Showing posts with label wealthy. Show all posts
Showing posts with label wealthy. Show all posts

Thursday, December 31, 2020

Looking Ahead at 2021 (not predictions)

 (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.

 

Sunday, May 17, 2015

What a Ten Year Old Can Teach Us About Salman Khan


“Wrong does not cease to be wrong because the majority share in it.”
Leo Tolstoy


Salman Khan gestures to fans from the balcony of his home, flanked by his mother Sushila Charak and father Salim Khan in Mumbai. (Source: Zee News India) 

There has been much ink spilled over Salman Khan’s recent conviction for drunk driving. Mr. Khan is one of Bollywood’s biggest, most bankable stars and as a result this news has dominated the Indian media landscape for the last few days. Mr. Khan’s recent sentencing to five years in prison has usurped coverage from Narendra Modi, the Indian Premier League and the Nepal earthquake, all subjects that now seem a distant memory in the daily Indian psyche. 

It seems there was an expectation amongst the wealthy elite of the country that this trial would result in a suspended sentence, or perhaps a few years of community service along with a large fine. Much like nothing happened to Sanjeev Nanda, the son of a wealthy industrialist, who killed six people (including three police officers). Or Puru Raj Kumar, the son of a big Bollywood star, who ran over and killed several pavement dwellers, and was never charged. Like the rest of the third world, India too has a rich and un-illustrious history of a dual justice system, one for those who have the means to buy it and the other for the rest of us, who must languish and suffer within it. 

The outrage in India was two-fold. The powerful elite were clearly outraged that a lowly session’s court judge had the audacity to sentence one of theirs. The entire Bollywood fraternity came out unabashedly in support of a man who has blood on his hands, the same fraternity that has stayed notoriously silent on virtually every other important social issue from defending free speech to violence against women. A younger, less erudite and less PR savvy Bollywood group even took to social media blaming the pavement dwellers for putting themselves in harm’s way. One famous Bollywood singer even equated pavement dwellers with dogs.

There was an unsurprising wave of sympathy from die-hard fans of Mr. Khan, a group that would no doubt proclaim his innocence even if any of them had been sitting in the passenger car seat next to Mr. Khan on that fateful night thirteen years ago. One fan drank poison in front of the courthouse in a suicide bid, unable to handle the news of his idol's upcoming rigorous imprisonment. None of this was surprising; one expected both constituencies to play out their scripts and public dialogue in the manner that they did. However, what was surprising is the reaction of a number of educated, middle class people in India. Many of these people came out in support of Mr. Khan, vehemently protesting his conviction.

Their arguments ranged from saying it was grossly unfair to single out Mr. Khan, since no other rich person has had to serve time for the same offence. Some simply said that he was a good man who had done a great deal of charity work, helping many people over the years, and therefore should not be treated like a common criminal. Yet others argued that he was being convicted merely based on his celebrity status and not on the value of the irrefutable evidence against him. This despite the fact that the judge stated in his ruling that “the prosecution had established beyond doubt that the accused was driving the vehicle at the time of mishap.” (Source: Livemint article).

What is frightening about this middle class defence is that it supports and reinforces the notion that it is fine to have two distinct rules of law - one for the haves, and one for the have not’s. Importantly, it also ignores the fact that had Mr. Khan been an ordinary citizen, like you or me, he would not have been able to avoid being in police custody or to drag out his trial over thirteen years. During this time his people were able to buy off and coerce witnesses, turning them hostile and getting them to change or withdraw testimony. One key witness who refused to acquiesce was a police constable who was in the car with Mr. Khan at the time of the accident. Instead of being provided witness protection, he was fired from the police force and thrown into prison after he claimed that he was frightened for his life for refusing to change his statement. His family was most likely also paid off, as they proceeded to also disown him. The man was driven to living on the streets and finally died a pauper, of tuberculosis, in some nameless government hospital.

What is at issue here is not making an example of Mr. Khan, but allowing people like him to make a mockery of our judicial system. My heart goes out to Mr. Khan, his family and to all the other families involved in this tragic and avoidable accident. I don't doubt that Mr. Khan has done a lot of good with his charity work and has a large heart but none of this changes the fact that, according to our laws, he committed a crime. If we want to be a global power, the rule of law must be sacrosanct and justice must be blind. This is a fundamental bedrock of any a civilised democracy.

My mother’s friend has a ten year old grandson who is a self-confessed Salman Khan super fan. He knows all his movies, song lyrics and even dance sequences (much like I used to with Amitabh Bachchan growing up). She was recently chatting with the boy and decided she would broach this subject gently, and with empathy, so as not to hurt the young boy’s feelings. She started to say how bad she felt about the fact that his hero, a good man by all accounts, had been convicted of a crime, but before she could finish her thought, the boy jumped in and said “Daadi, he (Salman Khan) made a mistake and he has to pay for it.”