Series: Looming Economic Crisis

This is the second in my Series, presented with research, data, articles, links, context, and opinions. I hope you enjoy the Series, and please feel free to contact me directly. We can discuss a multitude of regional & world issues and explore potential solutions. I’d look forward to hearing from you.

Series: Population Growth and Aging



Looming Economic Crises

Communities, regions, and countries all face multiple upcoming financial crises.

Retirement by the aging population, massive job loss due to new technologies, neglected infrastructure improvement costs, the collapse of retail, the U.S. dollar losing its strength of economic position, human migration due to climate change and urbanization, and climate change catastrophes costing billions each year. There are many factors contributing to economic instability in the world today, and these factors continue to grow unchecked. Income inequality rises – resultant higher percentages are left in poverty.

It doesn’t even seem possible. Most people won’t recognize the inevitable, the warning signs, the coming economic crises. If solutions were simple, economic crises wouldn’t exist – on any level. Certainly, the leaders of many regions might’ve scoffed at forecasts ahead of time rather than acknowledge and consider what could be done to avert them. But don’t simply take my word on it, consider the experts and their opinions.

New solutions are needed. And they are needed immediately.



The Retail Apocalypse

Retail is dying. The rising trend of e-commerce is killing local retail. Which destroys a lot of entry-level and mid-level jobs. And local small businesses. It also withdraws a lot of money from localized economies. This means money doesn’t recycle through the financial ecosystem – as tax revenue, as jobs, as economic stability. Less money is available to spend on infrastructure, parks, police, schools, public transit, and other local needs.

In order to address and help solve the issue of money escaping localized economies forever, one of the optimal solutions is creating a community-based currency. Buying local matters. Retaining money matters. I’ll discuss this in greater detail in an upcoming Series post.



Artificial Intelligence and Automation

Within 20 years half of the population in advanced countries may be out of jobs due to artificial intelligence and automation. People have heard the predictions that self-driving cars could lead to 5 million jobs being lost in America, but few people understand that once artificial intelligence is good enough to drive a car, it will be good enough to do a lot of other things, too.

This isn’t the same thing that people have been forecasting since the dawn of the Industrial Revolution about automation diminishing jobs. It’s a lot more real. In part because those labor jobs shifted into design, manufacturing, shipping, processing, repair, and maintenance jobs for past and current automation.


It won’t be millions of people out of work; it will be tens of millions.


We’ll need to create massive new job markets that robots will be less competitive at. Ultimately, this won’t be dentistry, accounting, customer service, or manufacturing. It’s probably mentoring and teaching. It will be professions that require unique skill sets like creative thinking and detailed opinions – drawing from personal human experience and applying it.

If 20 years seems too short or impossible, consider twenty years ago few people had internet access and massive mainframe computers weren’t nearly capable of the processing power we have within a wristwatch or cell phone today. Consider how “quickly” people adopted online shopping once the benefits were recognized. Consider the sequence of exponential improvements over the timeline of exponential growth during the past 15 years alone and then try to consider what that will become – with future iterations and developments.



U.S. Dollar and the End of Its Reign as Global Currency

If countries like the United Arab Emirates, Saudi Arabia, China, Japan, Germany, India, Indonesia, and Brazil begin using the Chinese yuan as an IMF reserve currency; a lot of fiscal dynamics will rapidly change. This can affect geopolitical interests – altering embargoes, trade sanctions, and foreign policies. Countries could begin dumping U.S. dollars held as reserve funds, effectively destabilizing economic systems and structures – like the price of oil, wheat, cotton, and other essential commodities. Which, in turn, dictate consumer prices – and the costs of shipping and travel.

For any that have followed the economic collapse in countries like Argentina, Portugal, Venezuela,  Egypt, or Greece; this will surely be worse. Much worse.

Global economics can certainly affect specific regions and countries. Iran is experiencing their most violent and volatile protests since 2009 and appear to have initially been caused by proposed slashing of cash subsidies to the poor and raising fuel prices to lower debt. Working-class Iranians want higher wages and a solution to unemployment, and are frustrated that the economy has been slow to grow. Currently, the unemployment rate is 40% for young adults in Iran. Partly due to an export crisis, the country’s stunted economy saw a 40 percent jump in prices for basic goods like eggs.

Taking risk is always seen as foolhardy and unwise. Yet some notable leaders are still willing to fight against status quo and establish higher standards towards important solutions. Ireland is entirely divesting from fossil fuels. Costa Rica and Iceland are powered by 100% renewable energies. Belize just ended all future oil exploration in its waters. Auto manufacturer Volvo promises electric motors in all new vehicle offerings by 2019. American states like Hawai’i and California are setting legislation towards 100% renewable energy transportation in the future.

