Generational Politics, the Elliott Wave, and the End of the World

Ever hear of the Elliott Wave?

It's pushed by a guy named Robert Prechter in Gainesville, and I've followed it out of a corner of my eye since the late 1970s.

The idea is that markets proceed in five waves.  First there's a long up, then a correction, then a longer up, then a correction, and finally a big-up with no relation to reality, and finally it all falls down.

Prechter, one of those Republicans who likes to call themselves Libertarian (so they can get out of the blame when their theories fall apart) sells this  as technical analysis to stock traders.  The fun part of it is that the dreaded "fifth wave" can be anywhere, and the hammer can fall at any time. In Prechter's universe, it's always ready to fall, because the numbers tell him so.

I don't believe in technical analysis, but in examining the generational theory I've been preaching here lately, some interesting parallels emerge.

Mainly, I've seen that, in addition to a generational pattern, there's a two-generation pattern. The Founding Thesis of 1776 collapsed completely in the Civil War (four score and five years), and was essentially re-written by Lincoln and the Myth of Union. That myth, in turn, lasted pretty much intact until the Great Depression, when it had to be rebuilt on behalf of FDR and the New Deal.

The numbers aren't exact -- FDR was elected just three score and 12 years (72) after Lincoln. But if you date the nation from the Constitution, as was done before Lincoln, that's 72 years from 1788 to 1860.

The events of the world tell me we're in that kind of "end time" again -- the time that begat the Depression, the time that begat the Civil War. (In 2008, it will have been 76 years since FDR's first election.) This is not an ordinary political re-adjustment. The wrenching change needed to save the world from self-destruction has to come about through fire.

And the world is on fire now, not only in the old ways (Iraq, Lebanon) but in an entirely new way (Katrina, heat waves). The first gets in the way of dealing with the second, which is the real threat. (Did you know a Category 5 hurricane hit China this week?)

What's happening as a result  is, literally, a sea change in our attitude toward life, politics, and the link between them. The new political "enemy" is growing ever-smaller -- the number of people who question the reality of global warming (and its manmade causes) declines daily.Something new is coalescing, and an entire worldview is collapsing at the same time. 

This is bigger than the changes which occurred a generation ago -- the Nixon Thesis, or two generations before that -- the Progressive Thesis. This is not a course correction. What's required is an entirely new direction, an entirely new outlook, something truly wrenching.

And that's the subtext of Prechter's Elliott Wave. Slow growth, correction, fast growth, correction, unsustainable growth and fall. Repeat. It's a multi-generation process when applied to the market as a whole.

Is a "Great Depression" around the corner? Maybe not, but something very like it is already enveloping all of us. As this reality dawns, major changes begin, first on a micro level, then on am macro.

And now, as a sort of a backdrop to all this, a video: