Showing posts with label The Big Freakin Transition. Show all posts
Showing posts with label The Big Freakin Transition. Show all posts

Monday, August 15, 2022

The main theme of this blog: We are in transition


This above, is the world that the Greatest Generation, the Baby Boomers, and my posse, Generation X were born into.  Assembly line jobs defined the 20th century, that was how over half of working Americans earned their living.  To people over about 40 years old, this is the "normal" we grew up with.  The vast majority of people in the U.S., and the industrialized world, worked jobs they hated, but that paid well.  Little thought or creativity was needed, and most jobs were a monotonous grind, day after day.  Workers did their 40 or 50 hours, lived for the weekend, and coped with it, to feed and raise their families.  This, above, is what the late Industrial Age was like, this is what we are still in transition from 

When I was in 8th grade, in 1979, in the small town of Willard, Ohio, we had a "Career Day."  All of us kids in junior high were herded onto buses.  One of our teachers told us, "A few of you may go to college and become doctors, lawyers, or accountants.  But most of you will spend the rest of your lives working in one of the four factories we are going to visit today."  Everyone's heads dropped.  We were all depressed at the idea of being stuck in this tiny little town, working lame jobs, just like our parents, for the rest of our lives.  With very few exceptions, our parents always bitched and moaned about their jobs.  That was life for most people in the Industrial Age.  Jobs paid well, the men worked rote factory or office jobs, and most women stayed home with the kids.  Most families could buy a house, by saving for a few years first, on a single income.  But very, very few people actually liked their jobs.  That was in 1979, the day our school disillusioned all of us kids.  Yeah, the Willard Flashes basketball team kicked ass, and you could water ski at Holiday Lakes, but many of us figured there must be more to life than that.  It wasn't just us kids in Willard thinking that, it was kids and teens all over the country, and other parts of the world.

Every little town had one or more busy factories, all with assembly lines.  Larger towns and cities had many factories.  Pollution from these poured into local rivers, lakes, and harbors.  The Cuyahoga River running through Cleveland,  actually caught on fire for three or four days once, when I was a kid.  The river... water... caught on fire, because it was so polluted.  

The Midwest industrial cities were booming, Chicago, Pittsburgh, Detroit, Cleveland, Cincinnati, and the rest poured out all kinds of products, "Made in America."  The same was true across the U.S., and it was similar in other industrialized nations.  Those products went to warehouses, and then to huge department stores in shopping malls.  That's where our families went on the weekends to buy clothes, tools, car tires, applicances, and big, warm, soft pretzels, which were 39 cents each.  Life moved slow, every small town's Main Street had several bustling, local, "Mom and Pop" businesses.  Most families went on a one or two week vacation each summer.  In Ohio that meant a trip to Lake Erie (Cedar Point) if you were middle class, and Florida if your parents were a bit better off.  When I was a kid, if another kid said they were from Detroit, we thought, "your dad makes MONEY," because the auto plants there were thriving, and paid really well then.

Houses had two phones sharing one line, that the whole family shared.  We had those new, big, color TV's, which had three channels, and a few fuzzy UHF channels to watch.  Most adults had hobbies like bowling, fishing, target shooting, model railroads, ceramics, knitting, or something else they did in their spare time.  People actually had "spare" time.  Think about that one.  Sometimes after dinner on Sunday, my family would go for a "Sunday drive," just drive around the region aimlessly, just for something to do.  Those drives were cool, because it was fresh scenery, and usually ended with an ice cream cone.

But right around the time my classmates and I got disillusioned by "Career Day," something else started happening.  I think it was 1978 when I first heard adults talking about a factory shutting down.  That was unheard of then.  But a company, a whole factory, in nearby Bucyrus, I think, closed down.  All of the workers got laid off.  The owners moved the whole business,  and built a new factory, far away, in a distant land, where people worked for much less money... Alabama.  That was the first I remember hearing of what became known as "outsourcing jobs."  Yes, the early outsourcing of jobs from Midwestern facotry towns and cities, went largely to the American South, then Taiwan, Mexico mequliadoras, and then to places like South Korea, Vietnam, Pakistan, and ultimately, China.  During those same years, the late 1970's to early 2000's, industrial robots and new technology also took millions of Ameircan factory jobs.  

