Decision Vision Episode 123: Now What? 10 Decisions to Make in a Trans-Pandemic World
We’ve endured a pandemic, social and political upheaval, and economic uncertainty. Now what? Decision Vision host Mike Blake takes up the challenge of answering that question, presenting ten major decisions which must be confronted in a “trans-pandemic” world. You may not agree with all of Mike’s conclusions, but you’re guaranteed to be challenged. A link to the accompanying slide deck is included below. Decision Vision is presented by Brady Ware & Company.
Mike Blake, Brady Ware & Company
Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.
Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.
Brady Ware & Company
Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.
Decision Vision Podcast Series
Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at email@example.com and make sure to listen to every Thursday to the Decision Vision podcast.
Connect with Brady Ware & Company:
Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional full service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.
Mike Blake: [00:00:21] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.
Mike Blake: [00:00:40] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols. If you like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself, and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. If you like this podcast, please subscribe on your favorite podcast aggregator, and please consider leaving a review of the podcast as well.
Mike Blake: [00:01:16] So, today’s topic is, Ten Decisions to be Made in a Trans-Pandemic World. And today is an experiment. I’m doing something that I have never done before, either on this podcast or another podcast. And I’m making, I guess some people call it, the guru format, in which I don’t have a guest today. But rather I’m going to talk about a topic flying solo.
Mike Blake: [00:01:43] And, also, by the way, this is going to be cross-posted on my brand new YouTube channel, it’s so new this is going to be the first piece of content that goes on it. If you do a search for Unblakeable, then you can find the YouTube channel, please subscribe and follow all that good stuff.
Mike Blake: [00:02:00] And I’m making a presentation here that I’ve already done twice that has been met with a lot of positive feedback. And since the nature of the podcast is, in fact, about decision making and the topic is making decisions in a trans-pandemic world, I think it’s appropriate to do this here. So, we’ll see what happens. If you guys like it, we’ll do it more. If you guys hate it, then this will probably be the last time we ever do it, unless we really find something compelling that would want us to go against the collective wisdom. So, I hope you like it.
Mike Blake: [00:02:42] So, joining us for today’s program is me. I have been the host of the Decision Vision podcast since March of 2019. This is, I believe, podcast recording number 126. We are up to, roughly, 23 million cumulative downloads, and that number still blows me away, and I can’t thank you enough for that. A lot of people don’t know, my day job at Brady Ware is I’m one of the Managers of the Business Valuation and Strategic Advisory Practice. I don’t talk about that a lot because I don’t want this podcast to simply be an infomercial. I don’t want to do it. You guys don’t want to listen to it. But since I have to introduce somebody and I’m the person on the podcast, that’s the introduction.
Mike Blake: [00:03:28] So, I’m going to move over now to the slide presentation. And for those of you who are viewing from YouTube, you should now be able to see the actual presentation. And I use the term trans-pandemic because I think that term is useful. It’s not necessarily my trying to be clever. But, you know, as I record this, on June 29, 2021, we’re not in the pandemic anymore, particularly if we’ve been vaccinated, but we’re certainly not out of it. I think only the most optimistic people think that we’ve left the pandemic behind. But I do think that we’re in an optimistic scenario relative to a year ago and that we can at least see the end of the forest even if we haven’t made it out of the woods yet.
Mike Blake: [00:04:22] And I think in a way that actually makes decision-making more difficult, because when you’re in that trans-pandemic or trans anything stage, everything is so fluid. The environment in which we make a decision today may very well not be at all the same as the environment that we faced three months from now when and if that’s the point in which we are then in a post-pandemic world.
Mike Blake: [00:04:50] And so, this is my attempt to try to make sense of some of the things that have gone on really over the past 18 months now – it’s hard to believe it’s been 18 months – since the pandemic hit the United States and most of the rest of the world. And, you know, at the end of the day, it’s just my take on the decisions that have to be made and you may agree or disagree. In fact, many of you will probably disagree quite strongly. But if at least I make you think about it or I present you with some new information, hopefully, you will find that helpful regardless of whether you agree with the conclusions.
Mike Blake: [00:05:27] So, some disclaimers I always add on any presentation that I do, at the end of the day, if you act in any of these things it’s your own risk. I assume that my audience is comprised of grown ups and capable of making your own decisions. Of course, I’m speaking in generalities. There are going to be entire college courses that will be taught simply around the history of the pandemic in the United States or the Western world or China. That’s going to happen. That’s outside the scope of a one hour monologue here. So, it means that if you make a decision based on something I present here, you don’t get to sue me in case things don’t pan out.
Mike Blake: [00:06:10] You know, the nature of decisions, too, is you can you can make the right decision. That doesn’t mean you’re guaranteed success. Nothing in here should be construed as a legal opinion of any kind. I’m not a lawyer. I’ve never been to law school. The closest I’ve ever come is that I’m a really big fan of Boston Legal because I’m in the tank for William Shatner, but that’s about it. And, by the way, as a special bonus and absolutely no additional cost to you, if you find any spelling or grammar mistakes in this presentation, you may keep them.
