The National Center for Employee Ownsership is holding its virtual annual convention this year. If registrations are still open when my stimulus payment arrives later this week, I may register. Chances improve if, after seeing this essay, they put me on a virtual panel.
Among NCEOs offerings are assistance to member firms and individuals in dealing with COVID. They are all tailored to a predictable, status quo situation where government programs work as designed and the usual semi-egalitarian, semi-hierarchist management model can remain as it is. Just describing these assumptions show how unlikely they are to reflect reality.
Enhanced unemployment benefit levels and one time stimulus payments will keep food in the table with rents, mortgages, car note and credit card payments continuing to service the asset backed securities holding these debts. The gamble is that the great American quarentine will end in short order with little disruption.
The optimistic view is that nothing collapses in the next six months, Federal and State Unemployment Insurance premiums increase enough for continued program solvency and trust fund replenishment and a change in administrations results in minor income tax rate hikes to suck extreme liquidity out of financial markets.
A less optimistic view is that there may be some mild inflation, but people returning to work will increase the supply of goods and services enough to make it a blip rather than a trend.
A heroic assumption is that Leader McConnell will agree to a mild tax increase on capital income to suck up liquidity at the top and Speaker Pelosi will agree to limit already passed UI benefits to get people back to work.
Even more heroic is McConnell agreeing to minimum wage hikes, which will get people back to work quickly and give most workers below the executive level a raise. Lower executive compensation will take money out of the speculation (don't call it investment) sector, leading to long term growth and greater opportunity and equality.
A more pessimistic, and therefore more likely, scenario is that cheap money by the Federal Reserve and subsidized returns to asset securities lead to the creation of more junk bonds and Ponzi schemes to spread the cancer to all investors, leading to (or deepening) the recessionary trend in the current economy. Combine this with higher income individuals and the better funded unemployed pushing more money at an ever-decreasing supply of goods and services. The result is hyperinflation.
The only good side is the elimination of household debt. This possibility could scare up support for higher taxes and a quicker opening of the economy, but I would not bet the securities holding the mortgage on your farm on it.
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