Living through the lost decade(s)
It’s April 5, 2023, here we go:
Living through the lost decade(s)
Killing cows vs. spoiling milk
Numbers and links
Living through the lost decade(s)
I’m feeling lucky to be living in such interesting times.
I was born in the mid-1980s, and have had the chance to live through a number of once-in-a-lifetime events: 9/11 and its subsequent wars, the financial crisis and Great Recession, the election of the first black president (and his predecessor, the election of…another guy), the pandemic, and the million little things that have all happened in between.
Suffice it to say that for my entire adult life, there’s been a pervasive feeling of “if we can just get through this rough patch, things will improve.” We’re always seemingly on the tail-end of a crisis, only to walk into a new one. Maybe that’s what it’s always been like. I don’t know. But it seems like we’re on the cusp of ending one crisis and walking into another right now, doesn’t it?
And if any of us were hoping or expecting things to calm down and improve in the coming years, I guess we should stop now — because a recently published, 564-page report from The World Bank says we’re in for a “lost decade.” You know, like the previous two “lost decades,” I suppose.
The “lost decade,” as it relates to The World Bank’s warning, concerns economic growth, and is going to be driven largely by the Ukraine war, the ongoing effects of the pandemic, higher prices, and then you need to add in a few more key elements: An older workforce, lower investment levels, and lower productivity.
To me, this sounds like “we’ve kicked the can down the road as far as we can, and now we’re actually going to need to realign our expectations with reality.” I think it’s fair to say that, in the U.S. at least, we’ve forgone investment in people and the public in an effort to increase economic activity and growth for the past several decades.
If we think about the “aging workforce” element here, the problems associated with it aren’t easy to overcome. For instance, we have many companies who won’t or don’t want to invest in a new batch of workers — the expectation is that those workers will pay for their own training (getting a degree), take on unpaid internships to get experience, and then start at the bottom of the barrel with little or no job security, and a wage that likely can’t cover basic living expenses.
Meanwhile, older workers may not be able to retire, as they didn’t or couldn’t save and invest enough, need health insurance, and are keenly aware that the safety net systems we have (Social Security and Medicare) aren’t going to cut it if they do decide to stop working.
Again, this is just one of many elements at play that could lead us to a “lost decade.” And I don’t see a way out of it, because if you take the temperature of the room right now in the U.S., we are definitely getting further away from a more sustainable and equitable economy — not closer to it. In other words, there are a lot of people who are much, much more interested in scoring a victory over the Mouse or policing public bathrooms than they are in solving actual problems.
I don’t think that this is all pandemic-related, either. Prior to the pandemic, in 2018 and 2019, I did attend a few presentations from investment firms that laid out their expectations for the next decade or two. I remember distinctly that they all thought the economy would see a big slowdown, and for many of the same reasons that The World Bank’s report points out. That’s to say that these are land mines that have been laying on the road for a while, and at some point, we can’t keep avoiding them.
The choices we’ve made in relation to choosing short-term economic sugar highs over creating sustainable and lasting growth — even if it’s slower growth, and investors don’t receive 30% average annual returns— are going to need to be paid for sooner or later.
I suppose it’s just my luck that after two lost decades — largely driven by post-9/11 actions and the financial crisis in 2008 and 2009 — that I’d get to see another one.
Of course, there’s no guarantee that this will happen. Nobody knows what the future holds. But let’s be real: We can’t even agree on what problems we, as a nation, are actually facing. How can we be expected to think about and plan for the future in any meaningful sense?
We caught a fish, decided we don’t like sushi, and broke apart our fishing pole for firewood to cook it. Now, we need to figure out what comes next. That’ll take some serious readjustments on a broad economic scale.
Generationally speaking (if that’s a thing), I feel like my cohorts and I have long been told to do more with less. Even as more and more wealth has been created all around us. I suppose the warnings about another “lost decade” are more or less that same message dressed up in a new way: “We made billions from a series of crises, but now we need to get serious about fixing it, and that means you should tighten your belt and lower your expectations so that we can ride this all out as comfortably as possible.”
Hey, at least we’re going back to the moon, right? That’s cool.
Killing cows vs. spoiling milk
A Supreme Court case that went under the radar could have big implications.
In case you missed it (I did), the Supreme Court heard an interesting case a few months back with big potential ramifications. It circles around whether there’s a limit to how much damage — economic, or otherwise — unions or union members can inflict on employers.
The case was on the Supreme Court’s docket back in January as Glacier Northwest Inc. v International Brotherhood of Teamsters Local Union No. 174. It involves a company that sells and delivers concrete in Washington state, and the union members that worked for it. The short story: the workers walked off the job, going on strike, leaving trucks loaded with concrete that could be destroyed or damaged by the setting concrete.
As such, the case tries to get at the heart of how much pressure a union can put on an employer — it can cause a company to lose revenue (via a strike), but can it destroy property? That’s what led to Chief Justice John Roberts to ask “the difference between milk spoiling and killing the cow.”
There’s some he-said-she-said going on between the union and Glacier, too, that’s important to note. The union says that workers were instructed to keep the cement trucks’ barrels spinning so that the concrete would NOT set, for example — something that Glacier says is not true. But note that Glacier’s lawsuit (which was dismissed in Washington state court before finding its way before the Supreme Court) claims that the union told workers to try and damage its property and inflict as much damage as possible, all while the union and Glacier were engaged in negotiations for a new union contract.
Yeah, I know. Blah blah blah.
Getting deeper, though, what could potentially come of this is that companies could sue workers and unions for damages. Given that the current Supreme Court doesn’t exactly have a worker-friendly bend right now, it’s hard to know what the long-term ramifications could be here.
I think that, if workers did intentionally sabotage the company’s equipment, then yes, that seems to cross the line from “striking” to deliberate destruction. But if they didn’t, and this opens the floodgates allowing companies to go after workers and unions for any and all lost revenue, or potential lost revenue?
Well, we’d find ourselves in yet another tricky position. And I wouldn’t put it past Neil “freeze, buddy” Gorsuch and company to do it.
Strikes should be peaceful. They are meant to grind a company’s operations to a halt, and cost it money. That’s the whole point. If you light your company’s factory on fire? Well, then that’s a different story.
I guess the main thing that caught my attention about this is that it seems to be yet another attempt for big businesses to reach out and grab money for doing…nothing. Obviously, there’s more at play here, but it’s not hard to envision how a ruling against unions/workers, in this case, could be yet another step toward the ability to sue an employee for being five minutes late to a shift or something. Anyone can claim that they’ve lost out on potential revenue — imagine someone suing the government because “burdensome regulations” held back their potentially-lucrative hitman business.
I seem to remember that, years ago, there was a trade deal negotiation going on (it may have been the Trans-Pacific Partnership?) in which big businesses would have had the ability to sue nations if they passed laws that caused them to miss out on potential revenue. Potential revenue. Potentially, they could have not driven any revenue at all! But hey, they had the potential to, and damn it, they deserve compensation!
Get JG Wentworth on the phone.
Anyway, it’s an interesting case, right? We don’t know what’ll happen yet, but a betting man probably says that the current Supreme Court sides with Glacier. Maybe that ultimately becomes another step closer to a future in which Omnicorp provides every good and service to us all and files lawsuits against those who grow their own food or something — that squash is missed potential revenue!
Yes, I may have gotten pretty far off the path here, considering we started out by talking about cement mixers. But I’d really like to see a little more power go to workers and coalitions of workers. Big business gets away with enough in this country as it is.
Numbers and links
8%: The increase in oil prices as OPEC decides to cut production. Remember, when it comes to gas prices, we’re all at the mercy of a cartel. (Bloomberg)
48/55: The number of counties in West Virginia that saw their populations contract over the past year, mostly because deaths outpaced births. (Census Bureau)
Nashville and Austin: The nation’s hottest job markets. (The Wall Street Journal)
“I am a very smart lady”: A charter school principal quit her job after giving $100,000 to an internet scammer she thought was Elon Musk — oh, and she’s also claiming she was “groomed.” Why would you give the richest man in the world money? (WESH)
Tech-to-defense pipeline: More and more laid-off tech workers are considering switching to the military-industrial complex. (Fast Company)