Black Swan
I don’t want to write about what we’re going through right now because it’s just too frightening. I just want to try to talk about after we get on the other side because the world will get to the other side, somehow. I want to put out some ideas of what I think might change and who will be affected. These are just possibilities, not what I think will actually happen.
First, China. We’re already sort of seeing this but there may be more drumbeat on the culpability of China in this pandemic due to its stifling of information from doctors. I would not be surprised that after we get through this horrible time, there would be an assessment on whether China should remain a member of the WTO. Or maybe US businesses will start to pull out of China because businesses cannot depend on China to be open with information in crises such as this. If I remember correctly, I think when China joined the WTO in 2001, it was hoped that its participation in the global economy would introduce changes within the country, bringing in more democratic tendencies as people start to enjoy their wealth, but that hasn't happened. It’s a real possibility that Americans will call for businesses to pull out of China, especially after so many years of offshoring to China our manufacturing.
Businesses. I’m already seeing signs of this and it will continue to grow as we head into this crisis. Some businesses, such as airlines and cruise lines, are asking for help and there are voices out there saying, “No bailout without some conditions.” We had the bailouts in 2008/2009 and they were necessary to save the financial system but many people were not happy with companies being bailed out while the average Americans were hurt. At the time, I thought, if we go through this again in a few years, people will be out for blood. They may get violent. Now, we are far away enough in time that that might not happen but I’m not real sure. They may get violent if the government try to aid the companies but not the people.
Here are some arguments for why companies should not get bailouts unless there are conditions:
- The airlines, when they got that nice cushy tax breaks, instead of investing in the business or their employees, they did stock buybacks which only helped the shareholders. There was no trickle down. So, the argument is: if the airlines want help, the bailouts have to come with conditions, maybe raises or maybe adding employee representatives to the board room. Something that will help the average American worker. Airlines will definitely get help because they are a vital piece of our economy but they do need to change their ways so that all stakeholders can participate in the gains.
- The cruise lines apparently are not registered in the US and thus do not pay taxes here, at least that is what I read somewhere. If that is the case, I would think people would say no. Pay no taxes here, get no help. Also, cruise lines are not really a vital piece of our economy so if they “die”, no severe impact on the US economy; the only problem is what do we do about the employees. How do we help them?
- I read that hedge funds may be in trouble because of their debts. Now, I haven’t read any opinion on how to deal with hedge funds but my take is: NO! Hedge funds are part of the financial Wall Street who got off scot-free during the Great Recession, so I can’t imagine regular Americans wanting to extend a helping hand to the hedge funds. Hedge funds are basically vultures who sweep in when a company gets into trouble, loads it up with debt and then, oftentimes, proceed to extract out money, sometimes too much money such that the company falls into bankruptcy. Hedge funds have a mixed record of turning around companies and they vacuum up a lot of money, whether they succeed or not. So, what do we do with them? We might not be able to let them fail so the only thing I can think of is to nationalize them, see what other companies might fall in a domino effect if the hedge fund were to fail, identify those that won’t have that effect, and take the money and divert that money to agencies that will distribute that money to services aiding average Americans. The shareholders in those funds lose their money, period. I don’t know if that would happen but it would send a signal that supporting vultures is no longer business as usual. We all need to think about society in general.
Capitalism. Already, younger Americans are against capitalism and lean toward socialism. The pressure on capitalism could continue to grow if companies don’t step up to the plate and help Americans in these hard times. If they don’t raise wages, don’t provide medical benefits, don’t provide paid sick leave, etc., then I can easily see people looking more and more toward socialism and healthcare for all, and whatever else they want/need. This pandemic could be the tipping point because the moderates and independents may well join the young progressives and call for some change to business as usual.
Our current version of capitalism has to change. The shareholder model has to go away. Shareholders can no longer take precedence over all other groups because this is how we got to the inequality. Shareholders will have to join in the shared sacrifices. Throw the shareholder model away and start thinking about average Americans and their needs so that all of us can make it to the other side and beyond.
Along with throwing away the shareholder model, we need to retain regulations and government. Just like we always have murderers or thieves and thus we will always need laws to deal with them, we will always have the greedy and the selfish not caring about what is best for society and thus we need regulations to rein them in. And self-regulation does not work. That’s just the sad fact of human affairs.
I think we are going to start seeing more of the government role; it is just a question of how big it will be. We have to think in terms of balance. Because there is an issue of when the government could get too big.
Socialism. The call for some kind of socialism will get stronger, especially from the youths. What I don’t know if they want just socialism or a combination of capitalism and socialism. I get the impression that they don’t want any capitalism which would be a mistake. Capitalism does bring in competition when it’s done right, which can then seed innovations to improve our lives. Capitalism provides incentives to improve things or do better. But capitalism, especially the unbridled kind that we've had for the past 40 years, can lead to inequity so we need a government to counterbalance that. So again, we need both capitalism and socialism/government. It’s just whether on the other side of this crisis, the people will stop at this combination rather than go all the way into government or socialism.
