Common Cents & Unsettling

Last week I was in the Nashville area on business and was fortunate to have dinner with a close childhood friend. He is conversant on a variety of topics, even if he isn’t always correct. Obviously, that is something we share in common.

Although it hadn’t been that long since we had last seen each other, we went through the whole litany. How is the family? Where are your (his) kids thinking about going to college? Any exciting trips planned? You know, the usual fluff, if you will. Then, we got a little deeper, as we are prone to do.

During this portion of the conversation, the word “unsettled” arose. I am not sure if I used it first or he did. Regardless, we both said we felt it to some degree. You know, that gnawing feeling something is amiss, but you can’t quite put your finger on it.

Then he summed it up nicely: “We all want to pretend everything is back to normal, but it really isn’t.” The only problem being it is almost impossible to define what normal means in this context. The low-hanging fruit would be how things were prior to the pandemic. However, were things really all that normal then? You decide.

To be sure, this feeling we have might be a product of getting older. Perhaps we are just a couple of grumpy old men. Could be, but I suspect not, at least not for a sizable portion of our population. The non-nihilists in our midst.

Nihilism in an economics newsletter? Really, Norris? Yeah, it is a bit pretentious, but bear with me.

According to masterclass.com, the following are some inherent tenets of nihilism.

  • Existence is useless. A nihilist believes there is no purpose to having values or beliefs because everything in existence is unfounded.
  • There is no truth. Everything is unfounded and useless, including the truth, so there are no reasons to uphold moral principles for your own sake or the sake of anyone else.
  • Everything is meaningless. Active nihilism says that since there is nothing and nothing we do matters, all things are therefore meaningless, including the meaning of life.

If that reminds you of John Lennon’s song “Imagine,” you and I think alike.

This is important, because, as Aaron Tippin once sang: “You’ve got to stand for something or you’ll fall for anything.” What’s more, if you stand for everything, you stand for nothing. If an entire society doesn’t stand for anything, some core belief system and/or other uniting factors, it is doomed to eventually fail.

That is a little unsettling, isn’t it. The concept of a society collapsing because it stands for nothing and everything at the same time. This is an inherent flaw with nihilism, because, ultimately, it leads to its own destruction.

But are Americans today really nihilists? I submit many of them are, as I strongly suspect many in our society would like to destroy its underlying value system and beliefs. In essence, they want to upset the proverbial apple cart in order to restructure it into something different. To be sure, this has happened plenty of times in history, when countries upend themselves in order to deliver some version of utopia. Unfortunately, the results have mostly been hellish.

How else can you describe the First White Terror during the French Revolution? The Red Terror during the Russian Revolution? The Great Proletarian Cultural Revolution in China? All of these happened when self-described idealists overturned the existing order in order to consolidate political power. We can debate whether this was actually nihilism. However, all of these started with an attack on the long-held values and beliefs of the general population. To me, that makes it nihilism enough.

Is that what is happening currently in the United States? Again, you can decide.

For years, I have maintained the problems with our country aren’t economic in nature and in aggregate. After all, the top 25% can grow 10% per year, and the economy will grow 2.5%. Of course, everyone else stagnates, but so what? The math is the math.

No, the problem is societal in nature. It’s what happens when a society quits believing in itself.

In 2020, YouGovAmerica conducted a survey. A Jamie Ballard wrote about the results in a posting on July 18 of that same year. I will cut to the chase: Only 54% of the 14,000 responders felt the “American Dream” was attainable for them. Another 37% replied it was either unattainable or no longer existed. The remainder wasn’t sure.

Perhaps not surprisingly, the Baby Boomer generation was the most optimistic and the Millennials were the least. Of that much-talked-about younger generation, only 46% thought the American Dream was attainable, and a depressing 42% said it was either unattainable or no longer existed.

The kneejerk reaction is: “Well, Norris, that was during the worst of the pandemic. No small wonder people weren’t feeling it. Come on, bruh.”

Fair enough. However, the same group conducted a very similar survey last year. This time a Linley Sanders reported on it on July 14. Get this: In response to the question, “Is there such a thing as the American Dream?” only 43% of U.S. adult citizens responded in the affirmative. Fully 35% said there is no such thing, and another 23% weren’t sure. If that is depressing, consider this: Only 29% of those under 30 believed in the American Dream. And while 31% didn’t know if it existed, an amazing 40% said it didn’t exist.

Apparently, people are still somewhat unsettled.

Admittedly, this is only one of the many groups conducting such a survey. There are others that are more sanguine. On the flipside, there are plenty that are less. Regardless, this should give us some pause. We somehow aren’t teaching or otherwise indoctrinating our citizens into the system. At least not to the degree we should.

Given the recent provocations by the Chinese, North Koreans, Russians, Iranians and other countries most Americans would consider adversaries, how do we answer the following: Will younger Americans be willing to fight for a country, and a system, in which they seemingly don’t believe? If history serves as a guide, and it often does, the answer isn’t terribly reassuring.

If I haven’t been a downer enough already today, consider the following verbiage from an article on the Military Officers Association of America website from December 14, 2022.

As military leaders testified at the end of September, only one in 11 eligible Americans aged 18 to 24 want to serve, and the pool of those who meet basic eligibility requirements is itself steadily shrinking. Multiple personnel experts described the convergence of all these realities as a “perfect storm” of bad news for the military.

At the close of the 2022 fiscal year, only the Marine Corps — the smallest Defense Department service except for the Space Force — met both active-duty and reserve recruiting goals. The Army, the largest of the services, was in the worst position: falling short by 15,000 active-duty troops, even after lowering its target by 9,000 troops.

And no one is expecting 2023 to bring better prospects for recruiting.

If you go through the remainder of the article, the group presents some potential ways to increase recruitment. However, if you read the article more than once, they won’t give you very much solace because they seem to miss the underlying problem.

Since I am going on very long today, let me stop here. In the end, this topic is unsettling to me, extremely so. Many of the headlines, if not most, are also unsettling to me. The nihilism and even anarchism I see or read about is something I never thought I would, given how well the United States used to indoctrinate its citizens. Again, and let me be very clear here, our problems are more societal than they are economic. However, they will become economic at some point if we don’t figure out how we ALL pull in the same direction.

That, well, is unsettling, isn’t it? Or, maybe we could just chalk all this up to my being an increasingly grumpy old man. For the third time, you decide.

Thank you for your continued support. As always, I hope this newsletter finds you and your family well. May your blessings outweigh your sorrows on this and every day. Also, please be sure to tune into our podcast, Trading Perspectives, which is available on every platform.

John Norris

Chief Economist & Cynic

Please note, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. My opinion, as those of our Investment Committee, is subject to change without notice. Finally, the opinions expressed herein are not necessarily those of the rest of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself.