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A MUST-SEE CONVERSATION. YOU’RE INVITED.
Join legendary Hedgeye Demography analyst/author/historian Neil Howe as he goes one-on-one with Quill Intelligence CEO & Chief Strategist Danielle DiMartino Booth. This special conversation is not to be missed.
Neil will cover a wide range of important topics including the significant challenges the United States (and the world) are facing during this fiery Fourth Turning.
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Howe argues that the 2022 midterm results and Trump's declining influence signal a fundamental realignment in American politics, with independents rejecting election-denying MAGA candidates, while deeper structural forces—demographic decline in China, rising wealth inequality, and generational phase extension—are accelerating toward a Fourth Turning crisis in the early 2030s that will likely combine internal civil conflict with external great-power confrontation.
- MAGA candidates systematically underperformed relative to mainstream Republicans, losing 10+ percentage points of the independent vote—the margin that determines elections
- China's demographic collapse and erosion of relative power trajectory is psychologically triggering more aggressive near-term action rather than deterring conflict
- The Fourth Turning climax is being delayed by generational phase extension (later marriage, homeownership, career independence) pushing the crisis window into the early 2030s
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Negative real interest rates (1% negative to 2.5% positive real rates, a 350bp swing) since the pandemic suddenly made speculative, low-quality, and far-future-cash-flow assets like crypto and tech extremely valuable; the shift to positive real rates devalues anything with distant cash flows.
“the reason why uh crypto uh valuations shot up so much was the unnatural negative real interest rates that we experienced uh since you know just before the beginning of the pandemic uh you know up until about six months ago, right Danielle? Uh, and what that did was it just made anything a good investment. You know what I mean? It just just, you know, anything. It didn't matter what.”
When a great power perceives its long-term power trajectory as declining relative to rivals (per Organski theory of power transitions), it is psychologically motivated to escalate conflicts now before its relative advantage erodes further—the 'window closing' effect.
“Power in other words every great power looks at its future power trajectory going forward. And what they pointed out was when a country sees that it is threatened in its long-term prospects visa v its arrival that actually precipitates more rapid action. Right? The psychology becomes Danielle I better do something now because I'm not going to get a better chance.”
MAGA candidates (election deniers, QAnon adherents) systematically underperformed relative to mainstream Republican candidates in the same districts and states, losing approximately 10 percentage points of the independent vote—representing more than 3 percentage points of the total vote and explaining Republican underperformance.
“They lost a huge share of the independent vote. Now, I'm I'm sure we're going to talk about this, but right now, when you think about elections, you're dealing with a third, a third, a third, right? Roughly a third people identify with Democrats, a third with Republicans, a third with independents. They're all equally important quantitatively. What happened is, yeah, they got all the Republicans out. Democrats didn't as many came out, but they lost 10 percentage points of the independent vote. That's 10% of a third. That's more than three percentage points of the total vote.”
The American Revolution was much more of an internal civil war than commonly recognized, with more Americans killing Americans than British killing Americans, particularly in the South where bloody reprisals occurred.
“Civil War was obviously totally almost entirely an internal crisis, right? The American Revolution is was much more of a Civil War than most people realize. And I I often remind people that during the American Revolution, a lot more Americans killed Americans than British killed Americans. And in fact, in much of the South, it was a veritable it was a bloody civil war. Uh you know, with reprisals and and and massive deaths. uh within the south.”
US net indebtedness to the rest of the world is rapidly rising and turning negative for the first time, with an increasing share of US debt owned by foreigners, creating vulnerability if those creditors lose confidence.
“what I'm worried about is the fact that uh the net US indebtedness to the rest of the world is rapidly rising. I mean you just see that that you know it's it's going negative for the first time and it's rapidly plunging now every year and um and and and and a large share of this debt as you know is now owned by by u by foreigners”
China's fertility rate has seen a precipitous and unexpected decline, making China the most rapidly depopulating country by absolute numbers for the next ~70 years, with the UN projecting net population loss of 10 million annually.
“China's fertility rate all the time and this is a complete mind-boggling new reality for China that they've suddenly seen this precipitous and unexpected decline and now the UN is looking at the future and they see most of the rest of the century they're gonna be losing 10 million Chinese. This is the most rapidly in absolute numbers the most rapidly depopulating country in the world for the for you know the next I don't know seven decades.”
