The ultra long term trends leading into the Tumultuous 2020's... This online book is so controversial, it's banned from linking on Facebook and Instagram
The classic scene where Harry Potter first meets Fawkes, the phoenix.
Recessions happen. Much like thunderstorms, they have a cleansing effect, along with their destructive side. Lightning supposedly cleans the air, at least that's what my dad told me, when I was a kid. The rain may flood for a time, but it waters the flowers and the vegetables and the trees and all the plants. The wind breaks off the weak and dying branches of the trees and bushes, a natural form of pruning. We all know that storms come, and storms go, and that they will pass. Storms of all kinds may be destructive, but we realize that they are part of the natural process. They come, they whoosh through our lives, drop the needed rain, the wind blows, the lightning sparks and the the thunder crashes, they cause some destruction. Some storms, like hurricanes, cause an incredible amount of destruction. But we, as humans, despite all our differences, recognize that storms are a part of life. We hunker down when necessary, weather the storms, and we rebuild if needed, and we go on.
Yet, when it comes to the "storms of the financial world," market corrections, recessions, depressions, and full scale economic collapses, most humans like to pretend that the last financial storm was the last one ever, and there will never, EVER, be another one. Every few years the majority of people delude themselves into thinking that the powers at be have finally "figured out" the economy, and now it will just keep going up forever. And then the next crash comes. The storm hits. And millions of people act like they had absolutely no idea such a thing could ever happen. And the process starts all over again. Honestly, it baffles me. Yes, recessions are not fun things to look forward to, for most people, but they are a regular occurrence.
That's where we are now. I'm starting to write this chapter on March 1st, 2020. This past week the stock markets collapsed, presumably due to the crazy virus from China. The Dow Jones Industrial Average dropped 3,600 points this past week. This may turn into a correction, but it seems more likely this is the visible start to the next "financial storm." It actually started with the Repo Market crisis, last September, but that's out of sight to average people. People are acting surprised, like they never expected this could happen. Many are unsure weather to "hunker down" financially, or to "buy the dip" like the business media tells people to do. The business media, by and large, tells retail investors to buy all the way to the bottom, and many people do just that, losing their savings and nest eggs along the way. CNBC show host Jim Cramer is famous for telling people to buy Bear Stearns stock in 2008 a few weeks before the company collapsed. I actually like Cramer, he's smart and entertaining, I just wouldn't blindly take his advice without a ton of other research on my own.
Whether this recent market slide heads us into the visible part of this economic crash, or whether that major crash comes in the coming days, weeks, or months, it will come. But this next economic downturn will be much more than just a standard 6 month to 2 year recession. As I've explained in the previous chapter, there are other large scale changes happening as well. This next financial downturn will accelerate many of those changes.
So why am I sounding alarmist by calling this next recession "The Phoenix Great Depression.?" First of all, let's start with the " great depression" part. There is now a crazy, convoluted definition of what a financial "recession" is. Then there's the older, traditional definition. A recession is an economic contraction for two consecutive quarters. So instead of growing, when the economy shrinks (a little or a lot) for six months straight, or more, that's a recession. A financial "depression" is when the economy shrinks for two or more years, or the GDP (Gross Domestic Product) shrinks by 10% or more. So a depression is either a really deep recession, or, more often, one that lasts two years or more. A "great depression," by the traditional definition, is a depression that lasts five years or more. So it's a time thing, mostly. When the economy shrinks for six to 18 months, it's a recession, 2 years or more, it's a depression, five years or more, it's a great depression. A "great depression" isn't necessarily worse, in intensity, than a recession or depression, it just lasts longer.
I think the next actual economic crash or downturn, will probably last 2 to 3 years. I also believe that the official numbers will be so manipulated, that it will be called a "recession," or maybe a "double dip recession," like the early 1990's downturn. But I also believe that it will be more intense than most recent recessions, and the overall economy will be largely stagnant for at least 5 to 7 years . So whatever the official definition turns out to be, it will feel like a 5 to 7 year (maybe longer) recession, to most people. So that's why I'm calling this next downturn "The Phoenix Great Depression."
Now, for the "phoenix" part. In the previous chapters here in "Dystopia," I have laid out my thoughts on why I think the Toffler's Third Wave concept is still playing out. I believe that we will continue to see old, Industrial Age organizations, systems, industries, and businesses continue to break down, and be replaced by new, Information Age versions, where needed. Systems that don't have a needed role in the Information Age, may simply disappear altogether.
I also believe that, at the same time, we are seeing Sarkar's Law of Social Cycle transition play out. The Acquisitor Age, the "rule by businessmen," is hitting peak corruption, and the Laborers, the average working people, are rising up, in a widespread populist movement. It's Super Tuesday as I write this part, with primary voting in several states. President Trump is the only serious Republican candidate at this time. Democratic socialist, Senator Bernie Sanders remains a top contender for the Democratic nomination. They are not the only candidates in the race, but 8 months before the presidential election, the populists are leading the parade at the moment. That's the Acquisitor cum Laborer transition in action. (Writer's note, as I proofread this a day later, Democratic moderate, former vice-president Joe Biden, was the big winner on Super Tuesday, but Senator Bernie Sanders won several states, as well.)
So we have a financial crisis, the Repo market seize up, that started over five months ago (September 2019), and has required massive daily injections of money into the financial system, to keep the system operating. In addition, interest rates have also been lowered to try an stimulate the economy, including an emergency 50 basis point drop this morning. So we are over five months into a financial crisis, as of today, March 3, 2020. If this slides us into the next recession, we also have stock and real estate bubbles to deal with, and multiple debt bubbles, with levels of debt never seen in human history. In addition to all that, we are 11 years into a business cycles, where recessions usually happen every 4 to 7 years. Things are just built up for a much larger downturn than normal, for all of these reasons. AND we have the huge societal shifts from the Industrial Age into the Information Age, and the Acquisitor to Laborer mentality(eventually to Warrior mentality) shift in societal mindset, as well. There's just a ton of stuff that's happening all at once. We are not simply going to have these issues shake out and work through them in a year and a half. It's going to take a while. My educated guess is five to seven years, more or less. Tough years, for most average people. It's a big storm, a financial and social hurricane, and it's going to be a big one to hunker down and watch go by.
Now, the "phoenix" part of this is that a lot of traditional ideas, organizations, systems, industries, and businesses will break down in this next downturn. That's the bad part, for people tied to those systems and organizations. The good part is that we, as a society, will have to figure out new ideas, new systems, new organizational models, new business models, and we'll see many whole new industries and systems emerge from this decade. For example, pretty much everybody complains about our crappy education system. It will break down, likely sparked by a breakdown in the college system, fueled by too much student loan debt. As a society, we'll need to figure a better education model out. It won't be easy, but it will be necessary. Hopefully the new education system functions a lot better in 5 to 10 years, as we work out of this mess. The same is true of all kinds of other societal institutions, the ones that haven't been fully disrupted yet. So this is the "phoenix" part of this economic downturn/"great depression." The longer term trends I've written about will lead to breakdowns of businesses and systems, and the need to create and build new systems and business models.
I know hardly anyone wants to hear "bad" news. I also know that damn near everyone complains daily about this thing in society, or that thing. OK, here's your chance! Find some little part of society the bugs you, think up a better way to do something, and do your best to bring your new idea into existence. That's what this next decade, the 2020's, is all about. The time has come to build something new, out of the ashes of the old. The phoenix transition, for society itself. The remaining parts of the Industrial Age will collapse. So let's all take a deep breath, find a piece of the world we think needs fixing, and get to work building a better version.
Blogger's note- 9/12/2023- I haven't changed anything since I wrote these posts back in 2019-2020, except these notes at the bottom. I even left in the typos I missed initially. As of late summer 2023, I'm doing most of my writing on Substack. Check it out.
April 2, 2020 report, Hoda Kotb and Stephanie Ruhle dicuss the latest jobless claims number, 6.6 Million Americans filed for unemployment this past week.
"I just want to hug the country."
-Stephaine Ruhle, in the report above
We have what's looks to be the worst pandemic, in about 100 years, spreading across the United States, right now. Most businesses have closed temporarily, a largely mandatory shutdown to slow the spread of this new disease. We're about three weeks into self-isolation, ordered by politicians, in many parts of the country. Life in America has completely changed in a matter of weeks. I wandered up to a CVS this morning to buy a Diet Coke, and people were lined up to buy toilet paper, before the store opened. When I was in high school in 1983, a "dime bag" meant $10 of weed in a plastic baggie (with stems and seeds to be picked out), and the dealer would tell you, "Dude, it's Hawaiian Tai Stick," when it was really Idaho homegrown. We're about two weeks away from a dime bag being a 10 cent shopping bag with two rolls of toilet paper, and the dealer saying "Dude, it's two-ply!" Check the bag first, make sure it's really two-ply, dealers will always be dealers.
Over 200,000 Americans have caught the Covid-19 corona virus as of today, and over 5,000 have died. The arc of the contagion is still on the upswing, we don't know when we'll see its peak, and infection numbers will begin to drop. A bungled early response to the crisis, by the White House, has definitely made matters worse than they might have been. A huge number of Americans have been "self-isolating," and are online all day, and getting a bit stir crazy, trying to cope. That's the "black swan" illness aspect that's happening. A black swan is a event that is very unlikely, but has huge consequences if it does happen. The term comes from the 2007 book, The Black Swan, (not a paid link) by Nassim Nicholas Taleb, explaining the concept.
For about three years now, I've been blogging about several social and economic trends that I thought we really needed to try and get ahead of. During that time, I've been largely struggling survive myself, for a variety or reasons, and haven't been able to put near enough energy into writing about things I saw coming down the pike. Here in Dystopia I've written about the Toffler's Third Wave, and how I believe it is still playing out, and remaining parts of the old, Industrial Age world are still breaking down. I covered that in several chapters. I also wrote here about how I saw P.R. Sarkar's Law of Social Cycle concept playing out. American business culture, specifically the massive amounts of "crony capitalism," and the revolving door between government and Big Business, has reached peak corruption. This massive level of corruption has stifled the lifestyle of working Americans, by and large. This lowering standard of living spawned the widespread populist movement, predicted by Sarkar's theory. This Populist Movement first raised its head in the Occupy Wall Street Movement, nearly a decade ago. Then, in the 2016 presidential cycle, we saw populist presidential candidates spring out of nowhere, and gain huge amounts of support. Senator Bernie Sanders led the charge on the political Left. Real estate billionaire, and reality TV star, Donald Trump, led the charge on the political Right. Hillary Clinton and the Democrats old guard fended, off Bernie, and she won the popular election, but Trump squeaked to the win with the electoral college.
Now, after three years of gross incompetence in the White House, we have an early, bungled response to the deadly pandemic, AND the long held back economic collapse, happening simultaneously. The result is a sudden change in everyday life for all Americans, and over three million new jobless claims a week ago, and 6.6 million jobless claims this past week. We are in a place unknown in modern history, none of us alive have seen a pandemic and economic collapse like this, at the same time.
I, as a homeless blogger, living on the streets of L.A. county, predicted a nearly 10,000 point drop in the Dow Jones Industrial Average, on January 26th, 2020, weeks before it actually happened. You can read the post here. This was NOT some crazy event that couldn't possibly be predicted. It was inevitable, and I happened to get fairly lucky calling the timing of it in my blog, Steve Emig: The White Bear.
Four months ago, a major stock market drop and economic collapse, seemed like a ridiculous idea to most people. Now, my belief that we are heading into an depression, possibly a full scale, 5-7 year very stagnant economy, maybe a textbook great depression, seems much more possible. And we are still only at the beginning of the economic consequences. We've seen a collapse in the repo market, treasury bond yields, and the stock markets. The corporate bond market collapse is starting, as I write this. In addition, millions of Americans will have trouble paying the house or apartment rent, either now, or in the next month or two. Then comes the collapse in residential real estate prices, auto loans, consumer debt, and student debt. Those collapses will be mirrored by collapses in the commercial real estate and commercial rental markets, and later, colleges and universities (a result of the student debt collapse). Then we'll see a massive economic hit to many of our second and third tier cities and small towns. A huge number of those are now "Eds and Meds" cities, relying on their local colleges, universities, and hospitals, as the largest employers. With a collapse in student debt (and other forms of debt), these towns and cities, hit hard by the loss of factory jobs 20-30-40 years ago, will take another huge economic hit. That will be another huge blow to rural and small town America, places like those where I grew up in Ohio.
THIS is why I've been trying to raise some awareness to these issues over the last three or four years. This is HUGE. This affects pretty much every American directly, and much of the world, indirectly. The human cost from the pandemic will be enormous. I do truly feel for all the sick, and the families who lose loved ones. But those are not my particular areas of expertise. I'm a social dynamics/economic trends/futurist thinking geek. My area of knowledge is the Big Picture I've tried to put into some kind of context here in "Dystopia," and how we first survive, and then rebuild America, as a vibrant, smart, much more creative, entrepreneurial, and green thinking nation in the Information Age.
As I write this, The Fed has been creating dollars by the trillions (which devalues every dollar in your wallet, purse or bank accounts), and throwing that money at Wall Street, the major banks, and corporate America. But that can't fix this. No matter how much money may be in the coffers of large corporations, WE, regular people, are the actual economy. If money isn't flowing through our hundreds of millions of hands, into the businesses and organizations of our choice, then the economy won't work. Period.
The underlying systems are breaking down. The central bank led, Industrial Age built, U.S. and world economy infrastructure, is breaking down like my mom's 1979 Ford Pinto falling apart in 1985. It just won't keep working no more. It will need to be rebuilt. The whole fucking economic system will need to be rebuilt as an Information Age economic system, with things like digital transfers, crypto, the hyper-connectedness of today's world, all built INTO the system. How do we do this? I don't know on the macro level, because the macro level is so screwed up right now.
This is new to all of us, we've never had a society with the technologies available today (unless you believe in Atlantis, and Plato told us how that ended). There is no pre-made game plan. The new Information Age needs to be created, piece by piece, and linked together.
There is, however, a context for all of this. I think the three theories I've shed light on, the Toffler's Third Wave concept, P.R. Sarkar's Law of Social Cycles, and Richard Florida's Creative Class concepts, best explain the underlying story of why this collapse is happening, and happening now. I think these concepts give us ideas and trendlines on where society is heading. They give us some direction work towards. But this is new, we are all winging it. And it will get crazier before it appears to get better. So how do we begin to rebuild? That's what the next chapter is all about.
Written by Steve Emig (aka The White Bear)
All opinions are mine, and are not officially endorsed by anyone in the videos I share, or by anyone whose work I mention.
Blogger's note- 9/12/2023- I have not changed anything in these posts since I wrote them in 2019-2020, except these notes at the bottom. I even left in the typos I missed initially. As of late summer 2023, I'm doing most of my writing on Substack. Check it out.
This is one hell of a cover of Aerosmith's "Dream On," by Morgan James and band. For you younger people here's classic rock legends Aerosmith singing this 1973 power ballad, that put them on the map in the world of rock n' roll.
"You got to lose to know how to win."
-Aerosmith, "Dream On" lyrics by Steven Tyler
I'm writing this chapter on April 14th, 2020, while America is on "Time Out." The Covid-19 form of corona virus has made 587,815 Americans sick in the last 2 1/2 months, and taken the lives of 23,765 people in this country, so far. Those numbers frow by a large amount daily, unfortunately. Most businesses, in the entire country, are shut down. People across the country, in most regions, are under local orders to "shelter in place," to stay at home, and go out only when necessary. Schools and colleges are shut down. Restaurants are open for take out and delivery only. Grocery stores have empty shelves where the toilet paper and hand sanitizer used to sit. Conspiracy theories are popping out of the woodwork about this disease and its origin. We know it came from China, and shut down the whole Wuhan province there for weeks. More than twice as many New Yorkers have died from Covid-19, than from the 9/11 attacks in 2001. We, here in the United States of America, are living through a tragedy on multiple levels.
To make matters worse, our president and the White House's inaction, in the early stages of this crisis, without any doubt, cost hundreds, maybe thousands, of American lives. Thousands are dead, hundreds of thousands are sick, and hospitals and first responders are overwhelmed. This pandemic became the trigger for the stalled economic collapse. The long anticipated "next recession" is here, which is hampering the president's re-election campaign. That's where his focus seems to be during this crisis. Many other countries are living through similar situations. The global economy has nearly ground to a halt, not because of this new disease, but definitely amplified by it.
