Mobs, Messiahs, and Markets

Signs of the Times

Indeed, we wondered recently if they had. We were enjoying one of the most beautiful nights we had ever seen in the south of France. After dinner—followed by a concert performed by the family band—we wandered outside. The earth looked like it had been covered with a shimmering gauze. And then there was a strange apparition in the southern skies: a shooting star that would not stop shooting. A comet? What could it herald?

At dinner earlier, a French historian had wondered why Americans had supported the Bush administration's military adventures in Iraq and Afghanistan. “You are wasting your most precious resources,” she told us, “your military strength and your money, on nothing. Why?”

We tried to explain. “Because our experience with war has been rather positive for the last 100 years,” we began. “The military is the one institution that people seem to trust.”

Americans’ faith in the righteousness of their military is an old one, only paralleled by their faith in the solidity of land and houses as investments. “You can't go wrong with real estate,” is a stock phrase. But, of course, it's simply not true. When our office in Baltimore was sold during the early 1900s, it brought a price that—in real terms—was not matched for another 70 years. Our point is that really big moves in the market or in the military are driven by sentiment, which follows very long patterns, like the orbit of a distant comet that makes its appearance in the southern skies only once in ...