Aug 29 2009

State of the Wave — Obama is Not LBJ; New Space Age Will Bloom

This State of the Wave updates my January list of “10 Space Trends for 2009” and synthesizes new insights into Obama’s presidency as well as prospects for the approaching new Space Age in 2015.

This post marks a significant departure from my previous view of the 2015 Maslow Window. Indeed, the weight of new data and interpretations opens up the possibility that the 2015 decade may be even more than merely an analog of the spectacular 1960s Apollo Maslow Window.

With the Apollo Moon project’s continuing success and his unparalleled Great Society programs, Lyndon B. Johnson (2nd from left) was on track to become one of the most celebrated presidents in U.S. history, until Vietnam ended his career. Click lbj.jpg.

The New York Times recently (8/23/09; Peter Baker) suggested — in “L.B.J. All the Way” — that Obama’s “presidency may ultimately be decided in the rugged terrain of Afghanistan.”

Let’s be honest: This is not the most insightful idea I’ve ever seen in the Times, but at least it was inspirational (to me) and resulted in “The State of the Wave…” that you see here.

The Times’ approach strikes me as typical of continued unfairness to Obama from most of the media, much like his supporters who, ever since the campaign began, unrealistically projected their near-messianic hopes and aspirations on him. Admittedly, Obama encouraged this premature hero worship, like any politician trying to get elected would, but for the Times to draw a parallel this early in Obama’s term between Afghanistan and the Vietnam War of President Lyndon B. Johnson (LBJ) — who, along with President John F. Kennedy (JFK), presided over much of the 1960s Apollo Maslow Window — is really a stretch.

Before we dive in let me make a couple contextual points:

Because of impressive macroeconomic and historical evidence of the last 200 years, I have been compelled to admit to myself that, in some key ways, I am essentially an “economic determinist,” — but not in the usual sense. With me, it refers only to the fact that over the last 200+ years, long waves in the economy enable clusters of large engineering projects (e.g., Panama Canal) and great human explorations (e.g., Apollo Moon), as well as major wars (e.g., W. W. I), exclusively during rhythmic, twice-per-century pulses of ebullient activity (called Maslow Windows). This long-range perspective provides unique insights that fundamentally motivate this post, and most others on this blog.

Secondly, in 21stCenturyWaves.com the focus is on evaluating our technology and space forecasts in the context of key events and global trends using the 10 Wave Guides, not to express preferences for politicians or parties. We seek to identify what is most likely to happen, not what should happen or what we would like to happen. In essence, this strives to be a reality-based blog, even when we set sail into the far future.

This is such a remarkable time — economically and geopolitically — in U.S. and world history, that the last 200 years point to really only 2 likely Scenarios for the next 15 – 20 years:

Scenario 1: The 1960s John F. Kennedy (JFK) Replay … In which the economic and geopolitical trends of 1945 – 1960 reappear about one long wave later — between 2000 and 2015 — including the end of a world war, a great economic boom, and the election of a charismatic JFK-style Democratic president, that trigger a Super Apollo Maslow Window (2015 – 2025) featuring a Camelot-like zeitgeist.
Or…
Scenario 2: The 1900s Teddy Roosevelt (TR) Encore … In which the economic and geopolitical trends of 1888 – 1903 reappear about two long waves later — between 2000 and 2015 — including a financial panic followed by a major recession, and the election of a charismatic TR-style Republican president, that trigger a Super Apollo Maslow Window (2015 – 2025) featuring a Panama Fever-style zeitgeist.

Until recently, I have seriously considered only the “JFK Replay” as the nominal scenario for the 2015 Maslow Window, but recent economic and political events have convinced me to also consider the “TR Encore.”

It’s of particular interest that in both 2015 Maslow Window scenarios above, the key difference is which political party provides leadership, NOT whether major unprecedented technology and space activities (that I’ve estimated costing between $ 1 T and 3 T, current USD) will occur. In fact, based on macroeconomic data and historical trends of the last 200+ years, we can expect they will.

But why does the politics differ between the JFK Replay and the TR Encore?