Mike Blake: [00:06:42] So, last year was a pretty fun year, wasn’t it? You know, we had a global pandemic. We had political upheaval on an unprecedented scale, at least, in most of our lifetimes. We have initiated a conversation about race that is unlike anything we’ve seen, I think, since the 1960s, which predates me, I was born in 1970. Did anybody forget about murder hornets? You know, that was going to be a thing for a while, but I don’t think that turned out to be the big thing that was supposed to be. But, you know, they were coming.
Mike Blake: [00:07:18] And then, if things couldn’t get any worse, Tom Brady wins a seventh Super Bowl. So, I guess it goes to show the more things change, the more they stay the same. I say this actually as a Patriots fan. I think it’s great that Tom Brady won a seventh Super Bowl. But I understand if you’re the rest of the league and you’re tired of Tom Brady being scorched earth on the NFL since 2000, I understand if you’re getting tired of it. And definitely in the ATL, people are tired of it. Not only did he orchestrate the greatest comeback in Super Bowl history against the Falcons, but then he comes here two years later and wins the Super Bowl in Atlanta. It’s fair to say most people in Atlanta have had enough of one Tom Brady.
Mike Blake: [00:08:04] But, you know, the world has changed, right? And so, now, we have a lot of decisions that we have to make. Some of them are urgent, some of them are not as urgent, but they’re all important. And I love Yogi Berra despite being a Red Sox fan. But I mean, you’ve got to appreciate the wisdom. And, you know, I think actually a lot of us feel this way. You know, when you come to a fork in the road, take it. I mean, the environment is just so uncertain right now that, I mean, what do you do? And, again, I’m really not telling people what to do, but I am telling people the decisions I think people have to make one way or the other.
Mike Blake: [00:08:47] So, today’s outline I’m presenting in the form of a mind map. I’ve recently become familiar with mind maps and I’ve come to like that much more than outlines. I built this using an app called SimpleMind on the Mac. I think it’s also available for PC. And one of the things I love about mind maps is their nonlinear. You can think, and articulate, and organize your thoughts in a nonlinear way. Whereas, in an outline, you’re forced to do so, which implies some kind of priority of decisions.
Mike Blake: [00:09:18] And I’m not placing any priority decision except that a linear element or linear characteristic of time forces me to only cover one topic at a time. But I think these are all, frankly, of equal importance and they mainly differ as to whether or not they’re important on a micro level, i.e. your own particular circumstances and priorities, and they’re important from a broader social perspective. We have decisions that we have to make as a society collectively.
Mike Blake: [00:09:50] So, the big question everybody’s asking right now is, Do we continue to work from anywhere? We don’t know. I mean, companies are bringing people back to the office. They’ve planned to bring people back to the office. They’ve then reversed decision to bring people back to the office. You know, there is no best practices. You know, we didn’t have the Internet back when we had the Spanish flu. So, you either worked on location or you didn’t work, that’s all there was to it. We just don’t know what best practices are.
Mike Blake: [00:10:24] And if you’re looking at this on video, you can see this chart that I’ve put up that was posted by Erik Samdahl and the title is “When Will U.S. Workers Return to the Office? Over 50 Percent of Employers Have A Plan.” When you look at the chart, you can see very clearly when the items are ranging from we’re already returning to the workplace to haven’t decided yet which is 17 percent, you know, 14 percent don’t know. And when you look at this chart, it’s pretty much even, all the choices are even all the way around.
Mike Blake: [00:11:01] That means that best practices have not emerged yet. And that makes things difficult. We just don’t know what best practices are. And they’re probably going to vary by industry. They’re going to vary by location. They’re going to vary by company culture. And they’re going to vary by company size.
Mike Blake: [00:11:18] But one thing that we do know, and there’s an emerging picture here, I happen to have a chart up and if you’re listening on the podcast, it’s called “Productivity Better Be Top of Mind in a Post-Pandemic Hybrid Work World.” This is from Forbes magazine. But the chart clearly shows that when you’re looking month by month, employee productivity is up significantly relative to where it had been the prior year. Now, that’s converging. The latter half of ’19 and the latter half of 2020 are sort of converging a little bit, because, I think, we are actually seeing the leading edge of a digital transformation at that time. It was just sort of got overshadowed by the pandemic.
Mike Blake: [00:12:05] But, you know, the overall data is pretty clear that people do appear to be more productive working from some place outside of the office. But it is complex. According to this chart “Succeeding With Remote Work” from gallup.com, workers are more productive, but they’re also more stressed. They’re also more worried. And so, that speaks to whether or not whether work from home is truly a long term viable solution. I don’t think we’re going to know the answer to that until schools reopen en masse and daycare comes back.
