Things didn't end well for Cassandra, but they were bad long before they got worse: the thing about prophecies of doom is, even if they're right, they're a downer.
The downer at present is that we're in a "K-shaped economy," which feels preposterous to most Americans: how can a rising tide not be lifting all boats?
But that's how it's working: if you were well-off to begin with, came out of the pandemic with money to play the stock market and not worry, a bit in crypto, maybe dabble in prediction markets, you're doing fine. The trade war (wars?) haven't bothered you; the un-war with Iran hasn't been an issue, and while there's a whole lot of oil and gas (and aluminum and ammonia plus nitrates for fertilizer) bottled up in the Strait of Hormuz, those chickens are still scratching in the yard, and aren't due home to roost for weeks yet. The top half of the K is going up, up, up!
But this K is a fancy font: the bottom half is a quarter circle. If you started out just okay, you're still mostly okay; if you were worse off, you can already feel the pinch of high gas prices and grocery prices that have barely budged down or even gone up, of rising energy costs.... And the people near the bottom, where the curve is getting steep? They're hosed. (Welcome to Calculus 001, by the way. Oh, we've reached my stop already.)
There are a lot more of us in the bottom of the K than the top, but we don't make colorful news copy; we're not part of the "AI boom" and some of us have lost jobs to it; still, one of the biggest groups is right there where the curve is barely sloping: they're not feeling it much so far.
But the big dip in the road is coming. There is no magic restart for the lost months of global trade in oil and all the stuff you can make with it. Fertilizer is in short supply and expensive, and that's what grows the crops you and your entree eat. Aluminum -- beer cans, soft drink cans, all manner of consumer and industrial goods -- is getting scarce and costly. And oil prices -- well, you buy gas; you know how that's trending. There will be a "capture transient" as it ends, prices ramping up beforehand, undercut by the sudden bump in supply that may result in a nasty fall. A saving grace as the problem continues is that idled refineries and oil wells (etc.) don't start up quickly; but it's a bitter pill, since it will mean lingering shortages and higher prices until it's all back up to speed.
Nobody liked Cassandra very much. They liked her predictions less. And in a K-shaped economy, you can see the party is roaring! Look at 'em, in their Rollses and Bentleys, with BMWs and Mercedeses (Mercedii?) for the kids, and all their outrageous costumes -- surely you, too, will soon join them! It's right there, online and on TV, glittering and shiny, nearly close enough to touch.
Thing is, you're not gonna get there. In a K-shaped economy, very few cross over. The odds it'll be you or me are lousy. I'm not Cassanda; I'll be happy to have missed my mark. But that's not how I'm betting.
Update
1 year ago
