Commentary: The Coming Dark Age
Call me a pessimist. Maybe it’s my career choices. Possibly the dysfunctional family of my childhood. Potentially it’s just a reading of history which more often seems filled with monsters than heroes. I’ve lived for years with a belief a new dark age is approaching. The optimists point to our increasing technological sophistication and reply I’m not much of a party guest.
I’ll remind you there are stretches of Roman roads, aqueducts and stadiums still standing in parts of Europe, North Africa and the Middle East, however. The Roman Empire is long, long gone. For centuries after its collapse no one within its old confines could remember how to pave a path, mix concrete or build a decent sanitary system. What people did remember from the ruins was how to inflict cruelty on neighbors.
Sometimes the pessimists are wrong and I’m glad we are. Living in an optimistic world is a lot more pleasant. If you click on this link you’ll read the warning of a fellow pessimist from 5 years ago. I remember quoting Robert Prechter at the time in a series of writings and people who never heard of the man gave me a share of verbal abuse. Prechter later apologized for his blunder. Which is fine with just about everybody because the worst economic disaster in 300 years didn’t sound like a whole lot of fun. Now consider for a moment you’re making a prediction where you’re applying centuries of experience versus a handful of recent years. Being off by 5 years may only be a slight miscalculation. In fact take into account the global economy has never really recovered now almost a decade after a collapse. Consider the printing of money and the injection of “liquidity” into markets, banking and shovel ready projects is a bit like the treatment of a cold. We can’t cure a cold. We can lessen the symptoms but doctors explain the easing of symptoms actually lengthens the duration of the illness. Or perhaps a simpler analogy is one many of my old friends would better recognize. You can postpone a hangover by staying drunk. Long-term drunkenness is far worse for you than going clean and sober. A bad hangover hurts but when it passes if you eat well and don’t get sloppy again your health will be much better.
Over the course of the last few months I’ve been reading about the possibility the postponement of the economic hangover is coming to an end but this time the governments of the world don’t have any else to offer for improving health. I’m using medical metaphors but among the financial writers most are using archery to make their points. The one most repeated is industrial nations and central banks have no arrows left in their quivers. Another is better understood by anyone with a household budget. The credit card is maxed out and your personal fortunes haven’t improved. You can no longer meet the basic promises you’ve made to your family. There won’t be a vacation. Christmas isn’t coming and this winter the heat could well be shut off.
A friend sent me this video this morning. Dr. Paul Craig Roberts is no slouch. He may not be as flashy as Prechter but he has been involved with or offers witness to most efforts to tame the economy over the course of the last few decades. I listened to the entire 17 minute plus change interview even before I had breakfast or poured a cup of coffee. At one point Dr. Roberts suggests the field of U.S. Presidential candidates are metaphorically midgets. A hallmark of American history is during a crisis a great leader usually emerges. George Washington leading a revolution to improbable victory. Lincoln saving the Union. Franklin Roosevelt rallying the nation to mobilize for total war. I’m sorry but I can’t see Scott Walker or Hillary Clinton filling any of those shoes. Perhaps Bobby Jindal but he has got a snowball’s chance in Hades of winning a nomination next year. He set the bar for crisis management in the days following Hurricane Katrina. It elevated him to Governor of Louisiana. He’s currently polling at one to 2 percent among Republicans. And the band played on.
By the way, Prechter is back with another prediction. Yes, he was wrong before but now he’s just a member of a chorus growing and growing louder by the day. Last week I read some doom and gloom about my chosen vocation. I’m a radio talk show host and the chorus sings we’re fading because no one much cares about political talk and politicians. Tell you what, if Roberts and Prechter are right a great many people are going to get politically astute if not downright ornery in a very short period of time. George Washington’s war will be small in comparison.