If you haven't noticed, I took a break from writing this last week. The primary reason being, I was a bit burnt out from trying to tie some thread together on some topics I found / read during the week. Truthfully, it was nice to have to not write. And if there was a time to do it, why not when it was during a holiday week leading to memorial day. I actually took time to remind myself why I even keep this up to begin with.

When I looked at what defines a memorial, its defined as

"an object which serves as a focus for the memory or the commemoration of something, usually an influential, deceased person or a historical, tragic event."

I somewhat view this newsletter as a letter to myself especially considering we're all living during the influential time of COVID. But never had I imagined I'd be keeping some memorial of my thoughts and how I continue to see the world unfold during this time. Revisiting even my tagline for this newsletter, I always considered this as:

a place unveiling learnings, analyses, & opinions on product, policy, economics, business, or technology

It was me trying to make sense of the world, hence decrypt.ed (the "ed" is also a shorthand for education to me from one viewpoint). So that's what I'll continue to memorialize this newsletter as, a place for me to rant and continually learn to decrypt how the world operates.

And with the world looking to operate much differently going forward, my mind has honed in on topics like:

• The Evolving Conception of "Work"
• The Various kinds of Debt
• The Emergence of New Networks

Here are a few things that caught my mind:

What Would Happen If Congress Lets The States Go Broke? | FiveThirtyEight

A pandemic is an expensive thing to weather. The COVID-19 crisis has already prompted a huge drop in state tax dollars, and seems likely to cost states hundreds…

Recessions are never easy on state finances, since states rely heavily on tax revenue — whether it’s income tax, sales tax or property tax — and all of those sources of income tend to fall when people lose their jobs or stop buying luxuries. And because states generally have to balance their budgets — unlike the federal government, they can’t go into massive debt during a financial downturn and promise to pay it back later — they have to make up that missing revenue in other ways. In the aftermath of the 2008 financial crisis, many states took a hatchet to higher education funding and reduced their spending on K-12 education, infrastructure, local governments and their own government workforce — and raised taxes.

Link

As tech companies have cut jobs, so has the rest of the country. Recent U.S. layoffs now exceed those during the Great Depression in sheer numbers, and could end up rivaling the 1930s in percentage terms. At the Depression’s height in 1933, almost a quarter of Americans were unemployed, according to estimates from the Bureau of Labor Statistics. Currently, about 15% of Americans are unemployed, up from 3.6% in January.

Although technology companies often employ fewer workers than their counterparts in other industries, tech makes up the biggest chunk of the stock market, meaning its performance has a disproportionate impact on individual retirement portfolios and other assets. At the end of the first quarter, seven of the top 10 companies ranked by market capitalization globally were technology giants.

Deflation also makes the burden of debt heavier, as the same fixed dollar amount of a loan (the “nominal” amount) stays the same, but wages and prices fall, so the “nominal value” gets relatively bigger in “real” terms. In 2019, U.S. household debt hit a 14-year high. Deflation would increase the relative cost of every mortgage, every student loan, every credit card debt, every car loan, and every medical debt. Deflation also encourages businesses not to invest, both because borrowing to do so incurs these same costs, and because the expected future revenue from investments fall over time and thus they will never be worth the high cost.

All of these problems accentuate each other. Businesses do not sell enough to make profits, so they fire people and do not hire new ones. People lose their jobs, so they don’t have money to spend, or they fear losing their jobs, so they save for an uncertain future instead of spending now. Businesses and households spend more servicing old debts than on new consumption. Prices fall as people don’t buy things, and people don’t buy things as prices fall. The result is a feedback loop of economic paralysis.

The risk now is not that it is doing too much but too little. Supporting credit markets will not reopen locked down businesses or get unemployed people to buy new cars. No one-off stimulus check will reassure anyone that the lockdown will not extend through the fall, or return once it has been lifted. Demand stimulus through normal fiscal and monetary policy tools—even on an unprecedented scale—are incommensurate to this crisis. People need direct, universal, unconditional income support. Far from generating a sudden hyperinflation, it may be the only way to avoid a deflationary spiral that rivals the Great Depression.