The wave of infections from the COVID Omicron variant that started just before the holiday break has been nothing short of breathtaking. I don’t know about you, but it seems like almost everyone I talk to lately has been infected and or re-infected. Vaccinated, unvaccinated – it seems like Omicron doesn’t play favorites and is out in full force to wreak havoc on our nation. The only good I can make of it is that (at this writing) it seems to be much less lethal than the previous strains.
Last month, I wrote about the research article by J.P. Morgan Chase which said they thought the new variant could finally get us to herd immunity and that this could mark the beginning of the pandemic’s end. Well, I sure hope that they are right, and with the amount of money and stimulus being pumped into the economy, we are very hopeful that we could be looking at a solid “stimulus driven” economic recovery.
It’s often said that “history repeats itself.” I am one to contend that history often rhymes with the future. When we reflect on U.S. history, we need only look back about 100 years to see that we very well could be at the start of the next Roaring 20s. There are multiple similarities that are simply uncanny.
The first similarity is one that we can’t ignore. In 1918, there was a worldwide pandemic labeled the “Spanish Flu.” We are now living through another pandemic. The second similarity is that the world back then was experimenting with a new and fun, unregulated way of doing business that allowed “regular” folks to own shares of large corporations; it was called the stock market. We now are engaging in another new, fun and unregulated technology and way of doing business called Bitcoin. The third rhyming reason of similarity: there was a ton of debt being used to stimulate the economy. The term “bet the farm” came from the Roaring 20s, when people would take loans out against their farms and invest it in (bet on) the new, ever-growing stock market. I’ve known multiple people who have sold their homes in order to put the proceeds into crypto currency (which could be risky, as cryptocurrencies are subject to volatility and there is no Self-Regulatory Organization that oversees cryptocurrencies). This go-round, the bad debt isn’t on individuals; the massive debt that is piling up is being brought to us by our legislators. As of January 10, ‘22 usdebtclock.org said the U.S. had $29.4 trillion in accounted for government debt.
The last comparison I have to the Roaring 1920s and the possibility of a”Roaring 2020s” is that back then, there was an illegal substance that people were desperately trying to get legalized so they could (legally) make money selling it: alcohol, which was finally legalized in 1933. Americans are now desperately trying to federally legalize marijuana, so that the business savvy can profit from its sale and the government can generate revenue by taxing it.
With so many similarities between the 1920s and our current 2020s situation, it will be very interesting to see how this all gets resolved. During the next 4-7 years. I would not be surprised to see us enter into a huge, stimulus-induced economic boom in which things become desperately overpriced.
Truth and time tells all, and I am very hopeful that the Roaring 20s of the 2000s doesn’t end in the same fashion that the 1920s did. Until then, I can’t wait for the U.S. to be rid of this COVID stuff, so we can start to sing “Happy Days Are Here Again”… like they did when they repealed Prohibition!