Fourth Turning's Neil Howe Fears "Strong Parallels" Between 1930s And Today: "It's Going To Be A Rollercoaster Ride"

Tyler Durden's picture

This week on the MacroVoices podcast, host Erik Townsend interviewed Neil Howe, co-author of The Fourth Turning, an investing tract that’s found renewed relevance thanks to White House Chief Strategist Steve Bannon, who’s cited it as an inspiration for his (and by extension, President Donald Trump’s) worldview.

According to the New York Times, which published a story earlier this year explaining the theories encapsulated in the book, the Fourth Turning was “written by two amateur historians, making the case that world events unfold in predictable cycles of roughly 80 years each, and that they can be divided into four chapters, or turnings: growth, maturation, entropy and destruction. Western societies have experienced the same patterns for centuries, the book argues, and they are as natural and necessary as spring, summer, fall and winter."

Few books have been as central to the worldview of Mr. Bannon, a voracious reader who tends to see politics and policy in terms of their place in the broader arc of history.”

Townsend shares Bannon’s enthusiasm, saying in his preamble that he believes the Fourth Turning is “the most important investing book of our time…I am such a big fan of this book personally that I literally named my own investment management company Fourth Turning Capital Management after Neil’s work.”

During the interview, Townsend and Howe discussed Howe’s conclusion that America is presently in the middle of a 20-year-long period of social, economic and political upheaval.  

Howe begins by explaining how the first book written by himself and William Strauss, with whom he also collaborated on the Fourth Turning, introduced him to the idea that America’s economy and culture follow distinct patterns. While studying cultural differences between generations of the American population, Howe says he began to notice a pattern, with one generation tearing down and reinventing some of the institutions, both physical and cultural, of the generation that preceded it.

“So, on the one hand, you have these turning points which are civic and institutional and involve politics and empire and the economy. These are the fourth turnings. And then you have these value-focused episodes which involve culture and religion and the interior of life, not the exterior of life. And of course our most recent awakening was in the late ‘60s and ‘70s, something a lot of us boomers today remember because they came of age during that period.


So this was an interesting pattern to us, and it was in The Fourth Turning where we sort of formalized that into looking at history moving through a series of social moods in a certain order. And we think there’s some very fundamental reasons for why we move through history.


And not just American, I should mention, but I think most of the modern world moves through history and cycles like this. They can be interrupted, they can be cut short, but there is a tendency for this. It’s manifested itself very strongly in American history. And we call these—each of these eras is about a generation long, they’re about 20, 21, 22, 23 years long, and we call them first, second, third, and fourth turnings.


The fourth turning is the final season of history, if you will, the final generation. And that is the period of crisis. That is the period when we tear down institutions that we’ve built, everything that’s dysfunctional. And we sort of rebuild things from scratch again. And it usually follows a period where—it’s bound up in a period where there’s complete disgust, complete distrust with what we have. And, usually under pressure by the younger generation, we kind of rebuild. These are the civic rebirth moments we’ve talked about earlier. That’s by way of introduction. That book was in 1997. You’re right, it’s about 20 years ago.

In Howe’s more recent writing, he has cited the 2008 financial crisis as the catalyst that signaled the beginning of the most recent turning. But Townsend questions why Howe didn’t pick 9/11. For one, Townsend believes it had a more dramatic impact on how Americans view and feel about the US’s relationship with the modern world.

Howe says he didn’t choose 9/11 because it didn’t have the same transformational influence on markets that the financial crisis had. It also arrived too early: In 2001, most members of the millennial generation hadn’t graduated from high school yet, and most baby boomers hadn’t reached retirement age.

“A couple of reasons. One is that, although 9/11 changed America’s attitude towards the rest of the world, I think that the stock market boom and celebrity circus that’s here in the United States really hadn’t changed very much. And I don’t think you really had a shift, a fundamental shift, in America’s perception of themselves as a people, as their own country, to a fundamental degree until 2008. Also, 2001, as we explained to many people at the time, was simply too early. Every turning starts when each generation is beginning to move into a new phase of life. Back in 2001 boomers were not yet retiring, millennials were still—maybe the first one of them was barely graduating from high school.


