The "changing mentality" of the baby boomers

A trend of sorts that Bill Bonner wrote about in Monday's DR was prophesied in a book written ten years ago: the baby boom generation, forced by economic circumstances to give up its getting-and-spending ways of the 80s, returning to its peace-love-and-poverty ways of the 60s.

Let's revisit what Bill wrote:

"My guess is that this real estate problem is going to change the whole mentality of the baby-boomers," said a friend yesterday. "We're going to go back to our roots in the 1960s and focus on happiness, rather than money. What I mean is that we're going to give up on money as a source of happiness…either because we finally got money and then discovered that it didn't make us happy…or, probably for most people, the wealth we thought we had – in our houses – is going to disappear.

"We're too old to build wealth by saving it…or by earning it. So, we're going to focus on being happy the way we did in the '60s, when we didn't have any money. We're going to remember how happy we were back then, with nothing. There's going to be a huge new interest in the spiritual side of things…in music…in living inexpensively…and maybe even in drugs."

For the last 30 years, the baby boomers have been up-scaling their lives. If our friend is right, the next years will be spent down-scaling…getting rid of things…simplifying…and focusing on things not directly related to money.

Now let's open the pages of The Fourth Turning, by William Strauss and Neil Howe, and a passage that speaks of a Great Devaluation coming in the early 21st Century:

In the Fourth Turning, Boomers are likely to occupy the vortex of a downward economic spiral… Sooner or later, the truth will dawn on old Boomers that the money simply won't be there to support their accustomed consumption habits in old age.  Neither they nor their nation will have saved eonough… Many will have no choice but to live communally or with their adult children, while groping for ways to preserve a meaningful life on very little money…

Old Boomers will construct a new social ethic of decline and death, much like they did in youth with sex and procreation.  Where their youthful ethos hinged on self-indulgence, their elder ethos will hinge on self-denial.

And earlier in the book:

Downwardly mobile Boomers will "face the truth about the way they live now with some dignity and grace," writes Katy Butler. "If it's by choice and it's not overwhelming, having no money can be a way of entering more deeply into your life."

Again, this from a book written ten years ago.  Spooky, huh?

You find all sorts of things like that in The Fourth Turning.  Its premise is a little hard to condense into a single paragraph, but I'll try here:  Anglo-American society has had regular shifts in cultural attitudes going all the way back to the 15th Century.  They occur cyclically, with four different types of generations, each coming to the fore one after another.  What's old becomes new again (a theme Bill speaks of in his book Mobs, Messiahs, and Markets).  And as a consequence, these "attitudinal cycles" (my term) beget somewhat predictable cycles in the course of history… with crisis periods ("Fourth Turnings") arriving more or less every 80 years or so.

The American Revolution… the Civil War… the Depression and World War II… and now, what?  Again, the book was published in 1997 and the authors posited the fourth turning would come around 2005, give or take a few years.  Did it arrive early, on September 11, 2001?  Or has it not yet arrived?

I have my own thoughts on that, if not a definitive answer.  I'll head further down the rabbit hole with this tomorrow.

The Daily Reckoning