9/11, the Financial Crisis and COVID

Readers Write: “You’re Too Cynical”

“I read Dave's Paradigm Pressroom's 5 Bullets each time it is published,” a reader wrote a while back.

I’ve been doing this daily e-letter thing for 15 years now. I knew there was a “but” coming.

“I have an overriding impression that he simply engages in diatribes and negativity.”

Said another reader more recently: “His raw cynicism can be a bit much.”

One more email, last winter, addressing me directly: “Like a smoker at a no-smoking venue, for nearly two years I have subtly jonesed for the time when your newsletter would come out each day.

“But I think your dire cynicism has actually taken a toll on my soul.”

That’s a heavy load to lay on me — but go on, sir…

“I am a naturally suspicious and critical cat who does not easily trust things, but you too often leave me feeling like I have been in proximity to a Black Mirror episode.”

Gee, I detect a pattern here.

I take these critiques seriously — as I take everything that comes into our inbox.

Long ago in pre-internet days, an old newsroom boss gave me a rule of thumb: For every viewer who called in to comment or complain about something in our newscast… there were 10 more who thought the same thing but didn’t pick up the phone. I figure the same applies here and now.

But earnest as these critiques are, none of them is backed by concrete examples.

If someone, anyone, could point to something specific, well, then I could engage in a bit of self-reflection and make a course correction.

In the absence of such examples, however, I’ve still tried to look inward. Am I too cynical?

What I’ve tentatively concluded is this: If ever I end up in a cynical place, it’s because of the idealistic place from where I start.

Adams’ Aspiration

And where I start is with the aspiration expressed by Founding Father John Adams during the American Revolution — in a 1780 letter to his wife, Abigail.

"I must study politics and war,” he wrote, “that my sons may have liberty to study mathematics and philosophy.

“My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce and agriculture in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry and porcelain."

Long before I encountered Adams’ letter, his ethos was my own whenever thinking about war and “political economy” — to use the term from the Founders’ day.

It’s probably the ethos of anyone with a moral compass who thinks about these things, really. We aspire for humanity to move beyond war and want, conflict and hardship, so future generations can enjoy “the good life.”

Alas, Adams’ inspiring vision of each generation climbing to ever-greater heights of enlightenment was not to be.

Roughly 80 years after the American Revolution, the nation was torn apart by the Civil War… and two of Adams’ five great-grandsons ended up serving as Union officers.

(We’ll come back to the significance of that 80-year interval later.)

Perhaps a goodly amount of your editor’s “cynicism” is a simple function of when I was born and how old I am now.

I’m an early-wave Gen Xer — at this stage of life, too old to belong to the 25–54 demo, too young to qualify for early Social Security.

I had the good fortune to enjoy 17 years of “adulting” at a time when America was still kinda-sorta a free and prosperous country — a period bookended by Ronald Reagan’s “Morning in America” campaign of 1984 and the very different morning of Sept. 11, 2001.

I wish I had better appreciated at the time how good we collectively had it, given everything that was to follow.

Three Hammer Blows

The federal response to the 9/11 attacks was the first of three hammer blows to peace and freedom and prosperity in these United States.

The Patriot Act, the warrantless surveillance, the Iraq War — and the groupthink condemnation of anyone who objected to those steps as “terrorist sympathizers” — I haven’t forgotten.

It’s what ultimately drove me out of the news business after 20 years.

In September 2003 — two years after 9/11 and six months after the U.S. invasion of Iraq — a poll showed 69% of Americans still believed Iraq’s Saddam Hussein had a role in the 9/11 attacks.

If, like me, you took advantage of the internet to read the foreign press… or the skeptical reporting of the now-defunct Knight Ridder newspaper chain… or the scathing columns of the late Justin Raimondo at antiwar.com… you knew better, long before the U.S. tanks rolled in.

It was the instant I saw those poll numbers that I knew my chosen profession had failed spectacularly at its most solemn responsibility — as defined by Supreme Court Justice Hugo Black in the 1971 Pentagon Papers case.

“Only a free and unrestrained press can effectively expose deception in government,” he wrote. “And paramount among the responsibilities of a free press is the duty to prevent any part of the government from deceiving the people and sending them off to distant lands to die of foreign fevers and foreign shot and shell.”

The media was no longer “free and unrestrained.” It was domesticated and shackled.

Meanwhile, the government went on a mad spending spree after 9/11 — aided and abetted by Federal Reserve money printing.

The result was a bubble in the housing and credit markets that started to approach the bursting point in 2007 — just as I made my escape from broadcast news into financial publishing.

The second and third hammer blows were the bailouts after the 2008 financial crisis… and COVID lockdowns, restrictions and mandates in 2020–21.

I won’t dwell at length on these episodes today. I marked the 16th anniversary of the Lehman collapse and the bailouts that followed last fall. And I did a five-year retrospective on “COVID 9/11” earlier this spring.

Together, these three hammer blows have made a mockery of the saying “It’s a free country.”

Even Freedom House — a very mainstream nonprofit funded mostly by the U.S. State Department and other government grants — sees the declining trajectory.

In 2017, it rated America’s combination of political rights and civil liberties at 89 out of 100. By 2024, the rating had declined to 83 out of 100.

The Fourth Turning

To be sure, my “cynical” outlook is further colored by the conviction that we’re hurtling toward the climax of what’s called a Fourth Turning.

Today isn’t the day to go deep into Strauss-and-Howe generational theory. Suffice to say that every 80 years or so, Anglo-American societies are convulsed by crisis, a “Fourth Turning” — and it’s been that way going back to the War of the Roses in the 15th century.

“History warns that a Crisis will reshape the basic social and economic environment that you now take for granted,” demographers William Strauss and Neil Howe wrote in their seminal 1997 book, The Fourth Turning: An American Prophecy.

“The Fourth Turning necessitates the death and rebirth of the social order. It is the ultimate rite of passage for an entire people, requiring a luminal state of sheer chaos whose nature and duration no one can predict in advance.”

If you haven’t figured it out already, we’re in such a crisis era now.

The generations with adult memories of the crisis before this one — the Great Depression and World War II — are mostly gone. They’re not around to impart the wisdom that present-day movers and shakers need to avert a rerun of the crisis cycle. (And even if they were, present-day movers and shakers probably wouldn’t listen.)

And that’s how it always goes.

Strauss and Howe anticipated the onset of a new crisis era somewhere around 2005. Strauss died in 2007; as Howe sees it, the current Fourth Turning began with the 2008 financial crisis.

Fourth Turnings last an average of 20–25 years, but they’ve been known to drag on for as long as 32.

We’re not even 17 years into the current one. So we’ve still got a slog ahead — as Howe made clear in his 2023 follow-up tome The Fourth Turning Is Here.

➢ The authors were also far-seeing enough to anticipate that the internet — widely hailed in 1997 as a force for individual liberation and autonomy — might become a tool for collective surveillance and censorship.

Fourth Turnings do come to an end. But they never end with the government smaller, less powerful and less intrusive than it was before the onset of the crisis.

Strauss and Howe don’t state it exactly the way I just did. But going by their framework, the conclusion is inescapable.

For instance: Dwight Eisenhower became president a few years after the conclusion of the Great Depression-World War II crisis.

Upon taking office in 1953, he pledged his Republican Party would not undo the Democrats’ New Deal. Upon leaving office in 1961, Ike came to understand that the way Washington waged World War II gave rise to a “military-industrial complex” that operated beyond the control of elected leaders.

But, you ask, what about the American Revolution? That was a crisis era, right? And we freed ourselves from the yoke of British tyranny!

Tellingly, Strauss and Howe mark the conclusion of that crisis era not with victory at Yorktown in 1781 or ratification of the Constitution in 1788.

They mark it with the crushing of the tax revolt known as the Whiskey Rebellion in 1794.

Makes sense. That episode marked the defining victory of the Hamiltonians and a strong central government over the Jeffersonians and their vision of decentralism, devolution of power, subsidiarity.

The die was cast. Analogous to Ike in the 1950s, Thomas Jefferson did little to reverse the Federalist agenda during his presidency — his florid rhetoric about the “Revolution of 1800” notwithstanding.

Breaking the Cycle

“The natural progress of things is for liberty to yield, & government to gain ground,” Jefferson lamented to his fellow Virginian Edward Carrington during the ratification debates in 1788.

And yet…

And yet in recent years I’ve come to believe it’s possible that humanity is on the verge of ascending to a higher level of consciousness that would break the crisis cycle — and begin to fulfill Adams’ aspiration.

(Why I believe that to be so would require a foray into spirituality that’s much too far afield from this e-letter’s focus on markets and the economy.)

Until such a time arrives, my guiding principle when I put fingers to keyboard each day is the one laid down by the fellow who gave me my shot at this line of work.

Sauve qui peut. It’s a French expression that translates roughly to “Let he who can, save himself.”

See, one day late in my newsroom career, at a moment I was feeling despondent about finding something different to do, my wife pressed me to identify what I really wanted.

I blurted out the clumsy sentence, “I want to help people.”

I gave it a bit more thought and refined it: At the very least, I wanted to do something of greater service to my fellow humans than working in a newsroom.

And here I am. The great thing about the financial publishing industry is that our whole reason for being is to empower the people who’ve sought us out, guiding them to achieve a greater measure of financial independence.

The more financial independence we have, the more time and attention we can devote to the things that really matter — deepening our interpersonal relationships and our spiritual lives. To grow closer to each other and to God (however you might define that).

That’s the vision. That’s the hope. In a way, that’s the essence of Adams’ aspiration — for all of us.

It’s what keeps me going each day.

Nothing cynical about that.

Best regards,

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets

P.S. The big market stories today are Walmart and oil.

Walmart issued its quarterly numbers this morning – but the numbers were overshadowed by news that the company will raise prices on at least some items affected by tariffs. Speaking of WMT’s wholesale costs, CFO John David Rainey tells The Wall Street Journal, “The magnitude and speed at which these prices are coming to us is somewhat unprecedented in history,”

Ahead of the market open, WMT shares are down more than three-quarters of a percent. The major U.S. stock indexes are down about a third of a percent. Meanwhile, Treasury yields are pulling back after the 10-year note popped over 4.5% yesterday.

Crude tumbled hard after Donald Trump said, “We’re in very serious negotiations with Iran for long-term peace.” He offered no details, but nonetheless a barrel of West Texas Intermediate is down to $61.48.

Precious metals are licking their wounds from the price action earlier this week – gold a few bucks below $3,200 and silver a few cents above $32. Bitcoin hovers just below $103,000.

The one surprise among the day’s economic numbers is wholesale prices. Whatever Walmart’s experiencing doesn’t show up in the April producer price index, down 0.5% month-over-month. Year-over-year, the official wholesale inflation rate is 2.4%.

Thanks for indulging us with this unusual edition today. Back to regularly-scheduled programming tomorrow.