My year as a consulting futurist and speaker began on January 8, 2009 with a speech on future trends for Cobalt, a company that does websites and other computer services for the auto-dealer community, historically General Motors dealerships.  They obviously face some big challenges in 2009.

In that speech I said, for the first time, “This is not your father’s recession, but it could be your children’s renaissance.”  Since that time most observers have suggested that when we come out of this recession the world economy, national economies, and our personal economic outlooks, will be different.  As one friend, formerly a city manager, now CEO of a municipal development corporation put it, people hoping to get back to normal are going to be surprised the learn that the next normal does not look like the old normal.

So, here is my question.  If what emerges on the other side of this economic chasm is something new, what does it look like?  I hope SNS blog readers will weigh in on this via comments.

In the video interview below, I suggest some preliminary thoughts.  The interview was conducted by Brenda Cooper, futurist, science fiction writer, and technology executive.  Brenda happens to be a featured speaker at FiRe 2009 in the program slot on the final day, where we look “further ahead.”

We live in a time where exaggeration of all things is the norm, and thus it is easy to become caught up in the idea that “everything is going to change,” (a familiar phrase, no?) because of the economic meltdown.  We need to be cautious with our forecasts.  But a few things seem likely – a less debt-driven consumer culture which translates to slower growth in consumer spending, a financial culture focused more, for a while at least, on investing in innovation and productive capacity rather than merely manipulating digitized money in the global casino, a more cautious corporate culture when it comes to debt financing, ditto for the construction industry.  Most of all, a shift in societal values toward sustainability and back to thrift as admirable habits.  These value shifts may manifest most of all in the newest generation, the Millennials, if we believe what they say they want.    Admittedly, we will have to see if these value-shifts hold and become long lasting as the long climb out of the recession continues.

The video interview also explores what keeps me up at night:  the chance of a run-away negative feedback loop if Arctic methane melt gets out of control and we get a quick spike in global warming, and also the deep political divides in this nation that lead people to prefer to be right rather than happy.  The latter shows up especially when people express a hope that certain economic remedies fail, and fail spectacularly, so that a particular point of view can be proven right, never mind the consequences for communities.

And finally, in the interview with Brenda I discuss the concept of optimism, about which I am asked all the time.   To be optimistic is to believe, as I think Mark Anderson once said, that human beings have the capacity, when it matters, to choose the right problems and apply workable solutions to them.  This is not guaranteed, but always an option.

Let’s hear from some of you:  If the world on the other side of this recession is actually different from what came before, what are a few of its new features?

Here is the video interview of Glen Hiemstra on the future and what comes after this recession.

Former New York Senator and UN Ambassador, Daniel Patrick Moynihan famously said, “Everyone is entitled to his own opinion, but not his own facts.”

Increasingly, it seems, Republicans are trying to create not only their own facts but their own reality. This is particularly problematic when the mainstream media treats every issue as some kind of polarized “Crossfire” debate, with “balanced” treatment of “both sides.” Hence, we can end up with mainstream media “debates” over things like evolution, global warming and even torture.

A few years back Paul Krugman commented on the media desire for “balance” over objectivity. As an example he said that if Bush proclaimed the world was flat, the headline in the New York Times the next day would be “Shape of The World, Views Differ.” Indeed, that would be a “balanced” portrayal of the “debate” over the shape of the Earth. But objectively, the world is spherical. Stating that fact is not “bias” (except to the extent reality is a bias). Even if a large group of people – like the entire remaining rump of the Republican Party – disputed that fact, the New York Times would be doing its readers a disservice to give the impression that there was any credible, objective basis for the dissenting view.

At the Future in Review Conference in San Diego last year, Harvard professor James McCarthy, former co-chair of the Intergovernmental Panel on Climate Change, was asked how many of the world’s top 1000 climate experts would disagree with the basic scientific consensus that the increase in greenhouse gas concentrations over the last 50 years to levels not seen in 650,000 years is primarily anthropogenic. He replied, “Five.” (He also told an amusing anecdote about a colleague being asked the same question at a conference and answering, “Ten.” McCarthy went up to him later and asked how he got to ten. The guy replied that he could only think of five – the same five as McCarthy – but doubled the number to provide a margin of error.) That is about as solid a scientific consensus as you are ever likely to get for such a complex set of phenomena. Yet it is almost an article of faith in Republican circles these days that the threat from global warming is at best greatly exaggerated and at worst a “hoax.”

