The Real Ownership Economy

bring back baby bonds

the economy, writ large

• Is the vibecession really over? in FT Alphaville

• In This Economy? Kyla Scanlon’s NYC Offline SuperSeries

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So I read the Case for Pool Party Progressivism this week, and thought it was brilliant.

Kate Arnoff walks through climate policy and the *promise* of the IRA - but how it has failed to resonate with the public. No one really trusts the government to actually get stuff done - even though, they arguably are, with new clean energy jobs and all sorts of subsidies and support. She writes -

“People don’t seem to experience the idea of the economy through the numbers by which the administration is judging that success… left out of most conversations about industrial policy is the question of whether people are having a nice time.”

Arnoff then argues that the New Deal, which was incredibly successful, built a lot of infrastructure - sewage, postage - but it also built a lot of places for people to chill. Athletic fields, cabins, visitor centers - a focus on recreation. But of course -

“These kinds of places are a tough sell to investors, though. What sort of returns can Wall Street expect from a library that gives away books for free, and serves as a cooling center during a heat wave? Where is the revenue stream from letting people host their kids’ birthday party at a public pool?”

She then ends the piece with a simple, yet astounding idea -

Why not give people something to enjoyabout decarbonization instead of just a daunting to-do list of large-scale infrastructure projects? Call it Pool Party Progressivism: a politics recognizing that the unionized workers erecting all those wind turbines and solar panels might want to go sit by the water with their friends and family after work, grow zucchini next to their neighbors, or join a rec soccer league. That will mean finding ways to invest in things that companies won’t. The government, though, gets to take all the credit—not just for some impressive set of economic indicators but for strengthening communities and letting people have some fun cutting carbon.

This is really important for how we think about making money in the future.

We have failed our kids. We have to think about the next generation and build for them rather than always focusing on the returns of the current generation. We have good stuff going on, but we don’t have any fun, we are lacking community, there is chronic individualism, we are all familiar - this is all known.

And fun is important.

David Dayen writes about how the economic metrics are fine, but things clearly aren’t. Highlighting consumer spending as a driving force, he writes about a “psychological mass-FOMO (fear of missing out) event in the U.S.” - financed by a lot of credit card debt and people living in an economy that still doesn’t feel great.

He writes “there’s a lot of talk of a “soft landing” that avoids recession, but that’s still a landing, at a lower spot than if you’re in midair. People would rather be flying high” and how it takes time to feel better. People are just in mid-freak-out right now¹, and it’s because of lack of fun, lack of community, chronic individualism, again, we are all familiar.

There’s a lot coming - the government is likely going to shut down again in September, energy prices, student loan repayments - and all that could make everyone feel a lot worse.

We have a lot of good stuff happening with Bidenomics and the labor market (objectively) but because it’s all isolated or centralized to some boring stuff, we don’t feel the good stuff.

We have a lot of bad stuff happening too, like Big Bad Stuff, homelessness on the rise, the housing crisis, a feeling of stagnancy for many workers - in incredibly reductive terms, it sucks. It's not about just feeling bad. Things are objectively bad in a lot of instances, but also there are things that are good. However, the things that are good don’t outweigh the bad stuff in a meaningful fashion for many, many people.

I got this comment on a TikTok video I made yesterday, and it’s very true.

I think the relationship you've overlooked is that the majority of economic metrics fixate on assets. The "economy" is a diagnosis of property health, not necessarily people's well being. If you own securities, businesses, or other asset classes, your situation does look more optimistic. However the majority of young people have no holdings and therefore feel disconnected from statements about the economy as an inclusive determination of people's quality of life. Getting onto the property ladder is harder than ever and wages have not matched productivity for a half century. For indirect issues there's also a growing understanding that politics much like the "economy" are also not inclusive. There was a Princeton study that showed 90% of voters are disenfranchised from policy decisions. Politicians only pay attention to the top ten percent of constituents, otherwise known as major asset holders. So if we did want to affect change in the economy we are not afforded the political leverage to do so. In short, things are bad, plutocracy prevents us from making them better, and leading businesses and policy makers keep gas lighting is that their success somehow also benefits us... and you wonder why the vibes are off. I appreciate the analysis but it comes across as strikingly tone deaf, especially for a fellow young person²

I’ve talked in-depth about things that the commenter brought up, but their main beef with the video was that I said “the vibes are off” - and didn’t explicitly state the reasons that the vibes are off (which is unsurprisingly hard to do in a 60 second video). But it’s around ownership - that’s really one thing we need to focus on fixing.

I’ve been talking about vibes for a year now, and recently it’s been… not about vibes.

I went on PayPigs with Emil and Ben (the best guys) and we spent most of the podcast discussing System™️ and some of the issues that come up for people.³

There is a HUGE conversation to have about ownership. Because wealth is wrapped up into homes, people feel bad when they can’t get a home because 1) it’s nice to have a home - having a yard is kind of cool (grass is a whole different conversation) and housing is a human right but also 2) owning a home is the path to becoming Rich in the United States of America usually.

But that isn’t really an option right now. 38 million people have no mortgage on their home. They're not going to sell with mortgage rates this high. They're just going to be chilling. They have a huge asset.

So people are like “what do I do I thought this was the way to wealth and I don't have access to it anymore?” And it has to be more about giving people opportunities for ownership beyond the thing that they live in, because then housing becomes a speculative asset, which is a whole other issue.

