Reset

Is this a reset? A meme suggests we reboot this year to get 2020 off on the right path. But maybe this is just that. Maybe this is a a major reset of our world economy and, society.

Other deadly viruses have attacked other parts of the world in the past. SARS, ZIKA and more. But since the contamination in North America was very limited, these viruses didn’t affect us very much. So we didn’t act, and we didn’t change. But CoViD19 is forcing us to react. It was bound to happen.

Economy

Our stock market and many world markets were over valued. We were brash and brazen, taking ridiculous chances. Most experts told us, the market was being propped up by consumer spending, not industry and trade. consumer confidence was growing, so spending was too. 10 years of growth and bull market run had brought us a false sense of security in a normally volatile investment. In just the last 10 years, twice as many stock trades have become automated, with as much as 80% of buying and selling being initiated by a computer program, simply executing its command lines. So a market drop of 2% in some key stocks triggers a sell off in still more stocks, and the 2% drop becomes a 5% drop. certain stocks hitting new lows, triggers a few programs to buy them, and so the next day, the pendulum swings the other way. The stock market, which used to reflect actual corporate profitability and production, is now just a computer program, run amok.

Unemployment is at an all time low and job numbers look great. Taxes are low, consumer credit is cheap although credit loads are growing. People were buying higher ticket items, and spending on vacations, dinner out, and other entertainment. Yet, the majority of American households have no more than $400 available for an emergency and most have no retirement savings. None. So what went wrong?

For one thing, our measurements don’t matter anymore. How the federal government calculates unemployment is an archaic formula that ignores under employed people, self employed, or part time employed looking for full time employment. How many people do you know who have a degree, but work in a lower paying job that has nothing to do with their education? Or people who work 2 or more part time jobs? how many man-hours does the typical household have to work to pay the bills?

As a country, we think we are doing well, but we are not. For years, we have been told, add to your savings, fund your IRA, pay off debt. but we didn’t. We spent instead. Since we were spending, the system assumed we had already saved, funded the IRA and paid down debt. So the system showed a healthy economy. Remember the stock market uses old measurements for consumer confidence. how many new cars are sold, big ticket electronics, restaurants, etc. So we fooled the system, and now it failed.

Society

We don’t care about each other anymore. We bought into the divisive tribalism, the us versus them. We participated in a society that abandoned those who had fallen into poverty or homelessness. One party decided decades ago that “win at any cost” was better than compromise. The other major party was slow to catch on. As one played a game of winner take all, the other still played by the old rules, trying to do what it thought best for the country, specifically, the middle class. But the first party played where the money is. Cater to the wealthy and corporations, and they can fund your re-election, continuing the cycle, year after year, term after term. But, in case the electorate caught on, it was important to do two things.

First, make the victims of the economy, the middle class, feel like they were included in your scheme. That required telling the vast majority of working class, under employed households that this new economy would help them. That, if corporations and wealthy prosper, so do you. Trickle down economics, already proven repeatedly to be a failure, was again sold as a new program, and this time failed even worse as the wealthy invested their windfall in off shore sheltered investments, rather than spend at home.

Second, was to demonize the other party and the poor. The other party was out to take your meager savings, and give it to people who refused to help themselves. Never mind that in fact, the idea of higher taxes for wealthy to help the poor would never have affected the middle class, because that wealth was definitely not trickling down anyway. The term “socialism” soon became the equivalent of “communism” and “un-American.”

All this time, the second party was still trying to figure out the new playbook. Attack lies with facts? Doesn’t work, because the lies just become “alternate facts.” Expose the liars and cheaters in the press? No use, since the press has been labeled “fake media.” A scandal no longer has any meaning because credibility has been destroyed. Corruption exposed, just becomes a “witch hunt.”

The poor and homeless who desperately need a hand, have been labeled as drug addicts and lazy people who just want handouts. Yet, everyone getting a check for $1,000 due to an economic crisis somehow doesn’t seem like socialism to those who abhor handouts?

The same people who must have the new Mercedes or Bentley, who appreciate the workmanship and the status symbol, still accept the lowest bid on building their $3million dollar home. Special order Italian marble and german made doors and windows are installed by $12 per hour unskilled labor rather than $25–30 per hour tradesman. The Bentley driver wont know the difference until the window leaks, the plumbing backs up, and marble floor cracks. I bet most people building a home for over $1million never ask who is working on the jobsite, and how much they are paid.

Meanwhile our homeless population explodes because that builder can make more building that $3million home, instead of 30 affordable homes. Any attempt to fund low income housing is labeled as redistribution of wealth. Proposed legislation is called big brother over reach, anti-capitalism.

As we suffer the beginning of the viral pandemic, we will soon be faced with how we rebuild. Let’s look at ways to be inclusive, not divisive. Be benevolent, not miserly. Empower those who have proven themselves as public minded, educated and trustworthy.

Resetting is painful. We will lose a lot of recent progress and our growth after the reset will be slower and many will wish for the old system, the system that played in their favor. But let’s hope more join us in a true reset, a beginning of a better bipartisan, inclusive society and economy. It can work, if you help.

Start saving, not spending. pay down your debt, quickly. If you hire someone for a job, make sure they are paid fairly and pay their employees fairly as well. Support your local government and state government who repair our roads, schools and infrastructure. Learn and study issues that matter, rather than read memes and salacious headlines. Give to charity, locally and worldwide. Take interest in what your society is really doing. But most importantly, care about others. Everyone. Act with compassion and empathy every day.

Let’s reset and restart 2020.