Welcome to “Apocaholics Anonymous” –
Join Me in a Crusade for Panic-Free Living
Updated for the Atlanta Investment Conference
20th Anniversary Reunion, 8:45 am, April 20, 2007
By Gary Alexander, Recovering Apocaholic
Hi, I’m Gary and I’m a recovering Apocaholic. I am currently Apocalypse free for nearly 18 years. I left the church of the Religious Apocalypse in 1976, over 30 years ago, and I resigned from the secular church of the Financial Apocalypse in 1989. Yes, I still feel the urge to proclaim the end of all things, from time to time, but I white-knuckle my way to a history book for a little perspective, and then I breathe easier. If you wish to join AA, the only requirement is that you give up the adrenaline rush of media-fed fantasies.
Since I spoke to you last on this subject, in 1994, we have survived “Bankruptcy 1995” (the original epidemic of Hockey Stock charts), the Big Bang in Hong Kong, years of Y2K scare stories, a SARS epidemic, Mad Cow disease, Bird Flu, a real threat on 9/11, Triple Deficits (Budget, Trade and Balance of Payments), wars in Serbia/Kosovo, Iraq and Afghanistan, Deflation in 2003, Inflation since then, The Perfect Storms of 2005 (Katrina, Rita and Wilma, the 3 Witches of the Bermuda Triangle), and today’s reigning fears of Global Warming, $200 Oil and the Sub-prime Housing Loan Crisis Implosion.
But before we go from today’s Sub-prime to the ridiculous claims of imminent collapse, let me introduce the depths of my past addiction to the Apocalypse. I was born in July 1945, the day the first atomic bomb exploded in Alamogordo, New Mexico. That mushroom crowd has haunted our lives ever since. As a teenager, I became convinced the world would end before I was 30. Too soon old…too late smart, I was very, very wrong:
50 Years Ago (1957) – The “Duck and Cover” Generation
My apocalyptic addiction began 50 years ago, in the Year of Sputnik, when all of us Seattle-area 7th graders – mostly the offspring of Boeing engineers – were told that we must now learn more science and math, to close the missile gap with the Soviet Union.
Back in 1957, the U.S. was the proud owner of 100,000 kilograms of U-235, in what was termed “45 times overkill” of the Soviets. But the Soviets had more missiles than we did. In that same year, 1957, the first underground nuclear explosion was set off near Las Vegas. In junior high, I soon became addicted to dystopian novels, like On the Beach, by Nevil Shute, a Briton who had moved to Australia, in order to be among the last on earth to be fried by the inevitable radiation cloud following nuclear Armageddon. The novel was adapted for the screen in 1959, directed by Stanley Kramer, and starring Gregory Peck as captain Dwight Lionel Towers of the USS Sawfish. The story was set in the near future, 1963 in the book (1964 in the movie), in the months following World War III. Nuclear fallout killed ALL life, with hot air currents killing off Australia last,
The characters made their best effort to enjoy what remained of their life before dying from radiation poisoning. The film was shot in Melbourne, with a chilling ending of wind-swept but empty city streets there. That image has haunted me, to this day. I am convinced that this hopelessness sewed the seeds for the senseless rush to immediate gratification in the 1960s. With a world about to die, hedonism soon reigned supreme.
In high school, I read Aldous Huxley’s “Brave New World” and the scathing exposes and novels of Philip Wylie (1902-1971), son of a Presbyterian minister father and a novelist mother (who died when he was five). Wylie wrote apocalyptic nuclear war novels like “Tomorrow” (1954), about the atomic bombing of two fictional Midwest cities adjacent to each other in the mid-1950s. One had an effective civil defense program, and the other did not. Later, I read his novel, “Triumph” (1963), another graphic description of the effects of nuclear war story involving a worst-case USA/USSR “spasm war,” in which both sides emptied their arsenals into each other with extensive use of “dirty” bombs to maximize casualties, resulting in the main characters (in a very deep bomb shelter) being the sole survivors in the northern hemisphere, the new Adam and Eve of a new creation.
In the financial realm, I was also becoming convinced that America’s economy was doomed, especially after reading John Kenneth Galbraith’s “The Affluent Society” (1958), which said the rich get richer and the poor get poorer, while advertising creates artificial demand in the West. The same theme was echoed in Vance Packard’s “The Hidden Persuaders” (1957). He followed up with “The Status Seekers” (1959) and “The Waste Makers” (1960). Also popular was a book we young cynics all read, “The Ugly American” (1958), by William Lederer and Eugene Burdick. America was supposedly incredibly shallow and bigoted in the 1950s, soon to be rescued by the Liberated 1960s.
