Dana Blankenhorn

The Looming Labor Shortage

Perhaps the biggest issue of the 2020s is now hovering within view.

It’s the labor shortage.

We are so accustomed to seeing labor as super-abundant that we’re not ready for it. But demographics are dictating it.

Consider this. I’m hale, hearty and 62. In 2020 I’ll be 65, retirement age. So, too, will millions of other Baby Boomers. We’re the heart of this demographic “pig in a python.” My wife was at the female peak of that boom, born in 1957. She can expect to retire in 2022.

Now, forget all those AARP ads you’ve seen. Retirement is not a picnic. I watched aging take my parents, and my wife’s parents. It’s like the old joke by Robert Klein. “I sent Florida two perfectly healthy 65-year-olds, and 25 years later they come back dead!”

The Next Recession

What recessions all have in common is that they’re unexpected.

The only people you’ll hear yelling “get out” beforehand are a few cranks, and the usual rascals who think they can profit from the panic.

Why have I suddenly become one of the cranks? Because I know bad economic policy leads to bad results, and Trump economic policies are stupid. But there are other signs.

I went for a bike ride over the weekend, and the most amazing thing happened. I was nearly run over. Several times. (Not by one of Thomas Friedman’s Third World cabbies, either.) One idiot screamed “sidewalk” at me as he blew past, 20 miles over the speed limit. While it was nice to be thought 25 again – I felt the same disregard on my bike when Houston’s oil boom was peaking – disregard is a symptom of a larger economic problem.

Greed.

Speaking of Sports

Let’s change the subject.

Atlanta media can’t cover soccer for shit. I don’t think they want to.

But they need to because Atlanta United is selling out all their games while the baseball Braves play to empty seats in their new Cobb County ballpark.

The season started well, but then went pear-shaped. The media has interviewed a few players, but Coach Tata Martino’s first language is Spanish so they haven’t asked him.

I’ll explain it.

There are two main problems. One, they’re not scoring goals. Two, they’re letting too many in.

That 1999 Feeling

I was awakened recently with a feeling I have only had a few times in my life, most recently in 1999.

It’s the feeling of a major market top, of the deep breath before the plunge.

I spent most of 1999 screaming about it through my newsletter, a-clue.com. When the top came, the purchase of Time Warner by AOL showing the highest possible valuation for Internet assets, I knew the top had been reached and the Internet boom was over.

This did not save me. I lost all my work, just like everyone around me. In 2002 and 2003 I made zero dollars. My investments plummeted along with everyone else’s. It took years for me to get back to even.

After the fall, it took me a long time, and a lot of reporting, to find an investment thesis that would work, and that would get me on the path of positive economic change. But clouds, and devices, have been that path.

What’s been growing this decade are those companies that can justify the capital expense of cloud through cash flow earned somewhere else. Amazon does this with commerce, Apple does it with phones, Google does it with search, Microsoft does it with software, and Facebook does it with social. In China, Alibaba does it by making markets between producers and consumers, Baidu does it with search and Tencent does it with chat.

These are the market’s winners. Everyone else is a loser. Retail is a loser, oil is a loser, resources and manufacturers are losers no matter what Trump may do, transportation is a loser, and any kind of service that can be turned into an app is a loser. Ultimately, even Tesla is a loser. All the great tech names of the past – HP, IBM, the phone companies, they’re all going away, or have gone away. They’re dust in the wind. Computers scale in ways people do not. You are either there or you’re nowhere.