Thoughts on Coming Apart and the Coming Great Reset
Turning and turning in the widening gyre
The falcon cannot hear the falconer
Kit Webster
Themes and Theses
Why I'm Contemplating Out Loud
(Initially formulated in the early 90s, following decades of reading history, philosophy, religion, psychology and a lot of contemplation, particularly on the subject of cycles. In the end, this is a relatively straightforward story about human nature and of history rhyming.)
The US will enter a period of crisis in the early 2000s. In the late 90s, I incorporated Strauss' and Howe's terminology of the Fourth Turning (without incorporating their generations paradigm) and agreed with Howe that the end stage of the crisis began with the Great Financial Crisis and would last into the early 2030s. We are now at the beginning of the end stage of the crisis.
The crisis will be serious and could be existential.
Internal strife will increase, up to and including secession and civil war.
International conflicts will increase as the vacuum created by the weakening of the US is filled by other players.
There will be many threads to the crisis, but the primary thread will be debt, deficits and entitlements. Other factors include, eg, demographics, a loss of meaning and myth and a loss of self-discipline.
Politics will move leftward as citizens look for some refuge from the chaos. The US will become increasingly susceptible to a (man) on a white horse, who can come from either the left or the right.
Inflation, as the most likely way to address debt since austerity is not politically acceptable, will significantly lower standards of living, exacerbating the civil crises.
Eventually, the dollar will be inflated away and lose its reserve status.
Once the old rot is cleared out, and assuming continuity, there will be the basis for the establishment of a new order.
There will be what Strauss and Howe calls a First Turning . It will be constructed out of the physical infrastructure, wealth, energy sources, thoughts and values in the culture at the time. At this point in time, those components are unknowable. We can anticipate that the next future will be increasingly chaotic. We can anticipate that there will be destruction, and then reconstruction from some level. We cannot yet anticipate the form of the reconstruction or the level from which it will begin.
(Added in the early 00s) While humans are contributing to global warming, policies implemented to address manmade global warming will create a significant energy crisis, probably toward the end of the Fourth Turning.
(Added around 2020) The loss of faith by our youth in our founding principles means that the new order will at least partially be based on new principles. As yet, I have no visibility as to what those principles might be.
(Added in 2023) The lowering / elimination of standards in education, the judiciary, law enforcement, the military and other segments of our society will create a population unable to adequately comprehend, do or respond to the challenges of democracy and culture.
(Added in 2025) China has won - at least for the next 5-10 years. The US is dependent on China for the materials it uses to create defense items. We literally cannot fight China without China's help. China's industrial base is impressive; the US has to rebuild. China is out-innovating the US. China is turning out more engineers and scientists than the US by far. This does not mean that China does not face challenges - demographics perhaps being its primary challenge. The US military remains stronger than China's, but in an age of drone warfare, that statement means less than it has historically. The US still has bargaining chips and will need to use them to maintain any kind of status quo.
(Added in 2025) AI has the potential to profoundly affect human culture. However, AI faces several significant hurdles, including the demand for massive amounts of electricity, which may not be available, and a cultural revolt against its existence. Since it could be existential, and since China is pursuing it, the US has no alternative, at least in the short term.
(Added in 2026) Maneuvering for control of critical materials will be a primary driver of geopolitics for at least the next decade.
Beware the Lame Duck /
AI and the Debt-Based Economy
November 6, 2026
Quotes to Contemplate
If AI works as designed, we are likely to get a consumer credit crisis; if AI fails, we are likely to get a recession and debt crisis. - Luke Gromen
Summary of Primary Thoughts To Contemplate In This Issue
Trump as a lame duck is particularly dangerous.
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It is existentially important that we implement AI.
Either the success or failure of AI will significantly impair our economy.
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The hysteria over data centers is unfortunate. Data centers are required for progress, much less AI.
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Although there will be much wailing and gnashing of teeth, it will be difficult for Democrats to actually accomplish anything.
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I have long pointed toward the 2028 election as the election that breaks America. I see nothing, yet, to change my mind.
Beware the Lame Duck
(Overstating to make a point.) Trump has time on his hands, nobody on his side and little to do. Since the devil makes work for idle hands, Trump will be taking off in multiple directions. From renaming everything in sight, to building stuff to bombing stuff.
Will we get to the point that the armed forces will not follow his orders, particularly on critical issues, say, like, nuking Picaxe Mountain?
So, You Say You Want A Revolution?