P.S. The world is still a dangerous and violent place, but the most chilling example of violent death now is in Africa, with machetes. We’ve now gone over 61 years without using nuclear bombs against humans – thank God. Back in the late 1960s, Herman Kahn wrote “On Thermonuclear War” and “Thinking the Unthinkable,” in which he demonstrated that we can survive a nuclear holocaust, but that didn’t seem likely in 1962:
45 Years Ago (1962): The Cuban Missile Crisis and “Silent Spring”
The closest we came to a nuclear exchange was in October, 1962, during the Cuban Missile Crisis, in my high school senior year. That was one of the events that caused me to throw away a National Merit Scholarship and decide to attend a small church college that seemed to made sense of these global threats. Another impetus was the collapse of the global ecology, as demonstrated in another best-selling book that I read in 1962:
Rachel Carson (1907-1964) published “Silent Spring” in 1962, based on a compilation of articles she had written for The New Yorker. Her book is credited with launching the environmental movement that culminated in Earth Day (1970), including a worldwide ban on the main villain in her book, DDT. Silent Spring was a Book of the Month Club main selection, spending several weeks on the New York Times best seller list. It was actively endorsed by one of my heroes at the time, a Washington State native, Supreme Court Justice William O. Douglas, as well as many other nature advocates in my school.
As a result of that book and further research, I wrote an extended scientific article for a national magazine in 1970, linking the chemicals in DDT to many of the pest sprays commonly used in homes. I wrote other articles supporting the ban in DDT, which I am ashamed to say, has caused the deaths of millions of Asians and Africans since then. Many insect-borne diseases were on the verge of extinction in 1970, when the U.S. tied foreign aid to poor nations to their “voluntary” banning of DDT, to our great shame.
Armageddon outa here!
In 1963, I threw away my future to apply to Ambassador College and join the Worldwide Church of God, in effect saying “Armageddon Outa Here.” The book that motivated me the most was Herbert Armstrong’s “1975 in Prophecy,” in which he showed from several perspectives that the world couldn’t make it past 1975. After four years of their college indoctrination, I became a leading writer, editor and researcher for a decade (1966-76) for their publications, turning secular trends into Apocalyptic rhetoric in magazines and in the electronic radio media, writing radio and TV scripts for the voice of “The World Tomorrow,” the late Garner Ted Armstrong. I didn’t have long to wait for ammunition:
40 Years Ago: “The Population Bomb!” and “Famine 1975”
Upon graduation from college, my job of predicting the End of the World by 1975 was made incredibly easier by a wave of new books proclaiming the inevitable end, based on the centuries-old (and easily discredited) theories of Thomas Robert Malthus, who wrote in 1798 that population grew geometrically, but food production could only grow in small (arithmetic) increments. In 1967, the brothers William and Paul Paddock wrote a book called “Famine 1975,” in which they said it was impossible for food production to keep up with population growth. The title of their first chapter said, “The Population-Food Collision Is Inevitable; It Is Foredoomed.” The Paddocks believed that the Malthusian formula was on a collision course and all we could do was starve a little less than others.
Then came Paul Ehrlich’s “The Population Bomb” (1968), in which he opened famously by saying, “The battle to feed humanity is over. In the 1970s and 1980s, hundreds of millions of people will starve to death, in spite of any crash programs embarked upon now.” Writing in Ramparts magazine, he went even further, “Hundreds of millions of people will soon perish in smog disasters in New York and Los Angeles…the oceans will die of DDT poisoning by 1979…the U.S. life expectancy will drop to 42 years by 1980, due to cancer epidemics.” Hepatitis and dysentery would sweep America by 1980 and nearly all of us would wear gas masks. Over 65 million Americans would starve in the 1980s, leaving only 22.6 million starved Americans alive in 1990. In 1990, he incredibly justified his claims as being right – a trait common to Doomsday prophets. *
* “The individual will frequently emerge not only unshaken but even more convinced of the truth of his beliefs than ever before. Indeed, he may even show a new fervor about convincing and converting other people to his view.” – Leon Festinger, “When Prophecies Fail.”
In the meantime, Dr. Normal Borlaug was launching the Green Revolution, which has managed to feed billions more people on moderately more arable soil than in the 1960s. Instead of starving against our will, millions of us are trying to starve voluntarily – by dieting. Food is far cheaper, relative to the overall growth of the cost of living, than in the 1960s. From 1977 to 1994, food costs fell 77% in real terms. Grain is in surplus, despite 46 million idle arable acres of U.S. farmland, and 11 million idle acres in Europe.
