This is powerful… I especially like how she uses the game Monopoly as an analogy to explain disadvantage… In my post “Your Life: Something The Elites Have Always Been Prepared To Sacrifice For Their Ends” I also used a Monopoly analogy, in that case explaining how the top 10% own 7/8 of the board, with just the first 1/8 of the board, with the cheapest properties, and poignantly “income tax”, shared amongst the remaining 90%… As Kimberley Jones explains, African-Americans are mostly at the bottom of that remaining 90% who own nothing on the board, after playing the game for 450 years with the rules biased against them, and most have nothing to lose by flipping the board entirely… I love her final statement to be grateful black people only want equality and not revenge!
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The US President shows no inclination to lead on much else other than creating division in society. Consequently the US with the UK remain the most severely impacted nations for which reasonable data collection and testing exists – i.e. amongst all but the least developed nations – although the pandemic is now out of control in South America. The latest report on the US by the Imperial College London, written before the BlackLivesMatter rallies began, showed that the US was on course for a serious escalation in the damage to its people (especially its underprivileged minorities, and it is my emphasis below):
We predict that increased mobility following relaxation of social distancing will lead to resurgence of transmission, keeping all else constant. We predict that deaths over the next two-month period could exceed current cumulative deaths by greater than two-fold, if the relationship between mobility and transmission remains unchanged. Our results suggest that factors modulating transmission such as rapid testing, contact tracing and behavioural precautions are crucial to offset the rise of transmission associated with loosening of social distancing.
Overall, we show that while all US states have substantially reduced their reproduction numbers, we find no evidence that any state is approaching herd immunity or that its epidemic is close to over.
My work on COVID-19 since last update has concentrated on developing a series of videos on food safety particularly with reference to processed meat from plants where large numbers of infected workers have the potential to contaminate the meat prior to packing. Last week I released a short form video and today I released a more detailed video. Although still working on the editing of the latter, the emerging news at the weekend out of China of a new cluster of COVID-19 at a wholesale food market and the finding of virus-contaminated cutting boards used for salmon, and then the removal of salmon from supermarket shelves, obviously prompted me to expedite the release.
I did receive a response from a federal minister to my most recent letter, but I shall not share it here because it says nothing of real substance.
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We are a family that could potentially make use of the builder stimulus, but I have a natural aversion to these types of measures given what has occurred with previous episodes.
The worst versions of previous economic stimulus, in my opinion, were the ones where the stimulus was capitalised into the price or cost of the purchase or works, and it is not difficult to imagine that occurring in this version. I foresee that there will be a lot of renovation quotes coming in very close to $150,000 – to keep the out of pocket cost after receiving the grant to the minimum of $125,000 – when without the stimulus measure the quote might have been $20,000 less anyhow. It could also lead to increased interest in older homes for renovation or demolition for a new build and thus be capitalised into the purchase price.
As a homeowner I do not find the idea of receiving at best a discount (due to the $25,000 grant) of 16.7% particularly appealing for a number of reasons.
As discussed in posts from mid-February through March, when I realised in early February the consequences of the emerging coronavirus outbreak in Wuhan I placed a number of hedging positions to pay out significantly if/when the pandemic caused the economic impact I feared it would.
The benefit and challenge with these hedges is that they are like an insurance premium on which you continually receive a quote on the value of cashing out. I did collect on the insurance – well before the market bottomed, but given how quick the market moved my return was over 3,000% within 6 weeks.
But here is the thing. I do not have the insurance policy in place any more. And while market movements after the market bottomed, i.e. share prices retracing most of the March losses, suggest that I did well to collect the payout I did, the events that I was hedging against are still very much in play.
The economic impacts of the pandemic are still very much playing out – we already know that our regular family income will be down this year, but it could definitely get worse as employers are busily reviewing operating costs and consequently headcounts. Having zero regular family income within a few months is a definite possibility for us, and this is a current or potential future reality for very many Australian families.
As a country already with an extremely high level of home prices relative to incomes, and thus high household debt, the wisdom of encouraging Australian families to plough even more of their hard-earned, or their anticipated future earnings if they increase borrowings, into their home when our economic future is this uncertain seems to be heaping folly upon prior folly.
I have spoken often about the imprudence of maintaining a housing bubble economy for a decade now in my policy contributions and early in the pandemic I highlighted how this was a particular vulnerability for Australia. Stimulus measures aimed at a continuation of this is not surprising, but it only perpetuates that vulnerability.
The utility of owning our own home and how much we spend on it has been a major intellectual endeavour of mine for 2 decades – having delayed buying a home in Brisbane before we went overseas in January 2001 to cement my future as a leading research scientist in my field, we have been playing catch up ever since and it has focused my attention on making the very best decisions that I can for my family.
That has certainly extended beyond the analysis of when and then the process of buying our family home to how much is appropriate to spend on renovations. A few years back we made a good capital gain from some investments. It was sufficient to either pay down a good portion of our outstanding mortgage or build a deck on our home to capture the views (not just those already on display off the original very narrow verandah, but those we imagined in our minds of us lounging on outdoor furniture as we sip some wine while watching the rugby league in our outdoor living room.)
When we bought our home I told everyone that would listen that, yes, relative to the way the market had been for the prior decade our home purchase did seem like a good buy, because it sits on a nice piece of well-situated land and the home is in good condition for its age, but that we still most certainly overpaid on a long term basis relative to incomes. The benefits of the quality of our land would only really be reaped many years later likely by our benefactors.