Futurist Alvin Toffler, brainstorming with his wife Heidi, published his second major book, The Third Wave, in 1980.  It forecast that new technologies of many kinds were beginning to completely transform society as we knew it.  The Tofflers explained that we were moving out of an Industrial-based society, and into an information-based society.  Many people read their books.  Many more of us didn't hear of their books until years later, if ever.  It was their 1990 book, Powershift, that first caught my attention.

Things like cable TV, touchtone phones, fax machines, VCR's, home video cameras, and the big one, the Apple Macintosh, and subsequent personal computers, began to completely change the work world in the late 1970's and 1980's, right as us older Generation X kids were going through high school and into college.  The good news was that the Toffler's were right, we were in transition out of the Industrial Age, as we now refer to it, and into the Information Age.  Us Gen X kids, and the younger generations, were not stuck in routine assembly line jobs, for the most part.  The downside was that about 1/3 of the new jobs that evolved, mostly tech oriented, paid really well, better than those old factory jobs.  But the other 2/3 of jobs, mostly service jobs, paid a lot less.  In addition, for a whole bunch of reasons, real wages for most workers had declined, compared to prices of goods, ever since.  

I got into a weird new sport of BMX freestyle in high school, when living in Boise, Idaho, in the early 80's.  I somehow managed to stumble into the BMX industry as a 20-year-old, which led me on a far different path than my former Idaho and Ohio classmates.  In my 20's, I was surrounded by young entrepreneurs, building their own businesses from scratch, and by pro and top amateur action sports athletes.  By getting into new sports, which really weren't even sports, by traditional standards, collectively, we created a whole new world of sports, and industries to support them.  Skateboarding, snowboarding, inline skating, rock climbing, and other sports were following the lead of surfing, spreading worldwide.  

Being a geeky BMX guy, I started reading a ton about business, and then personal development, to try and get over my personal shyness and inability to get my own business started.  The main reason was because I was afraid to sell to people, which is key to any business.  No sales, no business.

I wound up working a bunch of odd jobs, while reading 250 or so books over 20 years, and watching the financial and real estate markets.  I also saw the growth of action sports from the inside out, learning a ton about how ideas and new trends build and spread through society, without realizing I was learning it.  Trying to figure out where business and economic trends are heading has been a huge interest of mine since the early 1990's.  

As the interenet began to take over music, media, and commerce in the 2000's and early 2010's, I began to realize that The Third Wave that AlvinToffler explained, was still playing out.  And THAT is why we are not in the Industrial Age anymore, but were are not in the true Information Age either.  I believe we are still in between the two ages, in transition.  Many things, like telecommuncations, computers, music, video/TV/Film, and publishing,  have pretty much made the transition into the Information Age.  But many other things, like education, banking, housing/real estate, government, law, politics, and other institutions, are still working largely from Industrial Age models.  All of them use a lot of new technology, but the underlying business models or frameworks have not moved to a digital/tech native form yet.  

And that is why the world seems so crazy these days.  At the core, millions of people, and much of our work, social, fnancial, political, and business lives, are still somewhere in between the Industrial Age world and the Information Age world.  I call this late stage of this transition period, The Big Freakin' Transition, and I've written quite a bit about it (I added the word "freakin" to distinguish it from other "Big Transition" thoughts on the internet).  But the idea is still largely unknown to just about everyone.  I think that if people hear this idea, it makes a lot of sense, and helps our current, chaotic world make more sense, as well.  It's a bit like the whole world is going through puberty all at once, just less horny.  We used to be one thing, now we're in between, but not quite the new thing yet.   

