Happy (?) New Year!
Auld Lang Syne
Sometimes referred to as the “New Year’s Anthem,” Auld Lang Syne begins with a markedly rhetorical question: Should old times “be forgot and never brought to mind,” and spends the next several verses confirming the value of times gone by and friendships that were developed to be celebrated into the new year. Originally an old Scottish folk melody previously published by James Watson in 1711, the “modern” version of the anthem was updated by the immortal poet Robert Burns in 1788, with new music a few years after. This song affirms that whatever is gone from the past year, the friendships and matters of personal importance from “long, long ago” will go forward into the new year. No, old acquaintances should never be forgotten, we are urged. Nor should we forget to share a “cup of kindness” for those acquaintances and experiences from the prior year. We should remember and honor the past, so the song tells us, and move forward into the future building upon what the past has already laid down.
Looking back at 2021, it is easy to get stuck on the most tragic and vivid memories of the year, which started with the Insurrection on the sixth of January, and ended with the outrageous ravaging of the U.S. population from COVID-19. What began as a pandemic, has now, at more than 850,000 American lives lost, morphed into an epidemic of choice, where 98% of current deaths are the unvaccinated. Astonishing as it is, more people have died of COVID since vaccinations were widely available for free than died in the first year of the pandemic. In November, the Omicron variant arrived, and is proving to be far more contagious even if less deadly than the Delta variant we’re still suffering from. More than 15,000 folks per day are being hospitalized as this column is being written.
Schools were closed for much of the year. Our youngsters have been severely disadvantaged by the loss of social contacts. Millions of caregivers had to give up work to care for children. Daycare became even more expensive and harder to find. And, yes, opioid deaths went up significantly in 2021 as did gun violence and mass shootings.
Weather events turned more devastating and climate change proved more disastrous than ever. We saw incessant forest fires in California, and now Colorado, and a 250-mile-long tornado, with sustained winds of 195 mph, that touched down in Kentucky and left 90 dead. Even Goleta experienced the rarest of phenomenon: a tornado in December. My goodness, what a year!
With that toll of disruption, destruction, and death it may be hard to remember the many things last year that were very, very good.
Thanks to strong and appropriate intervention by the federal government, the great supply chain disruption didn’t destroy Christmas after all. There was plenty of merchandise on the shelves, package deliveries were mostly on time, and even gasoline prices that were jacked artificially high fell 14 cents/gallon by November. Mastercard reported that holiday retail sales jumped 8.5% from last year and were almost 11% higher than 2019. So much for the Grinch who stole Christmas — he didn’t!
The economy in general performed incredibly well in 2021. Matthew Winkler, former editor of Bloomberg News wrote last week, “America’s economy improved more in Joe Biden’s first 12 months than any president during the past 50 years notwithstanding the contrary media narrative contributing to dour public opinion.” The U.S. recovery expanded an estimated 5.5% with fourth-quarter growth dramatically outperforming Europe and even China.
To counter pandemic generated unemployment, the federal government transferred more than $2 trillion to households in 2020-2021, in the form of topped-up unemployment benefits and stimulus checks, which kept the consumer economy humming and left the average citizen with both increased savings and spending power.
Domestic stock markets were up by record setting amounts (nearly 30% on S&P 500); unemployment plunged; productivity jumped; consumer credit expanded significantly; corporate profits were their highest since the 1950s with corporate debt the lowest in 30 years; the bottom quartile of the working public had faster wage gains than the top 75% of wage earners for the first time since the 1970s; inflation is moderating even as we watch it drop month over month and will likely settle into a comfortable 2.5-3.25% annualized by the end of this year; the bond markets are signaling that finance folks think inflation is not a permanent concern; and, most importantly, the American Rescue Plan cut child poverty in half.
Despite the continuing epidemic, here are some other positive things to celebrate: Vaccinations were spread around the world, and 8.5 billion vaccinations globally were achieved. Developed nations now understand that until the whole world is vaccinated, no one is safe anywhere as COVID will continue to morph into new variants. We saw the tremendous protective power of mRNA vaccines, which literally were invented in one year flat. Similarly, the new monoclonal antibody treatments will be widely available soon.
Led by Tesla, Rivian, Ford, and a host of other automobile manufacturers, electric cars have finally made it to the big time. In August, electric cars outsold diesel cars for the first time in Europe.
China finally eliminated malaria; last March researchers at Brown University successfully transmitted brain signals wirelessly to a computer for the first time — a breakthrough for paralyzed people, as the removal of wires takes this tech one step closer to being available for home use; in an amazing technical feat that will move humanity “from science fiction to science fact” in space exploration, NASA’s Perseverance Rover successfully converted some of Mars’s carbon-dioxide-rich atmosphere into oxygen; Uber drivers were granted worker’s rights in the United Kingdom; in just 15 hours the affordable housing group 14Trees, built an entire school in Malawi using 3D printing technology; in December, the International Energy Agency (IEA) revealed that 2021 was renewable energy’s biggest year ever, with roughly 290 GW of renewable energy generation installed globally; and, there may even be a way to halt the death cycle of bee habitat all over the planet as the Dutch created “Bee Hotels” from hollowed out plant stems together with a ban on chemical neonic pesticides and stabilized the urban bee population. Given the importance of bees to human agriculture, this approach will prove instructive for agricultural advocates worldwide.
And so, reflecting on Auld Lang Syne: yes, there were a lot of traumatic events last year. And there were even more positive ones that we often failed to notice. By all means, let’s bring the best of our friendships, and the advances we have made, into the future we choose rather than be paralyzed by the challenges we face. That will make for a very Happy New Year.
Rinaldo, an entrepreneur, is the founding president and CEO of the Santa Barbara-based World Business Academy and a co-founder of JUST Capital