Mike Blake: [00:12:49] I suspect, but I do not know that much of the stress revolves around having to juggle childcare and, in some cases, elder care with managing your normal daily life. Because the infrastructure that we’ve had that enables us, women mostly, to work simply was taken away from us. And I can tell you, as a person who works from home and was engaged in, frankly, household chores and did participate in home schooling, even though I did less than my wife, even that amount added to a significant level of stress and did make things hard. And like I said, I didn’t even do the lion’s share. I participated where where I could and where Cordelia thought that I wouldn’t hopelessly screw things up.
Mike Blake: [00:13:38] But the fact of the matter is, is that, people are stressed to be in this environment. So, we’ll see what happens once kids go back to school. I think that’s going to be a major inflection point going forward.
Mike Blake: [00:13:55] So, the second decision we have to make is, Are we going to continue to rely on video conferencing? You know, I’ve stepped out now to a few in-person meetings, a few lunches, where either the restaurants are basically empty or eating outside that sort of thing. I’m still being very cautious even though I’m vaccinated, because I don’t want to be patient zero that they find out, “Oh, the vaccine wasn’t as resistant to the Delta variant,” or whatever. Frankly, I like somebody else to have that on. So, I’m still being careful. But with all the talk of Zoom fatigue, we still need to figure out whether or not we want to have these meetings.
Mike Blake: [00:14:41] Now, an interesting chart from an article called “Open Mike” from the National Institutes of Health shows how people participate in Zoom meetings compared to in-person meetings. And the data shows that people on Zoom seem to be a little bit less inclined to contribute to a discussion. They seem to be a little less inclined to voice opinions. They seem to be less inclined to be responsive to feedback, less inclined to communicate opinions, and much less inclined to maintain an attention span of any kind. This is a sample size of nearly 3,300 people.
Mike Blake: [00:15:21] So, I do think that there are some statistical umph to this. Now, I think this because we’re going to need to see more best practices emerge. And except for contributing to discussion and attention span, these other issues, these other worsenings, if you will, are not terribly strong. So, they could just well be statistical noise, frankly. But there does appear to be a pretty significant reduction in contributions and attention spans. Now, you might say, “Well, great. Less contributions mean less meaning with a bunch of hot air.” You could certainly take that position. But the point is, is that, Zoom and video conferencing in general, I think, is still a work in progress in terms of getting people to participate.
Mike Blake: [00:16:14] And the only thing I can tell you that I’ve learned is that, whenever I host a meeting, I require everybody to have their cameras turned on. And if you don’t have a camera, you can’t be in the meeting. And if you’re that important to the meeting, we reschedule. Because the camera is the way that I can tell if you’re engaged, paying attention. I get feedback from the audience. And I do think that by having a non-camera Zoom meeting, frankly, defeats the purpose and allows for suboptimal participation. But that’s just me.
Mike Blake: [00:16:51] Now, the thing to keep in mind is that, this is not necessarily a new phenomenon. There is an interesting survey that was published by the Harvard Business Review that talks about “What Are Employees Doing During a Conference Call?4 This is not a Zoom call. This is just oldy timey telephone conference calls. And for those of you here, you can see on the chart that 65 percent of people are doing other work, 63 percent of people are sending an email, 55 percent are eating or making food, 25 percent are playing video games, even six percent are taking another phone call, which is awesome.
Mike Blake: [00:17:29] So, you know, struggling with attention span during a Zoom call is really not a new phenomenon. And maybe this even calls in the question whether my my camera requirement is useful. I think it is because, again, if I can see people, I at least have some shot of telling if they’re engaged or not. But the point is that, you know, this is not a new phenomenon. It’s just newly visible.
Mike Blake: [00:18:03] And then, you look at the next chart, which is, What are people doing during virtual meetings? That’s a 2020 study by Kathy Morris, “Survey: Most People Are Distracted During Virtual Meetings.” You know, 60 percent, checking emails; 50 percent, cell phone texting; 52 percent, multitasking, i.e. doing other work; 45 percent, snacking, i.e. eating or making food. My point is, is that, what people are doing during virtual meetings have been doing roughly the same thing in roughly the same amounts as on a conference call.
Mike Blake: [00:18:43] Except, it appears that there does appear to be a slightly lower percentage of people that are doing something other than participating if they’re on a virtual meeting. The other work tops out at 65 percent. Here, it tops out at 55. So, there may actually be an additional benefit to a Zoom call. Again, I think it has to do with whether you have the camera on or not. So, something to keep in mind.
Mike Blake: [00:19:12] But it does also seem clear that virtual is costing money. You know, people do like to be sold to in person, at least in a lot of industries. I work in tech and I think it’s different. I think a lot of people have no interest in meeting me in person. I have not met over two-thirds of my clients in person ever. But, again, I’m in tech. I work a lot with millennials and Gen Y, you know, their comfort zone is virtual relationships. That suits me just fine. It saves me travel time and so forth.
