Have you ever seen “The Big Short”? If you haven’t, watch it. It’s a great movie. The director, Adam McKay, masterfully communicates the complex and sometimes confusing origins of the 2008 Great Financial Crisis. For the last few weeks, I’ve been daydreaming about the feature length film that is going to be birthed from all of… well, this. I say “all of this” rather broadly because by the day, the layers just keep adding on.
Way back in January (remember that far away place?) I opened up my monthly On My Mind citing the overwhelming flood of news coming from all angles. You had American politics, tense international relations, questionable central bank policy, and there was this new virus that had just popped up in China.
Safe to say we are all pretty aware of the current state of affairs a mere two months later. We’re watching global economies falling off a cliff and a raging pandemic. Sheesh. So yea, my fingers are crossed in hopes that McKay gets the call to direct this thing when it's all said and done. At this rate I’m thinking we’re going to need an epic Infinity War-Endgame kind of roll out.
While this month could probably be best summed up by a handful of memes, I’ll share a few updates and thoughts from a March spent almost entirely inside my apartment here in Italy. And yes, the theme here is largely covid-19. I know we’re all suffering a bit of information and sensory overload as of late but unfortunately, confronting this virus is the daily reality for the majority of us.
In this post I won’t talk so much about the virus itself, but rather some of the troubling revelations it’s having in the United States. In last month’s post, I briefly questioned the role American culture might play in the country’s crisis response. I’ll expand on some of those ponderings in the continued thoughts portion of this post. But first, life in Italy.
Quarantine day number?
I can’t tell you (or I’m too lazy to look up) exactly how many days I’ve been in quarantine. It’s all a bit of a blur at this point. I just know the quarantine measures have become increasingly more strict throughout the month. This has translated into less time outside. A few weeks ago I still made it out every other day to run the loop around the city center. Now I take awkward walks in the garden at my residential complex. The only other adventure is my weekly trip for food (and wine).
I’m still healthy, feeling safe, and (the new assurance to my friends and family) staying sane. I imagine if you ask many athletes who’ve played pro abroad, they’ll probably concede that their first season overseas felt a bit like a shelter in place primer. Not everyone has the same experience, but if you’re alone in a new country with a limited social network, you invariably spend a lot of your free time inside.
Over the course of eight seasons, I’ve learned to be both intentional and creative with that time. That said, I anchor my sanity to simply doing more of the things I’d already done--reading, learning, and working on personal projects. To really fill the days out, just throw in a home workout complete with innovative water bottle weight technology, the occasional movie or series recommendation (thank you, Ozark Season 3), Facetime updates with friends and family, and an early bedtime.
All of this doesn’t necessarily make it easy; it just makes quarantine more manageable. This isolation shouldn’t feel normal to anybody. I don’t care how introverted I, or anyone else is, we’re innately social creatures. I miss my family. I miss playing basketball. I remind myself that health and safety are the priorities here and I’m hoping that some of those sacrifices are starting to pay dividends.
Looking forward
Recent data here in Italy suggests they are. While new covid-19 cases and deaths remain elevated, there is some optimism surrounding the more recent trends in those numbers. As of this writing, it appears new cases in Italy may have peaked. Simultaneously deaths have seen consecutive day to day drops. Not out of the woods yet, but the news is encouraging after a few rough weeks. All over the world, I'm hoping the people still working around the clock in hospitals and grocery stores alike will see some relief soon.
That’s the update for the month. I hope you are all safe, in good health and social distancing. In the continued section below, I rambled off some continued thoughts on economics, the stimulus package and the covid-19 response at home in the United States. Feel free to check them out if you’re interested. Otherwise I read three books this March. As usual, you can find the reviews by skipping to the end of this post. Until next month.
peace and blessings,
-jo
Continued thoughts...
Early I briefed you on the optimism in Italy. America on the other hand… what to say? The last few weeks have been a masterclass in how not to handle a pandemic. Last post I hinted at how cultural and socioeconomic effects might disrupt efforts to contain the virus in the United States. With the high cost of healthcare and the economic need for many to continue working, I could see how people might prioritize their jobs over their health (whether or not they were sick). The implications here would be downplaying the severity (until it’s too late) and allowing the virus to spread.
To be fair, the USA isn’t the only country that took the “this is just the flu” position early on. A number of countries, Italy included, have populations that underestimated covid-19 in the first phases of contagion. That doesn’t make videos like this any easier to watch:
I don’t want to belabor all the US’s shortfalls in preparing and responding to the virus. Those are layered and many and go far beyond the scope of this post. After all, this crisis is a black swan event simultaneously striking the cores of government, socioeconomics, education, healthcare, and finance. How else do you have a population that is poorly informed, can’t access testing, can’t afford treatment, and can’t survive without working? Unfathomable. That’s why we’re all waiting on Adam McKay remember?
