I find the “reopen the economy” debate intrinsically flawed for a few reasons, and infuriated that the choice between livelihood & life has been politically weaponized by our country’s leaders. Here are a few reasons why I see the Reopen Debate as nothing more than two intentionally narrowed perspectives of a very complex issue.
1. Your rights end where mine begin.
In a poll conducted over the last week of April, 65% of Americans said “having people return to work” would be a bad idea. Over 80% said it would be a bad idea for students to return to schools, open restaurants again, and allow public sporting events.
It doesn’t matter if everything reopened tomorrow, 65-80% of Americans won’t go to work, businesses, or events. Reopening tomorrow means maybe 20-35% of former economic activity will return and that’s nowhere near enough to “save the economy” and further increases the cost of each human life lost due to reopening too early.
2. He’s dead, Jim.
The US economy peaked in Q4 2018. Since then, the rate of growth had been decreasing and after an unprecedented run of economic growth, a slowdown or recession was inevitable. Policymakers can tease the economy through interest rates and other levers, but it is simply impossible to maintain growth forever. A decline was already happening – that’s a fact.
US GDP fell by 4.8% in Q1 2020, but at an annual rate of 30%, a rate not seen since the Great Depression. Q2 2020 is going to be much worse and reopening local businesses isn’t going to change that. The tidal waves from the trickle-down effects are only starting to hit the shore of the global economy, and reopening bowling alleys and hair salons to fix the economy will be as effective as a holding on to a pool noodle when the tidal waves hit.
3. It’s actually a zombie economy.
As recently as last year, 12% of publicly traded companies in developed nations were classified as zombie companies. That means they weren’t earning enough money to pay the interest on their debt, let alone debt, or grow as a profitable company. They are being propped up by cheap money and a “too big to fail” classification.
The number of zombie companies will certainly skyrocket as a result of this, but can we let the American airline industry fail when another country will prop up their airline industry to take over this sector of the US economy? That’s just one example. Consider that effect across all industries and the giant whooshing noise you hear in the background is the sound of the GDP being sucked away by foreign companies and oligarchs.
It’s not much of a choice, and how/why we got here is another conversation for another time, but without other short-term options at hand, I’d rather try to outrun a zombie company than face a foreign enemy with an economic howitzer.
4. Our collective future is built on speculation, not savings.
The highest interest rate available in the US for traditional long-terms savings vehicles in the last 20 years was 6% in early 2000 – exactly 20 years ago. It’s hovered between 1-2% for the last decade.
In that time, we have seen an explosion of investment in the stock market because it yielded better ROI. This is why it’s important the stock market stays healthy – it is America’s savings. Unless you’ve been content to earn 1-2% in a savings account or invested heavily in raw commodities, your money is directly connected to the stock market.
Since Boomers are the most heavily invested in the stock market and on the verge of retirement, letting the stock market crash is not only political kryptonite but economic suicide. Tens of millions of Americans watching their retirement and savings get flushed away in a few months would create absolute chaos.
5. Our collective now is built on speculation, not savings.
Everyone is asking why the stock market is holding up when unemployment is rising faster than your latest attempt at homemade bread. They’re also asking why companies don’t have six-months expenses saved for times like this. The answer is the same as above – most everyone is a speculator because it paid better than being a saver.
If the stock market crashed, so would speculation that our economy will get through this economic period. Our economic growth has been built on speculation for decades. While the disconnect between unemployment rates and stock market movement feels unnatural, it hasn’t been directly connected for a long time.
6. It’s the people, stupid.
With the exception of the US, every developed nation in the world has made sure that the people of their country had food for money, rent, and other necessary expenses during this time. The difference between responses is stark and no, it’s not because they’re socialist and we’re capitalist.
The $2,000,000,000,000 CARES Act was funded with taxpayers money. From that, taxpayers will directly receive $158B. That means the taxpayers will be receiving 7.9% of that money with the rest getting funneled to businesses of all sizes, most of it to large businesses. From another perspective, that constitutes a 92.1% tax rate on our money to save our economy. In light of that, the socialism vs capitalism debate is simply political posturing.
Please stop acting like reopening local businesses will fix everything when the people in power who could be helping us have chosen not to and instead are distracting us with anger-fueled, wildly-inaccurate political breadcrumbs to fight over.
Here’s a shortlist of a few things I’m hoping to see happen in me and those around me:
1. Invest the time.
Learn something. Read those books you’ve been ignoring for years. Write. (Mostly preaching to myself here…) In all seriousness, you will probably never have as much time and freedom to learn, grow, and orient yourself for the future as you have right now. Go back to school for a new degree. Start taking classes from Harvard, University of Michigan, and more on edx.org. Time is money and we should all be investing this time in wise ways.
2. We are not the issue.
Start paying attention and giving your time to people who care about you, not those who care about issues you care about. It’s the oldest bait-and-switch in the book yet we still fall for on a regular basis. We’re all guilty of “rallying around the flag” for certain issues but how many times have our leaders left us on the battlefield worse off than when we started?
I’ve adamantly supported my country for nearly four decades and in the time when I most need a return on that investment, all they’re willing to offer me is the promise of a $1200 check to get me through a few months. I’m ready for politicians that care about the individuals before issues and people before profit. Let’s make that happen starting this election cycle.
3. Don’t tread on us.
America needs a significant capital investment into community and national projects that will unite and benefit everyone like Eisenhower’s Interstate system. This will funnel money into Americans’ pockets, provide jobs for decades, and enhance our national infrastructure.
Stop listening to politicians dividing us on issues that don’t rebuild America for us, and start voting people into office who are willing to work through complex issues with care for the individuals involved and present us with a plan to rebuild America. Anything less is divisive and destructive to everyone, including you.