August 22, 2012
Society, as if trapped in a speculative version of the movie “Ground-Hog Day,” gets swept up again and again in get-rich-quick fever. It happened in Britain in the 1720 South Sea Bubble, the 1800 canal mania and the 1820 Poyais swindle. The United States had its own canal mania in the 1830s, a huge stock-market mania in the 1920s, and then another in the 1990s, capped off by the TV-hit, “Who Wants To Be A Millionaire?” The global, all-asset mania of the past three decades has dwarfed those bubbles to produce a historical first: “consumer societies.”
“A culture of short-term speculation has run rampant,” writes John Bogle of Vanguard this weekend, “superseding the culture of long-term investment that was dominant earlier in the post-World War II era.” Clearly, get-rich-quick schemes and thinking are the norm at some times, and austerity and frugality the norm at others. More importantly, there’s evidence (click here) to suggest those times can be predicted.