Aug 22 2011
Our current lingering recession/weak recovery — whichever you believe — is a typical feature, over the last 200+ years, of the decade just preceding transformative, twice-per-century 1960s-style booms called Maslow Windows.
A transformative 1960s-style decade, complete with a Camelot-like zeitgeist, is expected to emerge by mid-decade. President Kennedy (right) is with Dr. Wernher von Braun (center) at Cape Canaveral in November, 1963,
The 1960s Apollo Maslow Window — named for the outstanding great exploration (or macro-engineering project) of its time — did not experience a financial Panic/Great Recession probably because of the post-WW II expansion and financial reforms dating back to the Great Depression.
However, the Panic of 2008 suggests that we have returned to the 200+ year-old pattern of financial Panic/Great Recession pairs followed by a JFK-style economic boom. Affluence-induced ebullience (e.g., the Camelot zeitgeist) is the fundamental driver of unprecedented activities (e.g., the Panama Canal; Apollo Moon program) characteristic of Maslow Windows.
Our current economic situation fits the 200-year-0ld pattern (as do current global trends) and points toward a new, transformative Maslow Window arriving by mid-decade.
That’s the story. A few details follow.
(A longer version of this post is available by clicking HERE.)
Although it was the only Maslow Window of the last 200+ years not to be preceded by a Panic or Great recession, the 1960s Maslow Window displayed their hallmark signatures.
The Apollo Maslow Window (~1958-69)
The Apollo Moon program was the greatest combined exploration and technology event in the history of the world because it was off-world. It was fundamentally triggered by a major economic boom preceded by the surprise 1957 launch of Sputnik and the intense competitive atmosphere of the Cold War. However in the typical pattern of Maslow Windows during the last 200 years, Apollo was effectively terminated by declining ebullience due to the escalating Vietnam War after 1966.
The 1960s were extraordinary. In their inaugural edition of “The Sixties” academic journal, the editors remark that the 1960′s produced an ebullience “that continues to intrigue, inspire, confound, amuse, tempt, repel, and capture us.”
In The Sixties, the editors recognize that “all this energy — by parts dignified, militant, uptopian, and delusional — was of great consequence…No recent decade has been so powerfully transformative in much of the world as have the Sixties.”
The 1960s Apollo Maslow Window displayed the classic characteristics of “critical states” over the last 200 years; Quotes are from Mackenzie and Weisbrot (2008).
1) Maslow Windows are brief, rare, profoundly transformative intervals:
They are watersheds that feature quantum leaps in technology, the economy, politics, and culture.
Powerful historical forces caught up with America in the 1960s and swept through every corner of national life…
2) Maslow Windows are triggered by major economic booms:
The 1960s were accompanied by unusual society-wide affluence.
America’s unprecedented affluence in the postwar years (was) keyed to an industrial engine that nearly doubled its output during the 1950s and again during the 1960s…
Disposable personal income, in constant dollars, grew by 33% in the 1950s. In the 1960s it grew by more than 50%.
3) Affluence-induced ebullience becomes widespread:
As ebullience spreads, many people ascend the Maslow hierarchy where their expanded worldviews and this brief, almost giddy feeling make most technology, exploration, and social programs seem not only favorable, but almost irresistible.
With wealth never before imagined, Americans could dream dreams never before possible. In the early years of the 1960s , national optimism reached epidemic levels …
The 1960s were presumed to be an age of unique possibilities. The wealth produced by the powerful engine of the American economy…made anything — and everything — seem possible…It was an optimistic age, and belief was too easily suspended.
4) Maslow Windows typically end abruptly:
As the economic boom begins to slow and/or geopolitical events intervene, ebullience fades and elevated Maslow states collapse. Affluent individuals or nations who do not ascend the Maslow hierarchy typically cause Maslow Windows to close prematurely.
By mid-1966 the liberal storm was passing…It came suddenly and raged briefly, but it left a deeply altered landscape in its wake … And the booming economy of the early 1960s…that fueled the limitless sense of possibility in those years, was also confronting the inevitabilities of the business cycle and the impacts of the combined costs of a foreign war (Vietnam) and a Great Society.
The Peary and Panama Maslow Window (~1903-1914)
The early 20th century Maslow Window featured the internationally contested polar expeditions, and the greatest macro-engineering project of the last 200 years (until Apollo) — the Panama Canal.
