This is a long, meaty, provocative and fiercely prescient look at today’s financial crisis. Quinn underpins the crisis to debt, makes a compelling case for the size and scale of the unwind (deleveraging) in our midst, and was alarmingly right about the speed of events from October 7th to now. He borrows a now widely cited quote by Andrew Jackson in 1832 that was new to me:
“Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.” (President Andrew Jackson 1832)
Quinn lays blame on Reaganomics (indirectly), the Bush administration, and directly onto baby boomers for their thirty years of living beyond their means.
In his conclusion he expresses a glimmer of somber hope. Somber in that he accepts the pain of the current process, and hopeful in that he sees this as a cleansing for a more sustainable future.
For the 1st time in many years I saw something that shows promise for our country’s future. Despite the rhetoric from President Bush, Hank Paulson, Ben Bernanke, Nancy Pelosi, Barney Frank, all CNBC commentators, and various ultra-rich Wall Street shills, the American public was firmly against this bailout bill. I sense that the “ME GENERATION” is finally ready to accept the consequences of their selfish lifestyle over the last 30 years. The materialistic frenzy that has been the hallmark of the Baby Boom Generation is coming to an end. It is being forced upon many, but will be the choice of many more. The worldwide deleveraging will lead to a new mantra for this generation, frugality and living beneath your means. The psychology of the whole world has changed in a fortnight. Our leaders are so consumed by their own agendas that they have not realized the implications of this psychological change. Chaos and turmoil reign in the markets today. The population of the U.S. will turn inward and seek comfort in more simple pursuits. This will ultimately be a beneficial change for our society. But, the immediate result will be wrenching for the country. [Full Story]
James Quinn is Senior Director of Strategic Planning at The Wharton School at the University of Pennsylvania.
Our Coming Depression
James Quinn, Seeking Alpha, October 07, 2008