Business Musings: Economic Shakiness
To understand what I am about to write, you need to understand that I am the adult child of two alcoholics. I’ve had tons of therapy to deal with my hugely destructive upbringing, so I know what triggers me.
2020 triggered me—of course. We all had to deal with things from deaths to illness to lockdown, and each of our journeys is personal. It’s also a shared experience on a global level, something which almost never happens. I honestly don’t think it would have happened this way if it hadn’t been for the internet, social media, and our massive interconnectivity.
Anyway. That’s a post for another day, or maybe for a science fiction website, since I usually rail at sf stories that have a planet dealing with the same thing at the same time.
I’ve been feeling shaky, on edge, like a cat startling at a loud noise, ever since we came out of the pandemic. (We did. I know not all of you have, and I’m sorry. We’re 100% open here in Las Vegas,
no masks if you’re vaccinated, and everything is coming back to life.)
I’m happy to be out, but aware that things are different. I’ve been filling my calendar with deadlines and concerts and theater and friends’ visits. In August, we were supposed to go to a small licensing fair, sponsored by License Global, but they decided to put it all online back in May.
I wasn’t sure if I was disappointed, even though I had planned that fair to be my return to thinking about licensing.
I’ve been struggling with planning for the future—not the immediate future (which for me is one year) but a farther future.
I blamed it on the pandemic and my issues as an adult child of alcoholics. When I’m going along on my own pace, doing my own thing, and something unexpected and impossible to plan for happens, it can trigger that childhood experience. You see, drunks promise a lot of things and when the time comes, fail to deliver.
I can live with that. Sometimes it irritates Dean because I have to plan for both the best case and worst case scenario, but I can do that. It’s how I’ve survived. (My therapist taught me to add the best case years ago, because my drunk parents almost never came through on anything special, so worst case for me was usually what happened. So I had to learn how to be positive.)
What always threw me for a major loop was the impossible-to-anticipate disaster, triggered by the drunk parents. The night they got into such a huge fight that 17-year-old me, who had just failed my driving test, had to drive my mother to the hospital because my father had fled the house is but one example of the unexplained disaster that takes over and dominates for days, weeks or months.
In my adult life, those impossible-to-anticipate disasters were rare. Even massive storms that cut power or destroyed buildings on the Oregon Coast (when I lived there) were predicted days out.
To be fair(ish), I had warning about the pandemic. I felt in early 2020 like a character in a disaster movie. As I went about my life, the news constantly mentioned this virus in China. Then my friends in Europe talked about how bad things were, and an Italian friend warned that lockdowns were coming to the U.S.—which I did not believe. Things couldn’t be that bad, right?
Fast forward to June of 2021, when Las Vegas opened completely. We have no mask mandates and no social distancing required for vaccinated folks. The Entertainment Capitol of the World is coming back to life, and more and more things are being scheduled—so many that we can’t do all of them, even if we want to, just like the Before Times. (Note: We got our mask mandate back because of the unvaccinated. Sigh.)
But it’s not the same as the Before Times, and we all know it. We’re aware that many of us are no longer here and all of our circumstances have changed. Dean and I even followed the crowd and moved to a better home for us these past few weeks, something we knew we had to do at some point, but “at some point” hadn’t hit yet.
So…I was blaming this unsteady-on-my-feet feeling on the past year-plus and getting used to the changes and on my own triggers. All of those are factors. But it wasn’t until I read an article in the Washington Post near the end of June that what I was feeling wasn’t entirely personal.
The article, titled “The Economy isn’t going back to February 2020. Fundamental shifts have occurred” takes a look at the U.S. economy in June of 2021. We’re suffering from a bit of inflation. We have a housing crisis—as in not enough supply for the demand. We might have the same thing happen in rental housing. There are a lot of available jobs, but not necessarily in the areas where the job seekers are. Oh, and some of those jobs pay so poorly or treat their employees so badly that no one wants to work there anymore.
What struck me the most about this article are quotes like this from Federal Reserve Chair Jerome Powell:
This is an extraordinarily unusual time. And we really don’t have a template or any experience of a situation like this.
Or this one from former Fed official Randall Kroszner about inflation:
Will consumers accept it as temporary? We really don’t know. In some ways, this is faith-based monetary policy.
Heather Long, the author of the Washington Post article, opines this in that way that all j-school graduates are taught these days (“many people agree…”) to avoid the look of editorializing:
There’s dispute, among other things, about how many of these changes are temporary and how many are true fundamental shifts that will stick around for years and reshape behaviors. But many people agree, at least, the changes are proving very disruptive.