The Financial Panic of 1893 Signaled the New Maslow Window:
It caused unemployment over 10% for 5+ years. The crisis initially lasted only 18 months but was followed by another (double-dip) recession that continued into 1897. The combination of GDP declines of several % coupled with population growth meant that GDP per capita didn’t recover to 1892 levels until 1899.
The Panics of 1893 and 2008 have interesting parallels”
The Panic of 1893 began about 6 years before its recovery generated a JFK-style economic boom that triggered the Maslow Window, suggesting that the global economy should recover to its mid-2007 “greatest ever global boom” status by 2015.
World War I and the End of Ebullience:
According to historians Sullivan et al. (1993),
To a visitor from Mars it must have appeared that the Western world in 1914 was on the brink of Utopia.
Instead they were on the brink of WW I and the end of ebullience. Keep in mind that the Titanic set sail from England on April 10, 1912. Although clearly second to the Canal, it was another extraordinary MEP decorating the crown of this Maslow Window.
The Manifest Destiny Maslow Window (~1847-1860)
The mid-19th century Maslow Window was unique in its diffuse international focus. For example, the great exploration was Dr. Livingstone in central Africa and the Suez Canal was the primary MEP, neither of which originated in the U.S. However, global ebullience was so strong at the time that an American newspaperman was sent to find Dr. Livingstone because of the obsessive concern of Americans, while the Gold Rush erupted in California.
Even more remarkably, “manifest destiny” overwhelmed the U.S. under a most unlikely president (James Polk), while the great revolutions of 1848 swept Europe.
The Panic of 1837 Set the Stage:
The financial Panic of 1837 was a major contraction when 40% of the U.S. banks failed and unemployment was at record highs; it lasted 6 years until 1843. According to Nobel Prize-winning economist Milton Friedman writing in 1960, the Panic of 1837 …
is the only depression on record comparable in severity and scope to the Great Depression of the 1930s.
The Boom of 1845 Ignited Ebullience:
As Polk assumed the presidency in 1845, the dynamic duo of prosperity and ebullience was everywhere. According to historian Robert Merry,
the national economy had been expanding at an average annual rate of 3.9%. Not even the Panic of 1837, for all its destructive force, could forestall for long this creation of wealth.
And throughout the land could be seen a confidence that fueled national success. “We are now reaching the very height, perhaps, to which we can expect to ascend,” ebulliently declared the Democratic Wilmington Gazette of Delaware.
Ebullience and Human Expansion in the West:
Manifest Destiny was fueled by an “Exuberance of Spirit” across the U.S. Against all odds, this smaller-than-life man (President James Polk) ebulliently changed the world in only 4 short years.
In his unlikely, self-imposed one-term presidency, Polk accomplished the nearly impossible — he “engineered the triumph of Manifest Destiny” — including the annexation of Texas (1845), and the acquisition of the Oregon Territory (1846) and essentially the rest of the U.S. West including California, Nevada, Utah, and Arizona — all by 1848.
The Lewis and Clark Maslow Window (~1791-1806)
The seminal Lewis and Clark expedition (1804-06) explored the Louisiana Territory to the Pacific and has many parallels with the 1960s Apollo Moon program and lessons for future human exploration
The Early Recession and the Boom:
Although this historical timeframe in America suffers from less official economic data than later Maslow Windows – not to mention a very new national government — it’s clear from historical accounts that similar economic triggers were operating.
A post-Revolutionary War “depression” existed from 1784-88. Its reality and severity are evidenced by the armed Shay’s Rebellion in 1786… Assuming the Stewart Energy cycle peak is near 1801 (1857 – 56), this would put the downturn about 17 years ahead of the peak; within one sigma of the observed intervals (21 yr) after the Panics of 1837 and 1893.
As we have learned to expect, after the recession of 1784-88 came the economic boom of the 1790s. The country’s credit was so good that every foreign money house was eager to offer low rates. The eastern industries and their financiers were “thriving,” as were the frontiersmen while Westward expansion gained momentum.
Affluence-induced ebullience was so strong that it added glue to the new national government by restraining the “hottest tempers” and making “conflict bearable.” The smaller, regional financial Panics of 1792 and 1796 did not alter this trend.
PLEASE NOTE: A longer version of this post is available by clicking HERE.