Confidence in worldwide markets is heavily damaged.
C = Commodity
M = Money
The so-called growth under the Obama and Trump era is coming to an end, but the story of growth isn't the full picture. Unless you're an investor (or an M-C-M earner), the growth in the economy hasn't impacted you much in any way. The price of living has outstripped the gains in working-class income (or C-M-C earnings). Obama increased M-C-M earnings via stimulus packs until the Republicans began blocking it in 2013, and then resumed support for market stimulus in 2017 to the present day. But much of this gain is not based on real growth, but optimistic speculation.
Coronavirus is just the latest in a series of severe outbreaks that have hit, and probably by far the most serious. While Ebola was about 10X more deadly, it was also limited to regions of relative unimportance to the economy. SARS, Swine Flu/Spanish Flu, and Coronavirus have all struck core areas of economic importance. Coronavirus hit China, the industrial capital of the world, which has heavily disrupted supply-lines and has shattered the confidence of investors.
I've seen some stupid advice "Now is the time to buy, not sell." which will ruin you if that's your tactic. You want to wait until the market bottoms out and then pull an Alfred Lee Loomis and buy the dirt-cheap stock before it recovers.
The difference between now and SARS is that during SARS, the GDP was 4%, today it is 17%.
Things aren't going to jump back. When this sort of thing happens, it's like a Jenga tower. Companies collapse from some stress; others follow. When investors see this weakness, they don't suddenly regain confidence at the end of it all, demonstrated in 2008 when the collapses expanded to entire markets.
It probably goes without saying, but our current North American economic structure is at least 20 years out of date. The nature of work is changing, and economic systems are not updating fast enough to accommodate them.
One thing that's happened is the creation of platforms that are entirely under the control of a few powerful investors, and this creates an almost monopolistic influence over entire industries. Government regulation needs to:
A. Reign this in.
B. Ensure that competition can remain viable within the platform itself - it is like the telecommunications industry where law maintains that third parties can lease parts of the network at a rate in which their products can compete.
Streaming services are a great example. Here's how it evolved.
1. Phase 1 - "Hey, Netflix has a platform we can use to put our content on and make some cash." Great!
2. Phase 2 - "Hey, Netflix is lowering our rates because now they have all this original content produced by them that is now in competition with us." Still good, but not ideal.
3. Phase 3 "Now Disney Plus is eating up market share, and we won't even get a shot of being on that network unless we let them buy X% of our company." Terrible.
That's just one example; there are also targeted content on social media and youtube (the fact we call an entire business segment youtube is telling) along with a slew of other issues. The monopolization impacts the economy, and the way of dealing with it is to update laws. Either that or a paradigm shift for the economy in general, which will create a system where this happens regularly without everything becoming part of the political polarity, must happen.
We have the private investor stock market, but there might be a better way of doing this. You might say that UBI is a way of fixing things, and it is. Still, it might be just a bandaid. Taking out the outside investment element of the stock market is a more drastic change. If you want to invest in an industry, you have to work in a union based on that industry to acquire shares rather than just shove a bunch of capital into it. That could be a new paradigm for the youtube/social media market, as it puts content creators in charge rather than investment middlemen who decide on how to deal with advertisers and other factors. That's a fairly significant change, though.
This kind of tech market update is also why I felt Warren's platform was more compelling than Bernie's or Biden's. Bernie Sanders support is not because it's an essential path, but because people are freaking out and don't know the best way to move forward for the US. Bernie Sanders, IMO, is the best way for an industrial nation to move forward, but I find that even a lot of his progress (minus the environmental stuff, which I fully support) is based on an old paradigm. He calls himself a Democratic Socialist, but I have yet to see even the most basic socialist policies proposed by him; much of what I see is FDR style New Deal politics, which is not Democratic Socialism, it's social Democracy; while both are similar sounding words, "Social Democracy" is a social policy owned by the government of a Democracy; while Democratic Socialism is a socialist system is implemented to impact the whole of a democratic society. Both leftist, but let me put it this way:
Government-Mandated Minimum Wage = Social Democracy. People vote for a government to improve their minimum wage, which private companies are obligated to pay at minimum.
Union to Government negotiations on pay scale = Democratic Socialism. That is, the workforce of a Union negotiates with Democratically elected government on behalf of the consumer population what the price of goods and services will be and how much a worker should be paid for their labour.
Two very different systems.
Anyway, in the end, the economy will get there, it's just a matter of who will progress legislation most effectively. That's Democracy. It's slow, it's lumbering, but it's the best system we know of for our society (granted, the reality is that a benevolent dictatorship like Cosimo and Lorenzo D'Medici or Peististratos of Athens is actually most effective, such a thing is unsustainable and wouldn't be acceptable here and now).
Who would update the US politician the most between the remaining politicians? Biden, Bernie, or Trump? Biden is the least attractive by far, he doesn't have any kind of strong compelling new thing. But ignore the race to jump the biggest shark, Biden is pushing for consensus and representation. Despite being boring, he's not looking to hamfist any kind of ideology, he's looking to help fix the democratic process to help others update the legislation of the nation at a faster and much faster rate.
After around 20-25 years of crazy polarization (with a small break in 2008-2010 or so), I think things have never been more desperate for a politician who is more about fixing the process and allowing a smoother update of the overall system, rather than someone who wants "new buzzthing number 117!" to be pushed through as the reason for him to be elected President. When did the Presidential politics become a competition for who can best advertise a product for legislation rather than a competition for who can do the best job running the country? Honestly, I think there's room for both, but lately, it's just been the one thing.