We have a huge population of poor and homeless people, myself included at the moment, who have fallen through the cracks in work or social lives.  As a society, we haven't figure out housing in a world where the high paying tech jobs mostly cluster in a few major metros, driving up rent and mortgage prices to astronomical levels for lower paid workers.  We have all kinds of financial systems, new and old, now in play, with fiat money losing steam and crypto gaining steam , and about 25 different ways to pay for a burger, or a cup of coffee, or a new car.  The deep, underlying issue is this continuing transition from older business and social models to new tech and info adapted models.  

On top of all that messy transition stuff, right now we have high price inflation and another recession (maybe a depression) here or looming. AND we have major climate issues, like floods, falling river/lake levels out west, heat waves, massive forest fires, and changing weather patterns.  And we have major drug epidemics, which include a lot of the same people who can't find good paying work in the places they grew up.  We have hundreds of small towns and cities that are dying on the vine, while major metros keep swelling.  OK, the pandemic led to out migrations of big cities in 2020 and 2021, but I think we will see that trend reverse in time.  There are so many abandoned factories, malles, and other buildings in the U.S., that Urban Exploring, or UrbEx, is a pastime for many Millennials and Gen Z people.  I used a video of Rolling Acres Mall from Akron, Ohio in that last link for two reasons.  1) Rolling Acres became famous in about 2014, as one of the earliest examples of a dead mall, before the term, "Retail Apocalypse" was invented.  2) I was born in Barberton, Ohio, about three miles from the site of Rolling Acres Mall.  Although we moved from the area before I was 3-years-old, my grandparents lived about ten miles away, and this is a mall we visited when I was a kid sometimes, back when it was thriving in the 1970's.  The places thousands of people worked and shopped when I was a kid are now often creepy, abandoned buildings to explore and shoot video for today's teens and young people.  Transition.

The point is, we have so many different levels of change happening, that nearly everyone is overwhelmed.  When people feel overwhelmed, they draw back, into the customs they grew up in , which may seem under attack.  That leads to poltical "tribalism," along with racial, sexist, cultural prejudice, and other divides.  We devlove into an "us" versus "them" world, across lines we used to think of as "us" on a large scale.  

The Tofflers put the start of the transition period, between the Industrial Age and the Information Age, way back in 1956.  That's when "white collar" office workers first outnumbered "blue collar" factory workers in the United States.  The long period of change began very slowly, from one age to another.  As new innovations came out and were adopted by people, change began to accelerate, with one form of technology or one new social norm, building upon others.  

So now we are in the late stages of this long period of transition, and change is happening all over the place, all around us, and it's driving us all kind of nuts.  Huge amounts of change do that to societies.  As I pieced all these ideas together, I began to believe that the financial issues of the 2020's, one or more major recessions, or possibly a great depression, would force change on many people, businesses, and institutions that have been resisting change so far.  I think this will be the craziest decade of this long, 80 or 90 year transition period.  It feels crazy, because it IS crazy.  

But we have models to look at now.  We've seen the factories shut down, and we survived.  We've seen phones go from the kitchen wall and parents' bedroom, to a tiny supercomputer in everyone's pocket, that can communicate with most of the world.  We've seen music go from 8 tracks and records to CD's, MP3's and now streaming.  We survived.  Books, thank God, are still available as books, but also as digital versions.  Three channels of lame ass network TV (millions of people watched Hee Haw every week when I was a kid), have turned to lots of quality streaming, and millions of options (many nearly as lame ass as Hee Haw), on the internet.  We watched Sears, J.C. Penney, and Kmart (blue light special anyone?) die off, as the Retail Apocalypse exploded, then quelled during the pandemic.  At the same time, over the last 25 years, we saw Amazon, eBay, thousands of Shopify and Etsy online stores, and buy online/pick-up in store models happen.  And we survived an actual depression in the Spring of 2020, AND a 100 year pandemic.  If you're reading this, you have survived all that.  We can figure out housing, crypto,  functional banking, education, and how to count votes as well as we count stock trades.  And NFT's.  Someday, even $400,000 monkey JPEG's may make sense. to most people.  Hey,you figured out internet porn  pretty damn quickly back in the day, didn't you.  (Pause now to delete your browser history).  