In the first 15 years after “Earth Day,” we made great progress against pollution. The amount of particulates spewed into the air fell by 64%, carbon monoxide emissions fell 38%, ocean dumping of industrial wastes was cut by 94%, and the number of rivers unfit for swimming dropped 44%. By 1990, cars emitted 78% fewer pollutants. Yet Lester Brown’s annual “State of the Earth” keeps saying the opposite, that pollution is growing.
And for anyone who still believes in Dr. Malthus, I have one word to share with you: Chickens! Are they food, or are they population? Do they grow arithmetically, or geometrically? On the Delmarva Peninsula alone, 90 million cluckers live their nasty, brutish, crowded and short lives on the way the chopping block and your local KFC.
The famine/population fear is older than Malthus. Confucius thought the earth was full, 2500 years ago. Romans thought they had “worn out the earth.” St. Jerome said “the world is already full, and the population too large for the soil.” Tertullian wailed about “teeming populations of Carthage” with “numbers burdensome to the world.” He saw death from famine, war and disease as “the means of pruning the luxuriance of the human race.” In truth, Rome was rich when it was crowded, and a wasteland when it was empty.
35 Years Ago – The Club of Rome and “The Limits to Growth”
In the early 1970s, Garner Ted Armstrong pulled me aside and gave me a challenging new project, which might take years to finish. He said that all the globe’s trends are getting worse, and that if we could only “feed all these trends into a computer,” we could predict the precise time of the end. Maybe it’s 1975, as we all still thought at the time, or maybe it’s a little later than that. After all, we can count the hairs we lose each day and predict when we will go bald. So we could do the same with all other trends – depleting resources, increased crime, nuclear overkill, chemical and environmental pollutants, etc.
Ambassador College had a new IBM 370 computer and a huge programming team at my disposal, so I set out on this impossible project full of hope. Two years later, I gave up, but a bunch of secular statisticians in Cambridge, Massachusetts did not give up. They fed all the same kind of data into Harvard’s massive mainframe and came out with their magnum opus, “Limits to Growth,” modeling the future consequences of growing world population and finite resources. The study was commissioned by the world’s aristocracy, gathered into a group they called the Club of Rome. Limits to Growth was written by Dennis and Donella Meadows, among many others. The book used computer simulation to project a rolling Doomsday. (All this made me feel like less of a religious nut….)
In short, the report’s authors projected that, at the exponential growth rates they expected to continue, all the known world supplies of zinc, gold, tin, copper, oil, and natural gas would be completely exhausted in 1992. They set specific dates for each commodity. President Carter later bought into this idea and published his gloomy Global 2000 report.
Then, along came Dr. Julian Simon, who bet Dr. Paul Ehrlich $1,000 that the price of commodities would FALL, not rise, implying an expansion of resources, rather than a contraction of supplies during the decade in which they were all to disappear – the 1980s.
By 1985, instead of running out of oil, an oil glut pushed the price down from $40 to $10 a barrel. Shortages beget higher prices and more exploration, not depletion of resources. In the extreme cases, shortages create new technologies. A wood shortage in England in the early 17th Century led to the use of coal and the birth of the industrial revolution. A shortage of whales led to the use and discovery of petroleum, and electrical lighting. The stench of horse manure in urban streets led to the invention of the horseless carriage.
30 Years Ago – Global Cooling and “The Next Ice Age”
My final TV script for Garner Ted Armstrong came in 1975, when I was about to leave the cocoon of the Church of the Apocalypse for a more mundane job at the University of Southern California. He wanted a program on Global Cooling, or the Coming Ice Age. In 1975, there were several covers in major news magazines about the Coming Ice Age.
One example was Newsweek, for the week of April 28, 1975. It said that leading climate scientists were “almost unanimous” (sound familiar?) in their predictions of global cooling. Time Magazine had “The Coming Ice Age” on its cover, and the November 1976 issue of National Geographic had a lead article on the problem of global cooling.
Later on, physicists combined the threat of natural cooling with nuclear war to predict a “Nuclear Winter.” Our future was clearly frigid. The trend from 1935 through 1975 was a gradual cooling of temperatures, since the Dust Bowl of the 1930s. (Most record-high state temperatures, to this day, were set in the 1930s, not in the 1990s, Mr. Gore.)