I’m not even going to waste time with evolution. If you think there is a legitimate debate over evolution, don’t even bother to read further.

And I’ve already commented at length on the “torture debate.” (Is it torture to shackle someone naked to the ceiling of a cold cell in an excruciatingly painful position so he can’t sleep for eleven days? “Views differ.”)

Another Republican myth that seems to have become entrenched in their alternative reality in recent months is actually the revival of a classic from … oh, fifty or sixty years ago: The New Deal was a failure. As is typical with these kinds of things, there is the weak form and the strong form. (Like the idea that tax cuts result in gushing tax revenue. The weak form of this Republican myth is that tax cuts merely pay for themselves – or maybe just almost pay for themselves. The strong form is that they will result in a big increase in tax revenue that will actually balance the budget.) The weak form of this one is that the New Deal didn’t do much of anything to help us recover from the Great Depression. The strong form is that the New Deal actually caused the Great Depression.

Then there is the crazy form. For this, I give you Michelle Bachmann (R-MN), the Sarah Palin of Congress. From a speech on the House floor last week (here is the video):

“[T]he recession that FDR had to deal with wasn’t as bad as the recession Coolidge had to deal with in the early ’20s. Yet, the prescription that Coolidge put on that, from history, is lower taxes, lower regulatory burden, and we saw the roaring ’20s where we saw markets and growth in the economy like we never seen before in the history of the country.

“FDR applied just the opposite formula — the Hoot-Smalley Act, which was a tremendous burden on tariff restrictions, and then, of course, trade barriers and the regulatory burden and tax barriers. That’s what we saw happen under FDR. That took a recession and blew it into a full-scale depression. The American people suffered for almost 10 years under that kind of thinking.”

Now there are just a few problems with this narrative. Primarily, there is the notion that FDR “took a recession and blew it into a full-scale depression.” During the Great Depression, unemployment reached its peak of 25% in 1933, the year FDR took office. Similarly, GDP bottomed out in 1933 at almost 33% below its peak in 1929 and began rising thereafter. (More on this below.)

It is probably also worth pointing out that the “Roaring ’20′s” (“where we saw markets and growth in the economy like we never seen before in the history of the country”) were what we call a “bubble,” with wild speculation in the financial markets that resulted in … the CRASH of 1929. Michelle actually stumbles upon a decent point here. The Republican laissez-faire economic policies of the ’20′s, resulting in an unsustainable speculative bubble, can probably be seen as a historical parallel to the de-regulatory policies that reach their peak under George W. Bush.

The crazy humor in this speech, however, is the bit about the “Hoot-Smalley Act” which she attributes to FDR. There is a nice little bit of Palinesque gibberish: “Hoot-Smalley” was a “tremendous burden on tariff restrictions.” Huh? Oh, and the act was actually the “Smoot-Hawley Tariff Act.” Which was named after its two Republican sponsors, Senator Reed Smoot (R-Utah) and Representative Willis C. Hawley (R-Oregon). And then there is the fact that the act was signed into law in 1930 by the Republican president, Herbert Hoover, almost three years before FDR took office.

The Republican rediscovery of the New Deal as an economic boogeyman has certainly been fueled by the constant references in recent months to our current financial crisis being “the worst since the Great Depression” as well as by President Obama’s energetic response, which is similar to the FDR’s economic activism. But the Bible of this revisionism is the book “The Forgotten Man” by Amity Shlaes, which takes the view that the New Deal was counterproductive and prolonged the Great Depression. Shlaes, a former member of the Wall Street Journal editorial board, is not an economist and the book, which is largely anecdotal, has few actual statistics in it. It has drawn fire from economist Paul Krugman, among others. But Republicans can’t get enough of it.

From Politico (“Why GOP is Devouring One Book“):

Shlaes’ 2007 take on the Great Depression questions the success of the New Deal and takes issue with the value of government intervention in a major economic crisis – red meat for a party hungry for empirical evidence that the Democrats’ spending plans won’t end the current recession.

