Watching the stock market, hearing CEOs and business leaders speak and listening to the news it seems that everyone is trying to rush back to where we were before COVID-19 all but halted the making of stuff and offering of services(the catalyst for the movement of money), and changed our daily behavior. The selling point has been concern that the shutdown will be worse for us than the disease itself. That is very debatable so why the rush?
Patience is going to be so important at this point for the sake of people’s lives, and to make sure the way forward is done properly. This may be one of the most important events in human history because of the opportunity it is presenting and the lessons it is teaching us in such a critical time in our evolution. If we don’t take a breath here and carefully measure our path forward, we will be sorry.
Even though we all loved that our retirement account balances were reaching new highs every day, I think we also all knew that the growth was fragile. Valuations of stocks were irrationally high, and corporate debt had reach unsustainable levels. Productivity was low. The world was pumping out goods and services at a meteoric rate and we were paying for them just because we could. We were buying shares in companies that were losing huge amounts of money. Profitable companies were buying back record amounts of stock. Life was good.
Now we are in a bit of a pickle.
But really, we were in a pickle before and just didn’t notice it from the frenzy of consumption despite the warning signs. People were not saving enough, too much debt was accumulating, companies and business owners were keeping too much of their profit rather than reinvesting in their business, oceans were getting warmer, skylines were dirty, and levels of stress and anxiety were through the roof.
The virus has forced us into a different way of living. It felt temporary at first but now that it’s dragging on and what seemed to be a painful inconvenience is becoming a new way of doing things. Perhaps even a new appreciation. We are now living an experiment that we were moving fast to try. If enough of us are paying attention to what is happening, then the results of this experiment should lead our behavior to a more sustainable version of capitalism. There will be a price to pay, but now is a good time weigh the sacrifices against the benefits. The hardest sacrifice to make will be the impulse to spend mindlessly. After that the richest of us must be prepared to earn at a slower pace and to reinvest more in the business’s that matter.
There is no reason that we can’t slow things down and be more progressive and prosperous in the process. We don’t really need a new car or a new phone every couple of years. We don’t need to drive somewhere just because it’s an easier option that walking around the neighborhood. We don’t need to log on and buy stuff online just because it gives us a squirt of dopamine.
Paying attention to what is happening now should be a reminder of what is possible. Some people think that human progress comes at a cost. But look around, in just 2 months:
- Politicians, corporations, countries and individuals are cooperating
- Crime is down
- Some wars have subsided
- Skies over cities have cleared of pollution
- Wild animals are moving back into encroached land, and restrictions have been place on wild animal trade.
- People are taking the time to call each other, or congregate online
- We re-found our appreciation for those workers who provide for our basic needs
- We have newfound appreciation for the availability of those goods and services.
- We are seeing and appreciating the power and ability of federal government to a valuable contributor to free trade and innovation.
We need to get passed the danger of COVID-19 and its impact on the economy.
Unfortunately, many more people will die, and many will lose our source of income. A lot of businesses will have to close, people will have to find new jobs and even might need to change careers or types of work we do.
But this is when we should be taking all off our technology, intellectual capital, natural resources and ability to create credit, not to become more profitable but to get better. How we spend our newfound credit is going to be critical to a sustainable path forward. Focusing on infrastructure, innovation, education, quality, not quantity, not speculation and not funding those that are not willing to change. We can make money while the making the world around us a better place. We can have our cake and eat it. Shame on us if we don’t.
P.S. The Joplin Tornado killed 158 people, despite getting a Tornado warning 19 minutes before the tornado arrived. Michael Lewis in The Fifth Risk describes the frustration of the National Weather Service who gave the warning that it wasn’t enough to save those lives. Subsequently they did an investigation on why people die despite an early warning only to find out that when people believe that a threat won’t affect them then warnings don’t matter. This seems to be a big factor in these troubling times of Corona Virus. A lot of people must not think they will get it, or they might think the symptoms won’t be that bad, and they are not thinking they can spread the diseases to others that are more vulnerable.