Some Big Numbers
I do however want to provoke some deeper thoughts about a few numbers drawing great interest in the United States over the last few weeks. Last week the US government ok'ed a $2 trillion (yes with a T) stimulus package to help prop up the American economy. While a little over $600 billion is being delivered to individuals in the form of cash payments and unemployment benefits, there has been quite a bit of controversy surrounding the roughly $500 billion going to large corporations. Why? Because many of these corporations recently received massive tax benefits (2017 Tax Cut) and have been spending billions buying back shares to boost their stock prices over the last decade.
And a Smaller Number
Let’s first look at $1,200. From the $600 billion for individuals, this is the one time payment that will go to qualifying taxpayers (adjusted gross income under $75,000) to help them weather the economic side effects of this health crisis.
By most indications, those economic effects will be severe since shelter in place policies are forcing businesses to close and furlough workers. Last week unemployment claims rocketed (into the stratosphere) to more than 3 million (and this doesn’t include gig economy workers like Uber drivers).
For some context, during the 2008 Great Recession, those claims peaked just above 650,000. The point being, there’s more than 3 million people that no longer have an income (to no fault of their own) that will depend heavily on this $1,200 to make ends meet.
Show me the money
With my interest in economics, this all got me thinking. Where did this number come from and just how far will $1,200 go in not only helping individuals but helping the overall economy? I couldn’t find any explanation for the figure online so I formulated a couple of hypotheses of my own.
The first thing that came to mind was an oft circulated fact about financial distress in the United States. It says 40% of Americans can’t afford a $400 emergency due to debt. My mind jumped on the clean division of 1200 into 400. Hmmm, $400 per month for a crisis that could last three months? Not insane. But I imagine this is a figure for people who had a job. Surely the margins are much slimmer than $400 when you’re talking about people that are unemployed. So if this were in fact the reasoning, it would be a pretty big slap in the face. Unrealistic. I moved to my next line of thinking; the minimum wage.
The federal minimum wage in the United States is a whopping $7.50. I did some quick math.
$1,200 ÷ $7.50/hr = 160hrs
Full time hours in the United States are at least 40hrs/week.
160hrs ÷ 40hrs/week = 4 weeks = 1 month
I see the logic and perhaps it made more sense than the $400 emergency theory. Still, it stuck with me for its consideration of time. While the minimum wage theory might get the numbers “right”, I think the emergency theory probably gets the time right. Off the top of my head;
$1,200/month x 3months = $3,600
probably makes more sense for a one-time payment. In my mind, people are going to be out of work for longer than a month because of this virus. If an additional $500+ billion in stimulus doesn't make sense, why not get creative and make the original $1,200 stretch? A bit more on that later.
How Much is $1200?
My next questions then were how far does that $1,200 really go and would it realistically help the economy fend off a deep recession? Having a general sense of the economic landscape and cost of living in the USA, my gut told me $1,200 would not go very far… at all.
According to Apartment List data, in February 2020 median rents in the United States for one and two bedroom apartments were $963 and $1,194, respectively. For homeowners, according to the American Housing Survey, the median monthly mortgage payment is $1,100. That’s just to keep a roof over your head.
Before you start thinking about variable expenses like food, gas, internet, cell phones, utilities and such, consider debt service. Think about student loans, car payments and consumer debt like credit cards (or heaven forbid medical debt). Oh, and if that’s not enough consider adding in a child or two (or three).
This is where I return to the $400 emergency fact. Yes, financial literacy and sound practices are lacking for many Americans. Surely everyone would be better off in these times if they could stash away some extra savings or an emergency fund. If anything though, I think these numbers highlight just how unrealistic that might be.
The reality is that many people earning minimum wage are already living on a slim margin. For those who were earning more (and then lost their job to the virus), $1,200 probably feels leaps and bounds from making ends meet. These are the types of larger structural issues covid-19 has me thinking about this past month. Things like a stagnant minimum wage and soaring debt and living expenses. This stimulus and $1,200 checks appear like more new bandaids for some issues that have long required surgery.
But even if we ignore the longer term issues of minimum wage and living expenses and think only about the immediate crisis, the USA is making a massive economic bet. They’re assuming people will be back to work in a relatively short period of time and will only need $1,200 to keep things from falling apart over the next few months.
If it is the government’s goal to protect the economy, I find it difficult to accept the terms of the $2 trillion package without additional considerations. Why not help stretch the $1,200 by also suspending rent, mortgage and other debt payments? Buying time is the name of the game here.