During real crises, governments shift to command-and-control economies with price controls, financial repression, confiscations, and regimented allocation, which often improves equality because everything gets socialized according to necessity rather than market price.
“what happens in in real crisis situations is you start allocating everything according to necessity. You know what I mean? Yep. You take wealth away from the wealthy and you give people enough to live in and you're basically in a command and control economy. And I would like to remind people going back to the climax of war turnings that always happens, right? That always happens. Um you basically live in a regimented economy and everything gets you know you have financial repression and confiscations and and price controls. You get you do what's needed. In other words, everything gets socialized in an emergency.”
In the 2022 midterms, the fundamental shift in partisanship and voter engagement that began in 2016 did not change—turnout remained high (though lower than 2018), Republicans and Democrats voted increasingly for their own party, and demographic divides by gender, age, and income showed no fundamental change.
“what did not change is some of the fundamental uh shifts that have gone on in uh partisanship and engagement. I mean if you look at the turnout again very high not quite as high as 2018 as the last midterm year but completely different from every election before uh Trump election in 2016 right where we had that huge jump in participation of every age bracket every income group and that has continued still a quite high turnout rate uh the electorate is even more polarized in terms of uh Republicans and Democrats you see Republicans even more likely to vote for Republicans, Democrats for Democrats. Um, and you don't find any fundamental change in gender.”
Marriage age, age at first child, and age at home ownership have risen by 6-8 years; similarly, ages at which people run for Congressional/Senate office have increased; and the current government has three octogenarians (president, House speaker, Senate majority leader)—unprecedented.
“getting married, having kids, being truly independent in your career, owning your own home. I mean, that's just hugely rising. We just see seven, six, seven, eight year increases now in marriage age, age of first child, age of home ownership. And we've seen the same thing actually in running for office now into Congress, in the Senate, and my god, uh we have we have three octagenarians by the end of this year uh as president, as um as a as as speaker of the house, and as a Senate majority leader, right? Uh that's without precedent.”
Inflation is an inevitable and recurring solution to large debt burdens; the US has done it historically (post-WWII, 1970s) and will likely do it again because inflation works in favor of debtors at the expense of creditors, including private debtors with mortgages and student loans.
“a a perfect Jerome Powell solution where you have a very low inflation rate that a higher inflation rate as so long as it's not accelerating is actually part of the inevitable solution, right? Inflate away the debt. We do it every time. We certainly did it after World War II. And a large reason why we got that that World War II that share debt down partly because we ran surpluses during the Truman and Eisenhower years, but mostly because we had a lot of infl We had a lot of economic growth, too. Real growth. We had a lot of inflation over those years. And during the 1970s, whoa, it just went way down.”
Taiwan has made up its mind for independence; the younger generation especially supports independence, and even the opposition Nationalist party has shifted to support Taiwanese independence to remain viable as a party—the idea of amalgamation with mainland China is dead.
“I think Taiwan I think Taiwan has totally made up its mind on that question, right? Um, and by the way, whoever was undecided was decided after looking at Hong Kong, right? I mean, that just decided all of the remaining. And in fact the the nationalistwoman party has come over to the side of Taiwanese independence to survive as a party. I mean they they had no future in what they were you know this idea of the idea of of amalgamation with mainland China today is dead in Taiwan. I mean just dead. And the younger you are the dead it is right in Taiwan.”
Germany has been at the forefront of rearming Europe and supporting Ukraine alongside the Green Party and democratic socialists—groups traditionally pro-détente—representing an unprecedented shift in German strategy against Russia.
“is a a a democratic socialist uh party which has always been you know in favor of olitique and and dant and getting along with Russia has been at the forefront along with the Green Party of rearming Germany and rearming Europe against the threat of Russia.”
Non-sovereign currencies like Bitcoin cannot work as reserve currency during crisis; libertarian solutions are viable only during peace and confidence, not crisis, when all societies revert to command-and-control systems.
“a non-s sovereign currency at a time of crisis, that's a non-starter. Okay, we can enforce it. Okay, so that never happens. And in fact, um this is a very bad time for libertarian solutions. Look, I mean, libertarian solutions are great at a time of peace, right? When everyone feels confident, everyone feels that their individual rights will be enforced no matter the circumstances. Uh that's not what happens in a crisis, right, Danielle?”