As I considered a few years back what to do with the capital gains of that successful investment, the more I thought about sinking more money into our home the more I realised that I would be doing it to achieve that magazine-like image in my head and that it was unlikely to genuinely enhance my family’s lives significantly.
Given how much was required to purchase a home when we did, and when I considered the cost/benefit of the spend for a deck, I quickly realised that it was not worth it until the value of money to us was significantly less (i.e. until we had a far greater supply of it, if ever). Moreover, by sinking more money into the home we would not significantly reduce our risk – sure it would increase the value of our home, but that would only assist us if we fell into financial difficulty and needed to sell or recapitalise, so that it became someone else’s home.
If an adverse event happens the builder will not take back the renovation and refund the money. Of course the banks are always willing to lend more on an asset if the renovation has increased its value, and critically now, if you have regular income. However, Australians in general already carry very high levels of debt. While we are definitely not levered to the degree that many others are who bought their home in the last decade, our preferred situation would be to be debt free.
So we could not justify the spend on a deck or conducting major renovations on our home.
We did not decide to pay those funds into our mortgage, however, as we did have an idea which we felt would genuinely enrich our lives proportionately with what we would spend acquiring the separate asset.
For a total cost of half of the minimum out of pocket spend on this renovation stimulus we bought a holiday home, with 4 bedrooms and a wood-fired stove, in a small village in Italy.
Believe it or not liveable homes in the south of Italy can be bought for a total cost (including fees and taxes) of 1/20 of the median-priced Sydney home. Yes that is correct – just 5%. And in doing so you get to experience immersion in a culture that has developed over thousands of years, and have a real and enduring connection with people who authentically value community and relationships above wealth and the other silly symbols that people try to assert their status through luxury homes and cars.
So if you are fortunate to have $125,000 at your disposal, then I suggest that instead of sinking more into your Australian home you broaden your horizons. With that you can buy a lovely Italian holiday home and have plenty left over to refresh and furnish it (if you need to as many homes are sold furnished), as well as pay for many annual family visits in the years ahead.
If you do that, you will be adding economic stimulus into a region that has been down on its economic luck for a good while now, but you would not know it by how lovely and friendly and jovial – simpatico – are its resilient people!
If you have read through to this point then this might well make sense to you, and you might like to learn a bit more of our experience (in a highly stylised re-enactment that premiered on US television in January). Note that the home that we decided on in the show is our actual home, and because of our wonderful neighbours the “shocking” walls will be gone by the time we get the chance to visit again. Search “Time to Chill in Abruzzo” and at present the best version on YouTube is the one by “Lili”.
By the way, if we are fortunate enough to get through this pandemic in good health and with our financial security in tact, well lets just say that the theme of our house hunt with me wanting some land for fruit and olive trees, and grape vines is accurate, and we might just be looking to make another dream come true. I do like the sound of “Edgo’s Olio” and “Edgo’s Montepulciano d’Abruzzo”.
My overall point is this – before you go ploughing more resources into your current existence, which may limit your future options, do not be afraid to think out of the box on what is possible for you and your family. I do not suggest for a moment that our choices will appeal to everyone. But perhaps there are other things that will genuinely enrich your life if you have the courage to dream. After all, that is what “The Great Reset” is all about…
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I recall voicing concern about the encroachment of American culture in Australia during discussions with fellow students while I was studying for my PhD. I would suggest that when I was a child in each suburban street there would be many kids out playing cricket, but that every second house seemed to have erected a basketball hoop over their driveway instead.
Some colleagues agreed while others considered it normal that in societies culture is forever changing.
While nowadays I am far less concerned about the drift in popular culture – my own sons love basketball and I am in no way keen to encourage them to play the sport that I excelled at as a lad, rugby league – my concerns about American influence in Australia have grown.
My concerns extend to how Australian elected politicians seek to find favour by supporting all American Presidents in any manner of activities and conflicts no matter how ill-conceived, to the creep towards a more individualistic, selfish and generally competitive society, and the related encroachment into family life by work life and concomitant growth in conspicuous consumerism. And of course the culmination of all of those trends in growing inequality in English-speaking countries and little progress at addressing global inequality.
Not all of this can be sheeted home to American culture, admittedly, because cultural change is effected by perception and reflection which inter-relate in a cycle of progression. However, there is no doubt that America has become the greatest promoter of their own culture, and their hegemonic status in the world for over half a century has meant that they have developed the tools to see that promotion diffuse across the entire globe like no earlier culture.
Now we have the emergence of a sleeping Asian power that historically knows that it has a right to be respected on the global stage. Middle country powers, like my own, are caught between having benefited economically from the emergence of China, but not wanting to get off side with America now that its President has decided that China’s emergence could not continue in the way it had been allowed over the previous two decades.
In “Hands Off My Chinese ‘Tanas” I was clear in my views that my respect and care for Chinese people led me to agree that the autocratic leaders of China needed to be made to understand that the western world would not choose mutually beneficial financial development if the Chinese people, and especially minorities within the country, did not also benefit from their economic development.
Since writing that piece the emergence of the COVID-19 pandemic has proved to be the most significant acute crisis to confront humanity in recent decades. These two global powers have chosen two very different approaches to dealing with the pandemic.
If we look objectively at who has better protected their citizens through the pandemic, it is a difficult argument to make that America has done better than China.
This, at a time when China is attempting to validate an emerging role as a genuine global leader, is not helping the American effort in convincing global humanity that they are worthy “leaders of the free world”.
Perhaps an America led by Donald Trump is of the opinion that power and strength is the only thing that matters, and that other nations will fall into line out of fear if not respect.