History and common sense suggest that the state of the economy is a major influence on the outcome of U.S. presidential and congressional elections. This was concisely expressed by Bill Clinton’s staffer James Carville during the 1992 campaign, “It’s the economy, stupid.” In a similar vein, the Wall Street Journal (6/4/09) has suggested the Obama presidency will “rise or fall” on the economy.

In U.S. history, major wars can also sway elections. For example, the end of W. W. II in 1945 resulted in a post-War boom that was uninterrupted by a 1929-style financial panic, and culminated in the 1960s Apollo Maslow Window — a boom of unprecedented, widespread affluence.

To discern which Scenario is more relevant to the 2015 Maslow Window we compare the economic and geopolitical situation since 2000 with the 25 years preceding 1970 and also 1913.

Since 2000:
We experienced the financial Panic of 2008 and are still suffering from a major global recession. Although Iraq and Afghanistan have been traumatic wars, there was no major W. W. II – style global war in the 1980s or 1990s or since 2000.
1945 – 1970:
There was no 1929-style financial panic during this interval. The Vietnam War/Cold War was a major, international war for America.
1888 – 1913:
The financial Panic of 1893 was followed by the major 1890s recession; there was no major W. W. II – style global war during this interval.

It appears that the decade just before the Peary/Panama Maslow Window (1903-1913) of TR shares more key elements in common with our current trajectory toward 2015 than the decade just prior to the 1960 Apollo Maslow Window of JFK.

This long-term analysis presents us with a powerful window into the future and suggests real political dangers confront Obama.

For example:
1) Some commentators suggest that unless Obama is able to reduce unemployment below 10% by the next presidential election (2012) he risks defeat. In a previous post, I plotted recent unemployment rates against those near the Panic of 1893 (as estimated by Christina Romer; see #2 below). If the 1890s are a good economic model for current circumstances, the 2012 goal will be a close call.

2) Published economic research by the current head of President Obama’s Council of Economic Advisors — Christina Romer — raises doubts about Obama’s policy of major government spending to end the recession. The Wall Street Journal (8/21/09; Alan Reynolds) quotes Professor Romer’s 1999 study (J. Econ. Perspect.) that between the pre-WW I era and the era of big government (post-WW II), “recessions have become only slightly less severe…and recessions have not become noticeably shorter,” in fact post-WW II recessions are one month longer. WSJ concludes that, based on economic history since 1887, “bigger government appears to produce only bigger and longer recessions.” If this is true, Obama’s large stimulus/bailout packages and large federal budgets will make the 2012 goal hard to achieve.

Obama’s current economic and political difficulties suggest that the chronology of the 1890s may be relevant to the 2015 Maslow Window.

1893 – 1897: Grover Cleveland, the first Democrat elected after the Civil War, became president during the 1890s recession right after the Panic of 1893. Although elected with a bi-partisan majority, his policies during the 1890s recession were generally unpopular. His party deserted him and nominated William Jennings Bryan in 1896.
1897 – 1901: Republican William McKinley defeated Bryan calling himself “the advance agent of prosperity.” In 1900, McKinley again campaigned against Bryan. While Bryan inveighed against imperialism, McKinley quietly stood for “the full dinner pail.” McKinley won again but was assassinated in September, 1901.
1901 – 1909: Theodore Roosevelt, not quite 43, became the youngest President in the Nation’s history. He brought new excitement and power to the Presidency, as he vigorously led Congress and the American public toward progressive reforms and a strong foreign policy. Roosevelt steered the United States more actively into world politics. He liked to quote a favorite proverb, “Speak softly and carry a big stick. . . . ” Aware of the strategic need for a shortcut between the Atlantic and Pacific, Roosevelt ensured the construction of the Panama Canal. He won the Nobel Peace Prize for mediating the Russo-Japanese War, reached a Gentleman’s Agreement on immigration with Japan, and sent the Great White Fleet on a goodwill tour of the world. Some of Theodore Roosevelt’s most effective achievements were in conservation.

Teddy Roosevelt presided over perhaps the most ebullient time — the Peary/Panama Maslow Window — in U.S. history.

Here are the Bottom Lines:

1) Following decades with wildly different economic and geopolitical circumstances — the Maslow Windows of both TR and JFK featured spectacular, unprecedented great explorations (polar expeditions, Apollo to the Moon) and massive MEPs (Panama Canal, Apollo/Saturn V space infrastructure). They will be even greater during the 2015 Maslow Window.

