What keeps you up at night - The Age of Transformation

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... “What’s on the top of your mind? What are you thinking about?” The
previous night we had a small group of about 15 people in my living room after dinner, and the
question was similar, “What keeps you up at night?”...



... In 1820 some 94% of the world’s population lived in extreme
poverty. By 1990 the figure was 35%, and in 2015 it was just 9.6%. Forty percent of those who
remain impoverished live in just two countries, Nigeria and India,...



... Let’s be clear: The Industrial Age and free-market capitalism, for all
of its bumps and warts, has lifted more people out of poverty and extended more lives than has any
other single development.

We live in the developed markets; and here, some of the outcomes of the Age of Transformation will not be so comfortable. Let’s start with this chart (hat tip, Downtown Josh Brown).

Obviously, the rig count in US oilfields is rising rapidly – no surprise there. But distressingly, the number of oilfield workers is continuing to fall. How can this be?

... There are oilfield operators here in Dallas running around with pro formas, raising
money, talking about how they can do very well at $40 and even $30 per barrel. And with oil at
$54 and looking as though it could well go to $60, they are raising money and punching holes. Just
with fewer workers.



... In the US, the most-cited estimate is the loss of half of all existing jobs by the early 2030s....



...RethinkX, in a 77-page report, concludes that 90% of all driving in the US will be TaaS (transportation as a service) by 2030, although that will utilize only 60% of the cars....



...Dr. Ray Takigiku, chief executive and chief scientist of Bexion Pharmaceuticals. The company is now 15 months into a phase I trial to determine the safety of a drug called BXQ-350, which is basically a full-on silver bullet for mass-tumor cancers. 



... In the case of Bexion’s drug, treatment will (hopefully) amount to a few months or less of three visits per week, no side effects, and your cancer goes away. That is the extrapolation from mouse studies. We’ll know more after phase II studies are underway sometime next year. Since it is now public information, I can mention that John McCain will be given access to this drug at the University of New Mexico Comprehensive Cancer Center. Randomly, McCain has one of the types of cancer that the phase 1 trial has focused on.



...at least $500 billion of market cap in big Pharma will be destroyed by a cure for cancer.



...whole job classifications that are endangered species. These changes are going to disrupt our lives and the social cohesion of our country. And of course these shifts are coming not just in the US, but in the entire developed world. And even technology centers in the developing world are going to find themselves at risk of employment dislocations....





...

this trend will continue. More production, with fewer workers. Just like we see in the oilfields. The transformations I am talking about are going to happen in one half a generation, or at the most a full generation. That is not much time for adjustment, especially for a country like the United States where 69% of families have less than $1,000 in savings. (I have seen the figure quoted that 47% have less than $400.) That is not enough to deal with the loss of your job. ... – for the past five or six years the country has had more firms close than be created, and for the first time in our history. Angst in America ... The problem is not the happy ending. The problem is the transition, which is going to be bumpy and frustrating and potentially divisive. I’m going to show you three graphs from Pew Research. Analysts have been conducting studies (see people-press.org/interactives/political-polarization-1994-2017/ and pewresearch.org/fact-tank/2017/10/05/takeaways-on-americans-growing-partisan-divide-over-political-values/) since 1994, trying to discern political polarization. These three charts look at the years 1994, 2004, and 2017. Even as late as 2004, notice the broad crossover between the median Democrat and median Republican. And then notice how wide the divide is today. ...The middle ground is much smaller, and to my eye it looks like the Democratic group is somewhat bigger than the Republican. ... the internet, social media, and the media we consume on TV have allowed us to live in echo chambers where we are not really hearing much from the other side. We talk to people who think like we do and who tend to confirm that we are correct in our beliefs. That constant cycle of reinforcement makes our positions even more hardline...... fewer than 30% of Millennials think that democracy is clearly the superior system of government. And that is where we are today. Where are we going to be when unemployment is well over 12% and rising to 15%, the government is routinely running multitrillion-dollar budget deficits, state and local pensions are defaulting, and taxes are high and still rising? And so, yes, when people ask what is in my worry closet, it is the fragmentation of society. As a country, we are going to have to begin to think the unthinkable. We really don’t know how to accurately measure GDP or inflation, and we certainly don’t have any way to statistically measure the improvements in lifestyle over the years. And we will need those tools. As conservatives and Republicans, we are going to have to think about something like universal basic employment, as opposed to universal basic income. ... Voters are going to want politicians to solve their problems. Politicians can’t really solve the problems we already have, let alone the problems of the future, so I expect we are going to see shifts from one political extreme to the other. Let’s be clear, these problems are not all going to show up next year, and most won’t even start to be understood until the early 2020s.