Bringing Down the House

An era of epic … instability lies ahead.

—E. W. Financial Forecast, Nov. 2, 2012

It was there and then it was gone. For sixty years the house up the street from us stood nestled in a lovely oak hammock. From the street, it looked fine, but the plumbing was shot, the electrical system inadequate and general decay had compromised its livability. It was demolished in a day and now, two months later, a brand new house is out of the ground, on its way to becoming some family’s dream home.

In similar fashion, our nation has lost its livability for much of its citizenry. Eighty years after it rose from the bottom of the Great Depression, and thirty years past its peak in productivity, decay pervades the economy and rot runs through government.

There is general agreement about this. The presidential election features two candidates promising to restore the nation’s former glory, but few believe in their heart of hearts that either man is capable of rearranging the club we call the Federal Government so that it benefits somebody other than the club members–the congresspeople, lobbyists and plutocrats that fund the game for their own gain.

This intuition is correct. There is no possibility that voters can bring into existence change of significance. The rot is too entrenched. What is called for is revolution in the form of radical politics. The Tea Party is in the vanguard of this movement. And, regardless of what one may think of their methods, they and the other extremists, fanatics and true believers that have captured the Republican party are the necessary elements to effect real change.

The immoderates, as David Brooks calls them, are ascendant. They have a narrow focus: bring down the present regime. They tend to be loud and self-certain, pummelling everyone within earshot with their diatribes. Anyone finding their self-righteousness obnoxious should steel themself, because they are just getting started.

Socionomists posit that radicalism is the natural response to the economic inequality and concentrated power and wealth that accompany major market and economic tops. The ensuing downturn is when the anger spills over into extremist agitation for change. Le Bon said, “When the structure of a civilization is rotten, it is always the radical crowds that bring them down.”  The Grand Supercycle bull market top that began forming in early 2000 is now complete, or near complete. All cycles are now pointed hard down into 2016. We should expect the radicals to make life uncomfortable for the entrenched oligarchy over the next few years.

The upside to this is that radical politics have a limited life. Le Bon also observed, “Crowds are only powerful for destruction. Their rule is always tantamount to a barbarian phase.” Moderates will have their day for negotiation, compromise and lasting favorable change after the radicals run out of steam.

Reminds me of a story a friend told me about the local sheriff in his town. The sheriff would say that, when called in to deal with a barfight, he always waited outside until the fighters had beat each other to a pulp. He went in to restore order afterwards.

If you’re a radical, you’re going to be busy over the next few years. If you are a moderate, you will just need to be patient. Our day will come.



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