One day in the control studio, Garner Ted Armstrong showed me a news clipping that pointed to the potential threat of carbon-dioxide emissions contributing to future global warming – a threat that currently assaults us in the daily media. He looked me in the eye, as his trusted researcher, and asked point blank, “Which is it – warming or cooling?”
“With any luck, sir,” I quipped, “We’ll get both, and then they will offset each other.”
He was not amused. But I was on my way out and no longer cared what he thought. I was happy that a peaceful new job awaited me at a less Apocalyptic California college. But that did not stop me from reading a series of best-sellers and coming back to the Doomsday business three years later. In the 1970s alone, all of this was “Coming…”
* The Coming Dollar Devaluation (1970) by Harry Browne
* The Coming Dark Age (1971) by Roberto Vacca
* The Coming Credit Collapse (1974), by Alexander Paris
* The Coming Bad Years (1978), but Howard Ruff
* The Coming Real Estate Crash (1979) by English and Cardiff
The 1970s were also book-ended by two big #1 best-sellers telling the same story from the religious and secular angle: “The Late Great Planet Earth” by Hal Lindsey (1970) and “Crisis Investing” by Doug Casey (1979). They were the biggest best-sellers each year.
25 Years Ago (1982): The Coming Kondratieff Collapse!
I didn’t stay out of the Doomsday press for long. By 1979, I was back in the business, in Virginia, writing free-lance special reports for a leading direct mail marketer on a more secular version of The End of the World. As “Mr. X,” I wrote a series of reports on survival havens, banking secrecy, the collapse of the stock market and the fiat currency system. I was consulting editor to Survival Tomorrow, Tax Angles and Personal Finance (formerly the Inflation Survival Letter) at KCI. In 1982, my first special report for Jim Blanchard was on the coming Third World Loan Crisis, leading to the demise of major New York City money center banks, including the much maligned Citibank.
In brief, I said, trying to re-arrange loans to Third World nations was “like re-arranging deck chairs on the Titanic.” At the time, most Latin American nations were following the Juan Peron model, as military dictatorships, starting in Peru (from 1948 to 1980), then Venezuela (1952), Colombia (1953), Bolivia (1964), Brazil (1964), Uruguay (1972) and Chile, under Gen. Auguste Pinochet (1973 to 1988). The giant of the region, Brazil, was ruled by a succession of four-star generals from 1964 to 1985, as their economy reeled from one crisis to another. Central America was in the same condition. El Salvador was under the military’s thumb for over 60 years, from 1931 to 1992. Then came military juntas in Guatemala (1954 to 1986), Honduras (1963-82), Nicaragua’s Sandinistas (1979-90) and Panama under General Noreiga (1968-89), so the situation indeed looked bleak.
Latin America dominated the news in 1982, when I was writing that Third World debt threatened to bring down the region, and perhaps cause many major North American money center banks to fail. The major New York money banks and the U.S. Treasury of the late 1970s had loaned too much money to the “ABC” nations (Argentina, Brazil and Chile), who were each in default on those loans, after crippling back-to-back recessions.
Like others, I said it was futile to re-arrange those loans. But behind the scenes, several New York bankers and Reagan-era Treasury officials quietly negotiated with the Latin American debtors, offering to reschedule their debts at lower interest rates, in exchange for some political concessions – such as free elections – which resulted in the gradual forced retirement of several military dictators. Throughout the mid-1980s, military juntas were replaced by democracies, the last one by a dramatic invasion of Panama in 1989.
As a result of increased economic freedom south of the border, between 1987 and 1994, external debt as a percent of GDP declined by fully half in most Latin American nations: In Chile, external debt fell from 109% of GDP in 1987 to 42% by 1994. Argentina’s debt fell from 58% of GDP to 31%. The biggest basket case of the early 1980s, Brazil, reduced its external debt to the lowest level in Latin America, at just 25.8% by 1994. Even Mexico’s debt fell significantly, from 79% of GDP to 44%. We heard all about their high debt levels in the 1980s. But I bet your never heard the rest of the story. In 1975, there were only 31 global democracies, but now, we have over 120 democracies.
By the way, Nikolai Kondratieff was proved right: The 1979-82 depression came exactly 50 years after the 1929-32 depression, but none of the Doomsday prophets noticed that.