Yes, the world IS crazy.  A big part of that is because we are in the middle of a Big Freakin' Transition that involves millions of small transitions.  If this basic idea makes some sense, then my blog is beginning to do its job.  My work here is to help anyone interested to navigate what I call The Tumultuous 2020's, survive the crazy parts, and look for opportunities that will help you thrive as time goes on.  That's my job here.  I hope that helps this make sense.  Now go create something this world needs.  Or go back to work, since most people who read my blog do it when they're supposed to be working at their real job.  




Tuesday, July 12, 2022

The Big Picture: The Big Freakin' Transition, The Phoenix Great Depression, and the Tumultuous 2020's


I know it's hard now, but remember way back, a couple of years ago, when 2020 seemed crazy?  Yeah.  The good ol' days.  By the end of 2020, this dating commercial made complete sense.  

The decade of the 2020's crept in with a yawn.  Uh... yeah, Happy New Year, another year in the 21st century, another new decade.  No big deal.  None of us had a real idea just how quick things would get out of hand.  Then came Covid, and 2020 spiraled into what seemed like another dimension.  "Yeah, everybody, you're grounded!  Stay inside for two months.  Oh, and you're fired."  It just kept getting crazier.  

Then, on New Year's Eve 2020, we all whispered, "Oh, thank God, 2020 is over..."  We didn't realize 2021 was waiting backstage, saying, "Hold my beer."  Apparently that was about the time 2022 started doing shots, and stumbled in a year later, slurring, "That's all you guys got?  What this..."  

Since 2017, I've been blogging about the financial storm clouds I saw brewing, which led me to believe we were in for at least another Great Recession level event, and quite possibly a full blown Great Depression in the 2020's.  Why did I think that?  There are two main ideas I saw building, some long and ultra long term trends.  When combined, I realized, these are not going to be the "Roaring 20's" again, like the 1920's, which many people were predicting then.  It appeared this decade would be really chaotic, to say the least.  So, in late 2019, I dubbed this decade "The Tumultuous 2020's" in a 20 chapter book/blog thing I wrote, called Welcome to Dystopia: The Future is Now.  In it I tried to articulate a whole bunch of big ideas that had been growing in my head, all interconnected with each other, and most focused on th enext 10 to 15 years.  

The Big Freakin' Transition

This is not my idea.  It's my name for an extension of a concept, by futurists Alvin and Heidi Toffler.  This husband and wife team brainstormed together, and Alvin wrote the books with their ideas, from the late 1960's until 2007.  In 1980, he published The Third Wave.  While there were a lot of nuances, the basic idea was that we were leaving an industrial-based society, and moving into an information-based society.  At the time, more than three years before the Apple Macintosh personal computer debuted, that idea was radical.  The Industrial Age was blazing at full steam then, and factories in small, medium, and large cities, acros the U.S., churned out goods.  Those physical items would then be sold at local grocery stores, small mom and pop Main Street stores, discount stores like Kmart and Walmart, and huge department stores in malls.  To most Americans, it seemed the world had always been that way, and always would be.  

But Alvin and Heidi Toffler saw a dramatic increase in information in society beginning.  That led to a need for new technologies to deal with more information, and those new technologies, along with changing social norms, were on the cusp of changing everyday life in ways even science fiction writers couldn't imagine.  The Tofflers saw much of what was about to begin happening, new technologies, new ways to live, work, and shop, and ultimately new social norms resulting from those other changes.  

I've read several of Toffler's books, and have watched every video and interview I can find of him online, multiple times.  In the 2010's, I began to realize that The Third Wave idea wasn't just about factories being shut down years earlier, and good paying American jobs being outsourced.  I began to realize that the Third Wave, the change from the Industrial Age into the Information Age, was happening in different industries at different times, more than 25 years later.  