So, this was not what we expected. 2008 really did coincide with the generational maturity of the turning, so to speak. And I think that, in terms of the basic shift in our efficacy of the social system, I think 2008 was a bigger change.” The crisis also ushered in an era where central banks exhibit total control of markets, which has created an “artificial quality,” Howe said.

“The economic emergency that occurred in 2008-2009 really catapulted us into by far the biggest economic emergency we’ve been in since the early 1930s. And, arguably, we are still living out the consequences of that with complete change in central bank policy, monetary policy, with sustaining these record low interest rates and arguable very high valuations in financial markets—almost anything pushed by that—and people still wondering how we’re going to get out from under that.


The constant discussion is when are central banks going to pull back on their balance sheets and actually go back to the old normal? So, I think there is the sense, even in this the booming markets that we see today, that there is this artificial quality: people think that there’s something wrong about this. We have not re-righted where we were. We are not letting price discovery and actual markets function the way they did before then.


So, I do believe that 2008 was the beginning of a whole new regime. And I also believe that the political dysfunction, the sense of political dysfunction—created during the two turns of the Obama presidency and, obviously, also into the Trump presidency—of government completely grinding to a halt is going to have some very powerful repercussions in the years shortly to come.”

Of course, there’s a certain futility in trying to determine the exact beginning and ending of a turning cycle while it’s still in progress. Townsend asks, since we can’t predict the future, how do we know that there isn’t an even worse crisis just around the corner? It’s a great question, Howe responds.

“It’s certainly a danger out there. Now we all just saw this morning how markets reacted to this war of words between President Trump and North Korea. I think that there is a rising tide of nationalism around the world. I think it’s driven by younger generations. And I should say not just nationalism but authoritarianism. And I would say these are strong parallels that we see between the decade we’ve been living through and the 1930s. Because it isn’t just what happens to/in the economy. I mean, you consider so many ways in which this last decade has recapitulated the 1930s, starting off with a financial crisis, worries about deflation, worries about declining fertility rates, and currency wars, and beggar thy neighbor policies, and radical attempts by monetary and ultimately fiscal policy to remedy the situation.


But also consider the geopolitical atmosphere of the 1930s. Which was a new world in which there was no concert of great powers, no great power who was taking responsibility for guiding or leading the world. Britain had largely retreated from its global influence after World War I.


The League of Nations had fallen apart. And the 1930s was the time when authoritarian leaders, and with growing popularity—growing numbers of people thought that that was actually a pretty good answer to the world’s problems. These regimes were doing whatever they wanted in their corner of the world with no one really to stop them.”

Evidence of the millennial generation’s contribution to the current turning can be found in the shift in political attitudes from those of their parents. Howe claims millennials are less interested in democracy, and that there’s a “growing appeal of authoritarian leaders that get things done.”

“And I think today we live in a similar era. Just look around the world today. You see a vacuum of any great power or concert of great powers who are orchestrating what goes on in the world. And basically people doing what they want and creating an increasingly dangerous world. I even think in the culture you find strong parallels. The decline in home ownership, for example. The decline in the birth rate and the fertility rate. The blanding of the popular culture that occurred during the 1930s is very similar to what’s going on with the millennials today. And the growing appeal among younger people, activists among younger people—younger people have a more collectivist or authoritarian notion of what kind of government works.


We actually wrote a piece recently called Are Millennials Souring on Democracy? And look at some of these recent opinion polls around the world showing that millennials are less interested. Not just in America but in Europe and East Asia. Not necessarily favoring liberal democratic solutions. It’s a growing appeal of authoritarian leaders that get things done. Well, you can see here in the United States we have a government that no longer thinks about the future at all and can’t get anything done. So you can imagine how turned off you would be if you’re a young person trying to think of the rest of your life.”

If Howe is correct, the US has another decade or so before the present cycle ends, and the next first turning, supposedly a period of economic and cultural renewal, begins. So, Townsend asks, with 10 years of turmoil left on the clock, what can Americans expect? Howe said Americans should be watching for 'all these little problems to coalesce in one huge problem.'"