Mike Blake: [00:19:43] But this chart from Oxford Economics, which is from an article called “The Return on Investment of U.S. Business Travel,” shows that, you know, manufacturers think they’re losing as much as 35 to 40 percent of their customers because they can’t meet them in person. And an education professional services, I think it’s around a third. Finance and real estate is around 20 to 25 percent.
Mike Blake: [00:20:07] So, you know, people do feel like there’s a loss in revenue because they don’t have that touch. And whether that’s visiting a client in their office, whether it’s taking them out to dinner or for cocktails, or going to shoot golf, or go for Tim Scones, or whatever it is that you do. You know, people do seem to lose that. So, you know, I have a feeling that people are going to go back, at least, in terms of reestablishing their sales vitality.
Mike Blake: [00:20:39] Now, the next question is a high level economics question, and I’m phrasing it as, Are we firing the Fed? You know, it’s intriguing to look at Bitcoin’s adoption curve and you can see on the chart here. These are charts that were tweeted out by Dan Held, who I guess is a big Bitcoin guy. I really don’t know who he is. But this is given to me by somebody else who does know a lot about Bitcoin. And if the chart is to be believed, then Bitcoin is somewhere between an outright novelty and on its way to becoming an established store of value, that’s what SOV means. And MOE on the chart means medium of exchange, meaning that it’s real money, basically.
Mike Blake: [00:21:35] And, you know, I don’t think that it’s a coincidence that Bitcoin is gaining traction in the middle of a pandemic. Because we’re breaking some laws right now that most people who have an economics background, like me, thinks should never be allowed to happen.
Mike Blake: [00:21:55] And so, the first issue is, we have to figure out what is the real deal with inflation. And I’m publishing a couple of charts here from The Wall Street Journal. It comes from an article called, “Rising Inflation Looks Less Severe Using Pre- Pandemic Comparisons.” And, you know, at a high level, I think actually that title is an apt analysis. And I’d remind everybody that economics is a slow science. It takes us six months to figure out if we’re in a recession or if we’re out of it. It takes us, in some cases, a year or more to figure out if monetary policy is having any impact whatsoever. It’s just a slow science. And this is why I think the Fed prudently is moving very, very slowly.
Mike Blake: [00:22:49] And the way that I read these charts is that, for the most part, the inflation we are seeing is likely simply a dead cat bounce where there had been so much deflation in sectors prior to the pandemic that we’re simply seeing a snap back into some kind of morality. And I’ve seen the memes all over the place. People want to get all over the government because lumber prices suddenly went up, and they did. And then, two weeks later, they suddenly went down again.
Mike Blake: [00:23:21] And however you want to view economic policy and the results thereof, anybody who’s honest and knowledgeable about economics will tell you that it takes months for real cause and effect to be plausibly established. And everything else, frankly, is simply statistical noise. So, there could be inflation that’s out there that’s lurking. I’m not saying there’s not. There could well be. Certainly, neoclassical economics would suggest that there should be.
Mike Blake: [00:23:56] But I’m simply advising people not to jump to conclusions because, quite frankly, simply, we don’t know yet how much of this is due to pent up demand, how much is due to too many dollars chasing too few goods and services, to short term supply chain problems in food, including labor. We just don’t know. And the way the Fed is behaving, where they said they’re going to steady the course until 2023, they are telegraphing to you that they don’t know either. And so, they’d rather not act rather than risk making the problem worse.
Mike Blake: [00:24:37] Now, the thing that’s confusing and why a lot of folks are sounding the alarm on inflation is because of this chart. It’s called “Annual Inflation” from inflationdata.com. Look it up yourself. It’s a busy chart, but it’s a cool chart because if you look in the orangish bands, those are indicative of when there’s been a significantly expansionary monetary policy, quantitative easing one, two, and three. And then, cash being flushed into the system during coronavirus. And the thing that jumps out with this chart is that, quantitative easing did help ameliorate and, in some cases, prevent deflation. And I think what we learned is that, we had massive deflationary pressures that we didn’t appreciate.
Mike Blake: [00:25:37] Ben Bernanke and the Fed did the right thing. Somebody deserves a Nobel Prize in economics for this because you’re not supposed to be able to do that. Had we not done that, there’s no doubt in my mind we would have entered a true economic depression. So, we did learn our lessons from history.
Mike Blake: [00:25:56] But there is a lot of fear, myself included, that we are going to experience hyperinflation. And it really hasn’t happened. It’s sort of peaked at around four percent or so. You know, that’s more than we’re used to. But there have been lots of years that we’ve seen more than four percent inflation. And so, the only time it’s even gotten up to five is right now in the trans-pandemic period, where there’s a combination of loose monetary policy and unprecedented social welfare spending. But even then, you know, the short term inflation rate is five percent. And, you know, we saw that regularly in the late 1980s and early 1990s, which until the first Gulf War and, some would argue, the Bush tax hikes, we were seeing a pretty strong economy back then.