The vast majority of us will live through these crises, though it may be hard to imagine that now. In the last three weeks, about 17 million Americans filed for unemployment, numbers never seen in our history. A few million more will likely apply this week, and more in weeks and months to come. Tens of millions of Americans are struggling to pay their rent or mortgage payments during this shutdown, as the less fortunate lose loved ones that they can't visit in the hospital, and then are told they can't gather for a funeral, for fear of spreading the disease to others. All these measures are in place to keep the virus from spreading as much as possible, to lessen it's cost in lives and illness. To most Americans, this classic Fleetwood Mac song below, covered by my favorite SoCal singer/songwriter, and friend, Kerry Getz, probably seems a lot more fitting to life in April 2020. It feels like we're caught in a landslide that just won't end...
But landslides do eventually end. Economic crashes also stop at some point. Our country, and much of the world, is currently falling on multiple levels. For the moment, most people need to hang on, to survive the tragedies. We will hit bottom. Then, not that long from now, the time will come to dream... and to begin to rebuild. Like all storms of all kinds, this, too, shall pass.
Recap
The theme of this weird, mash-up, book/blog thing, that I call Welcome to Dystopia: The Future is Now, is that several ultra-long term trends have merged into a period of massive, intensive change. The economic recession that was due about three years ago got postponed by central bank manipulation, and then initially triggered by the repo market seizing up, in September 2019. Then in February and March, the Covid-19 pandemic trickled into the U.S., and quickly spread.
This timing merged with the end of the Aquisitor Age in Sarkar's Law of Social Cycle, a time ripe with massive corruption, and suppression of the working class. These all merged in time with the continuing collapse of the remaining parts of Industrial Age infrastructure in our society, forecast by the Tofflers' Third Wave concept. Our government systems, most of our laws, our entire education system, and many older businesses and organizations in the U.S., and elsewhere, are still remnants of the Industrial Age society. They simply can't function properly in our world of hyper-connected communication, electronic money moving at light speed, and where nearly all information is available for free. These remaining organizations and systems will ultimately break down. This economic collapse and the pandemic have somehow happened together in time, accelerating that breakdown process. Like I keep saying, this decade is going to be a whole different level of crazy. Our country, literally, has become a fixer-upper, and it's getting worse for a while.
Forget the word "Recession"
If you turn on the business news channels, or listen online, one major theme these days is whether or not we're in a recession, or we're about to go into one. Just forget the word "recession." This is an economic collapse. Recessions only become official months or years after they actually happen. Then the numbers are manipulated, so it doesn't seem as bad as it really was. If you're my age (53), you remember that the "double dip recession" of the 1990's was really a stagnant economy from 1990 through 1996. "Double dip" makes it sound like a tasty ice cream cone. It fucking sucked... for six years. We often called it the "ramen days," because we ate so much cheap ramen. We came out of that because some little thing was invented... THE INTERNET. Without that, it may have lasted 3 or 4 more years.
The "Recession of 2020" probably started in August or September of 2019. We're already about 8 months into it. Maybe the official date will be February 2020 for the start. It doesn't matter to us now. This is a meltdown of the entire financial system itself. This crisis was caused primarily by the U.S. Federal Reserve and the central banks around the world. They literally drove the entire world economy into the ground trying to bail out the struggling Industrial Age mega corporations that should have gone out of business years ago.
For example, Sears, the foundational mall store for most the lives of us older Americans, is in bankruptcy, and their stock is 14 cents a share today. Their stock hit $133 a share in 2007. They're toast, and they should have been out of business 10-12 years ago. J.C. Penney's, another foundational department store of the 20th century malls, their stock is 24 cents a share right now, and today, they're talking about bankruptcy. Penney's stock hit $84 a share in 2007. Like Sears, they're toast. Stick a fork in 'em boys, they're done. But through the corporate bailouts of 2008-2009, and the super low interest rates since, the Federal Reserve has been propping up these and dozens of other mega corporations for 12 years now. There was the initial late 2008/early 2009 bailouts for major corporations, then The Fed had "rolling bailouts" since, keeping interest rates ridiculously low, so these old giants could stay alive, though often on corporate life support.
That's the crisis we're in, the dinosaurs that can't hang need to die. That's capitalism. If you can't run your business effectively, whatever the big picture situation is, then you go out of business. Period. End of story. The Fed and other central banks, and the globalists running our governments, have propped up these businesses for 12 years now. They've done it by forcing interest rates to unsustainable lows, and setting up a 12 year rolling bailout of many, but not all, major corporations. This has been done by loading up these businesses, and the whole financial world, with more debt than has ever existed in world history. That is what is beginning to collapse now, that huge mountain range of debt.
The theme for 2020 is bankruptcies, at every level, I hate to say it, but it's true...
My second blog post of my Steve Emig: The White Bear blog, this post, in June 2017, was about the problem of new technology replacing millions of human jobs. Yes, 33-34 months ago, I was thinking and writing about the problem of massive losses of human jobs in the next 10-15 years. I saw this as one of the most serious issues affecting all of human society. And what is happening now even caught me by surprise. We've had 17 million people file for unemployment in 3 weeks, and a likely a few million more this week, and more in the weeks and months to come. Usually that number is about 200,000 to 220,000 a week. The current numbers are completely off the charts.
So what does this have to do with debt and bankruptcies? Everything. All of these people getting laid off are human beings. Duh. They're people. Consumers. Most of these people are loaded up with all kinds of debt. Credit card and consumer debt is at record levels. Student loan debt is at astronomical levels. Auto loan debt is at absurd levels. Mortgage debt is really high. So all these people, now laid off, have debt payments to make. And food to buy. What happens now that they suddenly have to live on a much lower income. They pay rent, or maybe the mortgage, and start looking to trade their car in for something cheaper, if they can get out of their lease or loan. The pay the minimum on credit cards, maybe, and don't pay their student loans at all. Tens of billions or dollars worth of credit card and loan payments don't get paid this month. That money goes to some business, bank, or other organization. Now that business or bank has trouble making its debt payments, because corporate debt is also at record levels.