Telecommunications began the transition from Industrial to Information Age in the 1970's.  Rhen came the closing of factories nationwide, brought on by new technology, industrial robots, and outsourcing of jobs to less expensive countries.  Music went digital in the 1990's, as we also saw the rise of the internet.  Print media began the shift to digital media.  In the 2000's, TV, video, and movies went digital, social media and smartphones emerged, and suddenly everyone could share text, pictures, and videos with half of the world.  We all became publishers, radio stations, and TV stations, in a sense.  

As we headed into the 2010's, the Retail Apcoalypse began, and shopping, the act of consuming itself, shifted from huge brick and mortar stores, to a much more online and smartphone-based model.  These have all been, fundamentally, shifts from the old, Industrial Age models, to new, Information Age models.  The rate of change has been accelerating.  It started slow, but changes in different industries compunded, and change happened faster and faster.  It became obvious to me, that the 2020's would be a time of nearly all remaining industries and institutions being forced to change, from waning Industrial Age models and mindsets, to Information Age models, whether they want to, or not.  It's a matter of survival.

Alvin Toffler died in 2016, but much of what he and Heidi foresaw, and what he wrote about, is still playing out.  The Big Freakin' Transition is my name for the transition period we are in, from the Industrial Age to the Information Age.  It started around 1956, by the Tofflers' reckoning, and will go on until probably 2040 or so.  Just thinking of society as being in this in-between zone, helps all the craziness and chaos today make sense.  At least for me.  But the 2020's will be one of the most chaotic decades, with this transition happening in many different areas of society, all at once, that have been lagging behind, like education, banking, politics, law, the automotive industry, religion, and government, among others.  The Big Freakin' Transition is the 80 or 90 year long transition period we are in, between the Industrial Age and the Information Age.

The Phoenix Great Depression

Another long term trend playing out now is one I read about in a book by economict Ravi Batra, in 1990.  Among other ideas, Batra showed that the U.S. has had an economic depression, or great depression, every 30 or 60 years, going back into the early 1700's.  The only time the cycle didn't fit, was for about 30 years after the Civl War as the country got rebuilt.  Other than that, if we didn't have a depression at the 30 year mark, then we would have a deeper or longer one, often a great depression, at the 60 year mark.  That book was called The Great Depression of 1990, and that's exactly what Batra was predicting.  

We didn't have a great depression (officially, a five year economic contraction) in 1990.  But we did have a 6-7 year stagnant economic period, officially dubbed a "double dip" recession.  The reality of economics today is that even if the Great Depression of  the 1930's happened again, with the exact percentages of decline, unemployment, and everything, it would not be called a great depression today.  It would be a "Triple Dip Recession" over a 7-8 year period, or something like that.  Economists are deathly afraid of usng the word "depression,"  That's today's PR and political economic world.  

All that aside, we could make the case that the 1990's recession was a mild depression.  In any case, it was a long, stagnant, economic period, right when Batra said it would happen.  The rise of the internet helped bring us out of it.  But it wasn't near as deep and catastrophic as he predicted.  As the long recession dragged on, Batra faded from popularity.  But I was fascinated by his ideas, and I started watching the economic markets, pretty much every day, for years.  I would see the markets go up or down, and try to figure out what made them move.  I also read about 200 books in the 1990's, and listened to 150 more on tape, many of them business books.  I began to understand bits and pieces of how trends happen, and what made the markets move.  I stayed pretty broke, working a variety of low wage jobs, while reading like crazy.  I didn't invest any money until the late 90's, and then only bought a few commodity options (oil calls when oil was around $12 a barrel).  I ran out of money, and my options expired worthless, a few months before oil shot up in late 1998.  I had the right idea, but was just six months early.  I had to quit my job because of an injury in 1999, and became a taxi driver.  That soon led to my first bout of homelessness, as I learned how to make money in a cab.   

As 2016 and 2017 came along, I realized that the Toffler's Third Wave, and Batra's 30/60 year cycle of depressions, along with a few other cycles, seemed to be merging.  It looked like we would go into a major recesssion sometime between 2017 and 2020, and that economic downturn would force a lot of businesses to shift into more Information Age business models.  The economy tried to drop in late 2018, but the markets got propped up, and The Fed soon lowered interest rates.  Then, in September of 2019, came the Repo Market crisis, and The Fed started adding much more "liquidity" into the banking system.  Then, six months later came Covid-19, and the shutdowns.  Suddenly things became to change much faster than even I expected.  

