It Won’t Be Like Last Time

Dining car 2419D finished assembly in early 1914 in a northern suburb of Paris. It was destined to join the grand and luxurious trains operated by Compagnie Internationale des Wagons-Lits, better known as the company operating the Orient Express. Shortly after car 2419D was placed on tracks, Europe plunged into War.

World War one decimated Europe in a way the world had never seen. Of the 8.5 million men called up to serve in the French Army, 6 million would be either killed, missing, or wounded by the wars end. Rather than transporting the world’s elite abord the Orient Express, car 2419D spent its first four years carrying scared, homesick soldiers to the frontlines.

Car 2419 was certainly not the only car pressed into service for the War effort. The only reason we know anything about it, is because in 1918 it took on a new name, The Compiegne Wagon. Chosen as the command center for The Allied forces, it was in this very train car that on November 11, 1918, a German delegation would sign the armistice deal ending the Great War. Rather than return to the tracks, car 2419D was sent to a museum, to be forever remember as the place where the horrors of war ended. That decision would come back to haunt the French.

So intent were the French on making sure they would never again suffer like they had in the Great War, billions of Francs were spent on a state-of-the-art fortification system. The system includes hundreds of pop-up gun turrets, miles of antitank traps, underground tunnels complete with barracks, cafeterias and recreation rooms. With the horrors of trench warfare still fresh in their minds, the French Army had no intention to suffer as they had in the ill-equipped makeshift dugouts of the war. The Maginot Line stretched for hundreds of miles along France’s border with Germany, and was built to ensure, that Germany could never again break into France.

Despite its mechanized concrete glory, which was the pride of France, the Maginot line ultimately did little to stop, or even slow the German war machine overwhelming and occupying France in 1940. According to military historian Robert Kirchubel the reason was quite simple. “The Maginot line was meant to stop a World War 1 style attack of infantry and artillery, and it did what it was supposed to do.” The problem was that Hitler, and his generals abandoned the “static” style of WW1 fighting for a far more mobile blitzkrieg attack that punched a hole into France through Belgium and the Netherlands.

The Maginot Line was every bit the engineering marvel that it was meant to be. It functioned perfectly. It was truly impenetrable. But it was also immobile. And as the German forces quickly moved into France and surrounded the fortifications, the men manning the pillboxes had nowhere to go.

While named for Andre Maginot, the idea for the line was first proposed by Marshal Joseph Joffre. He was opposed in his ideas by Paul Reynaud and Charles de Gaulle who favored building up France’s stock of tanks and aircraft. Reynaud and de Gaulle were thinking ahead. They saw the direction modern warfare was headed. Joffre, and of course Maginot fell victim to what Psychology calls recency bias.

Recency bias is described as the idea that we tend to place too much emphasis on experiences that are freshest in your memory. Reynauld and de Gaulle were looking ahead. But Joffre and Maginot were so scarred by the memories of the Great War, that they expected the next attack to look exactly the same.

The miscalculation of Joffre and Maginot allowed the Nazi Army to steamroll through France in a matter of weeks. Wanting to avenge his country from the humiliation of the treaty that ended World War 1, Hitler summoned car 2419 back into service. He requested it be moved out of the museum and brought to the exact spot it had been in 1918, where French commander Charles Huntziger was forced to sign a surrender agreement with the victorious Germans.

Luckily, Tides turned against the Nazis, the allies retook France, and rid Europe of Hitler and his Nazi regime. The greatest hope of many, is that the world is never again faced with a threat like Nazi Germany. We are however faced with other threats constantly. And the threat that is currently all over the news cycle is impending recession.

Recession is never a good thing. But it is an important thing. And a normal thing. However, if you are like most people, you probably suffer from some recency bias when it comes to the word recession. It would be very normal if you did. While the most recent recession was quite some time ago, we all remember it vividly, because it was the worst, we had seen in almost 100 years.

Because it is our most recent memory, you may be prone to think that the next one, if it truly is impending, will be just like it. In fairness, I can’t tell you it won’t be. But I can tell you that it is unlikely that it will be. Recency bias makes us want to think it will be. But statistics tell another story.

Average recessions last 15 months, not 36. Markets on average drop 32%, not 54%. In an average recession foreclosures will rise, but they won’t quintuple. Average recessions cause slowdowns, not catastrophe. Your brain just remembers catastrophe best.