At the same time, 70% or 80% of American businesses have been put on Time Out. They had to shut down to prevent the spread of the new, pandemic virus. They also have debts, rent or lease, and many other bills to pay. Millions of people are strapped, and can't pay their basic bills. Then they don't spend as much in local businesses, or online and major businesses.
Small businesses in America are getting screwed the worst right now. A professor on CNBC this morning said that 60% or 70% of American small businesses don't think they can survive a three month shutdown. The bailout program for small businesses was designed by Big Business, who have entirely different cash flow needs. A huge percentage of the 30 million small businesses that employ 60 million people (CNBC factoid this morning, April 15th, 2020) will not take the government loans, because they can't use the money where it's truly needed due to the rules. Or they won't take the loans, because the last thing they need is another debt payment. Thousands of more businesses, that signed up for emergency loans, aren't getting their money in time. That's lots more businesses that can't pay their loans, and will lay off people, who won't be able to pay their debt. This cascading non-payment of debt is what will lead to the next two or three waves of economic collapse.
All of that will lead to bankruptcies soaring to levels we've never seen in U.S. history. I'm not being "alarmist," this if reality, right now. This is what's playing out, waves of layoffs leading to loans not getting paid. That leads to collapse in debt markets, and business loans not getting paid, which ripples into the larger banking system. The Federal Reserve, THE CAUSE OF ALL OF THIS MESS, can't lower interest rates to "stimulate the economy," they've been doing that for 12 years, already... since the last major recession. They've been doing this to prop up the Industrial Age major corporations that simply can't compete in today's world.
Unemployment and Disability Nation
A quick Google search shows me that 8.5 million adults were on Social Security Disability, as of last September. A lot of those are actually legitimately disabled, and truly unable to work. But if you live in the hood, you very likely personally know dozens of people who have scammed SS Disability, because they got laid off years ago. I'd say, at least 5 million of the 8.5 million are scammers. That's a personal guestimate, and to be honest, I think it's a low estimate. This Statista chart shows us having 158.13 million Americans (of 328.2 million in the total U.S. population) working in 2020. Young kids and non-working seniors are the rest of the population. Plus we had 3.6 % unemployment in January 2020, before the stock market collapse started. That's roughly 5.4 million people, give or take a bit. I'm not going to absolute numbers here, just getting a general sense of where we're at. The Bureau of Labor Statistics in a month or two will give us some sense of how crazy things really are, but this crisis is happening too fast now for really good numbers.
So two months ago, in January 2020, we had 158.1 million people working, plus 5.4 million people getting unemployment checks, and my estimated 5+ million long term scammers living off Disability checks. That's 168.5 million people of working age, and 10.4 million of them, or 6.17%, not working. Now we have 17 million more people not working, just in the last three weeks. So now (April 15th, 2020) we suddenly have 27.4 million people not working, or 16.26% of our working population, not working. And that doesn't take in all the people who have had their hours reduced, and all the gig workers and independent contractors who aren't working right now, or have deceased incomes. My point here is that a HUGE number of people are suddenly trying to live on much less money. (Writer's note- I'm still working on this chapter, and another 5.2 million people just filed for unemployment this week, bringing the total new claims to over 22 million in a month).
For the time being, The Fed will pull money out of its ass (the technical term for how fiat money is actually created), and U,S. government will send out monthly checks to keep people paying rent (hopefully) and buying food. Printing and creating these trillions of dollars ultimately devalues the dollar itself, and will cause high inflation at some point. Several million more unemployed people will be added to the numbers above, this year. And we have 30 million small businesses struggling for their very survival, because of the shutdown. That's where we're at right now.
The government checks will buy average people, the REAL ECONOMY, time to survive, while it bails out the mega corporations, many of which should have gone under long ago. But giving people government checks, and bailing out banks, Wall Street, and major corporations, WILL NOT fix the problem. The people who created the problem, The Fed and other central banks, Wall Street, and major corporations that are now insolvent, are the problem. They're not going to print themselves out of business. But they very likely will collapse and go out of business, at some point, in the next several years.
In my opinion, this means that all of us average people need to figure out our own plan.
After thinking this job loss idea over for three years, I see only one viable, real world solution. Tens of millions of everyday Americans will have to become entrepreneurs, and create our own small businesses, of some kind.
To do that, I say...
Let's Bring back "American Ingenuity"
When I was a kid, way back in the 1970's, I often heard of the concept of "American Ingenuity." That was the notion that, as a free society, with our inherent human rights, free markets, and a democratic government, America had a knack for being able to come up with new ideas, new products, and to bring those to fruition, better than other countries. It was also the idea that, as Americans, we could overcome any, and every, obstacle. We, as Americans, thought we were kind of special in that way, and our American Ingenuity, our collective ability to solve problems, small and large, and invent novel solutions, was why we were a world superpower. This was why America was believed to be leading the world into a brighter future.
OK, the U.S. had plenty of issues, then, as well. Huge groups of our citizens were fighting for basic civil rights, as much of America spoke of our ingenuity. Some groups are still fighting for those rights. But the unique blend of forces that brought the United States of America into being, and the men who wrote our Constitution (yeah, ladies, I know, they should have had their wives and daughters proofread it), these forces created a different kind of country. The United States of America was grand experiment in human governance. They created a society, a melting pot of people from all over the world, that blended to create many good things in today's world.
This started in the waning Agrarian Age, and surged in the Industrial Age. Now we are in the later part of 80 or 90 year the shift into the Information Age. Things are chaotic, life is weird, and scary, for many. But there's also an incredible amount of opportunity. This economic collapse, in particular, will offer up all kinds of opportunities for Americans, and citizens of the larger world, to take a crack at building their dreams. As scary as it may seem, there are few times in history like the one we are in right now. So let's take a look at the opportunities opening up.
