this channel. They want to get more Neil. How, in the interim, uh, besides buying your books, where should they go?

Uh, they can go to, uh, Substack. We run a site called Demography Unplugged. And, uh, yeah, Demography Unplugged. Just go there and, uh, we do a weekly podcast. And, um, I also do a monthly, All About the Indicators, which is basically looking at, uh, the macroeconomy of the US. Every, every month, we go through all of the indicators and kind of go through a dashboard of kind of where we now stand. And also have a number of, uh, print pieces that come out on various issues, uh, social mood, uh, uh, demography, public policy, and the rest.

Also fantastic. And it's a fantastic Substack, folks. Um, Neil, I will, when I edit this, I'll put an overlay of your, your Substack URL, so folks know exactly where to go. Folks, I'll have a link, uh, down below the video as well. Um, I've got one more question for you. I'm, I'm going to lie, I'm going to squeeze one more. And that I meant to ask you earlier, um, real quick, given that you do your monthly deep dive and all the indicators and whatnot, um, what's your level, when you look at the markets today? Um, are, are you worried about a downward repricing in the markets for all the reasons we talked about, or do you think the markets are going to potentially do pretty okay from here?

You know, I think, I think we, there's a lot of, um, there's a lot of buy the dip now in the markets, right? I, I just think there's both because of the, the put, sort of the ultimate, you know, floor. Uh, I, I think that what worries me is that we live at a time when the market goes down, everyone expects it to be bought back up again. But there comes a time which will go down, you know, and it'll break through a number of support levels, and then that will kind of be in a new world, right? Uh, I, I do worry, uh, this is more of a, a cyclical observation, but we've been through this whole drama before, right? The inverted yield curve, I mean, all of these long-term indicators going red, then the medium-term indicators, now we see it happening in employment, and then the Fed starts to cut, right? And the Fed always starts to cut before the next recession. And by the way, typically the yield curve un-inverts just before the next recession. In other words, I look at this and by the way, but when you go into the next recession, the markets always go down, right? I mean, you always have a huge, uh, fall in the market. So I look at this is sort of, um, I, I don't know about you, Adam, I, I just see, I've seen this exact, exact thing before, right? The Fed always cuts right before the next recession starts. And I, I think you're seeing that. And by the way, the fact that the CME futures is looking at 225 basis point cut, you know, by the end of 2025, not just the 100 points that the, that the, uh, FOMC is looking at, uh, I think is, is to the extent to which the markets kind of understand this game as well.

Okay, one of the things that I've said to people is, um, uh, when you look at the historical data, it does seem very much like this is a cycle that has repeated pretty much in almost every recession in living memory. So if you expect it's not going to happen this time, you better have a really compelling reason why not. And I, I get the sense that you're not seeing a really compelling reason that it should truly be different this time.

No, I, one big event last week that certainly reported on with these enormous revisions in, uh, the payrolls. Yes, yeah, the, the non-farm payroll. Um, and by the way, unlike what some people are saying, it doesn't always get revised negatively. And if you take a look at our presentation, I go back and look at the last 20 years of revisions, and it's absolutely counter-cyclical. Right? We always, we always go into these negative revisions right before recession. We always positively revise coming out of the recession. In other words, the birth-death model that the CES employs is totally counter-cyclical. And if you go onto their site, they admit as much. They say that they said, yeah, we understand this is not without bias. If you want an unbiased estimator, a lot more variance, but unbiased, take a look at the CPS employment. And that has been more or less zero growth over the last year in, in, you know, current population survey employment. So that's where I am on that. Okay.

Yeah, I just, like I said, I could keep going for hours with you, Neil. But here's the very last question. So like I said, I asked my audience, folks, I've tried to integrate as many questions as I could here. But here's one last one for you. Neil, is the only person that appears to be immune from anxiety when discussing and analyzing the fourth turning? What's the secret to remaining so objective and clinical in the presence of such ominous data, which he knows too well? Does he realize that he may become our great champion?

Nope, sorry, not in the running for that. Uh, I'm an, I'm, I've moved to pretty rural America, um, out somewhere in the red zone. And it's interesting, I, uh, I'll tell you why I'm optimistic, Adam, is that I think we need adversity to be strong. I, I'll just say it as simply as that. I think nothing could be worse for America than to have the trends we've now seen continue linearly into the indefinite future. That would truly be a nightmare scenario. You need these crises to turn things around. I think democracies are incredibly powerful when faced with these moments. I don't think democracies do very well in sort of, um, uh, unbroken prosperity and, and, um, and, uh, uh, uh, if not luxury, right? Simply moving from one decade to the next to the next. I don't think democracy functions very well in that environment. But I think democracy has actually functioned very well in crisis, um, and, uh, I, to some extent, I think we need this, uh, we need seasonality in history. Keeps us alive, keeps us active, keeps us interested in the world.

Well, thanks. We're very well said. And, uh, you know, for those of us that have children and want our progeny to do well, you know, we, we just as anyone who's raised a child knows that the child has to learn how to deal with adversity to become a self-sufficient, resilient adult. We want that kind of future for our, our kids and our grandchildren and their progeny as well. And so, yes, let's, let's embrace the seasons. Absolutely.

All right, well, in wrapping up here, um, folks, if you wish that this conversation had gone on for two or three more hours, like I did, please let Neil know you'd like him to come back on this channel as soon as the schedule allows by hitting the like button, then clicking on the red subscribe button below, as well as that little bell icon right next to it. Um, if you are trying to figure out how to navigate, uh, this very rocky fourth turning road ahead that Neil's laid out for us and would like some help from a professional financial advisor in doing so, uh, then feel free to schedule a free consultation with one of the financial advisors endorsed by Thoughtful Money. These are the firms you see on this channel with me every week. To do that, just go to thoughtfulmoney.com, fill out the short form there. The firm will be in touch with you right after. Um, lastly, just want to remind everybody that the Thoughtful Money Fall Conference, uh, is approaching, Saturday, October 19th. And if you cannot watch live the day of the conference, everybody who registers will be sent replay videos of the full event within 24 hours or less afterwards. A phenomenal lineup, as you've heard me describe in the past, so I won't do it again here. But if you want to learn more about that lineup and get your tickets at the current lowest early bird discount price, go to thoughtfulmoney.com/conference. And a reminder that if you're a premium subscriber to our Substack, you get an additional $50 off of that ticket price. Um, Neil, it has just been, again, a complete honor and privilege to have you on here. Thank you so much.

Great. Thank you for having me.

All right, everybody else, thanks so much for watching.