And a lot of the conversation circled back to the idea of ownership brought up in the above comment - and this is what I think (and others too) that should be done -

How to Fix the Ownership Problem

• Bring back baby bonds

• Turn FedNow (yes) into a super app where people can save, spend money, and invest in T-bills all in one spot. Parts of the fintech ecosystem should be consolidated by the central bank.

• The bottom 50% of Americans keep almost ALL their assets in housing. All of their wealth is wrapped into their home which creates all sorts of issues around speculation and the (ahem) housing crisis that we have going on.

• People should have access to equity in the companies that they work for (ESOPs, similar to Starbucks) as well as simpler access to various investment funds. Obviously it shouldn't be like Wall Street Bets esque era, but it should be a way that people can go and invest in the S&P 500 if they choose to do so.

Like look at this. The problem is clear.

One of the reasons that I think people are upset is because they saw what the government could do during the pandemic - freeze rents, send stimulus, help people out. And then all that stopped.

It’s like when you’re first dating someone and it’s perfect and you’re like “wow they care and are kind” and then they just kind of… stop trying? Like the potential is still within them, but they just started mailing it in. That’s what the government did to its citizens - showed them what they could do, and then just stopped doing it.

So it is bad. Doesn’t really feel bad, but more objectively, it is kinda bad.

I talked about this badness at length last week and honestly Derek Thompson summed it up perfectly in a single tweet (typical)

Most Republicans say *their economy* is good or great (Kyla note: this supersedes political lines) and most of those Republicans say *the economy* is bad or terrible. Many things happening here, but one of them is the nationalization of vibes. In a world of all of local news and no national news, everybody’s sense of reality ends at the metro limits. We have the opposite: with the death of local news, all the vibes are national-ideological. I’m not saying the following is an accurate depiction of todays reality but: Did anybody think to write a dystopia where everybody is doing fine but also, to feel something, they choose to plug their amygdala into a cortisol machine that makes them think everything is horrible?

And I think the “everyone is doing fine” is true - but there is a lot that leads to fine to not being good, which of course, is obvious.

It’s misaligned expectations.

It’s the idea that housing should be more accessible (it should be - and also, as Joey highlights, more of America's housing stock is from the 1950s than the 2010s), education shouldn’t bankrupt (it shouldn’t), and that healthcare, real wages, opportunities should all be better (should be!!), etc etc etc.

And like, yeah of course of course of course.

But then it gets into politics and politics are politics and that’s a tough pool to wade into. I do think the most interesting thing about Fitch downgrading the United States was the fact that they cited the debt ceiling debacles as one of the main reasons. It’s the inability to get along creating some of the issues at hand, and man, books have been written on that alone.

It’s frustrating. It vibes, and everything else.

Anna Gát introduced me to George Packer’s Last Best Hope about American tribalism -

Free America, which imagines a nation of separate individuals and serves the interests of corporations and the wealthy; Smart America, the world view of Silicon Valley and the professional elite; Real America, the white Christian nationalism of the heartland; and Just America, which sees citizens as members of identity groups that inflict or suffer oppression.

And then Packer says “hey the only way this gets better is if we establish a common identity and maybe try to get along.”

Ibn Khaldun, the og economist, wrote -

The individual human being cannot by himself obtain all the necessities of life. All human beings must cooperate to that end in their civilization. But what is obtained through the co-operation of a group of human beings satisfies the need of a number many times greater (than themselves).

There has to be a national story to align to. There are exciting and good things going on, but the bad is outweighing the good for many.

And there’s also a shift in how we talk about these good things - less about money, and more about how. As Talmon Joseph Smith points out

if ya ever wanted evidence that the convo in NY and DC power centers is shifting from financial constraints (is it deficit-neutral/"how do we pay for it") to resource constraints (few worries about affordability and a focus on IRL implementation and productivity) well here ya go

It’s not going to be about money, but about things. Hassan Khan highlights that too - “based on the numbers below (for the IRA): the US solar industry will require more imports of wafers / poly silicon in the years to come - likely from China - to fill its factories”

The future is going to be about resources, and the funny thing about that, is sure, money can extract a lot of them, but they are constrained to our natural world (unless we do synthetics, but that is also tangential to our natural world).

We are going to have to live alongside the Earth in coming years. Not on top of it, not barely remembering it exists - humans and the environments will need to become mindfully intertwined. And you might puff up your chest and say “global warming isn’t real” but that matters not - if we want to keep building, it can’t be in this muscle-Mad-Max-torched-land fashion.

More likely than not, as many have pointed out, we will need to develop narratives around nature and people’s role within it, not outside it. Ownership will be within assets, certainly, but also it might need to be more mindful of the Earth around it. Money can do a lot of things, but the laws of physics and biology supersede the almighty Dollar. Perhaps there are stories to be told within that- and fun things to build and systems to redesign.

More Things

Why Bill Watterson Vanished | Zuck and Elon | The Power of Stories | The Great Inflection? A Debate About AI and Explosive Growth | Institutionalized Belief In The Greater Fool | A lot of people are feeling social pressure to become more depressed about big global problems | The Long, Slow Death of Global Development | Unf*ckable Hate Nerds | The Key to Good Luck Is an Open Mind | How Plastics are Poisoning Us

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, or financial advice.

1. There is also a lot to freak out about. The economy is nothing if not nuanced.

2. One thing that kills me about making 60 second or so videos everyday is that people never refer to the full scope of ~my work~ where I did address many of the grievances outlined here, but alas

3. I think there is of course a few things - it’s important to not get jaded, to get bogged down by lack of hope, and to choose suffering over action.