The Post-Covid Economy Will Be Very Different from the Pre-Pandemic Bubble Economy
The comments below are an edited and abridged synopsis of an article by Charles Hugh Smith
Unsustainable systems can lull observers into complacency as instability increases under a veneer of stability—that’s the story of the past 20 years.
But all bubbles pop, all extremes revert to the mean and all that is unsustainable implodes as apparently linear systems (snow accumulating on a mountainside) suddenly go non-linear (avalanche).
The majority of the pre-pandemic bubble economy was unsustainable: the stock market and housing; corporate, household and public debt; student loan debt; healthcare; commercial real estate; supply chains; the fracking industry; over-supply and over-capacity for almost everything.
Thanks to decades of overbuilding caused by low interest rates, there is too much commercial space in the US. There are also too many new buildings on soon-to-be empty college campuses, too many hotels, etc. The decimation of retailers has been underway for the past four years.
As the old models break down, opportunities for new models will arise. For example, the education complex and healthcare sectors are ripe for disruption.
Decentralizing the economy sacrifices the long global supply chains and corporate monopolies for local jobs and local supply chains. The corporate and state monopolies and cartels that have hollowed out the economy and the social order were exploitive, parasitic and predatory as well as unsustainable, and their slide into history is accelerating as linear systems cascade into non-linear dynamics.
The post-Covid economy will be different from the pre-pandemic bubble economy, in ways few anticipate. Models that obsolete the old, unsustainable, dysfunctional models will blossom, and that is how civilization advances.