"The Age of the Unthinkable" - Why Life May Not Return to Normal

Each time a cycle swings, it strikes a number of people as a permanently cataclysmic cliff (on the down swings) or a permanently exuberant plateau (on the ups). Every bubble feels, to investors, like a new paradigm, though bubbles are the flimsiest of things. The sweeping Republican victory of 2000, to elders of that party, augured decades of dominance, though it was built on mere (Oval Office) blow jobs. It's human nature to expect highs to stay high and lows to stay low, though the pendulum always swings back. In fact, its this very outlook - the inextinguishable expectation of perpetual inertia - that drives the various pendulums in the first place.

I didn't read Joshua Cooper Ramo's book "The Age of the Unthinkable", but this interview shows all the hallmarks of that sort of fallacious thinking. The troubled state of the world has obviously served as a Rorschach test for Ramo's own issues with how things have been. And while I share some of his emotional impressions, I find his arguments just that: emotional. And fuzzy.

In busts, we inevitably hear the word "unsustainable" used a lot, as a peevish "told you so!" from prim (or envious) sideline observers who'd been watching with stern disapprobation through the preceding boom. And they are, of course, right. Booms are always excessive; that's what makes booms boom. But comeuppances are equally finite. Nothing's sustainable in the long run, so the boomsters hope of keeping the party going and the stern primsters hope of keeping a tidy, austere house are both destined to be dashed by the next tidal shift.

Underlying Ramo's proposition is an indisputable truth: change lies ahead. It's hard to go wrong with such a prediction, of course, but change comes neither via cliffs nor plateaus. It's a cycle. The downs go back up and the ups go back down, though the cards always shuffle a bit. At the other end of this economic crisis will be Something Different. But things will be better eventually. And then worse again. The perpetual cycle of reversal is the one single thing that never changes.