"A recession or a depression is when the whole world goes on sale, but almost nobody wants to buy."
- Me (Steve Emig)
Land of (crazy and chaotic) Opportunity
Let's start with some basic reframing of how we look at this crisis. If the unemployment rate jumps to 20%, as bad as that is, it means 80% of working age people still have jobs. If it jumps to 30%, that means 70% of working people still have jobs. Keep that in mind. Things may be really hard for most average working people, but even in the worst economic times, most people are still working. So that's where we start to look at the positive side of things. No matter what this, negative, dynamic duo of the virus pandemic and the business shutdown feel like, there will be opportunities all over the place available to people looking for them.
Dream on! The paradigm shift from employee to small business person mentality
As a Gen X kid form the 1970's, I was raised in a world where most adults had good paying jobs, either "blue collar" factory work, or "white collar" office work. The great American Middle Class was in its heyday. But of virtually all those adults complained about their jobs, continuously. That's what I remember as a kid. Most people hated their jobs, but that was simply believed to be the price everyone had to pay to earn a living and raise a family then.
The world is different now. There are a much wider variety of jobs, and other money making opportunities, the old 9 to 5 world has largely faded in many industries. People work all kinds of weird schedules, doing all kinds of once unusual work, and right now, during the Covid-19 shutdown, millions are working from home, or not working at all. As of today (4/16,2020), over 22 million people have filed for unemployment in the last 4 weeks. Millions more have had their hours reduced, or work gig jobs or as some kind of private contractor, where work, and pay, has dropped dramatically.
If you're out of work, temporarily or permanently, it's a good time to think long and hard about what you want to do for a living going forward. Everyone has to do something. But in today's world, you don't have to do a job you hate. There are so many possibilities of ways to make money, that hating your work is pretty much your own fault. But huge numbers of people still struggle on with the mentality of that bygone era, "It doesn't matter if you like your job, just do it and get a check." Those people are lousy employees, and they'll find lousy employers to work for. For many people, fighting the crowds to get whatever job you can during this crisis is the best option. They can always complain and blame their employer that their life sucks.
But pure and simple, there will not be enough traditional jobs to put the U.S. work force back to work again. Even years before the Covid-19 shutdown, this was an issue. Nicolas Eberstadt, in his 2016 book Men Without Work, chronicles over 7 million men who have left the job force. Many of these men (and a growing number of women), are the Disability scammers I mentioned earlier. They survive off government checks, all of the working Americans pay rent, food, and bill money for this huge group. If the federal government did nothing but shut off Social Security Disability payments, that alone would cripple the economies of The South, and much of the Midwest. West Virginia and Kentucky would pretty much collapse. That's how bad this issue was before the current crises started.
What do these guys and gals do all day? There aren't good statistics, but what there are, show that these guys mostly watch TV and play video games. For real. You are paying for MILLIONS of men and women, to live in a sketchy apartments, watch TV, and play videos games all day. Millions of them. This group is also closely tied to the opiate epidemic. This group is about to double or triple in size, at least temporarily.
Another huge group not working, is people with felony convictions, who have done their time, but cannot find good work in today's world. So even before the current virus scare and economic crash, many millions of Americans were surviving without working. You can apply for Disability and become one of them, most likely, in 3 years or so. That's how long the process takes to scam, last I heard.
Dream on
Or, you could dream. If you can't find a good paying job right now anyway, start thinking about what you would want to do, if anything was possible. What do you enjoy doing? What have you secretly thought or dreamed about doing for a living. What does your physical community need? What do the people you associate with online need? Is there some place where what you want to do, and what your communities need, combine? Is there a opportunity there that you could make money at? Are you willing to learn the new skills needed and actually work towards that goal? This is where new businesses, small and large, come from.
As I mentioned in earlier chapters, I got into the weird, new, little sport of BMX freestyle in the mid 1980's. Basically, I was a high school kid "doing tricks on little kid's bikes." That's how other people described it. But it really caught me. I stuck with it, I pushed myself, dreaming of becoming a pro rider, and going on tour across the country. That didn't happen. But by associating with a bunch of other weirdos riding bikes, who were highly motivated, and highly creative, I began to push myself.
I published a zine, then got a job a real magazines. I became a writer, photographer, and eventually a video producer. Later that led me to working on "real" TV shows. Many of my friends started small companies in the BMX and skateboard world. When did most of those companies start? During the 1990's recession. Us weird kids took over, not only our weird sport, but the entire BMX industry. Bikes got better. Business got better. The contests got better. Now BMX freestyle, in its many forms, is a worldwide thing, and will even debut in the Olympics.
We accidentally created a worldwide sport and industry by asking ourselves two basic questions, (often while drunk). I call these the "Two great questions." They are: 1. Why doesn't somebody make a better _______________? 2. Wouldn't it be cool if we made/did _________________?
Fill in the blanks for your life. What needs to happen? What needs to be built in your city? What needs to exist that doesn't already? What would be a blast to do?
Lots of people, most people in fact, sit around with friends, often drunk and/or stoned, and ask questions like those. People thorw fun and crazy ideas out. But only a few people wake up the next morning, nurse their hangover, and then actually get to work.
The decade of the 2020's will be built, and our collective future will be built, by those people. Do you want to be one of them? Hey, if you're not going to make much money for the next few months, or next year anyhow, why not make crappy money doing something really fucking awesome. Maybe it takes off, and you wind up making a decent living. Maybe it doesn't take off, and you get a more traditional job later on, and have a great story to tell your co-workers at lunch.
