Resilience is not a quality that is rewarded in normal times

Resilience is not a quality that is rewarded in normal times.

It strikes me that as we wring every ounce of performance from our global production system, we have made it very fragile.

When consumers spend all of their money and load up on debt, we admonish them for being bad at personal finance.

But that is exactly how most of our large companies (outside the big tech monos) operate. Made your numbers for the quarter? Well then we didn't ask you for a big enough number.

What to do with this cash? Share buybacks.

Need more EBITDA? Wring it out of the supliers and labor.

Need more profit from your healthcare system? Design it to handle just the baseline load.

See what I am getting at? Doesn't matter if it is neoliberal, communist, libertarian, authoritarian - we humans are absolutely terrible about planning for future negative events if we can extract profit now.

A good friend of mine Hermann Peterscheck recently posted a thoughtful essay on our poor ability to plan for low probability/high consequence events.

But I go a step further, I do not see us being good at high probability / high consequence events.

We have had a century since 1918 to properly prepare, or 700 years if you take the black plague.

What is my point?

We do need to slow down and make our systems more resilient. We need to leave more cash in our companies and raise labor pay, and have UBI. We need a medical system designed for surges.

And here is the thing. We already do all of this. As we can see whenever there is a recession, we bailout these fragile corporations. When consumers confidence craters we send out checks.

Where does that money come from? Future tax payers. But let's be clear we have always done that, and again irregardless of your political structure people have borrowed from future generations.

This time, weirdly, we are putting away toilet paper.

Weird.

We should however reverse policy and eliminate stock buy backs, and we should index labor pay to productivity.

We should absolutely raise taxes from folks who are renting their capital and plowing that money back into the economy much more efficiently through spending over managing money.

We should have universal healthcare and UBI now. That would raise the baseline resilience of our society.

One thing we can be certain of: covid19 is not going to be the Last Bad Thing Ever.

There is a harmonic convergence of "prepper" behavior on both the right and the left, and I think that is a great direction.

Imagine if we got rid of all the stupid lawns in America and replaced them with vegetables?

We would save gigatones of CO2, we would support the bees, we would save lots of money, we would have more slow time in the garden, learn to put away some jars of food, and and and we would have food in emergencies.

We need to stop taking the last dollar off the table.

Originally posted on Facebook on March 25, 2020.