In January, I layed out the socionomic trends I expected to see play out over 2011 in terms of the "Aspects of Social Polarity" from The Wave Principle of Human Social Behavior by Robert Prechter. Let's take some time here at the end of the year (how the hell did it get to be the end of 2011 already?) to go over the trends and see where I screwed up and where I was on track.
Opposition will increase in many forms – whether it is labor strife in professional sports and public unions or between the main political parties, expect opposition to rule the day in many interactions.
Action Items: Don’t expect to get huge projects that required many layers of agreement off the ground. If you need lots of permitting, complicated financing or political support – don’t expect it to be easy. I would suggest focusing on small, discrete projects that can be handled quietly and cheaply.
Review: While this is more of a long-term theme, I regard this as modestly successful and likely to be more so in the months to come. There is lots of talk about a "new Manhattan Project to fix..." energy, health care, etc., but we saw more headwinds than success in 2011. Whether it was opposition to fracking by activists and government agencies in the energy sector or the breakdown of subsidies for ethanol, the trend against "big fix" type activities seems strong and growing. As budgets tighten drastically, expect "big" solutions to problems get a lot of chatter, but little activity.
I’m not sure how far down the curve we will slide on this polarity. Expect a rough year for charities. Expect public discourse to get even rougher and don’t be surprised to see a rash of stories about serial killers or spree killers make the news. The recent spate of cop killings (which we discussed briefly here) might be a ugly foreshadowing of things to come
Action Items: Keep your wits about you and make sure you don’t get caught up in a wave of malevolent behavior. Heaven knows the world can be short on kindness in the best of times.
Review: I'm not sure how badly charities got dinged in 2011. While there is anecdotal evidence that charities have not had a great year, things are not as bad as I expected on that front, which is reassuring. Unfortunately, there was a 13% jump in cop killings, along with a host of ugly mass killings (such the one here), and a serial killer on Long Island is in the news as well. Malevolence is on the rise.
This one is easy to spot. Policies such as issuing more debt to try and “fix” a debt crisis is a screaming alarm bell for this sort of thing, no matter how man Nobel Prize Winners line up to support it. There will be a vast amount of glittering generalities thrown around when it comes to talking about more jobs and debt relief. Expect vast waves of unintended consequences from the programs that do get pushed through.
Action Items: Be careful to make sure any plans you make – be they business plans, bug-out plans, relocation plans, etc. are based on the best facts available. Leave the day-dreaming to others. Keep in mind the old country saying “wish in one hand, shit in the other and see which one fills up first” when considering an investment. There is a lot of dreaming built into financial statements and pro formas. Make sure you can spot it.
Review: Anyone watching the European sovereign debt debacle can see the power of fuzzy thinking hard at work. Expect it to get worse in 2012.
Discord should rule the day. We are seeing politicos play nice at the moment as we are in a significant rally in mood. When we pass Dow 10,000 once again, expect that to melt away into angry, bitter, partisan wrangling.
Action Items: If you rely on harmonious times for your income or safety – expect a decrease in both.
Review: We didn't descend into discord as deeply as I expected, so this is a miss for the year, but we should see it on the rise in 2012. We have a debt ceiling debate coming our way soon here in the U.S., so we may have a fine chance to kick off the year with acrimony and grandstanding.
Fear should make a big, big comeback. Whether in terms of personal safety or investments, times should get stressful.
Action Items: If you have ignored me over the last several years when I say “get to know your neighbors, get plugged into your community – the actual real-life one, not the digital one” then please stop ignoring me and make those connections. People usually have less fear of those they know. Do what you can to limit fear’s deleterious effects on your life. When others are fearful, you can be looking for opportunity.
Review: Big miss here. People are still amazingly optimistic on the whole. I expect 2012 to change that tune in dramatic fashion.
Expect to see things crumble or be blown to bits, whether it is infrastructure or political entities. Money for maintenance is going to dry up. Anger will spark the detonation of bombs and the collapse of many current social and political arrangements. Burn Baby Burn will make a comeback.
Action Items: I see this as a theme that will be picked up by macro themes such as Peak Oil or the Climate Change movement. Watch for a push to the return to gravel roads (informed by devastated local budgets and by an eco movement out to limit the use of roads) or for allowing infrastructure to decay to promote restrictions on access to areas and a return of those areas “back to nature.”
Review: Another miss. I think I am early on this one. Revenues held up better than I expected and while the Occupy protests generated much media interest at times, they were not violent in any significant fashion.
Retrenchment should be the order of the day. Again, this will be a tough era to see big projects through to completion.
Action Items: You should already have your defensive measures in place. Be ready to get daring while others get defensive.
Review: Miss again. Very little true retrenchment is in place on a mass scale. State governments have cut some, but consumers are still spending at a far higher rate than I expected and growth, not retrenchment, it still touted as the way to escape budget problems.
