If you want the best contrary indicator to markets, to culture, to life, look no further than science fiction movies. They take a fear about the future, extrapolate it, and magnify it. And it never comes true.

Except for Minority Report. Everything in Minority Report came true.

Take a look at Looper, where people are reduced to transacting in silver and gold; Gattaca, where eugenics is employed across the population; Children of Men, where people stop reproducing; Blade Runner, where killer androids have escaped; and Rollerball, where corporations have taken over the globe.

ElisaRiva / Pixabay

Has any of this stuff ever happened?

No, it has not.

But that’s how people predict the future. They look at the past and present, and go from there. Two points make a line, and then you just extend the line out into the future.

That makes for pretty bad forecasting, especially when it comes to economics.

Here are a couple of points about trends.

Humans Are a Very Pessimistic Species

If you’re my age, you probably think that optimism is the norm, but I think it’s the exception rather than the rule, especially outside of the US. People are just now starting to think that the future is going to be worse for their children than it was for them.

But they will probably be wrong. Things will probably be great!

It’s not just economic trends. When any big trend takes hold in the public consciousness, it probably means that it’s close to the end. That includes not just economics, but climate, culture, politics, sports, anything.

Climate?

I remember watching NBC Nightly News two years ago at the dinner table with my wife, watching the devastating drought in California on a daily basis. People were talking openly about the possibility that California would someday be a desert, that agriculture would disappear. Now?

Let’s think of some trends that people are extrapolating out into the future:

  1. Political polarization. It is worse than it has ever been. People think it will keep getting worse.
  1. Right-wing populism. Peaking, or just getting started?
  1. Unions. Membership at all-time lows. A thing of the past?
  1. Drug overdoses. It gets worse and worse—does it ever stop?
  1. Healthcare costs. They never stop going up.
  1. Higher education costs. They never stop going up.
  1. Obesity. The population just keeps getting fatter.

You get the picture. All of these trends are square in the public consciousness. If you asked the man on the street—sure, drug addiction is going to get worse. Sure, health care will just keep getting more expensive. Sure, there are going to be more Trumps and Le Pens.

It makes sense, because you take two points, draw a line, and…

The End of the Trend

None of these things ever play out, because economics, politics, and culture are all self-correcting. The cure for high prices is high prices. What happened when oil spent years at $100/barrel? People figured out new places to drill for it. And then we had more oil, and prices came down.

And just at the moment you think the trend can’t get any worse, is the moment that the trend is at the front of public consciousness—which inevitably marks the end of the trend.