Welcome to the weekend.
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16.2 T—The economic cost of COVID-19 in the U.S. has been $16.2 trillion.
.02—As if 2020 wasn’t bad enough, it came very close to being the hottest year on record. It fell shy of 2016 by a mere .02 Fahrenheit.
15—Country music streams have increased 15 percent compared to pre-pandemic levels. By comparison, genres overall logged just a 3 percent increase.
A hard thing to wrap your head around in economics is the idea that two opposite things can be true at once. For instance as we begin 2021, household finances might be in the best shape they’ve ever been in. That might sound crazy, and it’s easy to overlook because of the second story: COVID-19 has dumped kerosene on wealth inequality in ways we’ve yet to fully grasp. (1) Household Finances. Last year was the best year for income in American history. By far. It’s not even close. What do you do when you get a giant stimulus check, and you can’t use it to travel because everything’s locked down? Or, you can’t go shopping because the malls are closed, or eat out because the restaurants aren’t open? Millions of Americans used it to pay off debt. There is no precedent for credit card balances falling more than 10 percent in one year. But it just happened. The personal savings rate averaged 7 percent in the quarter-century before 2020. Then COVID-19 hit, and overnight it went to 34 percent. It’s since dropped to about 14 percent, which would have been a 50-year high before COVID-19. The result is that the amount of cash that households have in the bank has absolutely exploded. For perspective, Americans held $800 billion in checking accounts a year ago. Today it’s more than doubled in one year. (2) Income Inequality. Rising income inequality has been one of the most important stories of the last four decades. Then COVID-19 hit, and the trend was fed rocket fuel. Take two recent CNBC headlines: (a) The U.S. savings rate hits a record 33 percent as coronavirus causes Americans to stockpile cash. (b) Sixty-one percent of Americans will run out of emergency savings by the end of the year. Or these two: (a) Household wealth surged to a record high during the pandemic (b) More Americans are shoplifting food as aid runs out during the pandemic. That’s the story. There are 9 million fewer jobs today than a year ago, a decline of around 6 percent. But for those earning more than $28 per hour, the job market has fully recovered, like the recession never happened. For those earning less than $16 per hour, one-quarter of the jobs are still gone, which is on par with the 1930s. Collaborative Fund (13 minutes)
Everything is Broken
Beginning in the 1970s, the economic ground underneath this landscape began to come apart. This was the tinder. The tech revolution was the match—one-upping the ’70s economy by demanding more efficiency and more speed and more boundarylessness, and demanding it everywhere. They introduced not only a host of inhumane wage-suppressing tactics, like replacing full-time employees with benefits with gig workers with lower wages and no benefits, but also a whole new aesthetic that has come to dominate every aspect of our lives—a set of principles that collectively might be thought of as flatness. Sometimes the task of rebuilding—of accepting what has been broken and making things anew—is so daunting that it can almost feel easier to believe it can’t be done. But it can. Tablet (27 minutes)
Next Big Risk
Bloomberg asked three executives who’ve spent their careers on the cutting edge of the financial industry what risks they see coming in five to 10 years. Here are their answers. (1) Cybersecurity. Can we actually rely on, for instance, the integrity of core systems? (2) Mass Unemployment. The workforce is not being trained to participate in the modern economy. Dealing with that will take a lot more than a vaccine. The unskilled worker is the next pandemic. (3) Devaluing Humans. We may be building a world that is not particularly designed for humans. What we’re doing today is finding more ways to essentially reduce the need to have humans involved with work. So much of the investment in business in America is to essentially automate away human labor or, even more curiously, to devalue human labor. Bloomberg (14 minutes)
Tech and the New Administration
How will the new administration’s policies affect tech? (1) Antitrust regulation. In a speech on Tuesday, the Justice Department’s outgoing antitrust chief supported a House Democrat’s proposal to disallow any company with a 50 percent market share from making an acquisition in the same industry. (2) Section 230. Democrats want the companies to moderate the platforms or be held liable. Republicans want to penalize companies for censoring content. Biden has said Section 230 should be revoked. Both Twitter and Facebook have said they want it updated, too, so we may see changes here, potentially to the detriment of startups. (3) Net neutrality. The issue is popular among Democratic leaders, and going against it would defy a core principle of the party. (4) Rural broadband. A key economic goal is to rebuild America’s middle class, a task Biden calls “the moral obligation of our time.” To achieve this goal, he supports a $20 billion investment in rural broadband. (5) China trade war. Expect a more confrontational approach, especially after the outgoing administration just labeled China’s treatment of its Uighur population “genocide” (a position Biden agrees with). (6) Tech and immigration. Biden has “promised to increase the number of visas for ‘permanent, work-based immigration’ and eliminate limits on employment-based green cards by country.” As president, he can strike down many of Trump’s most restrictive executive orders. CNET (22 minutes)