Desiring Power Over Nature/Desiring Power Over People
I think the Climate Change Religion (as opposed to the legitimate science of climate studies) is going to be the poster child for this. The Climate Catastrophe folks have their villain (carbon emitting activities), they have their Mein Kampf (Climate Change and the Failure of Democracy – read what they have in store for you, friends), they control many levers of power in the establishment and they have a high profile champion in Al Gore. They’ve suffered some setbacks lately, but watch as mood deteriorates. They will be a vocal, angry minority and they will know what they want – always a dangerous combo.
Action Items: Tyranny is going to be hard to impose in this era of open communications systems, but don’t worry, plenty of folks will try and impose it. Be watchful and be ready to run – early or fight - if you must in defense of the Constitution, your life and property.
Review: A hit, but not from the direction I expected. The climate change folks have suffered a number of setbacks and as budgets grow tight and in the wake of the so-called Climategate email releases, their many machinations are coming unwound. But, Congress came through for us and passed a bill that, even with the supposed protections built in, still allows the President to declare anyone a terrorist and have them assassinated or detained without recourse to protections enshrined in the Bill of Rights. It will get worse before it gets better.
If this model is correct, we should expect a lot more acceptance of depression or stoicism rather than the manic insistence that we should all be happy we saw in the 1990’s and most of the 2000’s. Ludes and other downers should make a comeback. Hopefully meth abuse will shrink.
Action Items: Be watchful of your moods. Don’t get caught up in the waves of depression that could very well sweep the country after an ugly financial or political event.
Review: Not sure it has traction yet, but I still expect a movement to rise up in psychology that calls for the acceptance of some types of depression or a move towards a new stoicism. We'll see.
Embrace of Effort/Avoidance of Effort
Expect a lot of ennui if mood truly craters. A lot of “it doesn’t matter” will be floating around, in tandem with a depressed national psyche.
Action Items: While others avoid doing the hard things – you should be embracing them. This is the ultimate contrarian play.
Review: Missed on this one. I think it is playing out, but the timeline may be longer than I expected, plus mood held up better than I thought. Always good advice, though, to be ready to work hard when others quit.
As the text says “A rising mood leads to social expressions of acquiescence, apology and tolerance. A falling mood leads to social expressions of resistance, recriminations and intolerance.” Don’t expect to see things like the Catholic Church apologizing for the Inquisition or other public self-flagellation by political bodies to apologize for crimes or atrocities committed decades or centuries ago. This will be an age where we’ll be making plenty of our own atrocities that our great-grandchildren can the apologize for down the road.
Action Items: If you are a member of a group that relies on income based upon historical guilt. Get ready to see that income wither away. Also, this is just another ingredient in the stew that will keep politics a seething mass of anger and futility for the near future.
Review: We are not there yet, but expect things to get hard-edged and unapologetic.
Sigh. Watch as hemlines drop and fashion goes black, brown and ugly and people let their bodies go. It has been a fun ride in an era of short skirts, well-tailored suits, fun times and giddy excessiveness in parties and politics.
Action Items: If your business model relies on selling tiny amounts of clothing at a big mark-up or selling lot’s of sparkly rocks, expect to see a dent in your income. Fashion will always sell, but the trend is going to abruptly change, in my opinion.
Review: This is on its way, but fashion has not tipped over yet. Glad I was wrong here.
Pretty self-explanatory. Gonna be some good blues tunes that come out of this era.
Action Items: Don’t ignore the bad things, but don’t let yourself dwell on unhappiness. This too shall pass.
Review: If you are one of the long-term unemployed, you are living in quite an unhappy place, I imagine. A lot of unhappiness will stem from expectations built up that can no longer be met by current conditions. This will grow, I expect.
Watch for a shift towards a lot of “tribalism” in marketing and in politics. This should work hand in hand with anger and secession to make quite the ugly mix on the political scene.
Action Items: Take time to read The Breakdown of Nations by Leopold Kohr for an idea of how smaller, heterogeneous political and social organizations might be able to flourish. The heterogeneity pole can put enormous strains on big systems that count on people all behaving a set way. Breaking apart some of those sclerotic systems might not be all negative. Think of ways to market and thrive in such an environment.
Review: We are not there yet, but I expect the coming budget battles to heighten diferences and draw lines between groups. When things get so bad that we are talking about real battles and not budget battles, then we will have arrived.
Tribalism will continue to march onwards and upwards. The worst of “exclusion” takes us skin-color-based violence, to the re-ignition of historical animosities and just aggravates an already ugly national political scene.
Action Items: Go to the U.S. Census website and look up your city and your state. Where do you fall in terms of your ethnic group in your region? What do the projections for ten years out say? What would happen if ethnic-based conflicts erupted in your region?
Review: Might want to take the action suggested above. 2011 didn't get us there, but be wary of the future.
Interest in Love/Interest in Sex
Get ready to get your groove on if that is your thing.
Action Items: If you are in the arts, plan to write that big best-seller or direct that movie focusing on self-serving pleasure and the thrill of the “hunt.”
Review: We are not back in the 1970s on this yet, but it is a social trend worth watching for, for those of you that it might affect.
