I am one of many older adults who feels like we are now living in an unreal, artificial economy. It especially feels so when compared to the economy many of us grew up in, got educated in, worked in, and had hoped to retire in.
One of the lessons of the pandemic was the realization that most jobs in the US are in fact, not all that essential. Much of the economy was shut down in the early months of COVID when tens of millions of workers were sent home from their places of employment. Surprisingly, the country survived with relatively minor shortages of goods and services. Thankfully, there was little panic buying or looting of shelves.
But how could this be with most people absent from their workplaces? At one time during the pandemic, it was reported that only about 20% of all workers were on the job full time. What were the rest of us actually doing that was once before so important when we were at work?
The easiest explanation is that to keep the economy growing over the decades the feds kept creating and pumping more money into the economy than was actually needed for the basics of life. As a result, the money supply has grown faster than the economy, contributing to a growing inequality in incomes and wealth, along with exploding deficits and debts.
It seems most jobs are not really necessary to supply the basics of life. It’s like they were artificially created simply because there was an excess of money to do just that. These jobs and their employers were created by an endless supply of cheap capital put into the financial system by bakers and the government. And most of those jobs was not needed to grow food, manufacture products, or provide basic services.
Instead, all that money was used to create new industries with new businesses chasing new markets with new employees that in essence existed only to chase money from others who had also raised, borrowed, or leveraged capital to do the same. It’s like we have all been chasing our own long tails in a hamster wheel cage. So many of the new companies in the new economy seem as unreal as the jobs they produced. There were only able to survive while never turnig a profit because the cost of money was nearly free to them from investors or the fed’s artificially low rates. And now with higher borrowing costs we are witnessing many of them, and the lies they were built upon, implode into bankruptcy.
Yes, all this money had to be employed to do something. But the real economy we once knew of producing products and delivering necessary services simply could not consume all the excess capital manufactured out of thin air by the fed. There is now so much excess money looking for uses that an alternative digital world, the metaverse, is being created before our virtual eyes. And billions more are being raised in cryptocurrencies and private equity that will be used to invest in new ventures we cannot yet even imagine.
Perhaps there will soon come a time, if we are not already there, when the artificial economy is larger and becomes more important than the real one just to keep all of us gainfully employed. I will be ever so glad to be retired by then enjoying and traveling in the real world of nature.