VC in 2020
PwC and CB Insights just released their latest report on venture capital (VC) funding. The U.S. highlights: (1) Funding: 2020 was the biggest-ever funding year, with VCs disbursing $130 billion. The previous record was $122 billion in 2018. (2) Unicorns: 28 startups grew unicorn horns in Q4 2020 alone. For context, the U.S. only has 225 total unicorns (startups valued north of $1 billion). (3) Megadeals: We saw more $100-plus million deals than ever last year—318 versus 220 in 2019. (4) Miami: Funding went up 685 percent quarter over quarter in Q4 and 72 percent year over year. And for the first time, “emerging areas” attracted the majority of U.S. funding in 2020. The top three are familiar faces: artificial intelligence (AI), fintech and digital health. Industry experts told us to expect digital health to captivate VC hearts and minds in 2021 as well. Bottom line: Like public market investors, VCs were more than comfortable backing tech companies through the peaks and valleys of 2020. Emerging Tech Brew (3 minutes)
This satirical article from a fictional architect is both hilarious and searing—pointing out the bizarre world we love in right now. This restaurant commissioned me to create a structure that would allow its patrons to dine comfortably in cold and inclement weather while still keeping them at low risk of contracting COVID-19. Rather than respond to either half of this prompt directly, I instead chose to use it as a jumping-off point of sorts, exploring and exploding our collective ideas of structure, shelter and safety. My work seeks to interrogate the parameters by which we define and demarcate physical space, exploring the fertile liminal zone between the falsely binary notions of “indoors” and “outdoors” we too often take for granted. I am compelled by asymptotes: What if you could get infinitely close to being indoors, while remaining, by some convoluted set of standards, outdoors? I am also intrigued by the extent to which perception can shape reality: What if all it took to be outdoors was a simple belief that you were? Finally, and perhaps most urgently, how many tables can I fit in here? McSweeny’s (7 minutes)
At 22, Amanda Gorman was the youngest inaugural poet ever in the United States. She is joining a small group of poets who have been recruited to help mark a presidential inauguration, among them Robert Frost, Maya Angelou, Miller Williams, Elizabeth Alexander and Richard Blanco. But none of her predecessors faced the challenge that Gorman did. She set out to write a poem that would inspire hope and foster a sense of collective purpose, at a moment when Americans are reeling from a deadly pandemic, political violence and partisan division. I’d say she nailed it. YouTube (6 minutes)
Pre-suasion by Robert Cialdini. As the author of the legendary bestseller Influence, social psychologist Robert Cialdini shines a light on effective persuasion and reveals that the secret doesn’t lie in the message itself, but in the key moment before that message is delivered. What separates effective communicators from truly successful persuaders? Using the same combination of rigorous scientific research and accessibility that made his Influence an iconic bestseller, Robert Cialdini explains how to capitalize on the essential window of time before you deliver an important message. This “privileged moment for change” prepares people to be receptive to a message before they experience it. Optimal persuasion is achieved only through optimal pre-suasion. In other words, to change “minds,” a pre-suader must also change “states of mind.” His first solo work in more than 30 years, Cialdini’s Pre-Suasion draws on his extensive experience as the most cited social psychologist of our time and explains the techniques a person should implement to become a master persuader. Altering a listener’s attitudes, beliefs or experiences isn’t necessary, says Cialdini—all that’s required is for a communicator to redirect the audience’s focus of attention before a relevant action. From studies on advertising imagery to treating opiate addiction, from the annual letters of Berkshire Hathaway to the annals of history, Cialdini draws on an array of studies and narratives to outline the specific techniques you can use on online marketing campaigns and even effective wartime propaganda. He illustrates how the artful diversion of attention leads to successful pre-suasion and gets your targeted audience primed and ready to say, “Yes.”
Most Read Last Week
The Bet—On March 6, 1995, WIRED’s executive editor and resident techno-optimist Kevin Kelly went to the Greenwich Village apartment of the author Kirkpatrick Sale. “I bet you $1,000 that in the year 2020, we’re not even close to the kind of disaster you describe,” he said.
Writing—Here are a few thoughts on writing.
Books in 2020—This is every book I read in 2020 rated and ranked.
About the Weekend Briefing
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Income inequality is troubling because, among other things, it means that many people in our society don’t have the opportunities to advance themselves. – Ben Bernanke
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