The Road Ahead…2021

So, the heck with 2020…bring on this new year. And yet there are things lingering in the air from 2020 that may need out attention. Let’s start with covid…

Conspiracy theories…I hear you. This could be the worst attack on the world ever launched on purpose by a bad actor or actors. However, I am going to let the government sort that one out and I do not think it is going to help anyone if I stir up the pot with rumors, my own theories or forwarding emails from people that seem to be a bit unhinged by all of this. Anxiety levels are high enough. I’m going to deal with the risk at hand and the rest is truly way out of my control.

I have never in my long life seen an issue used more to push peoples own agendas than this covid issue. Somewhere along the way we lost our ability to do research before we come to conclusions…before we pass along “facts”…before we criticize those who do not believe exactly as we believe. Net result…division in the world, when we need unity….anxiety, when we need calm…rumors and untruths getting in the way of needed actions.

And then there is the economy…oh, our poor economy. I have always felt that one of the required classes for all human beings needs to be “economics”. We are going to see why that should be required in the decade ahead. We can not print money by the ton and give it out as we (actually our over lords) see fit and not have that mess up the economy down the road…can not happen. You can not shut down an economy for months on end, put restrictions in about rents and jobs and pricing and expect that to turn out well in the long run. Necessary due to the pandemic…quite possibly. An action without consequences for our economy and our finances as individuals…no way.

So here is your crystal ball predictions…taxes will have to go up whether our representatives are Republican or Democrat…taxes will go up. Why…because the kinds of things that bring in tax dollars have gone WAY down (like income and activities to tax). And yet, government spending has increased in some amazing ways…like stimulus payments, loans, medical expenses and testing. The notion that the government need only run the money printing presses longer each day shows a fundamental non-understanding of how money works in the world. Inflation will increase in some areas…like at the grocery store and deflation will hit hard in things like vacation rentals or other areas where demand will drop below supply. We are in for a wild ride ahead.

All this debt being built up…people who have not paid rent, not paid bills, borrowed money to stay afloat…that debt will one day come due and there may or may not be a way to cover the debt when that happens. In 2008, a bunch of people needed money to pay their mortgages because the economy was not doing well. The banks and others did not have the money or desire to lend more money. So, people lost their homes. When the economy decides that there is too much credit out there already…bad things happen. We consumers and businesses can no longer kick the debt can down the road. There is a “pay up or go bankrupt” time…and that time is likely to visit us again during this next decade. It will not be pretty.

And, maybe most importantly, the job market will change forever…companies are finding ways to do things with computers rather than humans, with workers who can work from anywhere and not have to come into an office and the degree of difficulty will change for jobs. That last one is hard to understand..always has been. Let me explain…

I was a CEO of a business and had a long career, much of it as an executive. In the old days of my career, I was told to move a dozen times…from California to Illinois to Pittsburgh to Illinois to New York City to Baltimore to Illinois again and numbers small stops in-between…with a wife and two kids to move each time. My then job put me in an airplane just about every week…thousands of nights spent in a hotel room away from my family and friends. I had sometimes long commutes to and from work…hours of each day wasted in a car so my family could live in a neighborhood that we felt would give them some advantages in life. Or, I would live right next to the office and pay rent like $5000 a month in the 1990’s for that privilege. These are degrees of difficulty that may well change dramatically in the days and years ahead. I’m not even sure we need office buildings or retail locations in the decades ahead…we can do a lot of stuff from our own homes…where ever they may be.

If I could effectively run my business from Kona, Hawaii…as people do these days with Zoom and computers and email and the phone…the degree of difficulty has been cut dramatically. And so will the pay. One of the reasons I got some of my great jobs was that I was one of only a few that would put up with that kind of disruption in my life…trust me, there were MANY more who could have done my job as well or better, but they were not willing to move or travel at my pace…I can name them by name..outstanding human beings. So…those jobs are now open to many more people…and the way economics works is that if the supply increases (the number of people who are now qualified to do that job from any location on earth) and the demand stays the same (there is only one CEO job of that kind available) the amount a company will have to pay that new CEO will go down and maybe dramatically.

One exception to that paragraph above…pay for performance will still make high performing CEOs rich, no matter how they got their jobs or where they do their jobs. Companies want to keep top performers.

CEOs and executives make too much money now…I hear that said most every day. I do not disagree. But, please do understand that there is often more to that pay than you might understand or appreciate…those jobs are not usually “cushy” jobs…most will wear you out quickly…kind of like being an NFL lineman. Point is…the economy is likely to flatten, job wise, in the years ahead…to narrow the disparity between the top and the bottom jobs…and that might be good overall…maybe not so good for you as an individual seeking to improve your own life.

Those who own businesses…who take the risks…invent…innovate…refine…build…save and invest…work themselves to death to succeed…educate themselves to a high level…they will always be a problem for us in society…because they will have WAY more money than you and I. China has that problem right now. So do we. It is a problem on earth we will have to learn how to handle. We can not end up all rioting in the streets to show our hatred for the most successful amongst us. If you want to really help all of us out on earth, figure out a way for that to work better for all, without vilifying and destroying those who are actually bringing us products, services and prices that we all need and enjoy.

So…we put a bad year behind us. Let’s all hope and pray for a good year and years ahead. But, just to be clear…there are still a few challenges left for us to resolve..and always will be. Those challenges are our lives. We take them on and meet them as best we can. And we can do that even better in the days ahead if we work together toward goals that will benefit us all…while still maintaining room, energy and a voice for those issues that may always divide us in important ways. I’ve been to countries where those differences are not tolerated…and am always very happy to be leaving them as quickly as possible.

Here is to better days ahead. Aloha.