Mar 12 2017

U.S. Optimism Rises Toward “Early Ebullience”

“With wealth never before imagined, America could dream dreams never before possible. In the early years of the 1960s, national optimism reached epidemic levels … (it made) anything — and everything — seem possible,” according to historians Mackenzie and Weisbrot (2008).

Here at 21stCenturyWaves.com, this feeling is called “ebullience” and is associated with a very positive — almost giddy — emotional state that’s historically associated with widespread affluence during a 1960s-style major economic boom. In response to affluence-induced ebullience, many people ascend the Maslow hierarchy where their expanded world views make Great Explorations (e.g., Apollo) and Macro Engineering Projects (e.g., Panama Canal) seem not just intriguing, but almost irresistible — hence the name “Maslow Window”.

A classic example of 1960s ebullience featured Walter Cronkite — a famous broadcast journalist/anchorman for CBS (1962-81), often referred to as “the most trusted man in America” — commenting on-air during the launch of the first astronauts to the Moon, that after Apollo 11, “everything else that has happened in our time is going to be an asterisk.”

According to the Maslow Window Model, full ebullience is historically triggered by a JFK-style economic boom. However the question arises now: Is merely the current widespread expectation of a future JFK-style boom actually triggering a preliminary version of the 1960s “epidemic” of optimism known as “early ebullience”?

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Is Bloomberg’s Consumer Comfort resurgence a precursor of 1960s-style “Early Ebullience”?

In response to the recent closing of the Dow over 21000 for the first time, the Wall Street Journal headlined: Stocks Surge As Optimism Rises. They continue:

Wednesday’s stock-market rally echoed the response to the Nov. 8 U.S. election, when investors bet market-friendly market shifts would help boost economic growth , inflation and interest rates.

Late last week volatility from the oil market (not surprisingly) caused a pause in the Trump Rally. This early ebullience, based mostly on expectations of imminent rapid growth, is merely a precursor and not as robust as true 1960s-style ebullience that drives transformative change.

However, early ebullience is also clearly evident in recent, very positive sentiment about the U.S. economy. Last week Bloomberg indicated that,

Americans’ confidence continued to mount last week as the Bloomberg Consumer Comfort Index reached the highest point in s decade (since March, 2007) on more upbeat assessments about the economy and buying climate…

Bloomberg notes that this impressive consumer optimism extends beyond Republicans to Independents.

Historical analysis suggests that ebullience has been the fundamental driving force behind the stunning, civilization-altering exploration and engineering activities during Maslow Windows over the last 200 years. Indeed ebullience appears related to the “animal spirits” of behavioral economist John Maynard Keynes and the “irrational exuberance” of Alan Greenspan.

In the 1960s Apollo program and Peace Corps of John F. Kennedy it was the ebullient feeling that we could do almost anything; in the early 20th century it was Theodore Roosevelt’s Panama Canal fever and (north & south) pole mania; in the mid-19th century is was manifest destiny of James Polk and the central Africa adventures of Dr. Livingstone, I presume; and about 200 years ago it began auspiciously with Jefferson, Napoleon, and Lewis & Clark.

However, even during these rhythmic, twice-per-century waves of ebullience, some people remain stalled at lower Maslow levels — usually distracted by personal affluence, unproductive ideologies, and/or partisan politics — and thus are empowered negatively. Internationally, they sometimes trigger conflicts or even major wars (e.g., WW I) that can terminate Maslow Windows.

Widespread ebullience is usually short-lived because it is fundamentally a psychological phenomenon that often responds to feelings and perceptions — either positive or negative — as much as or even more than facts.

Despite the documented growth in consumer and investor optimism, the Maslow Window model forecasts that early ebullience cannot survive or transition into full 1960s-style ebullience without the near-term, large economic expansion promised by President Trump. Although initial trends look good, this is the key challenge confronting the Administration and Congress.

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