Back to the future in the 2020s
https://medium.com/@mojomogoz/youll-be-dead-soon-but-first-the-boom-b85ad2f71482
2020 getting set to go out with a bang
The US is on the cusp of an economic boom. The Covid crisis is petering out yet policy will remain pedal to the metal with high powered fiscal and economic intervention more potent than the weak-assed monetary fiddling normalised after 2008, regardless of whether Trump or Biden wins. We’ll follow in the UK, and Europe will too but may drag its heals in that unique euro-dysfunction style and flirt with misguided austerity.
2008–2020 has been a sort of bastardised semi-depression in the West. After 2008 we prevented the debt deflation and capital destruction impulse that history foretold must happen through unusual and spectacular monetary policy responses. But we didn’t prevent the pervasive depression-lite economic gloom and lack of belief in a future that afflicted many an ordinary Joe.
The 2020s will be our reawakening after depression. The ‘mundane’ economy rather than the ‘innovation’ economy will boom back after years of semi-depression with the extra duress of the Covid crisis providing a clear end point to our decade plus depression and a platform from which to economically spring.
It has always been a delusion to think that economic power and success can only accumulate to megatech platforms. The innovation economy is wondrous but part of its huge success flows from the depressed state of other areas and the effectiveness of monetary largesse supporting asset prices and speculative behaviour that has favoured financial speculation and megatech.
Amazon is a superb business but is also a super parasite feeding on a decayed corpse, aided by diseased policy and political leadership. However, the majority cannot remain enfeebled in our hypermedia proletarian societies just so as a minority becomes ever stronger. Cake must be shared with all or it will be for none.
Economic renaissance is not necessarily equity index fuel
No doubt extraordinary support measures will be turned down a notch or two. There may be some errors in this winding back of support that cause moments of economic strain but on the whole support will be removed slower than economic ‘normality’ returns. Above all else and at all cost, US policy response (fiscal as well as monetary) will seek to avoid a slide into a deflationary doom loop. Whatever it takes!
Everyone knew already before the bug that the real economy needed to find…