Mike Blake: [00:26:52] So, again, draw your own conclusions. This is my observation. But, again, I simply caution not to have a knee jerk reaction on what’s happening in the economy, because, again, economics is just a slow science. And, you know, it’s not supposed to happen that as our debt to GDP ratio increases – and it’s well over now 100 percent – that interest rates are supposed to go down. But that’s what’s happening. And so, what happens is that people like me and those who are much stronger than I in the field of economics, it’s time for us to rethink what we thought we knew about economics.
Mike Blake: [00:27:38] Because, you know, the largest laboratory in the world is simply not producing the results that we thought that we were going to get. And maybe we need to give modern monetary theory a close look. Maybe there are other theories that need to be addressed that we have discarded, need to revisit, or somebody suggested and we haven’t paid enough attention to. But the one thing that I can tell you for certain is that, the macroeconomic forces and the data are not behaving the way that neoclassical economics and even monetarists economics, that have been the mainstay of American economic policy since the 1930s, at least, they’re just not behaving the way they’re supposed to.
Mike Blake: [00:28:24] The next question is a fun one, Are we going to require vaccination? The interesting thing is – according to a chart that I’ve got, “Vaccines: Low Trust in Vaccination ‘A Global Crisis'”. This is from the BBC – for all of the pushback and the reporting on vaccinophobia in the United States, there are large sections of the world that don’t trust the vaccines, even to the level that we do.
Mike Blake: [00:29:02] According to this chart, East Asia which has pandemics all the time, Western Europe and Eastern Europe that are highly educated populations, at least in Western Europe, certainly, strong health care systems, their trust in the vaccine is even less. Which may explain how, in spite of centralized medicine architectures in Western Europe, they are lagging far behind in vaccinating the population behind the United States. So, it’s just kind of interesting to note that, you know, for all the bad rap we give ourselves, we’re by far not the worst in the world at this. But vaccines are special.
Mike Blake: [00:29:47] And the two charts I’ve put up here, one is called, About Three in Five Voters Would Support COVID-19 Vaccination Card Requirement, and another is called, More Americans Now See Very High Preventive Health Benefits From Measles Vaccine. As we see a contrast in the chart, is that, Americans support measles, mumps, rubella vaccines for children to attend school. But they’re not nearly as supportive of requiring a coronavirus vaccine. I don’t have a ready explanation for that. I don’t have a firm explanation. I suspect a lot of it is because children are typically vaccinated against their will and Americans are not. And so, most children probably don’t even remember when they are vaccinated. I certainly don’t. I just have a chart that says that I was. And so, it’s not a big deal. There was never really even a choice for them.
Mike Blake: [00:30:48] But in terms of being an adult, you know, we do have a choice. And some of us are afraid of vaccines. A lot of us are afraid of needles. You know, it’s been documented that medical experiments have been conducted by the United States Government against sections of the population. The document, in fact, the U.S. Government doesn’t deny it. But, nevertheless, it is interesting how we trust certain kinds of vaccines, but we don’t trust the vaccine that is right in front of us that is the key to conquering the current pandemic.
Mike Blake: [00:31:29] The next question is, Are we canceling for good? You know, I’m putting up a couple of charts from the same source, “Cancel Culture and American Politics” by a person named Phil Ebersole. And what I find really interesting, in this culture where we no longer debate, we now cancel people. And we do that because I think there’s a lot of psychological “advice” about removing toxic people from one’s circles. And it’s gotten easier to do. It’s gotten easier to remove people. You just unfriend them. And I wonder how healthy that really is. I wonder how healthy it is to only hang around with people that never upset you, that never challenge you, that never make you feel uncomfortable.
Mike Blake: [00:32:31] And, you know, interestingly, there’s a large section of the population that feels like they cannot express their political opinions. And interestingly enough, the more liberal one is, it appears the more comfortable that you are sharing your political opinion, and that could mean a lot of things. It could mean that as a liberal, you feel like you’re somehow supported in society, maybe by the so-called liberal media. Maybe if you’re more liberal, you just don’t give a darn what other people think. You just sort of say it and that’s what it is. You know, I can only speculate as to what’s driving that. But even liberals – not all – the large portion of the population, 23 percent, still feel like voicing their political opinions puts them in some kind of jeopardy.
Mike Blake: [00:33:31] And then, the second chart blows me away, where a significant share of Americans support firing donors to one party or the other. Just outright firing them. They didn’t do anything, didn’t express an opinion, might be a model worker. It doesn’t matter. You made a donation, you’re out. I think that’s extremely dangerous. I think it makes our political climate much worse rather than better. But we’re going to have to decide as a society, are we going to rely and cancel as a way to resolve our differences? I hope not. I think there are long term consequences to that, that we can only begin to imagine today that will affect us in a generation if we do go that direction.