These policies are visionary and worthy of recognition. But they alone do not always establish alternative solutions. We’ll need systemic changes to meet new demands. We’ll require consumers to demand better and for industries to provide better solutions for their customers. As a small country like Belize forfeits earning potential from fossil fuel resources, they will need new economic engines and revenue streams to replace the old. As electric vehicles become more popular, we’ll need more clean energy providing the electric grids. As global currencies stagnate or create crises, localized regions and countries will need to create their own mechanisms for economic stability and financial security.



Aging Infrastructure

Aging infrastructure is neglected and failing everywhere. The American Society of Civil Engineering furnished America’s 2017 Infrastructure Report Card with a D+ overall grade. We haven’t maintained and improved fast enough. Around the world, most communities rely on decades-old systems. Urbanization happened from the 1930s to the 1970s – when much of the world’s infrastructure was created – roads, power, water, etc. It’s old. It’s failing. And things built today generally prioritize cost effectiveness over longevity.


Beyond roads and highways, 100,000 public schools – many of which are housed in aging buildings in desperate need of repairs and modernization – make up the second largest infrastructure system in the United States. More than half of the nation’s public schools need investments just to bring the building conditions to “good.” High quality school facilities have been linked to better academic achievement for students, fewer suspensions, and better staff retention.

For instance, from January’s “bomb cyclone” that hit much of America, Baltimore’s school district closed four schools and dismissed two others early… Baltimore City Public Schools CEO Sonja Santelises said that 60 school buildings – about a third of the district – reported problems that included broken boilers and water pipes. In an interview with CNN, Santelises expressed frustration with the lack of funding for school infrastructure. Maryland’s Governor Larry Hogan said he was “outraged at the failures in Baltimore City” and blasted officials’ “ineptness and mismanagement.”

In 1995, the Government Accountability Office (GAO) concluded that America’s schools needed a collective $112 billion to “repair or upgrade their facilities to good condition.” That number has ballooned to an estimated $145 billion per year… A 2012 report found 69 percent of the district’s campuses were in “very poor condition” and it would take an estimated $2.5 billion to bring buildings up to adequate standards. In 2015, 29 states had less overall state school funding than they did in 2008, even as student enrollment grew.


More than 2 out of every 5 miles of America’s urban interstates are congested, and traffic delays cost the country $160 billion in wasted time and fuel. It is expected that by 2020, 24 of our 30 major airports will experience Thanksgiving Day peak traffic at least once a week. The American Road and Transportation Builders Association, which tracks the number of bridges with structural defects in each state, found 55,710 bridges nationwide that need to be repaired or replaced. More than 2,000 dams are at high risk of failure. Mass transit earned the worst grade on ASCE’s 2017 Report Card: D-minus.

Getting America’s infrastructure into relatively good shape by 2025 would cost $4.6 trillion according to ASCE. The chronic failure to invest in infrastructure is a huge drain on the nation’s economy – and puts jobs and lives at risk. But standard operating procedure is to wait for disasters and be more reactive than proactive. Even though both FEMA and the National Institute of Building Sciences report that “one dollar spent on mitigation [disaster preparedness] saves society an average of four dollars in disaster relief and recovery costs.” Plus, preparedness can save jobs, lives, and all kinds of hardships.


A water main break left 1.5 million residents in Dublin, Ireland without water. A section of the Keystone oil pipeline leaked 5,000 barrels (210,000 gallons) of oil in South Dakota. Negligence by PG&E, the utilities provider in Northern California, was linked to the cause of the most devastating wildfires in the state’s history. A 93 year-old pipe burst, flooding UCLA’s college campus with 20 million gallons of water. Gas pipeline explosions in San Bruno and Los Angeles, California led to Elon Musk’s Tesla contract to build the world’s largest battery backup station. A gas leak collapsed buildings in New York. Chicago has the world’s largest water filtration station and could be losing 22 billion gallons of treated water each year to leaky pipes.

Experts estimate 2.1 trillion gallons of treated water are lost each year in the United States due to old, leaky pipes and failing infrastructure. That’s roughly one-sixth of all water treated in the United States. New Orleans recently flooded because 100 year-old pumps failed. The Army Corps of Engineers has projected “imminent failure” of many structures like bridges, tunnels, dams, and levees. In at least 3,000 locations around the United States, municipal water was found to contain poisonous lead levels at least double that of Flint, Michigan.


Puerto Rico after Hurricane Maria, 2017.

Largest blackouts in U.S. history – reported on October 26, 2017.

Typhoon Soudelor, the most powerful tropical storm of 2015, left some residents in the Northern Mariana Islands without power and water for up to nine months. Many rural residents in Puerto Rico now face a similar fate after the devastation from Hurricane Maria last September. Haiti continues to struggle with economic revitalization, rebuilding, and stability after Hurricane Matthew and their 2010 earthquake.



Why aren’t we maintaining and fixing these at a responsible rate?

The costs are too high. New needs demand attention. Short-termism. Complacency.