Expect different regions to express this in different ways. Down South you may see a return of Blue Laws and an expansion of dry counties. Up in Yankee Land expect extremely restrictive gun laws. Expect more and more efforts to legislate behavior to more rigid forms.
Action Items: Be aware of the culture of where you live. This will be a cross-cutting theme in realms of politics, business, fashion and social behavior.
Review: Hard to quantify, but do note that almost every "solution" to a problem is more restrictions or regulation.
This one is self-explanatory. While others are preparing for the world’s end in 2012, you can be buying their assets for pennies on the dollar, if you so choose.
Action Items: Buy when blood is flowing in the streets.
Review: Missed out at least on the levels of pessimism I expected to see. I continue to think that there will be some sort of 2012 craze towards year-end on top of all kinds of discord and confusion in markets and society. It will still be early for jumping in with both feet back into markets, I think, but be making your list of assets or items you want to invest in or support as other shy away.
Practical Thinking/Magical Thinking
Expect so much Magical Thinking as to make you puke. This will be everything from relatively harmless visits to a local Santero to help out with your love life or a business deal to truly pernicious magical incantations such as QE3 or other sorts of wishful fantasizing that just because you want something bad enough it will manifest itself with no consequences. Much of this has already played out on the national scene as budget deficits have continued to skyrocket, guaranteeing devastation in the near future.
Action Items: Think clearly. Feel free to indulge in the more harmless aspects of magical thinking (so you don’t stand out too much from the crowd) but base your actions on practical thinking.
Review: Well, the budget deficit is over $1 trillion a year. Europe proposes to fix a debt crisis with more debt and regulation. Magical thinking is alive and well, but this is only the appetizer, be ready for the full course in 2012.
Search for Joy/Search for Pleasure
I define joy as a deep and internal state of connectedness to the Source, to Divine Providence, with active aspects of faith, hope and charity. A search for pleasure is a road where you wind up like Hugh Hefner, a shriveled old shell of a once-vibrant man, subsisting on Viagra and gold-diggers.
Action Items: Indulge lightly as we descend this slope into hedonism, don’t get consumed by it.
Review: We have not moved towards hedonism on a large scale. Could get interesting once we do see it, though...
Watch as we recoil away from Hummers and McMansions to more humble digs and mass transit. In religious circles, look for a comeback of monastic environments and possibly more violent efforts such as flagellation. In politics, looks for “austerity” to rule the day in public spending and in general watch as society retrenches to a lower level of conspicuous consumption.
Action Items: Self-Deprivation, especially after an era of extreme excess is not the worst thing in the world. Use this wave of mood to clear out clutter and rationalize your budget.
Review: Hummer is gone. Conspicuous consumption is not as vibrant as it was. Expect to see a lot of retrenchment in spending paired with a moral justification for doing so. I also expect to see the rise of new monastic type communities of various faiths and practices. This type of community resurfaces in the U.S. periodically and I expect to see it again.
Sharpness of Focus/Dullness of Focus
This will be a tricky one to nail down. In the best of times, there is not a lot of sharp focused effort out there.
Action Items: If you work in manufacturing or the energy sectors (or in a research reactor!) be extra vigilant to make sure you and your people are doing things by the book. Cutting corners can mean injury, ruined equipment and regulatory nightmares. Make sure your QA and Safety folks stay on the ball.
Review: I'll have to wait to see year-end OSHA and FDA numbers before making a call here, but I think we are in the early innings of this polarity.
Another cross-cutting theme that should play havoc with any efforts to make big projects or big efforts succeed. There will be even more arm-chair quarterbacks out there ready to tell you why it can’t be done.
Action Items: Expect this. Build this into any timelines or plans you make. If you have important things you need to get done, keep the projects small and the group of people doing them limited. In politics, expect gridlock.
Review: Opposition continues to be a the dominant theme in political circles. This will only grow.
Tendency to Praise/Tendency to Criticize
Ditto from Supportiveness/Opposition. This will be a very tiresome aspect of this era of negative mood.
Review: Criticism is everywhere and expect that to increase.
If we truly are facing a Super Cycle grade downturn, a lot of political entities are going to be shattered under the strain.
Action Items: Keep your eyes peeled for secessionist sentiment. If you live in Texas, you might want to make sure any assets you have in other states is disposed of within the next few years. Come 2020, you might be a citizen of the Lone Star Republic and need a passport to visit Little Rock or Los Angeles.
Review: This is another long-term call. As the months roll by and I watch the decisions coming out of Washington D.C., I am continually reminded of each Elliott Wave Financial Forecast, and seeing the "signficance to" column for this Grand Supercycle wave marked as "U.S. Survival." I am not advocating it, but be aware, this mood shift is going to be on a level no one living has ever experienced.
Summary of Review
Well, I was early (in my opinion) on a lot of these, but there were some good hits in there as well. I am still convinced we are on the cusp of a downturn of immense proportions rather than building a base for a large upswing in mood and markets. Be prepared.