In my thinking, the main thing happening, Big Picture, was that we were seeing more and more industries, businesses, and institutions, begin making a shift from an Industrial Age model, to an Information Age model.  This usually was sparked by new technology leading to new players and new business models, which put lots of pressure on the traditional business model.  

Since I was a taxi driver form 2003 through 2007, I'll use my old business as an example.  The taxi industry, which went back to the 1700's and horse drawn carriages, changed overnight, and I mean LITERALLY OVERNIGHT.  This happened when taxi companies pulled out the old CB radios, and put dispatch computers in the cars, to give us fares.  Suddenly, the next day, every driver had to work 7 days a week, and there were soon many more cabs on the road.  More taxis, the same amount of business, and more drivers working 7 days a week.  All that led to each driver making far less money.  I struggled to pay my weekly taxi lease of $550, and put $300 worth of gas in my cab, before I made any money.  I worked up to 18 hours a day, to just survive, and so did many other drivers.  And then, a few years later, came Uber and Lyft, to drive nails in the taxi industry coffin.  New technology, new business models, new players, that brings Big "D" Disruption to an industry.  That is what happened to many industries, and many more have that happening right now. Like so many other workers, I dealt with industry Disruption first hand.  

When we put these two ideas together, The Big Freakin' Transition (Toffler's Third Wave), and Batra's cycle of depressions every 30 or 60 years, they lined up.  Officially, in the Spring of 2020 we dropped into a deep recession (technically, it was a depression, the GDP drop was way over 10%).  Personally, I clock the beginning of The Phoenix Great Depression as September 2019, with the start of the Repo Market Crisis.  

In my thinking, The Phoenix Great Depression is a 5 to 7 year period, from late 2019, to at least late 2024, and more likely through 2026-27.  In that period I see us having multiple "recessionary waves," mixed with periods of rebounding, most likely due to intervention by The Fed.  The Spring of 2020 was the first recessionary wave, and we are now heading into the second wave.  There will probably be three waves of recessions, like in the 1930's.  There could be four.  In addition, we have all these industries and institutions that are going through fundamental shifts in their business model or working model, due to new technology and new social norms.  Many are fighting for the survival of the business, or soon will be.  

The best example is that we used to shop at Sear's and J.C. Penney's en masse (Industrial Age), and now most people do a lot of their shopping online (at Amazon, eBay, online sites for major retailers, and small businesses with online stores), the Information Age.  That type of transition will happen to EVERY business and institution.  Like the mythical phoenix, every institution that hasn't made the shift yet will "burn up and die,"and either completely change its operating model, or go out of business.  New businesses and models will rise up, and replace them.

So The Phoenix Great Depression is the 5 to 7 year period when we have multiple recession waves AND a huge number of businesses and institutions changing to new operating models.  And that isn't going to happen in 12 or 18 months.  It will take several years.  Whatever the reality is, I believe these years from 2019 to 2027 will feel like a great depression, to most people, when they're over.  

There are other trends and transitions happening as well.  Respected investor Ray Dalio talks about the long term "Debt Cycle," which is his analysis of some of these same forces, but focusing on how debt rises, falls, and causes shifts over time.  It's the same basic idea, but he's focusing on different aspects of the change going on.  

So that's as brief as I can explain my concepts of The Big Freakin' Transition, The Phoenix Great Depression, and the Tumultuous 2020's.  They are different apsects of the same crazy decade and major waves and forces playing out.  

Here's the August 2019  blog post (on my old blog) where I called a "Great Recession" level event coming, even before the Repo Market crisis hit.  

This is the post where I coined the term "The Phoenix Recession."  I was thinkng great depression, even then.  But no one even wanted to hear the word "recession" in October 2019, so I went with this title.




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