“I think this is going to be the real rollercoaster ride. And I do think, not only—as you mentioned there are four stages to a fourth turning. One is the catalyst. The next is the regeneracy when we see some center of public trust beginning to grow around the new public agenda. We really haven’t seen that yet. Although you can look at various parts and begin to see certain—I would say particularly look at what young people are doing. Every fourth turning you kind of see where are young people going, who are they beginning to trust both on the right and the left. I think that’s an interesting marker. But then ultimately you move to the crisis.


And that’s when this new sense of public trust, which I think won’t really begin to appear once we begin to hit public problems that we have to solve. And I mentioned about two or three that we’re probably going to have to hit by the end of this year. And then, of course, comes the mid-term election next year. But that’s when that begins to grow.


And then the crisis, when all of these problems begin to coalesce into one huge problem. It’s when the Great Recession met all of these—the rise of fascism both in Asia and in Europe, and everything came together, currency wars, everything became part of a huge problem. Which, by the resolution, you see—and this is what happens at every fourth turning. All the little problems come together into a giant problem. And the giant problem gets completely solved.”

Americans – and investors, in particular – shouldn’t find comfort in the notion that the worst of the crisis has passed. Central bankers managed to engineer a quick recovery (in asset valuations, at least) with an unprecedented injection of freshly printed capital, but the magnitude of this intervention is preventing markets from working properly - what Howe calls “the valuation issue.”

Central banks’ willingness to keep us “not too far from the zero bound” has had myriad benefits for investors. But with US equity valuations still so close to all-time highs, Howe wonders: “Have we created a monster here.”

Listen to the rest of the interview below: 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
FreeShitter's picture

Yes Neil, why yes it will be. One hell of a ride, most wont even know its here until they suddenly lose it mentally. That's when reality hits.

Yukon Cornholius's picture

Fourth Turnings are for goy. The top of the pyramid remains stable.

Kidbuck's picture

Been reading about the coming collapse for 50 years. People been making money writing about the coming collapse fo those 50 years. 20 or 30 more years and I'll be dead and people will still be writing about the coming collapse. Can't hapen until the middle class is completely broke. Too much wealth left to steal and destroy yet out here in the hinter lands.

Oldwood's picture

And the only counter to authoritarianism is authoritarianism.

And the size, power and scope of the State only grows and grows. Note that Japan just had a 4% annualized growth last quarter due to....... government spending!

Who could have imagined????

I wonder how much "growth" they had from pouring money into a bottomless hole in the earth created by a melting reactor core???

mkkby's picture

Thread winner.  Doom/gloom stories never end because it meshes with how religions control the mob for power and money.  Scare em and pick their pockets.

A great way to sell books is to make up a fake cycle and say next year is the end.  Notice how every other headline is nuclear war, trade war, civil war/riot, market crash or reset.  It never gets old because idiots never notice the broken record skipping.

MozartIII's picture

He can stick his 4th turning up his ass!!!

Blue Steel 309's picture

The 4th turning phenomena has no validity in a society as heterogeneous as the USA.

mkkby's picture

The biggest social upheaval since the 30s was the 60s-70s.  The idiot book writers know this, but it contradicts their 80-year narrative.

Today doesn't even come close.  The viet nam war riots were 10x more than what's going on today.  And there was a much larger chance of world war with nukes.  The gold window shut and we had fuel shortages and 10 years of high inflation.  Don't forget there were some important political assasinations.  Not some little bitch who leaked emails.  Important leaders with bullet holes where their brains once were.

Also, don't forget this is when most of the socialism was hatched.  So count 60 years from 1963 and you get 2043 for the next 4th turning.  LOL -- don't buy the book.

Farmerz's picture

I make over 7k a month selling used rollercoaster parts.

political_proxy's picture

ooo, give me a metric shit ton!

numazawa's picture

Sounds good.  But for sheer job security it's hard to top Escalator Repair.

NashSolstice's picture

How will it ever be a roller coaster ride when there is endless fiat bailouts.  When the possibility of bailouts end, then the ride will begin

Gods's picture


alfbell's picture

We won't know if his data, conclusions and predictions are based in reality for another 200 years. As if anyone actually understands our current circumstances fully and where we will end up.

TuPhat's picture

In 200 years no one will remember Strauss and Howe or their book.  They pick and choose historical events to fit their theory.   If it doesn't fit it wasn't important.  They have no predictive value whatever.  They hope to make a buck off of the fact that everyone believes things will get really bad soon.  Even my cat knows when a bad storm is coming.