Inequality in America immediately before the Great Depression was as acute as it is today; the war and post-war period (1940s-1950s) saw enormous reduction in inequality called the 'Great Compression'—this is not exceptional but a recurring pattern during and after crises.
“That was the last time inequality was as that that was the last time in US history that inequality was as acute as it is today was in that era. I mean that you know the leading up to the the great depression and the halves and the have nots but during the war and after the war the late 40s and 50s an enormous reduction in equality. I mean that was the great compression economist call it”
The Weimar Republic used inflation to defund Germany's middle class and industrialists by inflating away their savings in domestic currency (though they couldn't pay reparations in inflated currency, only gold or sterling), which resulted in massive wealth transfer and contributed to a social revolution.
“during the Vhimar Republic it's how basically Germany now they couldn't pay the allies back in inflated currency because that had to be you know gold sterling right but they could mobilize and they could defund all of Germany's middle classes and all of their industrials take all the wealth away from them by inflating away everything that they had saved in the past they did that uh at the cost of filamenting a horrible social revolution.”
With a razor-thin Republican House majority (3-4 members), McCarthy cannot undertake decisive action on his own; any significant legislative move requires extreme party discipline or Democratic cooperation, limiting his leverage on debt ceiling and government shutdown conflicts.
“with a threeperson majority, you can't actually do anything. All you can do is block stuff, right?”
Big donors (Ken Griffin, Steven Schwarzman worth $63 billion combined), the Murdoch press (Fox News, Wall Street Journal), and billionaire supporters have withdrawn backing from Trump, signaling that Republican elites are shifting away from Trump.
“The billionaires have stepped back from him. Somebody there in Florida, Ken Griffin, Steven Schwarzman, some 63 billion dollars worth of support for the GOP has said it's not going to back Donald Trump.”
Interest on the debt and debt rollover would be protected even in an extreme debt ceiling breach because of appropriations law, and government shutdown or debt ceiling brinkmanship in 2023 is unlikely to roil markets as it did in 2011.
“I I think it's very clear that uh given appropriation law that uh you know interest on the debt would be paid even if I mean if it came to that I don't think it would be but I think if it came to that uh interest on the debt and the rolling over of debt and all that would would would not be impaired uh in the in extremist but I think all of this is showboating”
Universal basic income, modern monetary theory, and large stimulus programs were tested during the pandemic and 'got a whole lot of inflation to show for it'—suggesting caution about repeating these experiments.
“Obviously, we took universal basic income, modern monetary theory. We took that all on a test drive and we got a whole lot of inflation to show for it.”
Republicans improved among minority voters in 2022 compared to 2018: white men/women +7-8%, Black men/women +7-11%, Latino men/women +14-21%, Asian-Americans +~30%, with Latino gains being the most salient (especially in South Texas, Cuban Miami, and Florida).
“If you look at white men and women, they increased by about seven to eight% voting more Republican than they did back in 2018. Uh, black men and and black women is 7 and 11%. Okay, seven and 11%. Latino men and Latino women is 14 and 21% more than they did in 2018. And Asian-Americans, it's it's off the charts. It's uh almost 30 percentage points up.”
Germany's choice in a great-power conflict would not be freely made; Germany cannot independently choose between China and the West without EU and NATO consensus—geopolitical realities would compel Germany into the Western alliance.
“I don't think Germany is as strong as you think. I don't think Germany can just make its own national choices without without getting a a consensus of the rest of the EU uh and and and the rest of what we used to call the free world.”
American parents face a practical dilemma: they want to restrict children's device usage but need the devices to monitor children's location and activities, making unilateral device restriction infeasible.
“the problem for parents as you well know is that you know cell phones and all these devices um are also the means by which parents keep track of the children. Right? So this is the problem because the parents always want to keep track of what their kids are doing and so on. So they're in they can't it's it's practically very difficult to take these communication devices away.”
After the American Revolution ended in 1783, approximately 100,000 loyalists left America (equivalent to ~7 million Americans today), and these were the most educated, wealthiest, commercially capable people—representing an enormous economic hit to the new nation.