/Derailing my own thread in the topic post.
C = Commodity
M = Money
The so-called growth under the Obama and Trump era is coming to an end, but the story of growth isn't the full picture. Unless you're an investor (or an M-C-M earner), the growth in the economy hasn't impacted you much in any way. The price of living has outstripped the gains in working-class income (or C-M-C earnings). Obama increased M-C-M earnings via stimulus packs until the Republicans began blocking it in 2013, and then resumed support for market stimulus in 2017 to the present day. But much of this gain is not based on real growth, but optimistic speculation.
Coronavirus is just the latest in a series of severe outbreaks that have hit, and probably by far the most serious. While Ebola was about 10X more deadly, it was also limited to regions of relative unimportance to the economy. SARS, Swine Flu/Spanish Flu, and Coronavirus have all struck core areas of economic importance. Coronavirus hit China, the industrial capital of the world, which has heavily disrupted supply-lines and has shattered the confidence of investors.
I've seen some stupid advice "Now is the time to buy, not sell." which will ruin you if that's your tactic. You want to wait until the market bottoms out and then pull an Alfred Lee Loomis and buy the dirt-cheap stock before it recovers.
The difference between now and SARS is that during SARS, the GDP was 4%, today it is 17%.
Things aren't going to jump back. When this sort of thing happens, it's like a Jenga tower. Companies collapse from some stress; others follow. When investors see this weakness, they don't suddenly regain confidence at the end of it all, demonstrated in 2008 when the collapses expanded to entire markets.
It probably goes without saying, but our current North American economic structure is at least 20 years out of date. The nature of work is changing, and economic systems are not updating fast enough to accommodate them.
One thing that's happened is the creation of platforms that are entirely under the control of a few powerful investors, and this creates an almost monopolistic influence over entire industries. Government regulation needs to:
A. Reign this in.
B. Ensure that competition can remain viable within the platform itself - it is like the telecommunications industry where law maintains that third parties can lease parts of the network at a rate in which their products can compete.
Streaming services are a great example. Here's how it evolved.
1. Phase 1 - "Hey, Netflix has a platform we can use to put our content on and make some cash." Great!
2. Phase 2 - "Hey, Netflix is lowering our rates because now they have all this original content produced by them that is now in competition with us." Still good, but not ideal.
3. Phase 3 "Now Disney Plus is eating up market share, and we won't even get a shot of being on that network unless we let them buy X% of our company." Terrible.
That's just one example; there are also targeted content on social media and youtube (the fact we call an entire business segment youtube is telling) along with a slew of other issues. The monopolization impacts the economy, and the way of dealing with it is to update laws. Either that or a paradigm shift for the economy in general, which will create a system where this happens regularly without everything becoming part of the political polarity, must happen.
We have the private investor stock market, but there might be a better way of doing this. You might say that UBI is a way of fixing things, and it is. Still, it might be just a bandaid. Taking out the outside investment element of the stock market is a more drastic change. If you want to invest in an industry, you have to work in a union based on that industry to acquire shares rather than just shove a bunch of capital into it. That could be a new paradigm for the youtube/social media market, as it puts content creators in charge rather than investment middlemen who decide on how to deal with advertisers and other factors. That's a fairly significant change, though.
This kind of tech market update is also why I felt Warren's platform was more compelling than Bernie's or Biden's. Bernie Sanders support is not because it's an essential path, but because people are freaking out and don't know the best way to move forward for the US. Bernie Sanders, IMO, is the best way for an industrial nation to move forward, but I find that even a lot of his progress (minus the environmental stuff, which I fully support) is based on an old paradigm. He calls himself a Democratic Socialist, but I have yet to see even the most basic socialist policies proposed by him; much of what I see is FDR style New Deal politics, which is not Democratic Socialism, it's social Democracy; while both are similar sounding words, "Social Democracy" is a social policy owned by the government of a Democracy; while Democratic Socialism is a socialist system is implemented to impact the whole of a democratic society. Both leftist, but let me put it this way:
Government-Mandated Minimum Wage = Social Democracy. People vote for a government to improve their minimum wage, which private companies are obligated to pay at minimum.
Union to Government negotiations on pay scale = Democratic Socialism. That is, the workforce of a Union negotiates with Democratically elected government on behalf of the consumer population what the price of goods and services will be and how much a worker should be paid for their labour.
Two very different systems.
Anyway, in the end, the economy will get there, it's just a matter of who will progress legislation most effectively. That's Democracy. It's slow, it's lumbering, but it's the best system we know of for our society (granted, the reality is that a benevolent dictatorship like Cosimo and Lorenzo D'Medici or Peististratos of Athens is actually most effective, such a thing is unsustainable and wouldn't be acceptable here and now).
Who would update the US politician the most between the remaining politicians? Biden, Bernie, or Trump? Biden is the least attractive by far, he doesn't have any kind of strong compelling new thing. But ignore the race to jump the biggest shark, Biden is pushing for consensus and representation. Despite being boring, he's not looking to hamfist any kind of ideology, he's looking to help fix the democratic process to help others update the legislation of the nation at a faster and much faster rate.
After around 20-25 years of crazy polarization (with a small break in 2008-2010 or so), I think things have never been more desperate for a politician who is more about fixing the process and allowing a smoother update of the overall system, rather than someone who wants "new buzzthing number 117!" to be pushed through as the reason for him to be elected President. When did the Presidential politics become a competition for who can best advertise a product for legislation rather than a competition for who can do the best job running the country? Honestly, I think there's room for both, but lately, it's just been the one thing.
/Derailing my own thread in the topic post.