MozartIII's picture

Comparing the 1930's to today????  The soft marxists are more in control. The totalitarians are waiting to come out. Hopefully the passive american males will just shoot them all in the head, and save us from a generation of slavery.

order66's picture

Millennial's favor less democracy and Authoritarian figures.

What the fuck are you talking about? Try the exact opposite.

I'm going to print this page out so I can line the bottom of my birdcage with it.

Oldwood's picture

Probably why colleges around the country have polled to want to eliminate freedom of speech and outlawed contrary "hate speech".


ElTerco's picture

Agreed. Millennials have zero respect for established authority.

Tarrel's picture

Well, here in the UK during the Brexit referendum, the majority of millenials opted for the unelected authoritarianism of the EU, whereas the previous generations tended to vote "Leave".

Gulfcoastcommentary's picture

He says with some certainty that the public trust "has not coalesced around a new public agenda." I think Trump's agenda fits that bill. In the Fourth Turning, there emerges a Gray Champion and that is Trump as well. This Gray Champion is not some perfect guy, but someone who has warts and flaws, but he leads the nation in crisis.

We're heading for crisis and Trump is in charge which fits perfectly in the Fourth Turning crisis characteristics.

Yukon Cornholius's picture

Could be Bernie as well. He's grey and has warts. And a big fat wife too!

pinky lee's picture

not as fat as Trump thats for sure.

GOSPLAN HERO's picture

Fuck Communists.

Fuck National Socialists (Nazis).

They are all fucking Socialist swine.



Ms No's picture

Don't forget to file this in the NO FUCKING SHIT category.

Storm-Clouds's picture


Ah bite my ice clank.
Your analysis is elitist fear based crappola.
Except for gridlock.
It used to be that elections showed the country's trending momention.
Now social media creates trends.
Central banks direct market flows.
With the exception Of Nuclear Threats
Too bad for economic progress it's just to slow for HFT....

WINTER IS HERE.......brrrr

ReturnOfDaMac's picture

It's all bullshit and it's bad for ya.  Just buy stawks ...

Lost in translation's picture


You simply MUST hold off buying until we hit the ATH - THAT'S when you buy!

Stock tips courtesy of your local Uber driver...

ReturnOfDaMac's picture

Oh shit, THANKS!  And here I was, trying to get long before they stick save at the close ..

DEMIZEN's picture

keep buying until it pops.

kudocast's picture

The Neil Howe's hypotheses that younger generations want authoritarianism is complete bullshit.  It's exactly the opposite.  

Millennials Like Sanders, Dislike Election Process

by Jim Norman


Americans aged 20 to 36 favor Sanders over Trump, Clinton

Millennials more positive than older generations about Sanders

32% think 2016 election process is working as it should

WASHINGTON, D.C. -- Bernie Sanders is now considered a long shot for the Democratic presidential nomination, but his quest has accomplished one of his main goals -- scoring major points in the contest for the hearts and minds of America's youngest voters. Millennials, the generation of Americans aged 20 to 36, are far more likely to have a favorable opinion of Sanders (55%) than presumptive Democratic nominee Hillary Clinton (38%) or her Republican counterpart, Donald Trump (22%).

new game's picture

milles are being handed a shit sandwich courtesy of the fed. but they know not wtf has happened so they blame the ptb and want there share back in the form of taxing the rich and redistribution as corporations are evil(which they have become-thank the fed and congress, again(and a fuking gain)).

simple shit maynard...

Cabreado's picture

While I don't play the "generation" game, you have some good points there...

Blue Steel 309's picture

Gen X, and to a greater degree gen Zyklon B, are way more interested in community than authoritarian. They are not mutually exclusive.

Socialism doesn't have to be any more authoritarian than capitalism. Both systems are authoritarian and exploitative without social and governmental accountability.

Younger generations realize that people have more value than things, because us older folks have gone to such an cultural extreme of denying that.

rejected's picture

Millennials, the generation of Americans aged 20 to 36, are far more likely to have a favorable opinion of Sanders (55%)

Millennials, the generation of Americans aged 20 to 36, are far more likely to have a favorable opinion of socialism (55%)


Cabreado's picture

Best to know how the govt was designed to work, regardless of age/generation or anything else, and best to identify corrupt points of control.