20 Years Ago – A Wave of “Coming Crash” Books (after the Crash)
The #1 Best-seller in 1987 was Dr. Ravi Batra’s “The Great Depression of 1990.” Dr. Batra turned out to be right on his timing, but wrong on his geography. Japan suffered a decade-long Great Depression in the 1990s, but according to Batra and others, Japan was the last place this could happen. Many other best-sellers of 1987 were proclaiming the superiority of the Japanese management system, Japan’s work ethic, its currency, its wealth and ability to “buy up American assets” from Hawaiian hotels to Hollywood studios. (As it turned out, Japan only knew how to pay way too much for those assets.)
Several other authors (including me) tried their hands at “coming crash” books, sadly published about the same time the crash happened, failing to warn anyone in time, and keeping them from re-investing in stocks, which would have been the smartest move at the time. In the next wave of “coming crash” books, the overextended American debts were the paramount threat. Harry Browne wrote “The Economic Time Bomb: How You Can Profit from the Emerging Crisis” in 1989. Harry’s “bullet points” predict this:
Not one threat came to pass, despite deeper budget deficits and trade deficits in 1990-91.
Then came “The Great Reckoning” (1990), also predicting a “Depression in the 1990s.” But the 1990s turned out to be the best decade ever for global economic growth and the stock markets of free countries, as the Dow gained 5-fold, from 2,365 to 11,723.
It was at this time (1990) that I wised up and, mercifully, partook in the bulk of that rise:
10-50 Years Ago DOW 10-Year Gain
April 18, 1957 488.03 192.8%
April 20, 1967 878.62 80.0%
April 20, 1977 942.59 7.3%
April 20, 1987 2270.60 140.9%
April 21, 1997 6660.21 193.3%
April of 2007 c. 12,500 87.7%
60-Year Gain: 75-fold +7,400%
For my grandchildren’s generation, I look for another 75-fold gain in the next 60 years, despite threats from Global Warming, the Housing Crisis, the Triple Deficits in America, and anything else Doomsday prophets dream up in the future. I have been inoculated against such fears. Please join me in abandoning the siren song of the Prophets of Doom.
“Apocaholics Anonymous” Bibliography: For Further Reading
(1) Proof that “Things Really are Getting Better”
Anderson, Terry L., editor, “You Have to Admit It’s Getting Better: From Economic Prosperity to Environmental Quality,” Hoover Press, 202 pages.
Goklany, Indur M., “The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives, on a Cleaner Planet,” Cato Institute, 2007
Lomborg, Bjorn, “The Skeptical Environmentalist: Measuring the Real State of the World,” Cambridge University Press, 1998, 352 pages + 153p of notes and bibliography.
Moore, Stephen & Simon Julian L., “It’s Getting Better All the Time: 100 Greatest Trends of the Last 100 Years, CATO Institute, 2000, 265 pages.
Simon, Julian L., “Population Matters: People, Resources, Environment and Immigration,” Transaction Publishers, 1993
(2) Countering the Current Global Warming Scare
Avery, Dennis T. & Singer, S. Fred, “Unstoppable Global Warming: Every 1,500 Years,” Rowman & Littlefield, 2007
Horner, Christopher C., “The Politically Incorrect Guide to Global Warming and Environmentalism,” Regnery Publishing, 2007
Michaels, Patrick, “Shattered Consensus” (2005) and “Meltdown” (2003)
(3) How Media and Mass Psychosis Mislead You
Chafetz, Morris E., MD, “Big Fat Liars: How Politicians, Corporations, and the Media Use Science and Statistics to Manipulate the Public,” Nelson Current, 2005.
Mackay, Charles, “Extraordinary Popular Delusions and the Madness of Crowds,” 1841 first edition, 700+ pages
Simon, Julian, “Hoodwinking the Nation,” Transaction Publishers, 1999, 127 pages
(4) Currently Popular Doomsday Books in 2007: Random Sampling
Arnold, Daniel A., “The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away.”
Brussee, Warren: “The Second Great Depression: Starting 2007, Ending 2020”
Panzner, Michael, “Financial Armageddon: Protecting Your Future from Four Impending Catastrophes.”
Rubino, John, “How to Profit from the Coming Real Estate Bust”
Schiff, Peter, “Crash Proof: How to Profit from the Coming Economic Collapse.”
Wiedemer, David & Robert, “America’s Bubble Economy: Profit When it Pops”
In addition, Bill Bonner’s & Addison Wiggin’s “Empire of Debt: The Rise of an Epic Financial Crisis” (a 2005 best-seller) will be turned into a documentary film in 2008. Perhaps they will join Al Gore in the Apocaholics Hall of Fame in Hollywood.