(Photo by Danil Aksenov on Unsplash)
“Optimism means better than
reality; pessimism means worse than reality. I'm a realist.”
Margaret Atwood
I am an eternal optimist and feel
confident that our future is bright. I envision that we will build a more
equitable and just world over the next few decades, but the journey to get
there will not be without hardship. However, the next few years are likely to
get rockier, based on the current cultural, political and economic
realities.
There are five realities that exist and,
based on how we navigate these or allow them to unfold, we will determine if
the New Year turns out to deliver on the optimism we are feeling, with covid-19
vaccines rolling out and a new, more stable and predictable US President taking
office, or if it ends up being no better, or even worse, than the previous year.
One: Vaccine Rollout and Anti-Vaxx
Movement
Vaccinating 330 million Americans is
going to be a Herculean task, not to mention vaccinating 7.8 billion people.
Nothing on this logistical scale has been attempted since WWII. Adding to the complication is the
fact that some vaccines will require two doses or need to be stored at
temperatures that most storage and medical facilities are unable to accommodate,
especially in poorer countries. In America, we are already seeing
major hiccups in the rollout with states not receiving the promised number of doses, healthcare workers turning on each other to
cut in line and even one clinic accidentally giving patients
antibodies instead of the vaccine. The Trump administration’s
goal of vaccinating 20 million people by the end of December will fall woefully
short with only 2.1 million doses being administered as of 29th December.
Even if the Biden administration ensures
a smoother rollout and everything goes according to plan, which it never does,
it will take until the third quarter before 90% Americans are vaccinated, to
enable herd immunity. This does not account for the growing anti-vaccine movement around
the globe and here in the US. The latest Gallup poll found that only 58% of
Americans say they trust and are willing to take the Covid-19 vaccine.
Since wealthy countries have hoarded the initial available
vaccines, their populations will be vaccinated by end 2021. Other high-income
countries like China, India, Brazil and Russia will take until mid-2022 to
vaccinate their populations. As a result, low-income countries will not be able
to procure vaccines until mid to late 2022, and will take till end 2023 if not
early 2024 before they can able deliver mass vaccinations. And we are still
months away from developing a vaccine for young adults and children, who have not been a part of the
initial clinical trials.
It is easy to forget that there can
be no return to normalcy until the majority of the world has been vaccinated,
given our interconnectedness through trade and travel. We saw record-breaking Christmas travel in the US, showing that people
are starting to let their guard down when we can least afford to. At the same
time we are witnessing the worst global spike in cases and deaths since the
virus was detected, and have also discovered a new mutation that is 70 %
more transmissible than the previous strain. It was first found in the UK but
has already shown up in South Africa, India, United States and thirty other
countries. Based on these realities, before things get better, I fear the worst
of the virus is yet to come in early 2021.
Two: Stock and Big Tech Unreality
vs. Small Business Apocalypse
(Source: New York Times)
This one chart says it all. The red
line indicates stocks, while the blue and green show GDP and job growth,
respectively. While all three took an unprecedented hit at the start of the
pandemic, stocks have now climbed back to historic highs, while GDP and jobs
lag substantially behind their pre-pandemic levels.
Since the 1920s average Americans
and politicians viewed the stock market as a proxy for the US economy, with its
peaks suggesting brighter days and troughs indicating tougher times ahead.
However, this pandemic has made it clear that Wall Street is now completely
detached from Main Street. With access to cheap capital through bond markets,
deep cash reserves and global reach, these larger corporations can withstand
economic shocks and remain profitable in ways that small businesses simply
cannot.
Consider that the five largest
listed companies Microsoft, Apple, Amazon, Alphabet and Facebook have all seen
double digit profit increases this year, and each will exit the crisis in a
more market dominant position than
prior to it. Contrast this with small businesses that have suffered disproportionately,
with over 43% reporting significant
to severe impact.
Recent data shows that 60% have closed permanently,
which is a 23% increase in the number of closures since mid-July. One of the
worst hit sectors has been the restaurant and service industry, accounting for 82% of the jobs lost
since February. In California alone, due to the severe lock downs, the National
Restaurant Association predicts that 43% of restaurants will permanently close. Given that small businesses account for 48% of private sector employees
in the US, the economic devastation of this crisis will linger for years to
come.
Three: Uneven Economic Hardship &
Social Instability
Some ten million Americans are
unemployed, and over one million filed new state and federal unemployment
claims in the last week of December. More than four million people left the
workforce, between February and November, meaning that they are no longer
actively seeking employment. According to economists this skews unemployment
numbers, showing a drop when it is actually a reduction in labour force
participation.
Another worrying trend is the
increasing number of people who have been out of work for more than six months.
About one-third
of the total unemployed are
now long-term unemployed. That people are actively looking for work but still
unable to find employment indicates a problem in the labour market’s ability to
match skills with goods and service needs. Not a good sign.
This crisis has also
disproportionately affected women and minorities. Women’s job losses account
for 54% of overall net jobs lost. Of the 12.1 million women’s jobs lost, more
than 2 in 5 have not yet returned, according to the National
Women’s Law Center. Among
Black men the unemployment rate is around 11.3 percent, which is 5 percent
higher than the rate for white men. To put this in perspective, never during the Great Recession did overall unemployment rates
surpass 10 percent.
In addition, the crisis has
exacerbated the wealth gap that already existed between minorities and whites,
with job losses concentrated among minorities and low wage earners, according to the Brookings Institute.