However, as the cliché goes, this is a battle for hearts as well as minds in the world, and if America fails to find compassion – first for Americans – then the days of America leading the world, and all of the benefits that it garners from that privileged position, are numbered.
It is into this volatile environment in which another galvanising incident has occurred – the brutal murder of George Floyd, an African American, by a policeman with a history of racist violence.
Still Trump, whose political backers are affiliated with the Alt-Right, refuses to act as a soothing and conciliatory voice to all Americans.
In my views on Trump which I made publicly elsewhere, and reprinted in “Thoughts on Trump“, I stated that I had a concern that Trump’s electoral ambitions likely extend beyond two terms. Everything that has been learnt about him as President and everything that has occurred since making that statement has further convinced me of it.
The geopolitical and domestic manoeuvres of the Trump Administration do appear superficially to be erratic and consistent with a decision-maker whose persona is closer to a childish impetuous bully rather than a calm and thoughtful leader. However, I have come to consider much of it to be part of a consistent and calculated longer term strategy to create a febrile environment to advance a radical and divisive agenda.
To be clear, Trump was never quiet about his intentions to turn America on its head. However, right from his first signalling of his intention to run for President, commentators have underestimated him and his backers, and the depth and scale of the change that he and they aim to achieve may well be equivalent to only a few pivotal moments in American history.
In order to upend the tradition of American Presidents being limited to serving two terms which is enshrined in the 22nd Amendment to the American Constitution, extraordinary conditions would need to prevail.
If my views are accurate, around midway through his second term Trump will begin to use his social media channels to begin to foment for a longer stay in the White House. He will point out how America has become unstable and that he is the only “man” strong enough to deal with these tensions, and his supporters will not question his role in stoking those tensions.
Geopolitically Trump will point out that Xi in China, Putin in Russia, Khamenei in Iran, al Assard in Syria, et al., are all long term leaders who essentially will be there for as long as they wish. He will suggest that the stability in the leadership of America’s adversaries, while American political administrations can not extend beyond 8 years, cedes a significant advantage to them.
I believe that Trump is intentionally making the world a more dangerous place to argue to his faithful, many of whom are quick to become aggressive, that America needs stability at the top to lead the country against these adversaries who are becoming “increasingly unstable and aggressive”.
It is difficult to avoid a conclusion that contemporary Americans are presented with similar choices to that which German people confronted almost a century ago, and it is to be hoped that enough Americans of strong character think things through enough to realise that they do not want to spend the remainder of their lives justifying their actions or inactions like surviving Germans felt the need to do.
I would also caution that can definitely extend to allies of America because I well remember how my Finnish friends said that they would not join with me in visiting the Dachau concentration camp (for the first of many visits I made there) because of feelings of guilt and complicity in those atrocities as they were allies of the Nazis.
Eighteen months ago I decided that I did not wish to give my family’s capital to businesses which ultimately contribute to the emergence of an autocratic power which has a poor history of showing compassion for its own people. Having a focus on people and humanity, events during the COVID-19 pandemic have caused me to question my perceptions about the emerging cold war between these two powers.
I would be hypocritical if I continued to allocate my family’s capital to businesses which benefit the perpetuation of a hegemonic power that has lost its way so grievously.
Ironically the path back for America is shown in the Fourth Inauguration Speech of the last President to serve more than two terms. It does seem like a long road back, but it is always darkest before dawn.
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As I said on 8 May, the trajectory of Cases/100K population suggests that before long the US will be in the worst situation and that has certainly played out over the intervening 20 days. I repeat the remainder verbatim – Whether that is reflected later in the Deaths/100K population will be determined by the outcome of those infections and equivalence in collation of numbers of deaths. I have seen nothing to suggest that the US has been any better than any other developed country at treating COVID-19 cases, but there are clear differences between nations in collation of mortality data. Graphs from Johns Hopkins University Dashboard.
As I write I feel as concerned for the world as I did in February – no, worse, because then I put the inactions of the major English-speaking countries down to ignorance. Now it is clear that it is the ills of how capitalism has been allowed to develop in our countries. (Sadly, the problems of what would occur in the developing world were obvious due to inaction by the developed world over decades.)
A friend forwarded a post on Facebook that said “when a society regrets the economic loss more than the loss of life, it doesn’t need a virus, it is already sick”, and that sums up well my own feelings about the situation.
Mostly I am disappointed in myself, in my inability to be persuasive with others to ultimately have an influence on decision makers. As at writing I still have not received any reply whatsoever to my letters to decision makers.
I deeply disagree with the opening up of Australia at this point in time – heading into winter, on the verge of eliminating the virus within Australia, and with a large proportion of the community in agreement with the need for the stringent measures.
Here is as plain a statement as can be made – what New Zealand and Australia have clearly shown is that deaths from COVID-19 from this point on in people in Australia who do not travel overseas were preventable. There is a great deal of evidence now of the severe impacts of this disease on human populations, and developments since I wrote “COVID-19 Elephants In The Room” make it clear that it is indeed prudent to always bear in mind that we do not yet understand the full impacts on humanity.
To create momentum towards opening up, Morrison played a petty political game of pitting State Governments against each other over sensitive issues around schooling and borders.
If we had maintained our stringent measures in full for another 8-10 weeks we were highly likely to have succeeded in eliminating the virus from Australia, through diligent contact tracing and testing of the few cases that arose in that time, combined with very stringent international border measures. If the counter-argument, that decision-makers dare not utter publicly, was that they suspected there was already too much virus circulating in the community to feasibly be successful at elimination, then why would they lessen the measures just as we head into what all agree is the most critical season for managing the disease?
The economic and social benefits of elimination allowing the entire domestic economy and general society to open back up are so obvious and powerful that it is hard to fathom the decision to not continue on towards it. It makes no sense… except, of course, if my short post entitled “What Really Scares The Global Elite” is spot on.
More than ever I believe that the Elites fear “The Great Reset” and what it will do to their grip on wealth and power.
Their political puppets treated their societies like addicts – afraid that they would go cold turkey on their addictions to mindless consumerism and all that entails, like choosing aspiration for social standing over contributions to society through family and community, they were eager to give little tastes along the way to maintain those habits. Consequently, we will be doomed to repeated cycles of opening up which permits the virus to spread, and then we will (though what has occurred in the US suggests that the more appropriate word is “may”) go through periods of lockdown to temporarily slow the rate of spread.
What is already abundantly clear to me is that in the United States, the United Kingdom and Australia the elected decision makers did not choose “People Before Money“.
To conclude, as my post “COVID-19 And Food Safety In Processed Meat” showed, this is an emergent issue, but true to form, the decision makers seem more concerned with the economic impacts of closures rather than the public safety issues. So I am currently working on a video – or series of videos – to get to the heart of the risk factors. I will post them here, on YouTube and on Facebook, so keep an eye out.
Stay safe. I am for a united humanity!
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I write best, I believe, when I connect with my emotions. Today while I was driving to my home I was thinking of Dr David Banks, my former boss at Biosecurity Australia (formerly within AQIS), and I wanted to share my thoughts and, more importantly, my feelings.
As I have said elsewhere, the hardest part of retiring prematurely was losing my community of fellow scientists, and while I admit I could have done a better job at maintaining those links, when I became inactive in science I feared that there would be a lack of things to talk about. Obviously needing to recover from a breakdown and the associated anxiety also created a barrier to preserving those connections.
David passed away all too early and I know exactly when because of the circumstances – I learned of David’s passing in a plane crash from a television news broadcast while sitting in a hospital chair holding my first born in my arms in early May 2005. Having no ongoing connection with my former colleagues, I have never had the chance to reminisce or share with others my warm affections for David.
I thought the world of David, and I like to think he had a high regard for me. I should also say, because there will be no better time, that I thought the world of all of my bosses at Biosecurity Australia including Peter Beers, Bernie Robinson, and Gunny (he knows who he is). These were by far the best mentors that I ever worked with and I only wish that I were able to enjoy the work more because I certainly enjoyed working with them. These people are undoubtedly the most decent and authentic people that I have ever had the pleasure of working with.
David was a true gentleman with an enormous heart. There were times when I admit that I felt sorry for him because I thought that he was genuinely conflicted by the strains of treading a difficult line between science and politics. But then I would reflect on the fact that if there was somebody who would manage to find that line in the most optimal way it is somebody who cared as much as he did.
I have many fond reflections of David and for me he is one of the more memorable people that I have known in my life. I recall one time in his office having drinks with the entire Animal Biosecurity team present, and I was chatting in a small group with him when he said words to the affect of “the real difficulty with biosecurity policy is that it is a bit opaque – and often it comes down to ‘gut feeling’ or ‘the vibe’ – but you usually know you have it about right when both sides have the shits with you, and that makes the Minister have the shits with you also”.
On a Friday many of us from the team would go down to the RUC for a few beers and David would rarely miss one. My wife also worked for AQIS and would walk down to join us. The minute she appeared through the door David would ask what she wanted to drink, and if Bernie was there, too, he would stand as she and any other woman approached the table.
These are things that may at the time seem minor that stay with you and make people special in our lives.
When I was leaving Biosecurity Australia to take a fellowship with the CNRS in France, to work in JR Bonami’s lab, David gave a speech that has stayed with me. It was utterly beyond his comprehension why someone would want to go back into research and academia from such a good job and he expressed that view plainly. It hinted at some scarring that he obviously carried.
At the time, as a 30 year old, I disagreed with him. I never did see him again to say that I had come to agree with him – that he was right – but, unfortunately, research was still in my blood and I was destined to keep searching for a place that combined colleagues with the humane qualities of my Biosecurity Australia mentors and colleagues with the role that I wished to play for humanity in conducting scientific research, a place which ultimately eluded me.
It saddens me to this day that there is no chance that I will ever have the opportunity to again share David’s generous company and hear about his bees.
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When I launched MacroEdgo in November 2019 I had already developed a great deal of material to upload as I developed my readership. Some pieces were nearly complete, while some were just notes on a specific post topic.
I had developed notes on another post which I had entitled “The Underrated Benefits of Flexible Work Conditions”. I never got to go beyond my notes for that post as the COVID-19 pandemic quickly consumed my writing assignments, but I wish I had given how things have played out in workplaces due to measures to counteract the pandemic.
These are my notes as they stood at the time of the MacroEdgo launch:
talk about experience of [my wife] – on the few occasions when she works from home (eg when I am unwell and unable to carry out my usual stay at home Dad responsibilities) she gets up and turns on her computer, has a cuppa and around the time that she would normally begin getting dressed for work she reads emails and begins working and she normally finishes around the time she arrives home after work… so she devotes around the same amount of time to work as usual, except that the time spent preparing and travelling to and from work is mostly given to her work… but the family is happier because she is nearby all day rather than being out of the house for 11 hours each work day… she is relaxed because she is home and can go to our kitchen and grab a snack as she likes… she can cook a nice lunch if she likes… she can be more involved with the kids’ routines if she needs to or if she chooses after all she is doing way more hours than normally…
I realised the value of flexible working at uni where I basically worked for myself… if I made a discovery, eg found a new virus, I worked almost continuously until I had filled out my research and sent a paper to a journal… but after a week or two of intense work, I would not go to uni for a week… I just sat at home and watched TV and unwound, and built up my energy to get back into my normal routine… I finished my PhD with 8 peer-reviewed papers which is considered by most a prolific effort…
Essentially, I worked hardest when I was most passionate and that was when I produced my best work… everybody suffers the mid-PhD blues and that is when we must be disciplined and stick to routine to keep grinding out the work… but if we must always do a set number of hours every week regardless of what we are doing, then the periods of stimulation tend to lessen and the whole lot of it can become drudgery…
I realised the folly of the need to “be seen to be working” through the experiences of an Australian colleague who did a Postdoc in Japan and then Korea… He described to me his work week – working at a university in Tokyo, on a usual Postdoc subsistence-like income, he could not afford to live a short travelling time from the uni… He travelled in to uni every Monday morning leaving 4 am for a 1.5 hr bullet train trip to uni… in Japan people must be at work before their boss, and with a lot of hierarchy in their organisations, and with the strong work ethic and long hours of those even at the top of the hierarchy, postdocs and PhD students needed to be at the department by 5.30 am to unsure that they were there before their bosses/supervisors, and they would not be able to leave until at least 9 pm… They also worked Saturday mornings… so my colleague was at the Department from early Monday morning through to Saturday lunch time, and only was at his apartment from Saturday afternoon to 4 am Monday morning… when I asked him how he managed to work under those conditions, he simply said that they were not necessarily required to work all of the time while at uni – and most would need to sleep with their heads on their desks during the day – he just had to physically be seen to be there while his boss was there… I personally witnessed this culture at conferences where the Japanese academic would be followed by his entourage of students – like a brood of ducklings following their parents, they would follow them out of the auditorium and if they stopped to chat with a colleague the ducklings would just mill around behind them quietly chatting or looking at the ground until the professor was ready to move on… my colleague said that in many ways things were even more strict in South Korea… I honestly don’t know how he did it!
of course what all of this says is that it is the output that is what is really important, not the hours or even effort put into that output
for example, if someone is able to work more efficiently (smarter) and produce the same volume of output at the same (or better) standard as another who works 50% longer hours, who really is the better worker?? And if a workplace experiences a crisis where everybody must take on 50% higher workload to deal with it, is it realistic that someone doing 60 hrs can increase even temporarily to 90 hrs per week??
Is it fair to say that a lot of what is put down to hierarchy is really about ego of the manager… and tendency towards sociopathy/psychopathy… link in my Leadership post…??
a manager’s role is to evaluate output… a manager that must always see that somebody is working to evaluate that output is not really a manager… they are admitting that they are incapable of evaluating somebody’s real performance so must use a very physical metric of hours spent at work…
flexibility in work conditions, and especially on working from home, is a frontier that promises significant benefits for the employer (more motivated workers and higher productivity, and greater capacity to deal with challenges) as well as the employee (better work life balance and mental health, and potential cost savings in professional clothing and travel)… If embraced widely this could lead to significant benefits to the environment with the removal of single-passenger vehicles and lower demand on public transport…
Since writing these notes the world has changed, and nowhere more than in the white collar workplace. Quite remarkably the entire developed world has almost instantaneously taken up the opportunity that technology provides to have most of or their entire workforce working from home.
Rather gratifying for myself, employees have embraced it and employers have quickly realised essentially what was in my notes, and additionally realised other significant benefits.
Nearly every executive that I have seen discussing this issue on the Business media is overwhelmingly positive about the development. Undoubtedly most are pleased that their employees are happy with the arrangement, though many are equally excited about the potential cost savings as well as realising that their workers are more productive.
When the COVID-19 pandemic eases and employees feel safe to emerge from their safe bubbles, I am certain that some workers that could conceivably work entirely from home will decide to spend some time in the office for social benefits. However, I would suggest that white collar workplaces will never be as they were in early 2020, and I believe that very few employees, especially those with families, given a choice of workplace flexibility will turn down the opportunity to work at least part of their routine hours in their home.
Equally I am certain that this will continue to be a great benefit to employers as well as employees and their families.
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My dream is to live in a world where all human life is valued equally, where we are measured by the love and goodness in our hearts and the authentic deeds we do for others, not by the size of our house, the elegance or speed of our car, or the label on our clothes.
Let celebrating the real heroes of the pandemic be our start;
Valuing all human life above economic activity remain our present; and
The future is for us all to determine together.
I am for a united humanity!
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Yesterday I explained to my eldest son – studying economics and accounting in high schools, and currently reading Yannis Varoufakis’ brilliant book “Speaking to My Daughter” – why markets are fast becoming uninvestable.
I explained that since the Global Financial Crisis the world’s central banks have experimented with monetary policy to such a degree that markets are totally gamed. Now in response to the global COVID-19 pandemic they have doubled down and even trebled down.
President Trump is not the only elected politician who cheers higher asset prices. In Australia PM Howard made it clear that he preferred ever higher house prices, and our obliging past central banker Glenn Stevens once quipped that first home buyers’ concerns over high house prices usually reverse once they have bought.
As I explained in my submission to the Royal Commission into banking, that has left our economy vulnerable to the point where it seemed that economic management was synonymous with housing bubble management.
In other words, all central bankers know what pleases their Political masters, and, belonging to the club of Elites, which includes others in Business who they usually join in one form or another after their official appointment ends, they do not often disappoint.
The prices that one must pay to invest bear no resemblance to realities of the underlying economy and are only superficially relative to each other, with many companies trading at high prices even though they would be out of business but for the central bank “free money” shenanigans.
One of Warren Buffett’s favourite sayings coming from his mentor, Ben Graham, goes that in the short term the stock market is a voting machine but in the long run it is a weighing machine. Buffett has not been doing a great deal of investing in recent years, and had been notably quiet this year, not even repurchasing Berkshire Hathaway stock at lower prices in March. This suggests that the voting machine that has come to dominate this decade remains dominant.
Investors are under the belief that the central bankers are omnipotent and can save the situation no matter what, so this creates what is called “moral hazard” where there is a belief that there is no reasonable argument to not invest because it is impossible to lose.
The problem for this way of thinking is that central bankers are not omnipotent, and their shenanigans will work up until the point that they don’t at which point the market will crash like it did in 1929. And when that happens it does not just go down 30% or 50%. It goes down perhaps 90%, and from there it does not bounce back but grinds back over decades!
There comes a point where the more central bankers do the more a prudent investor fears them doing even more.
I have personally reached that point and my only positions in equities, besides a few very low value speculative positions, are with my preferred fund managers whom I wish to continue to support and in ETFs that will move inversely with the US and Australian stock market indices.
Note that I drafted the above before investing luminaries shared their concerns last week, including Stan Druckenmiller who said that the risk-reward in the market is the worst it has been in his (long and distinguished) career, and David Tepper who said that the market is the most overvalued ever with the exception of the 1999 bubble with parallels to now since both had a high involvement of technology stocks.
To be clear, I am not saying that I believe that stock market indices are likely to fall 90% from current prices. I am saying that the way that the stock market and central bankers are behaving, markets are about as likely to melt up from here as they are to fall to the March 23 lows or lower. However, if markets do melt up, then I would become more fearful of the consequences for our economies, nations and geopolitics.
Nobody making an active decision to allocate capital to broad markets at these prices is an investor in my opinion – they are speculators – and as such they are backing themselves to get out before the stampede. That is a very dangerous strategy and is not conducive to building and maintaining financial security.
After 1929 “playing” in the stock market was long considered a mug’s game equivalent to gambling. Unfortunately the actions of global central bankers are making it that way again, and the psychological and reputational damage could last as long as that previous episode lasted. I, for one, am not interested in allocating my family’s capital to businesses until I have confidence that the long term weighing machine is restored in primacy above political influence.
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Although unknown by most who play it, Monopoly was invented as an education tool to demonstrate the pitfalls of wealth being concentrated amongst a few.
It was designed to be a warning of the danger of ‘Monopoly’!
The history of the western world’s most popular board game is fascinating, especially in how it mirrored reality including in the events surrounding how it came to be so widely loved and the wealth it created. Parker Brothers, who marketed the game and brought it to global prominence, still to this day does not acknowledge Lizzie Magie’s role in the game’s origins.
Lizzie Magie developed the game, which she called “The Landlord’s Game”, at the beginning of the twentieth century. Now early in the twenty-first century it still explains much of the behaviours within society, and it remains “a practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences… It might well have been called the ‘Game of Life’, as it contains all the elements of success and failure in the real world, and the object is the same as the human race in general seem[s] to have, i.e., the accumulation of wealth” as it did then.
To suggest to an anxious and emotionally taught public that the light at the end of the COVID-19 tunnel is close is irresponsible in the extreme.
Yesterday I heard an Australian restaurateur enthusiastically discussing the 3-step plan to reopen the Australian economy and he used this same analogy. All I could think of was this poor fellow mistaking daylight for the light of a fully laden freight train.
The Elites use the same repertoire of tools in a crisis to frighten the public into believing that there is no other option but to return the ‘Game of Life’ as closely as possible to how things were before the crisis.
Of course they would do that. That is the ‘game’ they know best. In fact they came to know it so well, including through intergenerational wealth and power, that they have come to control or even own the game.
Lets take what occurred in the global financial crisis (GFC). Through the rampant greed of a few, investment products dreamt up on Wall Street created a deluge of debt down to Main Street so that anybody with a pulse could get a loan to turn a necessity of life – a home – into a speculative asset and with it the dream of a better future for the budding speculator on Main St. Of course what I describe is a classic bubble and they have a nasty habit of bursting, which is exactly what happened in the US in 2006. As the value of those speculative assets – homes – fell, the value of the products created and traded on Wall Street fell such that the financial viability of financial institutions around the world trembled. Indeed, long-standing investment firms collapsed whilst others were forced to merge.
As the value of their homes fell, and with the economic shock emanating from Wall Street reverberating, many people on Main Street lost their homes as well as chunks of their retirement savings and the ensuing recession cost many their jobs.
But it was not those people on Main Street, who were so directly disadvantaged, who received assistance. Instead the bankers who created the problematic products, and had earlier lobbied for the removal of regulations which would have prevented the egregiousness that caused the bubble, were bailed out by Governments. And no sooner had the cash come in their front door from the Government did the bankers turn around and give themselves rewards and incentive bonuses.
Meanwhile Central Bankers around the world continued to flood the globe with liquidity, from their own dreamt up manoeuvres, to keep aloft asset prices especially stock market values.
It is hardly surprising, then, that inequality between the owners of capital – the already wealthy – and the providers of labour – the workers who have little else to trade other than their own hourly labour – has continued to increase.
Effectively what happened in the GFC, as in other financial collapses, is that the ‘game’ became so out of balance that it collapsed under it’s own weight.
Imagine a Monopoly board in 2007 tipping under the weight of all of the hotels on the expensive half of the board, from the red properties to the royal blue ones, so that everything was sliding off the board. Immediately those who owned all of the hotels said they realised that they made an error in being so greedy, but they needed the (central) banker to get things back to ‘normal’ and support that side of the board so the game can continue safely. So everyone scrambled and lifted that side of the board and quickly put all of those hotels back in place. And for good measure the (central) banker paid them a few times over for a job well done. Meanwhile, the people in the cheapest properties lost their houses and were set back enormously.
Nothing demonstrates this truth better than this graph from the US Federal Reserve which demonstrates clearly that the only group of Americans back ‘in the green’ after the GFC is the most wealthy 10% (‘Top 10’). Moreover, this group experienced the least set back to their wealth during the GFC, besides the least wealthy Americans (‘Bottom 30’) who own few assets which went backwards in value, but who remained 31% less wealthy in 2016 than in 2007!
Already in the economic response to the COVID-19 pandemic there are signs that wealthy Americans are benefitting disproportionately which creates a perception that it is always ‘Heads we win, tails you lose‘.
In my post “The Magic Sauce of American Economic Dynamism Is Not Based On Personal Greed” I laid out my arguments for why such personal greed is not integral to the capitalist system of which America is upheld as the pinnacle, rather it is a malaise of wealth which serves to weaken society and thus the capitalist system.
Actions by Elites, including the bankers, politicians and senior bureaucrats (including Central Bankers), which have led directly to increasing inequality within societies, only serve to weaken trust in institutions.
Thus humanity confronts major challenges which threaten our sustainability on Earth from a weakened and non-cohesive position. It is in this fertile ground where populists with extreme views and emerging powers advance their interests.
The COVID-19 pandemic is fast-evolving and the consequences apparent already are devastating, but that does not stop some from continuing to try to downplay its significance. Another challenge, the climate crisis, is more serious but to this point has evolved less rapidly which allows some to downplay its consequence and even its very existence in the face of significant evidence and the intellectual weight of the scientific community.
In large part it is exactly the same actors who seek to dismiss or downplay the need for action on both crises.
The increase in inequality in developed countries is seen as a prime reason for the growth in populist politics. In the United States and the United Kingdom the top elected representatives presently are Caucasian men with similar backgrounds and political playbooks, born into immense privilege but having convinced a heartland of the most financially disadvantaged that they offer them a brighter future by scapegoating migrants and anybody or any organisation working towards a more united humanity. The current Australian conservative Government under PM Morrison uses a very similar playbook.
In the companion post to this, “Toxic Masculinity and Political Footballs“, I discussed how the elected officials of the major Anglophone countries have created a great deal of momentum towards re-opening economies while COVID-19 remains poorly understood in their communities, and what is known of it is devastating.
For these conservative Caucasian men the answer is always more economic growth, and suppression of any questioning over what is the quality of life experienced by broader society from that growth and how sustainable is it.
These same men, who apparently care about mental health in society during crises, but do not recognise that mental health has long been deteriorating in Western societies, never give credit to the opportunity to work on the deeper causes of this with the aim of improving the underlying mental health of populations.
They cannot do that because they continually promote ‘aspiration’ which is a synonym for competing in a never ending cycle of one-up-manship which we all implicitly understand is a zero sum game because no matter how rich we become, there is always somebody who has more wealth, unless you are Jeff Bezos… for the moment…
There are some Elites that I can respect and even admire – they are those who authentically understand the privilege that they have enjoyed, usually from birth by virtue of the luck of being born in a developed country or into middle class even if they consider themselves ‘self-made’, as well as respect and appreciate relationships with other human beings especially the people who loved and guided them.
Steve Schwarzman is a quintessential Elite and to some a hero of capitalism, or more specifically, the way it is currently practised. Schwarzman is enormously wealthy and by virtue of this wealth he is one of the most powerful men in the contemporary world. I recently watched his interview with David Rubenstein on Bloomberg Television. Now in his 70s, in modern parlance Schwarzman would still be described as being extremely goal-oriented and driven, almost the definition of ‘aspiration’. If you measure life success in terms of wealth accumulation, while there are a few that still have an edge on him, his personal wealth would equate to the cumulative wealth of quite a few million of the poorest of our 7+ billion contemporary human beings.
In discussing his formative years with Rubenstein, Schwarzman did not seek to disguise his lack of appreciation for, or even understanding of, his parents’ station in life. His mother was devoted to the family as a housewife. The family owned a retail shop in Philadelphia which his father ran successfully. Schwarzman told Rubenstein the story of him being a young man suggesting to his father that the success of his business suggested that he could take the store concept nationally. His father said he did not want to do that. He then suggested he could develop a strategy to open new stores throughout the state, to which his father again stated he was not interested. Finally he suggested that his father open more stores throughout the city. His father told him no, he was content and happy with what he has. Schwarzman shook his head saying that he could just not understand his father. The story was meant to be an indication of how a lack of aspiration was essentially the antithesis of Steve Schwarzman’s very existence.
How very sad…. for Steve… that he is blind to his own impoverishment.
I wonder whether Joseph and Arlene Schwarzman knew another quietly influential Philadelphian, Lizzie Magie, or at least learned the lessons of her game which they may well have played in their youth? Or perhaps it is just a strong indication of the change in American culture post 60’s as I discussed in “The Magic Sauce of American Economic Dynamism Is Not Personal Greed“.
In the midst of the COVID-19 pandemic, right now people are scared and they are training their hopes and trust on institutions and officials. Popularity of elected officials is (or has been) high but electorates will become more discriminate in their opinions as the shock of their altered existence subsides.
As I explained in “Politics Vs Society in the COVID-19 Pandemic“, it is never possible to totally remove politics from decisions and actions by officials. As would be expected at such times, there has been a range of responses – some of these trusted sources are acting responsibly and less politically, while others are using the COVID-19 pandemic as a crisis to advance their own political agendas.
In “The Great Reset” I discussed how major events that affect large swathes of society typically result in significant changes in the psyche of citizens, and such changes threaten incumbent Elites because they controlled the ‘game’ as it stood.
Right now there is an extraordinarily heavy weight pressing down on the centre of that Monopoly board. In early March this pressure was suddenly recognised and positions began sliding into the centre. Global efforts by Central Bankers have, however, supported the centre of the board and the Elites are busy sliding their property and other wealth back into position and making arrangements to keep them in position.
To be clear, from my first comments on the economic impacts in my 11 February Coronavirus (COVID-19) Update and in “Repeat After Me, This Is Not SARS: COVID-19 Is Far More Serious” I said that I expected Central Bankers to try “absolutely extraordinary actions (as opposed to the already ‘extraordinary’ actions that we have become desensitised to over the decade)”, and further suggested that while I was concerned about their continual inclination to ‘over-egg’ markets by doing too much and creating moral hazard – which they have never tried to redress by ‘removing the punch bowl’ – I felt that a financial panic on top a health panic was to be avoided.
Nonetheless, critically the response should be aimed at smoothing the transition to prices reflecting the nature of the challenge confronting humanity and thus businesses, not acting like it does not at all exist!
At the same time those playing the ‘game’ are becoming unwell, some are dying, others dealing with the pain of loss of a loved one, but all grieve the loss of their former freedoms.
True to type and form, the Elites want the board supported at all costs so that the ‘game’ can continue even if it means more players suffering personally devastating impacts.
Presently there is no better example of this than what is being played out in meat processing plants in America where President Trump has ordered them to stay open even though workers in such plants have been dying of COVID-19 and many are afraid to work, and COVID-19 is spreading quicker in areas where there are major meat processing plants suggesting that it is a high risk factor. The move listed meat processing as an essential service and protects the industry from legal liability should more workers become infected.
The inescapable reality is that 90% of those in the ‘game’ are sharing the resources from just the first 5 squares after “Go”, the least valuable 1/8 of the board, and every time they round the board, after they pay out the rents to the Elites, they keep going backwards.
Sometimes they pay with their life. Then again, their life has always been something that Elites have been prepared to sacrifice to meet (or meat?) their ends.
The memory of the wealthy being bailed out during the last collapse is fresh, as is the sting of how their own lives were negatively impacted, so Elites need to try even harder to give the appearance of the bailout not being tilted so heavily in their favour.
Then again, greed is such a serious malaise, and well everyone knows that political science, with its modern social media tools, has reached such an advanced state that the 90% will feel powerless to do anything other than accept the situation as inevitable, right?
Maybe…
Then again, human history is full of kids flipping the board while playing Monopoly against others who own all of the wealth of the board, especially when it is realised that the banker is slipping favoured players extra money for nothing and all of the “cards of chance” in the game have been intentionally tilted to favour the landlords.
The Elites know this well, and are aware that this risk is growing.
But greed is such a powerful malaise!
And power affords a lot of protection, right?
What I advocate is not a ‘flipping’ of the board, which some might equate with revolution, or anything near it, because that entails more loss in and of itself, and there is a wide range of possible outcomes with a great deal of uncertainty as to whether we will arrive at a place that is better.
But we do need a peaceful revolution to readjust the ‘game’ to make it much more fair and that requires resolute and sustained society-wide engagement.
Having just watched Warren Buffett’s entire 2020 Berkshire Hathaway Annual Meeting I was, as I often am, in total agreement that conditions have improved (not just in America but throughout the developed world) over the last century. Buffett’s comments around diversity in his introductory comments were welcome, even if the related motion did not carry. (Sadly this topic was not discussed in the Q&A.)
Moreover, due not just to his success but because of his patent authentic humanity, Buffett has become the cheerleader of prominence for American capitalism which, as I discussed in “The Magic Sauce of American Economic Dynamism is Not Based on Personal Greed“, has taken on a very hard edge in recent decades. Sadly Buffett bypassed the opportunity to take this on and instead largely concentrated on historic diversity and inequality.
Still Buffett’s clear views that there remains much to do to improve American society around these issues, as perhaps the best known “proponent” of capitalism, were incredibly valid and valuable.
I am a great admirer of John Lennon and I, too, am a pacifist. However, we have learned in history that when we are entirely passive then the aggressive actors within our societies will push all of their favourable positions back in place and with growing inequality, as discussed by many others including Ray Dalio, probably the highest profile hedge fund manager at present, we all risk a much more disruptive response in the future.
“The Great Reset” provides us all with an opportunity to dream of a world that we want for ourselves and the people we love most, and ponder how we can realistically bring that to fruition, not instantaneously but with enduring commitment and innovation.
Goodness knows humanity has proven to itself, once again, even still in the early stages of this pandemic, that human ingenuity and endeavour is without limits.
My general optimism in humanity means that, even while often pessimistic (or realistic) about issues over the short term, I am often considered a dreamer on the big picture.
It is a badge that I wear proudly, for I know that I am not the only one. In fact, we are the majority.
Let’s get to work, in our minds, our hearts and in our actions, and claim that luminous future for all.
MacroEdgo 
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