We could utilize more Public-Private Partnerships with social enterprises working towards common good. Consider the difference when the Works Progress Administration (WPA) helped build the Hoover Dam on-time and under-budget. The Empire State Building was erected at a rate of one floor per week. Now consider the new San Francisco-Oakland Bay Bridge span taking 24 years to open after the 1989 Loma Prieta Earthquake. A $300 million retrofit proposal became a $1.3 billion project, completed at $6.4 billion in expenditures. Boston’s Big Dig skyrocketed from a $2.4 billion budget into America’s most expensive infrastructure construction project in history at $24 billion.

Even those credible experts and leaders, the ones we rely on; that we entrust to budget, allocate, design, and build-out the most complex solutions… Even they sometimes let us down. These challenges are prevalent everywhere. Even actual rocket scientists have failed: NASA spent 15 years and $3 billion on the Hubble Space Telescope, another example.



Income Inequality and the Weakened Workforce

The concentration of wealth in America – and around the world – is frightening. This weakens the talent pool for advanced jobs. It creates social strife as income inequality rises to levels not seen since The Great Depression of 1929-31. America’s top-3 billionaires: Bill Gates, Warren Buffet, and Jeff Bezos collectively hold more wealth than the bottom 50% of the nation, “a total of 160 million people or 63 million American households.” Roughly a fifth of Americans “have zero or negative net worth,” with the disparity even greater among black and Latino households.

Wealthier households are (obviously) more resilient after a financial crisis, while low- and middle-income households struggle to regain their stability. The poor in America are worse off now than in 2007. On paper, the rebound and economic recovery of New Orleans after Hurricane Katrina looks fantastic. Plenty of middle- and upper-class moved in and brought lucrative industry and job opportunities with them. But this revitalization came at the cost of the most impoverished residents – like those in the Lower Ninth Ward of New Orleans. They became displaced because they could not afford to rebuild and recover. They were forced to move to even poorer regions. This is largely what happens when disaster strikes. And climate change forebodes that it will continue to occur. Many more times.


In many ways, the story of New Orleans’ economic recovery is similar to what happens with corporate profits from stock buybacks – which is to say that the rich get richer. And the poor are further disenfranchised, made more vulnerable,  and forcibly overlooked. This stock buyback procedure is popular for temporarily strengthening a company’s bottom line. Reinvest, distribute a dividend to shareholders, use that to continue the repurchasing cycle.

Corporate profitability is not translating into widespread economic prosperity.

From 2002 to 2013, the 449 publicly-traded S&P 500 index companies used 54% of their earnings ($2.4 trillion) to buy back their own stock. Yet most Americans are not sharing in the success of these stocks. While the top 0.1% of income recipients – which include most of the highest-ranking corporate executives – reap almost all the income gains, good jobs keep disappearing, and new employment opportunities tend to be insecure and underpaid.

Inherently, there is a very clear and present danger in the presumption of the “survival of the fittest” mindset. Fittest favors those already with success, wealth, power, and influence. Those incumbent. It restricts opportunities to those less fortunate – the poor, the disenfranchised. It contributes to urban sprawl, blight, and disinvestment in poorer neighborhoods. Welfare perpetuates more poverty. The lack of educational and economic opportunity dispels hope and inflates desperation. Which can increase crime, health risks, hate, and divisiveness. Seem an outlandish claim and correlation? Consider Camden, New Jersey as a case study.


For many small islands and nations that heavily rely on tourism revenue; much of what remains are big hotel operators, major retail brands, and franchised restaurant locations that withdraw the majority of revenue to help support their lavish corporate headquarters elsewhere. Local jobs stagnate. Development of advanced jobs is lessened – technology sector and otherwise. A heavy reliance on outside money – that tourists bring with them – is a dangerous value proposition for long-term stability. Farming often disappears as local businesses pivot to support the demands of tourists.

Fluctuations in tourist rates can destabilize economies. More fresh fruits, vegetables, and foods need to be imported. At great cost, Puerto Rico imports as much as 85% of all fresh fruits and vegetables, the CNMI imports closer to 90%. Lanzarote in the Canary Islands lost much of its agriculture as revenue pivoted to focus on tourism. As much as the Seychelles has prioritized agriculture since its independence from the U.K. in 1976, they still face some of the highest inequality rates of income and wealth distribution in the world.



These vectors may not occur simultaneously, but each is likely to happen within the next two decades. The monumental costs – and dire consequences – will hardly be afforded by those still completely unprepared. Let’s work to avert economic and natural disasters. I’d like any chance to help.




Please ask me how I can help you.

Even with just a bit of research, I’m certain I can help develop an outline of specific cross-platform solutions that can help you and your region. I can help research, design, plan, implement, and execute.

I’m available to assist you in any ways I can.

I am available to move anywhere in the world and help in any way – on the most difficult of challenges. I likely could work for less than $1,000 per month, depending on cost-of-living in your region. I would move to any impoverished area. I am not afraid of whatever hardships in living conditions I would face. I want to help solve any of the world’s toughest problems.

I hope to hear from you. I hope to help you. Thank you.

david Saipan