Republicans. Not sure how this could go but it is a possibility that the entire (or almost all of the party) could sweep away because of their close adherence to Trump. The reason why I’m not sure is because there are still a lot of Trump supporters who still follow him. Even right now, they continue to think the pandemic is a hoax and they think he is doing a good job. The only time they start to change is when one of their own gets sick. There was a story, I think in the New York Times, about a woman in Louisiana whose friends thought the whole coronavirus was a hoax. She did too until one day her husband came home sick. That’s when she realized, “No, this is real”. Once her other friends found out about it, they all started to believe in the reality of the pandemic. But why does it have to get to that point? Why couldn't they have looked at the news about China and Italy? The signs were there. Now the lady and her husband are very sick. Trump supporters will continue to believe the virus is a hoax until it hits home, or close to home, putting a real face to it. I wish it didn’t have to get to that point but unfortunately it does. And that’s probably when they turn on Trump and by halo effect, on the Republicans.
The other aspect of the Republicans is that there have been articles about the Republicans trying to prevent paychecks from going out to the average Americans in the bailout bill. I’m also reading articles describing the trillion-dollar aid to be mostly for huge corporations and nothing for the states and locals and average workers. Plus, there was a weak verbiage related to stock buybacks, in other words the bailouts or aid could lead to stock buybacks. And, there were no protections for the workers against layouts or loss of benefits. If any or all of this turns out to be true, there will be hell to pay. There is just going to be so much anger. We’ve been here before but the Republicans seem to have forgotten.
Personally, what I would like to see, is to clean out the Republican party, with the exception of Mitt Romney. He has character; the rest of them don’t. I might even want that clean out to extend down to the state level, but it is a bit more complicated. Not all states should have such clean out because some of them appears to be doing the right thing. Florida state is not one of those states; their governor is not acting in the best interest of people’s health when refusing to close down beaches. States that are trying to get rid of ACA – they probably need a clean out to bring in new blood. We still need two parties so I imagine one combining conservative moderates and Never Trumpers and the other merging liberal leaning moderates and progressives. Whatever happens, the entire Republican party at the national level needs to be voted out.
Fox News. I don’t know if this is possible but Sean Hannity, Rush Limbaugh (he is not part of Fox News) Laura Ingraham, Jeanine Pirro, and Fox and Friends hosts should all be charged with misleading the American public when they describe the virus as a hoax to take down the president. There was at least one article that described that behind the scenes the news organization made preparations to reduce travel, begin working from home, and sanitizing the most trafficked areas of business, amongst other safety precautions, while telling the American viewers that the pandemic was a hoax, that the coronavirus was no more deadly than the flu. Folks, that is deception, pure and simple. When we get to the other side, I would not be surprised if lawyers try to charge them for deception.
Actually, I would just like Fox News to be taken over and then sold to a new owner. The Murdochs should not have this media company operating in the US, but we can’t shut it down because there are quite a few honest reporters who do not like what is going on in the Opinion section of the company. So, nationalize the company and then sell it to someone else, someone who will kick out the liars and start bringing in real news, not politicized opinions.
Evangelicals. There is a real possibility that this religious category will die. Already the younger evangelicals do not like that the older evangelicals have maintained consistent support of the president, despite his behavior. For the sake of their own reputation, I’m hoping that the younger ones find another religion so that they don’t have to be identified with disreputable religious group. The evangelicals, the older white ones, are not Christians, as far as I understand it. They are a huge disappointment and that religion should just die.
Now the next piece is not about what I think is a possibility on the other side but more about the group probably most responsible for our current crisis and this is probably going to be heretical. Because, you see, Trump could not have become president without the help of a certain group voters. The Republicans would not have acted in such cowardly way if their constituents had not insisted on standing with Trump. I’m not talking about those who voted in Trump, hoping that he would grow into his job or hoping that it was all just an act, but have since found his leadership to be repulsive and embarrassing. I’m not talking about them because they watched and the woke up and realized that they made a mistake. People make mistakes in judgement, especially when they are so desperate for change that would improve their lives. No, I’m talking about the evangelicals and the MAGA rally attendees who have closed their eyes to all of his incompetence, his corruption and his cruelty. They have closed their eyes, accepted his actions and cheered him on. They wanted to tear down the institutions? Well, now they got it. We’re in the beginning of the headwinds of crisis (which they are still calling a hoax as of a couple of days ago) and no one knows how long this will last and what will be left as we come out of the other side. I pin the responsibility for our predicament on the evangelicals and the MAGA rally supporters along with Trump who closed their eyes, their eyes, their lips.
Now it’s the battle to the other side.