“when the British finally left, a 100,000 loyalists went with them. Today, that would be equivalent to about 7 million Americans leaving. And by the way, at that time in 1783, those were the most educated, wealthiest. Those are the Americans that knew how to do everything, right? they were the bankers, the the people who manage commerce and uh and and that was an enormous economic hit for America.”
Central bank digital currencies (CBDCs) are technologically feasible and make economic sense, but US progress is slow due to banking lobby opposition—banks don't want CBDCs because they would undermine bank revenue models by disintermediating deposits.
“one of the reasons why the US has been slow to move and why some of the European countries, think of Sweden, for instance, has been faster to move in the direction of a of a just what seems like a no-brainer, right? I mean, just an easy digital currency to send abroad or, you know what I mean, just a range of transactions is because of the banking lobby in America. I mean, banks don't want that.”
A regeneracy—intense partisan polarization, rising voter participation, and politicization across all levels from national to local—began with the 2016 Trump election and energized both red and blue sides, though it could shift to define political sides differently.
“we did enter something of uh what those those readers of the book will recognize the term regeneracy uh in 2016 with the Trump election and how it's um energize both sides, right? The red and blue of our of our political divide, uh this intense partisanship, uh rising voter participation, uh a huge interest in what's happening at the national level, and obviously just polarization across across everything across uh governorship, Supreme Court, all the way down to election for dog catcher in your local neighborhood.”
Elon Musk is a Gen X CEO attempting to run SpaceX, Tesla, and Twitter simultaneously—far more than any single person can manage—and has lost ~$150 billion in net worth since acquiring Twitter, suggesting scattered focus is hurting business performance.
“Elon Musk is a is kind of a Gen X CEO gone crazy. I mean, you know, he's just uh he's got probably 500% more on his plate than he can possibly accomplish... And um uh and I do say that I I think that it's not helping the it's not helping Tesla's no helping it price. Oh, I mean he's lost what 150 billion dollar unfathomable net worth, right?”
Jerome Powell's target is not just to lower inflation below 2% during recession, but to achieve under-2% inflation after the recession ends; this requires a Taylor Rule that would imply a much higher Fed funds rate than current levels.
“if Jerome Powell really wants to get the um full employment inflation rate down to under 2%. I I mean full employment inflation rate meaning it's not enough that it just goes down below 2% while the economy is in recession, right? I mean, he's supposed to be thinking longer term. It has to be under 2% coming out of the recession, right? So, think about that. And I I keep telling people a Taylor rule would mean a much higher Fed funds rate right now.”
The real problem is not just that Powell is raising rates into recession, but that higher interest rates compound the long-term federal debt burden accumulated since 2008, causing CBO long-term fiscal projections to explode and forcing rationing decisions about who gets funded.
“The real problem is not just that Powell's raising rates and we go into this rather severe recession. The real problem is is that with these much higher interest rates on top of everything that the federal government has borrowed since, you know, 2008, the long-term projections explode. You know, I I actually do a presentation every year, Danielle, on the long-term CBO projections, you know, going up to, you know, 30 years up to the late 2050s. And uh that's already beginning to shift, right? you have this enormous uh we've borrowed as much as a share of GDP since the GFC as we borrowed in World War II.”
For decades, China's strategic philosophy was 'hide your capabilities and prosper'—patience based on confidence that time and growth favored China; China is now beginning to shift toward active intervention to change the regional reality before its window closes.
“Remember that for so long China's philosophy remember Deng Xiaopang onward and then you know Liao Bao and all the others the philosophy was was um uh was was just you know you know hide your capabilities and and prosper right the future's on our side we can always wait the more time goes by the stronger we get relative to other people so why in the world would we want to fall in a crisis right we just keep getting stronger. I think the time is coming. China is seeing that's not actually going to happen. We need to actually change things. We need to shuffle things up. We need to change the reality, change the psychology, we need to intervene.”
The demographic profile of recent crypto investors—unsophisticated, lower-income, and minority voters—are the ones losing most heavily, paralleling the subprime mortgage pattern where late entrants bore the biggest losses.
“the big expansion of the people who came into the market particularly in the last two or three years are unsophisticated investors uh lower income and minority right and these are the people that are losing they're buying in light and they're losing big time.”
