The future looks positive

This year has been terrible, to say the least. The pandemic has killed more than 330,000 people and sickened many more. The real economy has performed worse than the Great Recession and perhaps close to Great Depression levels. Businesses are going through major disruption and transformation, and many may not survive. Despite all these challenges, there have been positive developments in 2020 that bode well for the future.

Vaccine Investment Worked

The development of a COVID-19 vaccine was successful. This is hugely impactful. Targeted, well-funded investment into health work and new bio tech looks extremely promising for a positive future.

  • Massive investment: The huge sums of money directed toward vaccine development by the government showed that such investments can and do work. If enough money is thrown at a problem, a solution can be found. What other diseases should we tackle next?
  • New biology: Both the Pfizer/BioNTech and Moderna vaccines use mRNA technology—a first in vaccines. This new approach using messenger (small “m”) ribonucleic acid (RNA) provokes an immune response without using actual bits of the virus. While the vaccines do not have full standard approval (they have emergency use authorization), their efficacy and long term safety are promising for future health.
  • Government still works: Despite the obvious failures of the Trump Administration, Operation Warp Speed was a success. A vaccine was developed in record time, distribution of the vaccine is underway, and more people have been vaccinated in a short amount of than ever before. Imagine how much more successful the program could have been had there been less incompetence and better leadership.

Keynesian Economics and MMT Look Pretty Good

Keynesian economics and Modern Monetary Theory are looking pretty good right now. The Great Recession destroyed classical economics (where is all that promised inflation?). The real economy is a hot mess. People and businesses are suffering great, but the massive direct payments to consumers had a very positive effect. That bodes well for the future.

  • Direct payments: Turns out that giving money directly to people works much better than trying to push it through the banking system. Consumers can direct those funds to where they it the most.
  • Inflation Fears are Inflated: Conservative economists have been predicting massive inflation for over a decade. Mainstream economists are far more worried about stagflation and deflation. The current crisis has clearly shown that spending can be used to help people without inflation running rampant.
  • Stimulus: 2020 has shown that massive government investment is needed in our increasing interconnected and complex world. Austerity only hurts people and provides no benefit. In many ways this is religion for a lot of people, so I do not expect a lot of change here, but we should start seeing a shift to economic polices that help more people.

Accelerated AI, Automation, and Technology

Business was forced into transformations and change at unprecedented rate in 2020. I do not see that slowing anytime soon. The pandemic accelerated investments into AI, automation, and other technological advances. The Great Stagnation looks like it might be coming to an end.

  • Accelerated progress: Businesses have increased their investments into AI, automation and other technologies. This will only increase. It is too soon to know the impact, but it will be huge. The trick will be make sure the benefits are widely shared and not concentrated at the top.
  • Increased productivity: Productivity has been stagnant for decades. These new technologies will increase productivity. This will certainly increase productivity. The question is, will it result in massive job loses? Just like the computer created a host of new jobs that did not exist before, I believe AI, automation, and other technologies will create more jobs than are lost.
  • Remote work: Most people cannot work remotely. Those that can will likely be able to continue to do so—the benefits for workers and businesses have been too great. Greater flexibility, happier employees, and reduced office costs are all good for the bottom line.

Despite an awful year, the future looks promising. 2020 could be the turning point in what has been a terrible decade. Applying the lessons from this year, we might be looking at another roaring 20s filled with massive change, new technologies, and positive economic growth.