Most likely what will happen, if you persist at it, is that you'll find a variation of the original idea that turns into a gig, a side hustle, or a full blown business, at some point. I didn't set out to be a writer or content creator. I made my first self-published BMX freestyle zine in 1985. The term "content creator" wouldn't be invented for another 20 years or so. Blogs were still 15 years away. The internet, as we know it, didn't exist yet. Yet I became a content creator in 1985. A zine is basically a "blog" in paper form.
When you start working towards an idea you are truly passionate about, weird and cool things start to happen. People very rarely become a huge success at their original idea. But they meet new people, creative, talented, and motivated people. They discover they are capable of doing things they never imagined they could do. They push their limits. They have more new ideas. Some work. Some don't. But they become more self-motivated, and more confident in their ability to make something new, cool, and interesting happen. Don't tell the bigwigs in Washington D.C. or Wall Street, but all these weird and creative people are where growth in the economy comes from. That's what Richard Florida's work (from a previous chapter) has studied and proved to be true.
The remaining parts of the Industrial Age are declining, and they will collapse. "This is the way we've always done things" is why things don't work in most areas. The internet, smartphones, and all the other tech created in the last 50 years, has changed what is possible, and what makes sense (and dollars). This is especially true in rural areas, and small town, small city America. But it applies everywhere. New ideas most often take root and grow during economic downturns, and this is the biggest one any of us will likely ever see. The world is waiting for your new ideas to make some little piece of the world better. Are you up for that challenge? Dream on! Then get your ass to work building something new.
The Big Opportunities...
No matter what the economy is doing, there are roughly 328 million people in this country, and they need food, the need places to live, they need good relationships with other humans, they need transportation, they need clothes, they need communication tools, and they need some form of entertainment now and then. All of those things present possible opportunities in this economic downturn for you to sell a product or provide a service. Most of these things just listed are handled by large businesses, most of the time. But that doesn't mean you as an individual, or part of a small business, can't provide some of these things.
There are a few things that, generally speaking, do well in most recessions and depressions. Here's a short list.
-Second hand/thrift stores
-Discount stores (from Walmart to 99 cents/dollar stores, to Costco, and T. J Maxx,-types)
- Repair shops- People tend to repair items like cars, bikes, phones, appliances more, and buy new ones less, in recessions and depressions.
-Entertainment- People need diversions and escapes from the misery of everyday life in down times. In the Great Depression of the 1930's, vaudeville shows were big. These days, I think video games, binge TV shows, and comedy videos (like YouTube channels) will be big winners, among others.
Housing- OK, as a homeless guy (at the moment), this is funny to write, but everyone needs some place to live. This downturn will wreak havoc on residential real estate. Prices for homes will drop severely, pretty much everywhere, most likely. They will probably drop the most in the expensive areas, like here in SoCal, the San Francisco Bay Area, Seattle, New York City, Boston, Austin, south Florida, Washington D.C. area, and Houston. These are the major tech hubs, and energy heavy city, Houston, Texas. The bigger cities on that list also have a lot of homes and condos, bought by global investors, and often kept empty. That's one reason of many that a few metros have insane prices. Being tech hub cities, with lots of high income earners, is another reason.
But prices for homes and apartments will probably drop most everywhere between now and 2021-22. If you have the resources, there will be good opportunities to buy a house, a duplex/triplex, of apartment buildings. The cities listed above, by and large, are probably the places most likely to rebound somewhat in the next 3 to 7 years. They will most likely rebound far faster than the rest of the country, in real estate prices. In huge parts of the U.S., real estate hasn't moved much at all in the last 12 years, since the Great Recession. The handful of tech hub cities, centers of Richard Florida's Creative Class, far outpace other cities in real estate value, and rental prices. Unfortunately, this also leads to more income disparity in the metro regions that are doing the best economically. Richard Florida's work explains these dynamics very well.
In addition, because such a huge number of people becoming unemployed very quickly, there will be A TON of people looking for cheaper places to live. This may help rentals in outlying areas of big metros, and it may also help with share rentals. Here in L.A. metro, there's a longstanding roommate culture for single people, regardless of age. Three people pay 1/3 of rent on a 3 bedroom house, condo, or apartment, and share utilities. This will begin to happen in other places, but finding good people to room with will be an issue. It takes time to build a culture of people sharing an apartment with strangers. In many smaller towns, only the serial killer looking types, and crackheads place ads for roommates, so everyone has their own apartment, or shares only with family or close friends.
Another version of thism very likely to happen in these tough economic times, is young couples sharing a two bedroom house or apartment, one couple in each bedroom, and shared open areas. Sure, it's tight quarters, but it'll save both couples a lot of money. I think many tech enabled forms of share rentals, like Air BnB, for example, will do well in the coming few years, if they can keep going at the corporate level.
Childcare- Being a Generation X kid, I remember the days of babysitting the two craziest kids in the trailer park, outside Boise, Idaho, for $1 an hour and all the government cheese I could eat. Really, that was the deal, and I don't like cheese (except on pizza). There's nothing like dodging marbles flying out of the bedrooms from the boys' slingshots, while trying to find that last can of Pepsi in the fridge. Remember, a paintball gun is a babysitter's best friend, and silence is golden... but duct tape is silver. OK, just kidding about that, we didn't have paintball guns in 1982. I actually taught those two brats to wrestle each other, so they'd wear themselves out in the first hour. Then we'd listen to music from their parents 400 album collection. They're kids, you should be able to outsmart them. Those two kids ended up being alright, and turned me on to some great bands, like April Wine, Bad Finger, Hot Tuna, and Foghat.