The Democratic Party has an internal strain between its coastal, educated, white, culturally progressive leadership and its working-class African-American and Latino voter base, who are religiously and culturally conservative—this is a major structural problem moving forward.
“One of the biggest strains within the Democratic party is that it has a um you know the leaders uh highly educated uh by coastal almost entirely white and they are very shall I say advanced and progressive in their cultural values and then you have southeastern uh uh southeastern America where you have African community community that's among the most religious and the most culturally conservative community along with Latinos. This is an enormous strain in the Democratic party. Um, and it's it's it's showing itself, right?”
The choice between great-power war and civil war is often overdrawn; most historical crises combine both internal and external conflict simultaneously (e.g., the New Deal/WWII crisis had both internal polarization and external war).
“the question of of great p power war versus civil war I guess you know and and just to to to preview a little bit something I talk about a lot in this book uh the the choice between the two is sometimes overdrawn because every crisis we have is usually a combination of both.”
China limits children to 40 minutes of TikTok per day and requires that viewing to be educational (museums, science), suggesting authoritarian control of youth media consumption.
“There was a 60-minute story uh recently about Chinese children being limited to 40 minutes of Tik Tok. And even that 40 minutes had to be cubrious. It had to be about museums or science.”
DeSantis still has significant room for improvement in voter familiarity; Trump is fully known with fixed opinions, while many voters are still learning who DeSantis is, giving him higher potential for growth in polling.
“Everyone in America, everyone in the world in fact, knows who Trump is, right? So, they all have an opinion about him. They've all made their decision. Uh, but Dantis is still um I I would say he has a huge amount of improvement room. Trump doesn't. Um, you look at many of these polls, they have an they have a majority of Republicans saying he should not run, right? So, in other words, they've already made up their mind, but if you ask people, a lot of people aren't quite sure who Dantis is.”
If Powell keeps real interest rates high and fights inflation without pivoting, it will function as an effective war on inequality and billionaire wealth, reversing the pattern since August 12, 1987 when Greenspan began perpetually bailing out asset holders.
“if Powell gets interest rates up and as you suggest keeps them high, something none of us have experienced because we don't rem so few remember the Vulkar era. But if he keeps interest rates high, it's going to be an effective war on on inequality, an effective war on the billionaires because they've always been bailed out. They've had the rules rewritten since August the 12th, 1987 when Alan Greenspan stepped in office.”
This will be the first true recession for early wave millennials (born early 1980s) where the Fed will not bail out the economy—a game-changer from their previous two recessions (2000s dot-com, 2008 GFC) where Fed intervention softened impacts.
“this will be for first wave millennials uh born in the in the early 80s. This will be their third recession. But it's but it's not a recession that the Fed is necessarily going to bail out. That's a gamecher. That's a gamecher for a lot of people.”
Trump would not run a third-party candidacy because such a run would guarantee defeat; Trump wants to win the Republican nomination or not run, not to lose as a third-party spoiler.
“Would Trump actually run a third party candidacy? Right. And the real question is what does Trump and you mentioned like you go back to the examples of you know Teddy Roosevelt and and Ross Perau and you think of all your great third party you know originally the Republican party was a third party right and these were principal candidates of people who wanted to sit up and do their thing because they thought it was important for the country it wasn't about themselves or willing to lose. Um, I'm wondering whether Trump is that kind of candidate. Does he want to do something where he's sure to lose, you know, come in a third, you know, be be just the total loser, right? The total I'm not sure that he that he would do that.”
The Fourth Turning crisis period will end in the early 2030s; the length and timing of generational turnings has been changing due to elongation of life phases (time to marriage, homeownership, career independence, entering/leaving office).
“I think the the you know the the the full period, the full era uh will my best guess is comes to an end in the in the early 2030s.”
Trump is perceived as discriminatory; George W. Bush won two-thirds of Hispanic voters in Texas governor races, suggesting Latino voters respond to non-discriminatory Republican candidates but reject discrimination and anti-immigration messaging.
“Trump is is perceived I, you know, I live in Texas. You know, I was George W. Bush got twothirds of the Hispanic vote when he ran for the governor the second time in Texas. So, I've I've witnessed the phenomena firsthand. Um, people don't want to be discriminated against. It doesn't work that way. And and Trump was probably the most discriminatory president that we've ever seen.”
