A classic scene that sums up a lot of the 1980's mainstream business mentality, Michael Douglas as Gordon Gekko, telling the crowd, "Greed is good." This Oliver Stone movie looked at the excesses of Wall Street, coming out in 1987, shortly after Black Monday, a day where the Dow Jones Industrial Average dropped 22% in one day. This movie also came out a year after the 1986 Reagan Tax cuts, that set the stage for today's incredible wealth inequality.
Written by Steve Emig, The White Bear
As I mentioned earlier, while visiting my parents for Christmas, in December of 1989, I picked up a book called The Great Depression of 1990, by economist Ravi Batra. Being the geek I am, I found it fascinating. Now, the U.S. didn't go into the great depression in 1990 that Batra predicted. But we did go into what was termed a "double dip recession," in 1990.
The definition of "recession" then was an economic contraction for two consecutive quarters. In real people speak, that means the economy shrinks for six months, or more, instead of growing. There's a new, convoluted definition of recession, which basically allows economists to avoid calling a recessions a recession now. Orwellian newspeak aside, a "depression", by definition, is an economic downturn for three years, and a "great depression" is an economic downturn for five years. In this long term chart of California real estate prices, you can see the prices rose slightly after the recession started in 1990, but didn't start coming back until 1997, as the Dot Com craze, fueled by that new thing called the internet, took over the stock markets and business world. We were actually a lot closer to a great depression in the early 1990's than anyone wanted to admit. It was not to the extent that Ravi Batra predicted, but it was a lot worse, and a lot longer, than anyone else seemed to see coming.
As wealth continues to concentrate at the top of the economic scale, an ultra long limo makes its way through Hollywood, California in late 2019. Photo by Steve Emig.
Part of Batra's economic prediction was based on 30 year, and 60 year, economic cycles he saw in the entire economic history of the United States. The only exception was for about 30 years after the Civil War, which dramatically disrupted normal business cycles. The rest of the time in U.S. history, we had a depression every 30 years. If it skipped the 30 year mark, then we had a great depression at the 60 year mark. So 1990 was 60 years after the start of the Great Depression of the 1930's. But we didn't have a full blown great depression in 1990, so now, as we enter 2020, we're at a thirty year mark from 1990's double dip recession. We're also at the 90 year mark from the 1930's Great Depression.
The U.S. stock markets have been propped up with easy, cheap money, by the Federal Reserve, since the Great Recession of 2007-2009. In September 2019, The Fed had to go into crisis mode, pumping more than a trillion dollars into the economy so far, to keep the markets from crashing, after the Repo Markets seized up. What was started as a couple weeks of "liquidity," has now become life support, and this rolling bailout of the banking system can't be stopped without collapsing the U.s.stock markets, and other markets around the world. You know, today's Wall Street, the Gordon Gekko types of today's world. As The Fed tried to figure out how to get out of this mess they created, the global economy is slowing, with dismal growth projections, even China's stellar growth is slowing down, though it's still far beyond other large countries. The world's economy is grinding to a halt, oddly right on track with the 30 year cycles Batra used to make his predictions back in the late 1980's.
But it's not these 30 year economic cycles that I found most interesting in Batra's 1989 book. He also wrote a chapter about an obscure theory called the Law of Social Cycle, written by a spiritual guru and thinker in India, by the name of Prabhat Ranjan Sarkar. P. R. Sarkar is a weird character, pretty much unknown to American intellectuals. Yet, using that one chapter Batra wrote about The Law of Social Cycle, and watching most of what Batra predicted in 1989 play out, I began to see great merit in The Law of Social Cycle. By looking forward to what it predicted, I realized in the late 1990's that there should be a massive populist uprising, at some point, in the future of the United States. During the Dot Com stock bubble fury, where damn near everybody jumped in the stock market, this sounded ridiculous. It was a "new economy," and "things were going to just keep going up forever." We heard those quotes, or very similar ones, day after day in the business news media then. Why would there ever be a time when average people would feel the need to rise up against the world of Big Business and the super rich? Damn near everybody was feeling the wealth in the late 1990's.
Yet, during that era of stock market euphoria, I realized that a massive workers' revolt was in store, somewhere down the line, if The Law of Social Cycle held true. I even wrote about it a bit, just in my little zines, and told some people in conversation. I also came to think of the action sports world as "the warrior sports," though they were then tagged with the lame, X-Games hyped tag, "Extreme Sports." The rise of a new category of individual-oriented sports was also something to be expected, in a world where The Law of Social Cycle made sense. These sports, most of which were born in the 1960's to the 1990's, have gone worldwide in a few decades. They've become so popular, that the Olympics, the freakin' OLYMPICS, needed to add some of them to insure the American TV ratings, which is the main source of funding for the entire Olympic system. Without snowboarding in winter Olympics, they couldn't afford to put on the games. BMX racing was added to the summer games in 2008, and skateboarding and BMX park riding will be demo sports in 2020. These sports have become so popular in 40 years, that the Olympics organizers feel the need to tap into them to keep TV ratings high in future games. This is the rise of the Warrior mentality sports, which I'll explain more in the next chapter.
A rider backflips over a jump at the 2018 D.I.Y. World Championships, a low-budget, hardcore BMX event, loved by top riders, in Richmond, Virginia, in October of 2018. Riders like him will be a demo sport in the 2020 Summer Olympics. Photo by Steve Emig
We're now deep into the rise of the populist movements, not just in the U.S., but in many parts of the world. Average working people are in the streets, motivated, in large part, by the long term decline in their standard of living. This populist uprising caught fire here in the U.S. first as Occupy Wall Street, then died down and went underground. But the dissension continued to bubble, and rose again, evidenced by the surprising mass popularity of 2016 presidential candidates Donald Trump, on the political Right, and Bernie Sanders on the political Left. While they had much different views on how the government should be run, both candidates tapped into large numbers of everyday working people, or often, formerly working people, who felt left behind by the mainstream candidates. This caused a splintering and fracturing of both major political parties in the U.S., which is also something inferred by The Law of Social Cycle.
So what is P.R. Sarkar's Law of Social Cycle? It's the second big theory that I think really helps put today's crazy world in context. I'll explain it in the next chapter.
Written by Steve Emig.
Blogger's note- 9/12/2023- I haven't changed anything in these posts since I wrote them, except these notes at the bottom. I even left in the typos i originally missed. As of the late summer of 2023, I'm doing most of my new writing on Substack. Check it out.
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