Better Vision Now
Our Leadership Is Woefully Underwhelming for Our Current Moment
In between spurts of work, I was pouring through inflation data to make sense of the impact of the demand shock that most of the world is going through. The good news so far is that it looks like there is coming respite because the Federal reserve explicitly understands now that it can perform monetary policy without having to touch the rate dial. Which is… paradoxically concerning.
Its concerning because the Fed seems to be the only American institution remaining that practices responsibility over its mandate. Which is to promote and support the health of the dollar. For as much of a critic I may sound off on Twitter about QE and the asset purchase program, Fed Chair Powell undertook a notable responsibility to keep not only the health of the U.S. monetary environment but also the health of non-U.S. swap lines. Something that prevented something much worse and that lizards like Larry Summers will try to convince you that we need less of.
I think it’s remarkable that the Fed is one of the few institutions that stand against the rest of the institutional malaise that we have been witnessing. Especially has they have historically “yelled” at the legislative branch for proper fiscal policy.
My post explaining the impacts of this inflationary period isn’t ready and the requisite prediction that comes with it needs time in the oven. However, while watching “Don’t Look Up” I became struck with disappointment that this was the peak of societal critique that we could muster. A movie written and directed by former movie director and now tortured Twitter user Adam McKay.
I know you are used to me talking about products (applied Micro) versus Macroeconomics which is as much of an art as it is a science. I promise it all connects.
Looking Down
For a year that was drastically better than last year, it’s no secret that the national mood is the way that it is. Almost none of the core issues that persisted before the pandemic was solved in any meaningful way whatsoever. Workers quitting due to stress and mismanagement were painted as opportunistic journeymen by a press that is incapable of self-reflection at scale. The medical communications community continues to be terrible at motivating the public to take the correct actions to be safe even under a friendlier administration. Not to mention, everything costs more.
The cynicism is palpable.
Who can blame anyone for feeling that way? I sure as hell don’t.
It feels like the current leadership of Republicans and Democrats are convinced to strip themselves of any liability of the current moment. Instead opting to find convenient boogeymen in each other, immigrants, and tech companies. In a target rich environment for thoughtful critique and comedy- “Don’t Look Up” saunters in.
Not to unfairly dogpile on the film, by any objective measure it’s a good film with good acting and good cinematography. Jokes land when they need to. But the film does a respectable job of being a marker for our cultural moment, which is exceedingly rare to capture succinctly in two hours. It perfectly captures the establishment liberal view of the country, and everything right and mostly wrong that comes with that.
If you want to watch it, don’t read ahead- I will be right here waiting for you.
To summarize the film, it’s about a giant comet that is hurling towards earth and the action/inaction that the United States of America takes when they learn about the news of its arrival. It tries to caricaturize the United States with its 24/7 vapid news cycles and incompetent leadership (with more punches being pulled at the “anti-Science” right and tech billionaires)
However, at the end of the film- instead of successfully averting the issue. Humanity reaches its demise where its faith in each other leads to its downfall. The solution proposed by its protagonists? Crying about peer-review and believing the science. The moral of the film reads like a “In This House” yard sign in a multi-million-dollar Cupertino neighborhood.
The film does a wonderful job making every single character unsympathetic. Which feels analogous to our current moment. Initially written to warn us about the dangers of climate denial, the film had to be adjusted to account for the craziness of the Covid19 pandemic, which doesn’t look to be abating anytime soon.
This essay isn’t to review the film, but notably to opine about the brain worms in American society which have downstream effects in our well-being. We have utterly forgotten to imagine a better future for ourselves.
Hope Isn’t Dangerous Its Necessary
Meanwhile, in meat space the CDC adjusts the quarantine time from 10 to 5 days using the same justification and gas lighting tactics from the Bush administration. Although it’s depraved that the current opposition party can’t seem to muster two brain cells against the rampant culture of safetyism in some parts of the left- while no time has been spent reflecting on why trust in institutions remains so low to begin with.
The hollowing out of American capacity has several culprits, one of which is the rampant focus of capital over labor. While the consultants of the world optimize market returns over growth, we have disconnected the value of an asset versus an asset’s true economic performance. As such the deindustrialization of America led to incrementalism- such incrementalism bled into our tech industry.
In tech, most of the progress made in products as of recently hasn’t been through pure technological breakthroughs but through regulatory arbitrage. The groundbreaking foundations took place from the seventies to the early aughts. The rest is continuous refinement, necessary refinement but refinement, nonetheless.
For the large existential challenges that humanity faces, we can’t approach it with the same mindset of austerity that we usually do with most crises. Much of the discussion around managing the financial burden of pandemic relief has been done in terms of determining what is enough. Likewise, much of the rhetoric around climate change is about “reducing” impact. However, I can’t recall any recent discussion where such proponents of green technology move beyond mere sustainability and into a mind shift where we design technology to support an exponential amount of people with a radically improved way of life.
Such framing might be seen as overly utopian, but the alternative is acceptance of the status quo- which is an inflationary point of view and increasingly untenable.
Any advanced country needs to continue inventing modern technologies to increase production of resources. It’s the Ponzi scheme of life that we sign up for. Whenever we do not meet that expectation- we enter the latter stages of a debt cycle, and after “a Beautiful Deleveraging” we begin again. However, we seem extremely committed on both sides to ruin what makes this country work and seeing the approach to climate change on the left and response to the pandemic of the right show how precarious the ground we stand on truly is.
Why does economics factor into all this? Economics is the study of decision making with limited resources. If Americans collectively believe that the future of our lives is lower than the present value of the choices we make, you can say hello to an inflationary spiral. However, on the other side, we feel irrationally afraid of any meaningfully large capital investment in industrialization that would lead to anything more than “full-employment”.
The Myth We Tell Ourselves Matters
All the important graphs show that American demand for products have made up for the losses of demand induced by the pandemic in 2020.
However, during the discussions in popular financial media, the one story that hasn’t been told is how the purposeful reduction of state capacity has knee capped American society by austerity. In Long Beach, containers were restricted from being stacked more than three high due to a local ordinance. The American obsession with preserving property values has now trumped livability in most cities. A zero-sum mentality has now permeated our culture after 20 years of robber barons working in concert with corrupt politicians. The frank reality is much more banal: we are ruled by the equivalent of an egregious H.O.A. where in return for removing Boomer’s pensions, we have made it politically unpopular to do anything meaningfully that would spur growth.
As a result, we are mired by cost disease, which leads to prohibitive cost of living. (Which impacts birth rates. It’s all connected baby!)
The truth is- we need enterprising individuals who believe in the promise of the country to create solutions far beyond our current perception. While other countries produce and watch “Wandering Earth”, we are busy standing up weak caricatures of ourselves to discourage anyone else to try anything new. The critical failure of “Don’t Look Up” was the movie neglecting how breakthroughs in science occur- from left field. mRNA was mocked, until it wasn’t.
The result is a public that no longer believes that problems can be solved by collective will. One that can’t imagine a country where economic opportunities can thrive. It’s an environment where dangerous third columnists will take advantage of American suffering and further damage the republic for their own gain.
Americans deserve better than the cowards of our elected officials and those who create media than what we have today.
Update: 1/03/22
It’s not lost of me the irony of my usual disclaimer on the bottom. With that said, I stand by what I wrote and published. It’s been a difficult period for all. However, there are consequences when real lapses of leadership occur.
It’s a rough world out there, let’s remind ourselves to be kind and charitable to one another.