“There aren’t many books that take a negative look at the New Deal,” explained Republican policy aide Mike Ference, whose boss, House Minority Whip Eric Cantor of Virginia, invited Shlaes to join a group of 20 or so other House Republicans for lunch earlier this year in his Capitol suite.

“Republicans are gobbling it up — and so are other lawmakers — because it tells you what they did, what worked and what didn’t.”

“It’s been suggested as required reading for all of us, I think,” said Erica Elliott, press secretary for Rep. Scott Garrett (R-N.J.) – who himself notes that his chief of staff “stole” his hardback copy, so he had to purchase a paperback.

Garrett said the book “is a good read” that details, among other things, “how FDR engaged in vitriolic demonizing of Wall Street and Big Business to advance his agenda.” …

Rep. Steve King (R-Iowa), who invited Shlaes to address the Conservative Opportunity Society earlier this year, uses words like “definitive” when referring to the tome, noting that Shlaes wrote it before the economic meltdown and that he read it “before we saw this even coming.”

“I think it’s conclusive when you read the book, although I don’t believe she said so, that the New Deal was actually a bad deal, and today we have a president who believes that the New Deal was a good deal, and would have been a far better deal if FDR would have spent a lot more money,” he said.

Shlaes builds her case largely around the fact that unemployment remained stubbornly high throughout the Depression, a fact she exaggerates by disregarding official unemployment statistics and coming up with her own that subtract all the government jobs created during the New Deal. Now it is true that unemployment was slow to decline from its peak during the Depression. But Shlaes goes further and argues, in effect, “The New Deal didn’t create many jobs if you don’t count the jobs it actually created.”

Unemployment actually fell pretty impressively during FDR’s first term, from 25% in 1933 to 14.3% in 1937. But in 1937, FDR reacted to concerns about the growing federal budget deficit by cutting spending too much, too soon, which plunged the country back into a “recession within the Depression” in 1937 and 1938, with unemployment rising back up to 19%. Federal spending actually declined by over 26% during those two years. Rather than taking from this experience the lesson that you shouldn’t slam the brakes on prematurely when the economy is still weak, Shlaes cites the state of the economy at the end of 1938 as evidence that the New Deal failed.

Shlaes uses the Dow Jones Industrial Average as her primary metric for gauging the state of the economy at any given time during the Depression – a rather dodgy metric. She pretty much avoids discussion of GDP altogether. And it’s obvious why. Because GDP grew impressively under FDR. Indeed, you can probably refute the New Deal revisionists with just this one graph:

[click to enlarge]

Between August 1929 and March 1933, GDP declined by almost 33%. It hit bottom just after FDR took office and exceeded the previous high three years later in 1936 (growing by over 14% that year).

So, according to this new Republican narrative, what was it that finally brought an end to the Great Depression? Because it did eventually end, right? Here the revisionist narrative merges (sort of) with mainstream economics. Both agree that it was World War II that finally ended the Great Depression once and for all. (Technically, the Depression ended in 1933, we just didn’t return to full employment until WWII.) I received an email a while back from a prominent Seattle investment advisor who slipped this little bit of partisan punditry into his commentary on the Obama stimulus: “[M]any economists are rethinking whether the massive federal spending [during the New Deal] helped bring an end to the depression, or whether WWII was the true catalyst for economic recovery.”

Think about that for a moment. How does World War II ending the Great Depression refute the notion that “massive government spending” doesn’t help stimulate economic recovery?

What happened during WWII? Federal spending and the deficit exploded. Federal spending increased to $97 billion in 1944, up almost fifteen times from $6.5 billion in 1940. But tax receipts only increased about fivefold, leaving a gargantuan deficit. The national debt increased six fold from $43 billion in 1940 to $260 billion at the end of the war. As a percentage of GDP, the national debt increased from 52% in 1940 to 121% in 1946 (see graph below), a level never reached before or since.