That's why I also find it difficult to accept the short timeline for the crisis, the reluctance to enforce strict quarantines and shut down the country, and certainly No. 45’s premature suggestion about opening up the economy by Easter. In past crises, throwing mountains of money and new debt at companies was enough to jump-start the economy. This time around, I’m afraid there is no quick fix.
Rushing the economy poses greater risks not only to working citizens (by potentially exposing them to health risks that will keep them out of work longer), but also to deeper pain for the economy itself. Only giving one month’s worth of wages to people that will likely be out of work longer while giving bailouts to companies that were at all time highs in the stock market a few weeks ago, doesn’t help much either.
If there is one economic takeaway from this covid-19 crisis as it relates to the USA, it’s that the economy is dependent, held together even, by the working class individuals who are disproportionately affected by layoffs from this pandemic. In a health crisis, the policy should focus first on the people’s safety and wellbeing. Money only goes so far, but a healthy and safe workforce can ultimately get the economy started again.
BOOKS
The Rundown: Bilton frames the launch story of Twitter through the tumultuous reigns of its cofounders and early CEOs.
Some Thoughts: This short read is a gripping story of a social media giant’s growing pains from afterthought startup to venture capital unicorn. A few people had recommended this book in the past, but I finally picked it up because I’d been thinking about how my use of Twitter had evolved over the years. Interestingly enough, I learned much of the chaos and battle for control over the company revolved around this idea; what should Twitter be used for.
While I found the power struggles and c-suite politics compelling, this was not something new. This drama is commonplace in many business reads whether the topic is startups or high finance. Here, I was most captivated by the design related commentary regarding the culture and mission of the company. One cofounder saw it as a status updating (what are you doing) service while another saw it as a mini blogging (what’s happening) service. This fundamental design detail changed not only the course of CEO’s careers but the company as a whole.
Review: Maybe we really should second guess working with friends. (5/5)
Did You Know: In 2005 just before joining Twitter, Jack Dorsey worked as a nanny for his friend's newborn.
“How to Do Nothing: Resisting the Attention Economy” by Jenny Odell
The Rundown: Artist and author Jenny Odell pushes back against the damaging side effects of attention capitalism in today’s social media economy.
Some Thoughts: I picked up this book expecting a rather vanilla read on why we should disengage with social media. You know, a “delete your Facebook” kind of thing. While it definitely touched on this idea, I was pleasantly surprised to learn that the book was much more. This is a short compilation of seven thought provoking essays exploring self, capitalism, attention and time and place. Early on, I realized the book’s argument isn’t so much a call to do nothing (as the title might suggest), but to reclaim our attention and engage with technology more intentionally. The book isn’t at all prescriptive. Instead the author anchors her argument to her physical world experiences. She demonstrates how misguided attention (to technology) can decay our relationships--with people, the environment, and time--in the physical world.
Review: A thought provoking dive into our relationships with technology and the physical world. (5/5)
Did You Know: Stanford University has a high performance and high achievement culture that students like to call Stanford Duck Syndrome. Like a duck, students appear to calmly glide on the water surface, but in reality, they are paddling vigorously below.
“The One-Straw Revolution” by Masanobu Fukuoka
The Rundown: Biologist turned farmer, Masanobu Fukuoka, pulls from his thirty plus years of farming experiences to explain the principles of his “do nothing” natural farming philosophy.
Some Thoughts: I first stumbled on this book a little over a year ago while reading Biomimicry by Jenine Benyus. It wasn’t until I saw it referenced again in “How to Do Nothing” that I decided to finally pick it up. One reference in a book on environmental design and another in a book about intention and technology. These are the types of intersections that pique my interest and curiosity.
This was a short book that reads like part memoir and part meditation. One might think loosely along the lines of something like “Zen and the Art of Motorcycle Maintenance”, but in my opinion, much smoother to read. Fukuoka tells his story about retreating from life as a biologist to the Japanese countryside. There he began experimenting with different techniques and over the course of thirty years, developed a philosophy for “do nothing” natural farming. He dismantles modern and traditional farming methods to show not only the damage they do to the environment, but also to the quality of the produce, the harvest, the market and overall life of the farmer. In exchange, Fukuoka details how his processes accomplish more (harmoniously improving all the previously mentioned items) by doing less.
My favorite aspect of this book was how the author extrapolates the farming principles more broadly to everyday life. He prescribes that the same techniques and philosophies that can help cultivate better produce and healthier fields can similarly help cultivate better thoughts and healthier minds.
Review: You’ll never look at your food the same. (4/5)
Did You Know: Masanobu Fukuoka is widely recognized as rediscovering and popularizing the modern clay seedball planting technique.