Future Forecast – The Economy
The economy has clearly become the primary subject today in America. It has become so not only because of all the issues discussed in the prior column, but also because it has also become the number one issue for voters in this significant election year.
In the “Forecast for 2008” column on January 9th of this year I wrote:
“The U.S. Economy will not go into a recession as it has been traditionally defined. There will be a bumpy ride, particularly in the first six months of the year. The traditional conversation will be an either/or discussion: will there be a recession or not. While there will most certainly be economic indicators that will point to recession, there will be others that do not. The problem is not whether there is or is not a recession but rather the symptoms of a reorganization that is going on due to the flow to a global economy. The view of the economic landscape is still too often looked at through traditional, increasingly less valid historical national measurements that seem to no longer apply. There will be pockets of recession, such as in the state of Michigan, but the economic bumps in the road in 2008 will not fit into traditional national recessionary measurements”
There are a couple of points to be made here. First I was clearly underestimating the severity of the economic upheavals and equally importantly the negative mindset that would descend, courtesy of the media, upon the general sense of danger and risk. There is no question that the economic climate we are in certainly feels like a major downturn, correction or reorganization. The second point is that the consternation as to what this economic situation really is points to the reality that old terminology, based upon nation state economic mechanics is no longer valid.
The technical definition of a recession in America is two consecutive quarters of negative growth. This has yet to happen. Yet the economic disruptions, the dropping stock market, the bursting of the housing bubble, the collapse of mortgage backed securities and the incredible losses at institutions that dealt in them all point to something.
There are two very important dynamics that explain what is going on in both the American and global economies.
We are in the midst of an economic global reorganization. The traditional nation state measurements and terminology that might have provided an accurate snapshot of the economy are now useless. The economy of America, and the economies of all countries, is becoming integrated into a new global economy. This means that all metrics based on the 20th century concept of distinct national economies must be jettisoned. When I made my prediction it was to this point I was writing. The completely predictable, boring and ultimately irrelevant discussion in the media about are we or are we not in a recession misses the point. Looking backward to a world that economically no longer exists as a guideline for what is going on is woefully incomplete, inaccurate and provides no insight except to point out the reality that we are living in a new age with new forces, flows and dynamics.
The Shift Age is the beginning of the global stage of human evolution. All things, led first by economics, are being organized around the concept of global. This new global order is replacing the old order of clear and distinct nation state economies. Whenever a new order comes into being, it not only brings reorganization but provides creative destruction of the old order and with that, the rendering useless of old terminology. What we are seeing is this new order taking root.
The second dynamic to point out is that these economic times are calling up remembrances to the stagflation of the 1970s. This was a time when seemingly contradictory economic forces occurred simultaneously. Well, what was happening during this decade? The Industrial Age was giving way to the Information Age. This transition from one age to another, at least in the U.S. and Europe, triggered unprecedented economic situations.
We are now moving from the Information Age to the Shift Age. The years between 2005 – 2010 will be looked back upon as the time this took place. This is exactly why the bewildering economic situations seem so similar to the 1970s, as that was the last time that one age gave way to another.
What we are going through economically in the world today is the transition from one age to another. The Shift Age will be a time of constant shift, reorganization around the concept of global, and of profound transformation. Our current economic situation is a symptom of this transition.