While some are hopeful 2020 was a fluke year, looking forward, it’s more important than ever to carve out options that maximize your independence.
By: Bobby Casey, Managing Director GWP
Seriously, that shows how off the rails US politics is. People made the Vice Presidential debates all come down to facial expressions and a fly. Because what place do issues have in the political discourse?
None, because none of those issues stand a snowball’s chance in hell of being addressed no matter who wins.
While everyone nitpicks at these candidates, I’d like to be a small voice in the void that directs your attention to actual issues.
I, like everyone else, would love to just bury this year’s mayhem in a tomb and lock it away. Write it off as a year of detoxification, and start fresh. Unfortunately, the reality is, 2020 might just be the beginning of a very long and arduous era.
Here’s a taste of the latest stats:
Final unemployment numbers before the election is 7.9% (U3), 12.4% (U6)
On Thursday, the Congressional Budget Office estimated that for fiscal year 2020, which ended September 30, the US deficit hit $3.13 trillion — or 15.2% of GDP — thanks to the chasm between what the country spent ($6.55 trillion) and what it took in ($3.42 trillion) for the year. (Source: CNN Business) While these are not the final numbers, if these are any indication, the US debt will have exceeded GDP. Something the US has not seen since just after World War 2.
Globally, it’s much worse:
100 million people were thrown into extreme poverty, according to the World Bank. The number has gone up from 7.9% to 9.4% (615 million to somewhere between 703 – 729 million people).
There’s an interesting distinction this time around. Barring a few short term exceptions, the world has seen 30 years of nearly uninterrupted improvement when it comes to solving for extreme poverty.
During economic downturns in the past, those most affected were rural, and under educated individuals. This time, however, more educated city dwellers are also feeling the pain. If you recall, the Caribbean islands cut their Citizenship by Investment Programs prices drastically to bring in funding.
These numbers are so devastating, it has the WHO urging world leaders to avoid lock-downs as a means of preventing the spread of disease. Using them for short-term solutions to regroup and reorganize resources is one thing; protracted economic lock-downs are quite another.
As WHO’s Dr. David Nabarro so concisely put it, “Lockdowns just have one consequence that you must never ever belittle, and that is making poor people an awful lot poorer.”
Where many people still get it wrong is in blaming the pandemic. The pandemic didn’t do this. Government policies did this. Pandemics don’t kill jobs. In this case, pandemics didn’t even kill much of the work force. In the US alone, over 40% of the coronavirus deaths were in nursing homes.
79% of US deaths involving coronavirus were over the age of 65; 57% are over 75 years old. The children and adults still in the work force should never have been made to turn their lives upside down over this virus.
Because this was a contrived economic crisis and not a typical event in the economic cycle, different sectors were affected, but with no chance of recovery. That’s not the same as other downturns or recessions.
During other recessions we could observe certain countries or industries getting hit harder than others, but they would come back. When it is economic forces, corrections are made and people move forward. When it’s government forces, and cutting hair becomes a criminal offense, that’s not the same.
If people cannot continue to do the jobs they did in the manner or numbers in which they did them (because of public safety), then it will take a while before humanity can come up with new jobs, or new business models, to fill the void.
Not to say that can’t happen. It can. Regulations need to be lifted for this sort of innovation to unfold. The more regulated the industry, the slower or less likely the recovery.
Where I see opportunities is in:
Concierge models – This is where service providers come to you, rather than you going to them. Everyone from nail and hair stylists to tax preparation and medical services would come to your home for basic services. Crowds would be avoided, and mask policies can be set by the households. Certainly if food or goods can be delivered, so too, can services, right?
Virtual or e-commerce – Internet based businesses were already on the rise, and e-commerce clearly did well during a time when people could not shop for themselves. Where I see this taking off, as I’ve said in earlier interviews and articles, is the gig work for virtual workers. This pandemic did do something to urge this sector to hustle a little faster.
Mobile and/or Kiosk – This is a model that was once considered a “starter” for many businesses. You start small and work your way up. But I expect to see small mobile and kiosk sized take-away experiences to become more of a franchise moving forward.
Things like travel and hospitality were the hardest hit. Those industries are so heavily regulated, I don’t know if or how they can come back.
Who knows? Hospitality might be so heavily regulated, conventions and events might just start to be held at people’s homes to avoid the hassle!
Until the automatic mandatory quarantines and face probes go away, it’s not likely that people will be eager to board a plane. I’m not kidding, my last trip from Latvia to Mexico was about 10 hours longer than it needed to be just because the routes have been so drastically reduced.
People cannot rely on their governments to create responsible policies, or look out for anything other than their political interests. They will indeed take every opportunity to grab more power and more control.
It’s on each individual to build a life that yields the greatest amount of independence from their regulations, restrictions, and mandates.
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