This widespread economic hardship is
represented in the fact that the number of Americans living in poverty has grown by more than 8 million since April this
year. Nearly 1 in 4 households are
now experiencing food insecurity. An analysis by Northwestern found
that food insecurity has tripled in households with children; reaching an
all-time high of 29.5%.
In addition, there is growing
housing insecurity. Millions of homeowners are now struggling
with mortgage payments. A Harvard study finds that
more than 6 million homeowners entered mortgage forbearance this year due to
loss of income, and nearly half (44%) of these households earn $25,000 or less
per year.
Many of these issues represent
deeper systemic problems that cannot be fixed by a vaccine or simple policy
prescriptions. The reality is that we may be three to four years away from
gaining back the jobs that have been lost during this pandemic. Economists are
already warning us about a K–shaped recovery that
worsens and exacerbates pre-existing economic and wealth disparities.
Four: Growth of Trumpism & Our Deepening
Divide
Far from being a decisive victory
for Democrats, the 2020 election showed a resilience of Trumpism. Biden won the
presidency with the same number of Electoral College votes as Trump did in
2016. Far from witnessing a Blue Wave, we instead saw Democrats lose ground in national, state and local legislatures.
Latino voters flocked to Trump in
Florida, Texas and New Mexico. A Wall Street Journal analysis found that Trump improved his performance in every
Texas County with a Latino population over 75 percent. Trump also measurably increased his support among Black voters, including over 18 percent of Black
men, 34 percent of Asians and 28 percent of the gay, lesbian and transgender
community. Even in New York, a solidly Blue state, Mr. Trump increased his vote
share within immigrant rich districts in
Queens and the Bronx.
If there is any doubt about the
broad appeal of Trumpism among the working class and minority voters, we need
look no further than Robeson County. It is the largest county in North Carolina
and possibly the most diverse in the nation. Robeson is 42.3 percent Native American, 30.6 percent
white, 23.6 percent black, and has a growing Hispanic population. It came as a
shock when Trump won this formerly Democratic county in 2016, with 67 percent
vote share, but in 2020 he increased it to a whopping 81 percent.
On a national level, rather than
seeing a healing of divisions that came into sharper focus during the divisive
2016 election, the 2020 election map shows a more entrenched electorate with
far fewer counties flipping from one party to the other. In the last election 237 counties changed allegiances from
Obama to Trump, in this election only 77 counties flipped.
American’s divisions are not just
political but also seep into bi-partisan institutions that require trust for
our democracy to thrive. Only 10% of Republicans polled by Gallup say
that they trust the media. This is a dramatic decline even from the 30% and 36%
who did during eight years of the Obama and Bush administrations, respectively.
According to Gallup we now have the largest gap recorded between the two
parties since they started conducting this poll in the 1970’s.
As we head into 2021 we can expect
these differences to become even more extreme at a time when the left does not
believe that the New York Times is ‘woke’ enough, and
the right is abandoning Fox News for not being far-right enough.
Five: Democratic Party Civil War
Any party that fields 27 candidates for
their presidential primaries, which is the largest number in history, is both
leaderless and visionless. Republicans only had 18 candidates during their
disastrous 2016 primaries which ended with a hostile takeover of the party by Donald
Trump. Imagine a company stating that they have 27 candidates vying for the
CEO’s job during a leadership succession – would you invest in them?
Much like the Republican Party, the
rifts we see in the Democratic Party have been growing for a number of years.
Like the Tea Party who targeted and removed moderate Republicans, this rebel
group, who call themselves Democratic Socialists, are intent on remaking the
soul of the Democratic Party from the inside. Waleed Shahid, a Bernie Sanders
campaign alumnus who now recruits progressive candidates for Congress, was
asked if this far-left group was the equivalent of the House Freedom
Caucus, his answer was unequivocal: “Yes,
it is”.
Even before the new administration
takes office, Alexandria Ocassio-Cortez, the most outspoken member of the
Squad, has called for the ouster of current Democratic
leadership. In the past she threatened her moderate colleagues,
saying she would put them on a list to oust them in primaries if
they made attempts to reach or work across the aisle.
After a poor showing by Democrats in
the 2020 election, despite facing an unpopular and polarising incumbent, the
knives have come out and the battle lines drawn between the moderate and
progressive wings. The divisions were best summed up by
Rep. Spanberger (D-Va.) when she said: “We need to not ever use the
word ‘socialist’ or ‘socialism’ ever again. … We lost good members because of
that”. President elect Biden too was heard on tape asking
civil rights activists to stay quiet about overhauling police, echoing what
many in the party believe; “That’s how they beat the living hell out of us
across the country, saying that we’re talking about defunding the police”.
It is easy to forget that
Progressive Democrats had written Biden off
during the primaries, and were also not happy about his selection of
Kamala Harris, who is viewed as being too establishment
friendly. It is true that Progressives grudgingly coalesced around Biden in
order to defeat Trump, but any group that is simply united by hatred for an
enemy and not by a common vision is in danger of self-destructing when it comes
time to govern.
The bottom line is that at a time
when the Democratic caucus is about as divided as it has ever been in its
history, they also have a razor thin majority in Congress. They have 222
members with 218 being the bare minimum votes needed to pass legislation. With
the smallest majority any party has had in two decades and given the deep internal
divisions, it leaves them vulnerable
to losing a handful of members. There is also a strong
possibility that Republicans will regain control of the Senate after the runoff
races in Georgia, They just need to win one of those races for
the wily Mr. McConnell to remain as the Senate Majority Leader.