The US has borrowed as a share of GDP since the 2008 GFC nearly as much as it did during World War II, but without comparable productivity gains or defensive necessity—raising questions about what the borrowed money was deployed toward.
“we've borrowed as much as a share of GDP since the GFC as we borrowed in World War II. And you might just say, well, you know, we we haven't exactly saved the world from fascism, right? I mean, you know, what have we done with all that, right? What do we have to show for it?”
Joe Biden will likely not run in 2024 because publicly declaring a run would immediately make him a lame duck with no leverage over Congress, whereas claiming he might run preserves his executive authority.
“I don't think he's going to run. Okay. You just don't think he's gonna run. I think he's claiming he's not going to run because he doesn't want to declare himself a lame duck instantly, right? Uh, you know, that just kills you. You know, I'm not going to run. Therefore, no one really cares anymore about cooperating with me.”
Markets responded positively to the 2022 election results not primarily because of inflation numbers, but because a narrow Republican House majority combined with Democratic Senate/presidency creates veto-lock preventing either side from doing damage—a Goldilocks outcome for stability.
“this is why I think that the markets responded positively to the election uh late last week. I don't think it was just the inflation number... I think the reason was the markets were positively impressed. For this reason, it looks as though the Republicans will have a a majority, a bare majority, enough to veto anything Biden puts through, but not enough to do any damage on their own. In other words, with a threeperson majority, you can't actually do anything. All you can do is block stuff, right? So, I think the markets thought that was about as good as we can do.”
Ron DeSantis's resounding victory in Florida—including taking Miami-Dade county and winning large margins among Latino voters (Cuban and other Latino candidates)—signals that the country is ready to move away from aging leadership toward younger, newer leadership.
“Ronda Santis is is seen as, you know, I mean, we've got a bunch of oxygenarians running the country. And I think that there is a tacit rejection. I think the country is ready for somebody young, new blood, and you his resounding victory. his resounding victory tells you that the country wants to go in a different direction. It it was it was a it was a huge victory. Um I mean my gosh, you know, taking Miami date, I mean, that's the ultimate, right? As well as the um the the sizable margin that that many of the Latino candidates got here, you know, Cuban, Latino, um he won. He it was very impressive.”
One reason Trump did not increase Latino support (despite media focus) may be that he was not on the 2022 ballot after being on it in 2016 and 2020—suggesting Trump personally was the alienating factor for Latino voters rather than Republican policy.
“Maybe it's because I I don't know. Maybe it's because Trump was not on the ticket this time. He was neither president nor nor for the first election in uh in you know since since uh since 2014.”
CBDCs can be implemented securely without blockchain technology using traditional top-down ledger systems, making Bitcoin-style architecture unnecessary.
“It doesn't have to be done in a in a um you know in a in it have to be done in Bitcoin obviously and it doesn't have it doesn't require the same technology. It could just be sort of a a a top-down system for keeping track of anyone's ledger.”
The real solution to excessive child screen time is good parenting: keeping children engaged in real-world activities and enforcing device boundaries as necessary, rather than relying on policy or app limits.
“the real question is whether or not I Tik Tok itself will be banned by government... I think a lot of it has to do with just good parenting Danielle and keeping your child interested in life and and making sure they're actually involved and engaged in the real world. And if an extremist that that means actually taking the device away, well, so be it.”
If TikTok is banned, it would be good short-term news for Meta, but Meta faces bigger long-term structural problems beyond TikTok competition.
“That would be you know great news for Meta I guess right uh but but you know at least a short term great news I think Meta has bigger problems than than that”
Most social media platforms are already failures; Howe does not regularly use social media and does not view it as a preferred method for acquiring information.
“in my opinion, most social media platforms are already failures, Daniel. I mean, I don't visit them. I don't use them. I I have a I have a tutor feed and I I do enjoy, you know, I do enjoy looking at what comes across, but I must say uh social media just isn't my preferred method of acquiring information.”
TikTok may be banned by the US government for reasons unrelated to child safety—geopolitical and national security concerns about Chinese data access—with the Biden administration expected to decide by March-April.
“I think the Biden administration is studying it and I think a decision is expected uh sometime in you know March or April of next year when they're going to reach a decision.”