> Shots fired - Microsoft recently announced a massive Voluntary Exit Offer allowing up to 60,000 employees—roughly 25% of its global workforce—to leave the company with financial support and career resources as it shifts resources toward artificial intelligence infrastructure.
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> Peter Zeihan on the world, particularly Europe, going nuclear here.
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> California Gov. Gavin Newsom commutes the death sentences of all 548 inmates on the state's death row to life in prison without parole.
The Market
I think the stock market retracement will continue; gold may have bottomed; and the dollar may have topped.
The Iran War and the Ukraine War
> Claude on Iran -
The strike window passed; the squeeze and the talks both continue. The November 4 strike window cited in pre-election reporting expired without a confirmed attack. Trump met his national security team on whether to resume, threatens to “finish the job” if Iran rejects a nuclear deal, and CENTCOM remains postured — but the tells point the other way: the third carrier group heading to the region is making a Singapore port call that delays its arrival, and AP’s exclusive that the administration held talks with Iran on deporting Iranians mid-war reveals a wider quiet channel than anyone knew. The economic war grinds on (new sanctions on India- and Turkey-based networks under Operation Economic Outcast), as does the tanker war — three vessels afire in Hormuz Wednesday, another mined Thursday, a UK tanker attacked near Qatar. Iran’s stated conditions remain: end the blockade, sanctions relief, frozen funds released. The week’s most strategically interesting move: Rezaei met Putin and GRU chief Kostyukov in Moscow Wednesday specifically about US-Iran negotiations — Tehran aligning its patron before any deal — while Iraqi reporting suggests Iran told Kataib Hezbollah to stand down in favor of directly-IRGC-run cells. Araghchi spent the week phoning Gulf foreign ministers, including the Saudis. And oil cast its vote on what the election means: Brent fell below $100 for the first time since early October, to ~$93.63, specifically on the Democratic win — the market pricing a Congress that defunds the war as more decisive than a president who threatens to finish it.
Israel: deadlock. The October 27 election produced no winner — Netanyahu’s bloc at 53 seats, Eisenkot’s at 48, with the Arab parties nearly doubling to ~17–19 seats and holding the balance. The anti-Netanyahu bloc totals 66 with them, but Eisenkot has so far refused that partnership (an ex-diplomat called the refusal “reckless”), Netanyahu reassured Ben Gvir and Smotrich he won’t abandon them, and the arithmetic points to weeks of coalition talks or new elections with Netanyahu as caretaker throughout — the shekel and Israeli assets fell on the stalemate. For the war: an Israeli government without a mandate complicates any joint “finish the job” operation and any signed peace alike.
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> Claude on Ukraine -
A six-day ceasefire, a First Lady summit — and 78 strikes on the grid. The genuinely novel development: Melania Trump hosted Russia’s Kirill Dmitriev and Ukraine’s David Arakhamia at the White House Thursday — billed as the first time a First Lady has brought two warring nations’ representatives there — marking the expiry of a six-day localized ceasefire that evacuated civilians from occupied Oleshky, with personal letters to Putin and Zelenskyy urging something “enduring.” The caveat arrived within a day: Ukrainian sources say Russia used the Oleshky pause to redeploy troops within Kherson region. The wider war intensified around the gesture — Russia logged 78 strikes on Ukraine’s energy infrastructure in three days, hit Ukraine’s largest private postal hub, a substation, and a cargo ship; Ukraine re-intensified its refinery campaign after a late-October pause (Ryazan burning again, with sporadic fuel shortages reported inside Russia). Diplomacy is multiplying without converging: Erdogan is seeking a Putin call toward a possible meeting in Ukraine, Czech President Pavel is floated as Europe’s negotiator, Spain committed €430M and Italy preps a new package, Zelenskyy wants Taurus missiles and doubts Musk “acted alone” on the Starshield throttling — pointedly implicating the US government. Estonia’s PM captured Europe’s anxiety: don’t appease. The structural read: Melania’s channel and Witkoff’s are real but cosmetic beside the math both sides are running — whether Russia’s grid campaign breaks Ukraine before Ukraine’s refinery campaign (Rosneft’s “unsustainable” admission still standing) breaks Russia’s fuel economy.
AI and the Debt-Based Economy
Debt everywhere.
Federal government
State governments
Corporations
Consumers
We have come a complete cycle - from debt as poison to be avoided at all cost after the Great Depression, to debt being mostly irrelevant as the controlling number became the monthly payment.
With the advent of buy-now-pay-later plans, we are reaching the logical conclusion of that trend.
There is a great deal to discuss around this subject, particularly as I define debt, deficits and entitlements as by far the greatest threat to the economy and I also state that we have gone past the point of no return.