2. Obama is not LBJ largely because of the vastly divergent economic worlds they each inherited. During the greatest economic boom up to that time, LBJ inaugurated the Great Society and successfully built the Apollo Moon program that JFK started. Such things are much more difficult for Obama to contemplate now because of the global recession and and its limited political vistas.

3. Obama faces significant economic and political challenges during the next few years. If he does not succeed, he may become Grover Cleveland instead of Lyndon Johnson, and Scenario #2 — the TR Encore — would be likely after 2015. Obama’s success would point to a JFK/Camelot-style Maslow Window.

21stCenturyWaves.com’s Tentative Forecast is … Given our current economic and geopolitical trajectory toward 2015 and the patterns of the last 200 years: Scenario #2 is more likely. However Obama still has time to reverse this trend and to shape the 2015 Maslow Window in his likeness.

2 responses so far

2 Responses to “State of the Wave — Obama is Not LBJ; New Space Age Will Bloom”

  1. [...] Wave Guides, not to express preferences for politicians or parties. … Read the original:  21st Century Waves » State of the Wave — Obama is Not LBJ; New … Share and [...]

  2. Peter Hookon 08 Sep 2009 at 5:50 am

    Why a fifty-year cycle rather than a forty-year or a sixty-year cycle? Does the duration of each cycle reflect the passing of, say, two human generations?

    Hello Professor Hook,

    Thanks very much for your question.

    I’ll try to give you a “short” answer here but for more info I suggest you consult some of the references/links I chat about in “A Short Intro to Long Waves.” I especially like Berry’s Long-Wave Rhythms…; Stewart’s (1989) compelling book is the first written on the 56 year energy cycle. Devezas (2006), the NATO Advanced Symposium on Kondratieff Waves, Warfare and World Security, was the book that finally convinced me that I should take long waves seriously.

    There have been lots of interesting ideas about the origin of the long wave and its length, and there probably is some truth in many of them. For example, Berry mentions evidence for deterministic chaos with self-organized criticality playing a role in the financial crashes. Modis’ book Predictions was the first place I saw sunspots suggested as a possible cause; Solar activitiy has an effect on climate and weather, and thus might influence agriculture and ripple through the economy. (This idea is especially attractive if you’re an astronomer!) BTW, 5 sunspot cycles are about 56 years, the length of one energy cycle.

    According to Berry, long waves are due to “innovation and diffusion of major new transportation and energy technologies, with infrastructure development, and with collective behavior marked by lag and overshoot.” So the length of the wave would include contributions from each of these effects. In the 1970s, Jay Forrester at MIT built an elaborate 15-sector model of the U.S. economy and found that it spontaneously exhibited 50-year long waves of economic activity. This was a surprise discovery to Forrester and suggests the fundamental influence of these capital-lifespan effects in determining the nature and length of the long wave.

    In the 1930s, Joseph Schumpeter, a Harvard professor and formerly Austria’s Minister of Finance, emphasized the concept of periodic innovation surges as the cause of the long wave. Stewart, himself the discoverer of the 56 year energy cycle in 1989 (which is correlated with the Kondratieff Wave), noted Schumpeter proposed that “a few particularly significant innovations…have been responsible for the strong economic waves beginning roughly in 1785, 1840, and 1895.” Each of these dates is about 7 years before the opening of what we now call the Lewis and Clark Maslow Window, the Dr. Livingstone/Suez Maslow Window, and the Peary/Panama Maslow Window, respectively. (Schumpeter died in 1950, just before the Apollo Maslow Window was launched.)

    It’s also interesting that long waves are correlated with major wars (see Goldstein), which apparently act to both intensify the economic boom and later its crash. And we would expect that long waves are correlated with the generational cycles of Strauss and Howe, which has been observed by Alexander.

    Your comment about one long wave approximating 2-3 generations is intriguing. 55 to 60 years is also the typical time that a human influences the economy. I’m with you — it’s hard to believe these are just coincidences.

    Hope this helps!

    Best regards,
    Bruce

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