20 April 2008
 
Four Transformations

 
The rains did cometh, and it is soft and the earth smells are wafting up the side of Big Pink. There is life in the air, and the sound of birds.
 
A child is making noises in wonder from the balcony above my open window, and her parents are speaking softly in Arabic.
 
I got a note from a pal, forwarding something I had seen a year or more ago, before we began to turn the tempo of the war around with the surge, and things looked dark, though in a different sort of dimness than they look today. What came in the mail was timeless enough that I read it, thought about it and sent it to the kids.
 
The note had suffered the mangling attendant to many bouncings though the magic of e-mail, so a link to a clean copy is provided here:
 
http://www.superfactory.com/articles/meyer_what_in_the_world.htm
 
The article is called The Four Transformations, and is written by a fellow named Herbert Meyer. He used to be someone in my line of work. I don’t know if the kids will read it, though I asked them to.
 
They are Words of Wisdom. I try to tell them myself, from the perspective of someone who has learned through the school of hard knocks, though none of it is rocket science. They may just take it as a plea to live their lives smarter than I did. Of course, a wise man advising me in 1973 might have told me to run a sound personal financial program, and invest in alternate energy sources, since the course of things clearly could not go on as they were.
 
The wise man would have been wrong, of course, since nothing was done about the problem, and vast fortunes have been made on the foolish disregard of the facts. And lost, truthfully, though many a golden parachute has been used in the process.
 
I told the kids that Herb Meyer’s analysis of the problems confronting the world was worth a serious read. This analysis has been around for a couple years, on the corporate lecture circuit. It does not address the of the sub-prime melt-down, though it does contain the heart of the oil problem. The strength of the Euro is anomalous, possibly because the Union has not worked the financial crisis fully through the system.
 
Ireland certainly is feeling the bubble, and the UK. But nothing in this crisis changes one whit the underlying issues.
 
I told the kids that basic message contained within Meyer’s Four Transformations is what should one that should provide the planning framework for their careers as adults.
 
You could restate Meyer’s long proposition in a simpler manner: “if something seems too good to be true, if probably isn’t.”
 
I wish I could say that the reverse was possible, but it regrettably is not. Things can always be much worse than they appear.
 
I mentioned that the Savings and Loan meltdown was ancient history, but was clear enough to those who saw it coming. The Internet Bubble is something that occurred a decade ago, and was every bit as irrational. It simply was not possible, and all the smart people who got burned were guilty of the same thing the wise-guys behind the sub-prime loans were.
 
The basic laws of economics have not been suspended.
 
Great societies rise and fall on belief systems. The West has done exceptionally well on one, which is being discarded. Meyer talks to it as a matter of faith, which it may well be. I do not advocate that the kids begin to reproduce, or try to save the whole civilization themselves.
 
There are some things you cannot alter, I said, and which those who pass as your leaders will get things desperately wrong in public policy. We have just suffered through eight years of flawed policy, and we are about to get one of those tectonic changes that will be as profound (and wrong) as the last one.
 
The resiliency of this society is remarkable and will continue, though the ability to continue to write off such enormous losses as the banks have just done and maintain a global military presence and confront the mass retirement of the aging work force will drain the inherent agility of the market economy.
 
For planning purposes, though, I said that they ought to incorporate the profound and brilliantly simple principles that Meyer outlines.
 
I used to try to tell them about the way to look at American history. The political climate always revolved around the value of labor. When a person’s economic worth is valued, there tends to be respect for the individual. When the value of a day’s work is marginalized, so is the person.
 
Herbert says it like this: Don’t go into the baby food business in a country that where the birth rate has fallen far before replacement value. In a country where the Hispanic population provides the only growth, learn Spanish.
 
Anyway, I told them to give the piece a read, and try to make smart decisions. Their world is going to be a very different place. All trends tend to be self-correcting to some degree, though once the tipping point is reached, some have a tendency to accelerate.
 
Copyright 2008 Vic Socotra
www.vicsocotra.com