But this piece is about a different subject I have touched on before - the success of AI is fundamentally and existentially at odds with a debt-based economy.
The concept is simple. The economy is based on those monthly payments; jobs are required to make monthly payments; if AI is successful, the debt will remain but the source of payments will go away.
Severe damage to the banking system and any holders of debt.
So, assume AI does not succeed, then we will have a severe deflationary stock as all the debt incurred to build data centers and purchase GPUs becomes worthless.
Severe damage to the banking system and any holders of debt.
The only way this works out successfully is if AI improves productivity while jobs are maintained.
The Elections
I woke up Wednesday morning learning that a Democrat was going to be the next Texas governor. It turns out that all those people who turned out to vote against Paxton voted for Hinojosa along the way.
I know nothing about her - was not paying attention. I thought Abbott was safe. I need to get up to speed.
But, disgust with Trump is widespread and total disgust with Paxton is widespread and here we are.
Republicans have been good for Texas.
Texas has been an extraordinary success story.
Californians to the right of Newsome and to the left of Abbott made a big difference.
We are in danger of maiming, if not killing, the golden goose.
But, I want to reemphasize something I wrote about several weeks ago - having one party in power for an extended period of time creates bad outcomes, including a lot of corruption. Illinois is the poster child, with California in second.
Texas is not in that league, but when Paxton was not impeached, it was clear that corruption in Texas had become pervasive. Doing things like requiring the Ten Commandments in every classroom indicated that Texas had lost whatever balance it had.
The golden goose that is Texas, if not dead, is mortally wounded and the primary culprits are the Texas Republican party and Trump.​
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I wrote several weeks ago about what I thought national governance would look like after a Democrat win - lots of probes and anti-Trump grandstanding; lots of attempts to undo Trump things and to do Democrat things, like DEI and immigration and taxation. Global warming might even make a comeback. And genders.
However, since the Congress will not have a veto-proof majority, not much will actually get done. One exception is spending bills. If Democrats can tack on provisions they want that would not otherwise pass and would be veto proof, the spending bill will do wonders.
Trump governed without Congress for his first two years and he will likely continue to govern by executive order in the last two years.
There may be some interesting jousting over limiting Trump's ability to fight the Iran war.
Democrats in general are not AI friendly. Not sure how that plays out.
One clear danger is that Trump doubles down on his renaming and arches and municipal takeovers. Basically peeing on all the bushes.
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That disturbance in the force you felt, however, was a national move leftward in rejection of Trump, setting the stage for what I see as an intergalactic battle in 2028. Part of that battle will be for the soul of the Democrat party.
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Again, as we have discussed several times, both parties as we have known them historically are now gone. Something new will emerge over time through Democrats' internal divisions and Republicans being a cult of personality and that personality will soon leave the stage.
Quite the vacuum.
My bottom line is that this is a rejection of Trump - he is pretty much on his own now.
The Democrats may have ironically hurt their chances for 2028 because on a federal level they really won't be able to do much - people will become frustrated with their inability to deliver on their promises.
On the state level, we will begin an experiment in how people react to real progressivism and real socialism as opposed to vague words wrapped in anti-Trump rhetoric.
The challenge is that in winning an "historic" blue wave victory, people expect results.
Reality is much messier.
On the Republican side, someone has to step up. Vance, who is an opportunistic weasel, has begun distancing himself from Trump. The way forward for Republicans is not a continuation of Trumpism, but a new direction.
Far from clear how they pull that off, or even what a new direction actually means.
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Most importantly, you don't get the $5,000 check Trump promised if the GOP prevailed.
Data Centers
I wrote recently about how the data centers thing went from a reasonable concern to hysteria almost over night. I want to leave you with this - today, progress depends on data centers, period. Also, if you believe that AI is existential in our competition with China as I do, then we must have data centers.
Opposing data centers is like opposing paved roads in the 1900s because of the noise, pollution and the effect on horse-centered jobs.
You gotta do what you gotta do.
And now, a majority of Americans believe we shouldn't do it because of political opportunism.
Reminds me of the nuclear power hysteria of yore.
Short Takes
> ObamaCare premiums will rise by 13% next year.
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> Scottish Member of Parliament Irshad Ahmed complains about pubs having alcohol and not being suitable for ‘Religious Minorities.’ “Pubs are not spaces designed for families, young teenagers or religious minorities like mine. We need these shared spaces too!”
Gallery
Nothing this week.
Miscellaneous
The memes!