Mike Blake: [00:34:27] The next chart is from a book called, “Facebook Hate Speech Removal per Quarter in 2020.” This is from Statista. And Facebook has now gotten involved, gotten in the business of removing hate speech. And I have friends that claim that they’ve been banned, they’ve been muted, they’ve had their accounts suspended because maybe they cursed or they cursed out somebody or something. Well, not something I would necessarily do. It doesn’t seem like it rises to the level of hate speech. But Facebook is clearly now getting involved. And I know there’s a segment of the population that wants social media to be held accountable for the things that people say.
Mike Blake: [00:35:16] I don’t know about that. For years we’ve said, if you don’t like what’s on TV, change the channel. And I think I generally agree with that, except where children are involved. And then, parents do need something to do. You know, am I that comfortable with Facebook intervening with us? I don’t know. It’s not censorship because only a government can commit an act of censorship. Facebook simply would call it selecting editorial content. Just like sending a letter to the editor of The New York Times. They don’t publish every letter that they receive. And, you know, I just don’t know.
Mike Blake: [00:36:03] I think that having lived in places where free speech has been and is suppressed, I think it’s very dangerous for free speech to be suppressed, no matter what the source is, whether it’s public or private. But, again, as a society, we have to decide that.
Mike Blake: [00:36:22] And, you know, this next chart really asks a question, Have we done all the canceling we’re going to do anyway? This chart responds to the question, how many people do you have in your friendship circle that support the candidate who is not the person for whom you would vote, basically? And, you know, most people are now saying that most of their close friends only support the candidates that they do. And I don’t know what to make of that. Should I be concerned? I mean, on one hand, it’s natural for people of a like disposition and an ideological outlook to hang out with one another.
Mike Blake: [00:37:07] But the background of what we’ve just talked about in terms of canceling, I can’t help but wonder, you know, is this simply more cancelling that’s going on, and we’re missing opportunities to learn through each other? You know, there’s a concept in philosophy called dialectical materialism. It’s actually Marxist in nature. And the notion of dialectical materialism is that, advancement only comes through conflict. There’s something called thesis that’s confronted by antithesis. And then, when they collide, they manufacture a synthesis, which is something better that results to the conflict of the two. And I think by cancelling, we’re missing out on that.
Mike Blake: [00:38:00] The next topic is, Are we going to be prepared for the next COVID? This chart that I have, “Viral Outbreaks: Past Encounters,” from Health Analytics, shows very clearly the viral outbreaks of a major nature are becoming more common and not less. I don’t know why that is. I don’t know if it’s related to climate change. I don’t know if it’s related to increased travel. I don’t know if it’s related to dumb luck. I have no idea.
Mike Blake: [00:38:30] But the data is very clear that we’re seeing, or at least we’re in a period right now of more frequent, significant viral outbreaks. It seems inevitable that another outbreak is going to threaten us again. And when they threaten us, the next chart – from “Pandemics in History, Assessing Their Costs” – shows that the cost of these pandemics is significant. I think that’s a function of our economy simply being more developed. But, nevertheless, enduring a pandemic carries with it a very significant financial cost.
Mike Blake: [00:39:11] Now, you notice the coronavirus is not on this chart. But never fear, because it is calculated now. I reviewed data from a paper called, “The Impacts of the Coronavirus on the Economy of the United States, Economics of Disasters and Climate Change,” and the estimated cost of coronavirus by the time we’re all said and done is between $3.2 and 4.8 trillion, which represents somewhere between 15 to 22 percent of the gross domestic product of the United States. That’s a big number. That’s a very big number.
Mike Blake: [00:39:51] And as you can see, for those who can see on the chart, you can see the footnote here that says, “The U.S. National Academy of Medicine estimates it committing an incremental 4.5 billion annually to be used primarily for strengthening national public health systems, funding research and development, and financing global coordination contingency efforts would significantly reduce the severity of future outbreaks.” So, you know, investing four-and-a-half billion annually – to use round numbers – 4.5 trillion, the breakeven point is, if you get one pandemic in a thousand years, you breakeven. To me, that seems like that’s a worthwhile investment. A pretty good insurance policy. But we’ll see. We will see.
Mike Blake: [00:40:41] Another question we’re going to have to address now is, Are we going to take mental illness seriously? Mental illness, frankly, I don’t think has been taken all that seriously in the United States up until very recently. You could discriminate against people for it. You can make fun of them. Generally speaking, the availability of mental health care is generally inadequate. Health insurance policies are paltry covering it. And even when it is, it’s hard to find a psychiatrist or a therapist that will actually take health insurance. There are a lot of issues with it.
Mike Blake: [00:41:21] But I do think that having to live with the invisible stalker of a global pandemic and the ensuing lockdown has greatly restrained our freedom of movement and our freedom of activity, frankly, our freedom of pursuit of happiness. For a lot of us, we could basically work all we want. But in terms of having fun, forget it. It should not be surprising that it’s taken a toll on people’s mental health.
