The future: much like the present

In cosmology, the steady-state universe describes a model for which the universe is neither expanding nor contracting, but, as the name suggests, remains the same size (in terms of its geometric boundary). However, this has long been ruled out by radio telescope data, which show the universe is expanding and possibly even accelerating.

But in terms of the US economy and the overall geo-political macro picture, I argue that we are in a steady-state world. In regard to what the future will be like, such as will there be societal and economic collapse in America or a realignment or reshuffling of the status quo, my answer to these questions and other unknowns about the fed, fiscal policy, America and its role in the world, the economy etc., is that the future will be a lot like the present, but more so.

So to get a glimpse of what the future will be like, extend the current trends outward. Sure, things sometimes change, even dramatically such as the fall of the USSR or 911, but we are living in a steady-state world in which the underling trends seldom change. Inflation will remain low in spite of printing, America remain on top economically and militaristically in spite of unrest. The stock market will keep going up in ‘real terms’ even though the economy may otherwise feel weak. The US dollar will remain strong.

Home prices will keep rising, especially in the usual coastal metro areas. There is unquenchable demand for housing in such regions even in spite of Covid, and regulation and other restrictions make it hard to increase supply, and landlords generally want to lock-in long-term rents with good credit scores due to difficulty of evicting, meaning more demand for short-term rentals, which is why I am bullish on Airbnb stock. Everyone seems to be in agreement there is a problem with housing in terms of insufficient supply, but no one knows what to do (in that, no one can devise a solution that pleases all the stakeholders and tenable given existing regulation). In spite of endless ink having been spilled about the issue, it is as intractable as ever.

The same for prison reform, which in spite of endless coverage, the trend of longer sentences and rising incarceration rates continues unabated. No one seems to have any idea of which reforms need be done or what it should consist of. There is the agreement that people who do crime need to be punished, and no politician wants to be perceived or branded as being ‘soft on crime,’ so this means that there there are direct pollical disincentives for reform even though everyone also seems to be in agreement about the need for reform.

Pundits hoped that Covid would herald a new ‘world order’ in which America, having according to the media blundered its response to Covid and consequently having a high death toll, would be surpassed by European countries that had supposedly handled the pandemic better. A year later, as measured by GDP and stock market gains, America not only is on top, but extended its lead. Emerging markets, Russia, the Middle East, South America , and much of Europe have not only had major second, third, and even fourth waves, but also are much further behind the US in terms of recovering lost GDP due to the pandemic. GDP forecasts for the remainder of 2020 are for 8% growth, which is huge and surpasses the rest of the world. This is not due to the stimulus, as wrongly claimed by the media, but due to increased productivity, the fed, consumer spending, and tech innovation. The $1400 checks help a little, but crunching the numbers shows that it only accounts for a fraction of the outsized GDP growth.

There will be more BLM and blacks vs police tensions , made worse by social media and smart phones, which capture every incident of purported abuse and misconduct, that decades ago otherwise would have went unnoticed or only would have been in the news momentarily. You have all these marginally or zero-productive people, usually clustered in low-income areas, who are barely contributing to the US economy ,if at all especially with Covid , who have a lot of free time and have nothing else to do but rage against the whatever happens to be the latest injustice.

But to conclude, we may not like the future we have, but it’s the one we got.