Not a critical mass (of any age/generation) knows how to do either.



TradingTroll's picture

The logic goes like this:


-Millenials like Sanders

-probably because Sanders sought to distribute wealth under socialism

-the kind of socialism that Venezuela has

-which has led to authoritarianism in Venezuela


Therefore, Sanders=Authoritarianism


This part doesnt look like so much BS to me, but other parts of this argument arent so strong

Md4's picture

"All the little problems come together into a giant problem. And the giant problem gets completely solved.”

Reviewing history to understand today or tomorrow only has the slightest relevance IF we end this "turning" business with far fewer of us than we began it.

What is seldom factored in are the major technical advances attendant our current situation. Coupled with the continued presence of great hordes of dirt-cheap labor, and the constant pressure to automate human labor out of the picture entirely, we simply need fewer of us than ever before.

Unless great calamity not only claims big numbers of us AND knocks our human advance back a couple centuries...

...there can't ever be a recovery or even a rejuvenation.

With what?

For whom?


F em all but 6's picture

Rollercoaster? Great. And just how the FUCK do I get off this god damn carnival ride?

new game's picture

expat or arm up.

some night training wouldn't hurt.

try a night alone in the woods, for starters...

numazawa's picture

Turner:  "Why did you choose 2008 rather than 9/11 as your turning point?"

Howe:  "Basically because 9/11 was too early.  Look, get with the program.  After all I've invested in this thing, you've got to give me some leeway to shoehorn the data like this.  By now the model is, for me, more concrete than actual events; it represents The Big Picture, so it's important not to get hung up on factual details.  Thank you."


Armed Resistance's picture

Actually, while I see your point I do happen to agree with him. If the public had realized earlier it was a false flag and that the police state was born from that event then I agree, the beginning should have been 9/11. But it didn't unfold that way and it wasn't until the economic unraveling, the Lehman moment and then the reaction and election of Barack that began to wake up the masses.

numazawa's picture

Likewise I cannot take issue with your more sober rejoinder :)  as I was being mostly facetious, not to mention opportunistic  (that "because it was too early" reply from Howe made an easy lay-up).  However, there does seem to be a common susceptibility among 'modelists' of this sort to reach a point where the theory begins to take on a life of its own and interpretation shades over into interpolation of data to preserve integrity of the model.

Kublai's picture

In other words.... it's all bs!

numazawa's picture

But only to the degree that Technical Analysis in a manipulated market is BS.  :)

HRH Feant2's picture

JHC! If all these little millenial brats think communism is a good idea we are fucked!

kudocast's picture

Outside the U.S. - Millennials are sick of existing authoritarian regimes such as Saudi Arabia, Jordan, Iran, etc.  That's what the "Arab Spring" was about. It's the older generations in these countries that are the authoritarians and they want to keep it that way - see Saudia Arabia, Iran, Jordan, etc.

The Arab Spring, also referred to as Arab revolutions or Democracy Spring, was a revolutionary wave of both violent and non-violent demonstrations, protests, riots, coups and civil wars in North Africa and the Middle East that began on 17 December 2010 in Tunisia with the Tunisian Revolution.

Blue Steel 309's picture

There are strong parallels between Weimar 1930s and contemporary USA. Most significant is that the Jews have given up all pretense of assimilation and are in open hostility with the core population of the USA.

I only hope that when the levy breaks this time, that it is for real and not a post facto hoax. The yoke of those who shall not be criticized (or even named) needs to be thrown off for all time. We have the internet. We have access to information that 'the greatest generation' did not have.

We won't be fooled again.

TeethVillage88s's picture

I think it is driven by people of Power, Status, Titles, Lands, Access, Affiliations, Networks, Wealth, Corporate Power...

But you know... go ahead with what you want to say....

"I think it’s driven by younger generations. And I should say not just nationalism but authoritarianism. And I would say these are strong parallels that we see between the decade we’ve been living through and the 1930s"

chosen's picture

Everybody is looking for cycles in history.  Only idiots find them.