Mike Blake: [00:41:49] And from this chart from Statista, Pandemic Causes Spike in Anxiety and Depression, the differences between January through June of 2019 through December of 2020 show a significant increase – really, a massive increase of symptoms of anxiety disorder, depressive disorder, or combined anxiety or depressive disorder. Perhaps as much as 42 percent of the population of the United States has exhibited some symptoms of anxiety or depressive disorder. That is a massive cost being borne by society. And right now, we’re generally deciding we’re willing to live with it. And I guess that’s the decision we’re going to make as a society, are we going to live with it? Are we going to say, you know, we can’t afford everything and you have to try alternative methods to address your mental anxiety.
Mike Blake: [00:42:58] But before we make that decision, we need to look at this chart, “Measuring the Lifetime Costs of Serious Mental Illness and the Mitigating Effects of Educational Attainment” by Seth Seabury, et al. And the chart shows that, when people have a serious mental illness, particularly before age 25, their life expectancy goes down, their quality of life goes down, their ability to function without being classified as disabled goes down, and their years work goes down. Which leads to increased medical spending and decreased lifetime earnings, which means people are not contributing as much economically into the tax base, Medicare, Medicaid, all that stuff.
Mike Blake: [00:43:51] So, it’s not just a human cost, but there is a measurable economic cost. And if we don’t pay attention to this, it’s going to get worse and that cost is going to become more painful and more visible. We have to decide if the benefits outweigh the costs or not. Benefits, meaning not paying as much attention to mental health.
Mike Blake: [00:44:17] And the interesting thing, as we can see on the next chart, you know, it’s not about money. Our health expenditure per capita is higher than just about everybody else. Number two is about 25 percent less in terms of health spending per capita than the United States. Now, granted, this is 2015 data for the most part, some is 2013. But I think it’s changed that much in the last six years. This is not so much throwing money at the problem as is being thoughtful about how to solve the problem and deploying the money that we are spending in a more meaningful and impactful manner.
Mike Blake: [00:45:02] Do we still want delivery? So, e-commerce boomed during COVID, obviously. A lot of stores were closed. And the chart that I’m showing is from “X’MAS 2020: Is Your E-commerce Startup Ready for the Biggest Delivery Season?” And we can see that during the pandemic, at least as of July of last year, e-commerce transactions were up massively. Sports equipment were up 83.4 percent. That’s why you can’t get a Peloton. Supermarket e-commerce transactions, Instacart, curbside services, up 66.5 percent. Even home furnishing is up 42 percent. Banking and insurance media, we’ve all learned not to go back to the movie theater. We’re watching Netflix instead. We’re used to getting things at home now, but do we want to?
Mike Blake: [00:46:02] Now, the dirty secret is, we are paying more for this as much as the companies try to hide the incremental cost of delivery from us. It’s very much there, and it’s going to get worse. The chart I have up in front of me now is, “The Hidden Cost of Food Delivery,” from TechCrunch. And even outside of the service charges, the tips, delivery services for food and, I think, for everything else – but I have a chart here for food – is that, delivery companies are marking up the entrees themselves. The same meals simply costs more to buy the meal itself, to have it delivered, for even delivery fee, than in the restaurant. And according to the chart, that could be as high as 40.5 percent. And we’ve seen this also with Instacart, they mark their stuff up all the time for groceries, Costco delivery. That all happens.
Mike Blake: [00:47:05] Do people want to pick up at the store? I don’t know really how much people want to pick up, you know, engage, or enjoy, or utilize, I guess, curbside pickup. According to the “2020 Holiday Outlook” from PwC, you know, home delivery pretty much stayed the same. People are not picking up orders in-store actually as much as they used to, but they’re picking up the order outside the store. But only 35 percent as opposed to 23 percent. I think the jury is still out. And I love pickup. I know a lot of people, they like the experience of going to the store and looking around and seeing stuff. And, you know, I do think that part is here to stay. A part of the shopping experience is here to stay.
Mike Blake: [00:47:55] Now, an interesting question that comes out of all of this is, when, ultimately, do the DoorDash’s of the world actually become profitable? It stunned me to learn that these companies are not profitable and they’re not even really close. And the question I have is, when large portions of the population are forced to be at home, and when many restaurants have either shut down, or they’re shut down in-house eating opportunities or in-house dining, if DoorDash can’t be profitable now, when is it going to be? And what are the circumstances under which it’s going to be profitable?
Mike Blake: [00:48:39] Probably that’s going to be – and I read this in a recent Wall Street Journal order – when one or more competitors drop out of the market and they can raise their delivery prices. That’s what’s going to happen. One of these guys is going to get tired of burning through millions and millions of dollars of venture capital. And they’re going to fall out of the market. Prices will then reach a true market clearing price. That’s when they’ll be profitable. But it is going to be a bloodbath in the industry until that happens.