[click to enlarge]

Now, I know Republicans think we should always increase military spending, even if we are already spending more on our military than the rest of the world combined. (Just as we should always cut taxes, even if we are fighting two wars and running record budget deficits.) But is there something about spending to fight a war – blowing things up and killing people – that is inherently more stimulative (let alone productive) than, say, developing alternative energy sources, or building a national high-speed rail system, or bringing medical records into the 21st Century? From a spending standpoint, World War II was just the New Deal on steroids and seems to support the view that FDR’s spending programs were too modest during the Great Depression.

The post-War prosperity was built on the foundation of the GI Bill that sent a generation to college and encouraged home ownership. How is that support for neo-Hooverist policies? And why do we need a war to provide the kind of stimulus required to get us back on a path of robust economic growth? (We already have two wars going on, of course, but from a spending standpoint they can’t hold a candle to WWII.) Why not spending on building the national infrastructure required for us to exert global economic leadership well into the 21st Century? Is anything more important than a new energy infrastructure (that frees us from the Saudis, Hugo Chavez, Iran and Dick Cheney, and propels us into the lead in the technologies that are going to drive economic growth for decades), fixing our health care system (which, by almost any metric, costs vastly more and produces woefully worse results, than that of any other major developed country), and bringing our schools (uniformly) back up to global standards. Is military spending somehow a better use of funds? If this crisis – with vast portions of our economy idle or under-employed and the risk of a major global implosion – isn’t enough to prompt a major national effort to re-build, what will it take?

Alas, to have a conversation of this sort assumes everyone shares at least a certain factual baseline – some means of judging the quality of various propositions.

But, then, why unnecessarily constrain ourselves? After all, everyone is entitled to his own facts. Let the “debate” continue.

Mark Anderson predicts the year’s coming developments, from expanded home entertainment to voice recognition to new, lightweight netbooks

Read the article and watch the video.

Future in Review – Calit2 Field Trip hosted by Larry Smarr. Super high fidelity, Creativity with Sheldon Brown.

Italian Art Discovery using new super visualization techniques. Hosted by Marchant Davenport.

Transonic Combustion, Inc.  http://www.tscombustion.com/about.html

Transonic Combustion, Inc. is a research & development phase company focused on developing a suite of technologies which is projected to enable conventional automotive engines to run at ultra-high efficiency on gasoline and on bio-renewable flex fuels. The Company was founded by an inventor/entrepreneur with patents in fuel cells, batteries, electronics and computer/communications architecture. The startup management team has a track record of establishing strategic partnerships with automotive, computer and wireless communications companies. The Company is financially backed by some of America’s leading venture capital firms including Venrock, as lead investor.

R&D operations are located in Camarillo, CA at the Northwest edge of Los Angeles. The area still has a rural-suburban feel, but with easy access to all of LA’s resources. At 7 miles from the ocean, it maintains a temperate climate year-round.

What is the FiReStarters program?

We have selected 10 businesses – top startups or businesses with new startup technology – for world promotion, based on nominations by trusted strategic investment SNS Members, as part of this pioneering program at FiRe 2007. These are businesses which we, and those businesses who nominated them, believe will change our world in a positive way. FiReStater companies and other details are listed at http://www.futureinreview.com/firestarters.php

In keeping with the FiRe 2008 focus of “Rapid Response” to the climate crisis, EcoVerdance has been selected as this year’s pioneer FiRe Spotlight Company.

What Is EcoVerdance? http://www.ecoverdance.com

EcoVerdance: (noun) – an ideal state of harmony between the environment and humanity, achieved through atmospheric carbon balance and agricultural advancement. Founded in October 2007, EcoVerdance Inc. is at the center of an alliance of environmentally minded corporations and individuals committed to cleaning the Earth’s atmosphere and ending world hunger. EcoVerdance’s primary method of carbon-dioxide reduction involves the purchase and donation of Accele-Gro-M, a plant fertilizer growth enhancer created by Accelegrow Technologies Inc. (www.accelegrow.com) for application in developing countries, especially those that suffer drought conditions, with the help of nongovernmental / charitable organizations. In addition to cleaning the atmosphere and thus creating carbon credits, the increased crop yields provide nourishment and economic benefits for indigenous people. Initial concentration is on eastern and southern African countries.

More details are at:

http://www.futurinereview.com , http://www.globalsolar.com

http://www.tekkeon.com , http://www.led-z.com