In typical journalismese, that’s very understated. “Disruptive” is a huge thing. The Kindle disrupted the publishing industry 11 years ago. Netflix disrupted the movie and TV industry in the past several years. The internet disrupted everything and is continuing to do so. I’ll examine part of that in an upcoming piece that specifically looks at the online changes the pandemic has wrought.
But the word “disruptive” is, for economists and financial managers and people whose jobs it is to predict the financial underpinnings of a culture, a terrifying word.
When something disrupts, it causes massive change.
When someone like Powell, whose job is predicated on correctly predicting the future, both near- and long-term, says we don’t have a template, so we don’t know what we’re doing, he means it.
He added: We have to be humble about our ability to understand the data.
Because the data isn’t based on what came before. It’s based on this weird new world we find ourselves in.
Perhaps the headline says it best. The fundamentals are shifting.
What does that mean? It means that we can’t look to historical patterns. We can’t say, well, in a previous circumstance the labor market did this when faced with a similar crisis—because there is no similar crisis, with all of the changes we’re facing in place.
Sure, there are pieces of similar crises, but they’re not instructive. The Great Recession didn’t include a lockdown and a sudden, massive rehiring. Nor did it include a population shift where people moved from their homes in one city to homes in another city, for reasons that have nothing to do with their jobs.
We haven’t dealt with this level of personal stress on our psyches outside of a war, and while fighting Covid was (and is) its own kind of war, it’s not exactly the kind of war that includes bombs and soldiers and occupations.
We’ve dealt with pandemics throughout human history but again, not like this, where everyone knew what was happening everywhere else, and doing their best to cope in a situation without a clear end point.
We’re still not at a clear end point. Here in the States, people are refusing to get vaccinated which just boggles my mind. If they actually understood the scientific underpinning of viruses and vaccines, they would understand that the vaccines are our only way out of this without a lot of unnecessary death and suffering.
In other regions of the world, they have no access to the vaccine yet and they’re still in the horrors of 2020.
If you stretch the war analogy, you can think of it this way: some places are still battlefields, while others have declared peace. Those of you who understand military history know that ongoing battles in far regions of the world/country can often lead to a restart of the overall war itself.
Which is why I constantly return to the science. Because I know that if the virus mutates enough to break through the vaccines, the scientists are prepared now. Those of us already vaccinated will get a booster or two or three.
That means that because I’m vaccinated, I’m legitimately out of Covid fears.
Now, I need to deal with the economic fallout.
And my inability to see what to do with my career and my business has less to do with my emotional reaction to the pandemic (as I had thought) and more to do with the economic experts being as baffled about the future as I am.
I must tell you, I’d rather the problem is mine alone. Because with all of us baffled, we’re going to make some serious mistakes. We’re going to trudge forward in the darkness, with no real clear light.
I need a clear light to predict things—even if those things are bad. When the fundamentals are solid, it’s usually pretty clear what will happen when a government or a leader screws up something or when a major economic event occurs.
The Great Recession was bad, but it could’ve been worse if various governments hadn’t acted quickly. Some of our suffering here in the U.S. occurred because the U.S. government didn’t act quickly enough in 2008. That was clear to anyone who understood economics (which apparently Congress didn’t).
But we are in a time when, in article after article, the experts admit they’re guessing. Or, in the case of Powell, they don’t even have a guess. It’s really unnerving to have someone in his position say that they have to be “humble” about their ability to understand the data.
Their jobs are predicated on understanding the data.
The future will come to us no matter what. It will do what it needs to do. And we’re going to have trouble guessing where we are.
I do know how to handle a baffling and fluid situation. I’ve lived it more than I ever wanted to, particularly as a child.
We have to remain vigilant and we need to watch for patterns. Eventually, everything will settle into a new normal and that normal will establish its fundamentals.
Those of us who pay attention will see the patterns and figure out how to use the fundamentals to our advantage.
I’ll be honest, though. I’d hoped that when we emerged from the darkest days of this pandemic we’d have a respite from vigilance. We do, when it comes to disease and dying (those of us who are vaccinated). But we’re still dealing with all of the changes that horrid little virus has caused in our lives.
And we will do so for years to come.
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“Business Musings: Economic Shakiness,” copyright © 2021 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / HitToon.