Mike Blake: [00:49:13] The next question is, Are we going to act on race? So, the protests that started nationwide in wake of the George Floyd murder in 2020, starting in Minneapolis, they had an impact on a lot of people. They, of course, had an impact on people of color. I think, at least for a time, they made an impact on white people like me. And the chart I have here is, “Support for Black Lives Matter Surged During Protest, But Is Waning Among White Americans.” And I guess that’s not surprising. There is a certain sense of urgency. You know, people of color were protesting all over the place. They were visibly upset as we interact with them on a commercial and a friendly basis.
Mike Blake: [00:50:11] But as time goes on and the case is, basically, now over. The perpetrator has now been sentenced to jail. So, I’m not sure there’s much more to do after that for that particular incident. But the issue still remains. And so, the question is, Are we going to have another conversation about race like we had in the 1960s? Or are we going to go back to the way things were, circa end of 2019? And I present for your consideration this graph, this info graphic, “The Pandemic’s Racial Disparity” from Statista. COVID deaths to people of color, particularly Black people, was just out of sight. They were more than double the rates of deaths among White people.
Mike Blake: [00:51:12] And, to me, it’s hard to look at that and think, “Well, we don’t have a race problem that needs to be addressed.” Why are people of color dying at such a higher rate? And is that a problem that we want to solve? Some of us are going to argue that’s not a problem that we should solve. The government should solve that. People of color should solve themselves. Okay, and I’ll just leave it there. But it is a problem that’s going to have to be addressed. And if it’s not, again, there are far reaching consequences. There’s only so long that a minority group is going to suffer with this. It’s not going to be indefinite.
Mike Blake: [00:52:02] And, finally, Are we going to lure people back to work or are we going to force them back to work? So, the topic of the day now is, people are not coming back to the workforce. And that’s the chart that I have from the St. Louis Federal Reserve on unemployment level and job openings shows that the number of job openings exceeds the number of unemployed people in the United States. Why are people not taking them?
Mike Blake: [00:52:37] Well, before I go directly to answer that question, this chart is really important. And if you look at no other chart, look at this one. And it also is from the St. Louis Federal Reserve, and it’s the labor force participation rate. And the labor force participation rate means the percentage of adult Americans who are working, or available to work, want to work, or in the labor force. And you’ll notice that the American labor force has been declining since 2000.
Mike Blake: [00:53:13] And I would argue it probably would have started declining before then, except I think people hung on in the workforce during the dotcom boom because they were getting their stock options. And during the Y2K remediation effort, because people who wanted to retire were the only people who knew enough COBOL to fix it, basically. And they got scads of money to work another year or two to fix Y2K vulnerable systems.
Mike Blake: [00:53:40] But since then, labor force participation has been dropping, particularly since, say, late 2008, 2009. And recovered a bit, I think, in statistical noise. Really dropped during the COVID pandemic, and has come back a little bit. And I say that because it provides, I think, a useful framework around understanding the nature of unemployment and the nature of people pursuing jobs. And that is that, we have been running up against a shortage of workers for two decades now. We haven’t noticed it for whatever reason, because we’ve had enough people, more or less, to take jobs. But that gravy train may have come to an end. But we’ll see, like I said, economics is a slow science.
Mike Blake: [00:54:40] And, frankly, I don’t know the story yet. I don’t know whether unemployment benefits are too high and people are kicking back in the extra 300 bucks a month. You know, I cannot imagine that myself. I can’t imagine $1,200 being meaningful enough to me that I would simply stop working and be on welfare. But I acknowledge I’m not everybody. I just don’t know a portion of the population that is. And I do think people have awakened and changed priorities and are willing to give up income for a different lifestyle. I think, you know, there’s nothing like 600,000 people dying over the course of 18 months to remind people how short and precious life is.
Mike Blake: [00:55:25] And I do think that people have discovered, you know, they’d rather live on less and would rather have more of what they expect their lives to be from a personal perspective, spiritual perspective. And, unfortunately, I mean, this is going to remain purely an ideological argument, we’re not going know until two to three months passed after states reduce unemployment benefits, which is happening now. We’re not going to know until schools reopen and a lot of kids are going to go back to – people aren’t going to like when I say this, but I mean, the schools are our form of nationalized daycare, like it or not. We do have nationalized daycare. We simply use it as an educational instrument. And, ideologically, we never pay for it if we call it daycare. So, we call it grade school. And then, more of the population will be vaccinated.
Mike Blake: [00:56:26] So, with that, that concludes my presentation on Ten Decisions to be Made in a Trans-Pandemic World. And as I’ve said before, if you like the content that we put on here, let me know. Let me know if you like this. And if you want more of it, follow me on LinkedIn for the Chart of the Day. You may have noticed I’m kind of into charts. And, you know, with that, I think we’re going to be able to wrap it up for today’s program. I’d like to thank you all for listening. And please let me know what you think of this format. If you like it, we’ll do more of it. If you hate it, then we’ll probably stop doing it.
Mike Blake: [00:57:08] We’ll be exploring a new topic each week, whether I’m doing it or with somebody else, so please tune in so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us that we can help them. If you like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision podcast.