All kidding aside, most young families need childcare, and prices are insane these days. This will be a huge opportunity if you're good with kids, in the coming years. A reliable person who works for half of what daycare centers charge could do well in coming years. Find out the legalities in your area, and do a good job.
Micro Businesses- In many ways, it has never been easier to start a tiny, one person business. With a smartphone, tablet, or laptop, and an internet connection, you can sell products and services (legal ones, of course) to people all over the world. I started without a dime 4 1/2 years ago, and have sold over 80 big pieces of my artwork to people on 5 continents. Really. OK, I don't make a lot, but that's due largely to the meticulous, and very time consuming nature of my work, and other weird aspects of my life.
These days, a single person can create a product or service, make it or get it made somewhere, market it online and through social media, and ship is worldwide, fairly easily. Yes, there are a lot of little things you need to learn to do this. You can find how-to videos and articles with a search on Google, Bing, or YouTube, that will teach you each step you need to learn.
Whether you want to sell your jars of raspberry jelly made from Aunt Agnes' secret recipe, sell drop-shipped items, find cool antiques at auctions to resell, make T-shirts with custom slogans, write and sell ebooks on your favorite topic, or provide a service to local customers, or people on the other side of the globe, it's possible with today's internet, technology platforms, and communication networks. It's work. It's not easy. You have to be self-motivated, day after day. But it is very possible, and nearly anyone can do some form of a micro business. I personally think this is America's future, with maybe 40% of people holding traditional jobs in 10-20 years, and 60% (including a LOT of kids and seniors) running micro and small businesses.
You can sell items on eBay, as an Amazon reseller, through your own Shopify or similar store, or through a custom designed website of your own. You can also buy things online to sell at a garage sale, a flea market or swap meet, or locally through Craigslist, Facebook Marketplace, or one of the local sales apps. There are literally thousands of variations of this basic idea to choose from, and you can find one to tailor to your situation.
Education- Right now, we are a couple months into the visible economic collapse of 2020, and 7 months since the repo market seized up, the real start of the economic downturn, in September 2019. Student loan debt in the U.S. sits at over $1.6 trillion. Over 40% of those loans were not being paid on time, a year ago, according to Nerd Wallet stats. That number of late/deferred payments will soar in the next few months. In addition, college enrollment is also falling, genrally speaking, and now we have most (all?) colleges and universities shut down because of the Covid-19 pandemic. OK, they're operating online, but closed in the everyday, traditional sense, for now. On top of all that, the March Madness basketball tournament, which makes tens of millions of dollars for many colleges, was also called off. This means a lot of colleges are in a money crunch right now.
The increasing failure to pay a huge chunk of the total student loan debt will lead to a collapse of the SLABS (Student Loan Asset Backed Securities), the student loan debt system. Most of those loans are already owned by the U.S. government, so it's hard to get a good grasp on just how this will play out. But I firmly believe there will be a massive collapse in the student loan, market, one of many debt crises we'll have to deal with as a nation.
That loan crisis will shut off a lot of the funds to the entire college/university system. This will force many colleges and universities to downsize dramatically, or shut down altogether, in the next few years. I see this playing out something like the Retail Apocalypse, but faster, over 2-5 years. In short, the entire college/university system will be hit with "The Big D," Disruption. Like the factories 20-30 years ago, the music industry around 2000, and retail brick and mortar stores in the 2010's, the entire collegiate system will have to re-invent itself for the Information Age. Yes, the age where nearly all information is available, for free, online or in a library somewhere.
This will be HUGE. In part, the shutdown of a large number of colleges will affect dozens of towns and cities, where the local college or university, and often the hospital associated with it, are the main employers for the region. This college disruption will force (FINALLY) a restructuring of K-12 schools as well. How should K-12 education work in the 21st century? My sister is a longtime teacher, and I know she, and most other teachers, as a ton of good ideas. Soon you'll have your chance at positive change in teaching.
There will be all kinds of opportunities associated with this massive paradigm shift in education. We obviously still need some kind of colleges for scientists, doctors, engineers, nurses, lawyers, teachers, and several other professions. Online learning will probably become a much bigger part of the new system. What will happen to other aspects of college life? Hard to tell form my vantage point.
Life in the rapid change of the 21st century means constant and continual learning for everyone, outside of traditional education. We all need to learn to software, new technologies as they're invented, and new ways of living with those technologies. "Google State" and the "University of YouTube" will continue to be huge in the 2020's for learning everyday things. But those will morph as voice becomes a more viable as a technology, and voice operated computers in our homes become more widespread. There are all kinds of opportunities that will spring up around education, in all its forms. And there will be massive push back from traditional education, of course, until they can't pay their employees checks, that is. The big take here is that this economic crisis (crises, actually) will force change on the college system, that it's not ready for. And it will do it even faster than I thought possible, with the role Covid-19 is playing in accelerating the economic collapse.
I don't have a ton of insight into what the exact opportunities will be in education, but I see the big picture of a major disruption falling into place. As a blogger and writer, I'm a tiny part of this picture, but not involved in the more traditional aspects of education, where there will be much greater change coming.
There will be other areas of opportunity, as well. Whatever your situation and interests, there will be people in financial binds looking to sell physical items cheap, collectibles, real estate, cars, trucks, and other vehicles, and all kinds of other things. But I think the biggest overall opportunity will be re-inventing every community, town, and city, into the best, most environmentally friendly, tech-enabled version of itself. In the decade of the 2020's, America is getting re-invented, not from the top down, that's the financially system that is crumbling to pieces. America, and many other parts of the world, will be re-invented from the bottom up, at the grassroots level, by the 99%. Build something cool.
Written by Steve Emig (aka The White Bear)
All opinions are mine, and are not formally endorsed by people appearing in the videos shared, or in any of the works or theories I mention.
