Predictions For 2021

Most of the time they are wrong.  People try to be logical, but often, they are full of confirmation bias.  I was reminded of that when I read some predictions this morning. 

Here are some predictions for you to ponder.

• VCs that think SF and NYC are going to come roaring back in a 1920s style are all incorrect.  SF was a shithole before Covid.  I was there in January of 2020 and I never wanted to go back.  I am not alone.  It’s a horribly mismanaged city where drug overdoses are outpacing Covid deaths.
• New York is also the sight of flight.  It’s not Covid.  It’s DeBlasio and a litany of shitty political policies and positions that have been put in place prior to DeBlasio.  Bloomberg wasn’t exactly the best mayor either.  Between Chicago, LA, SF and NYC I don’t know who has the worst mayor.  An embarrassment of mediocrity.
• Neither city along with Chicago recovers in 2021.  They have the wrong management team at the top.  Their fiscal challenges are too steep.  Poor and middle-class citizens that cannot escape will be hurt badly.  As F. Scott Fitzgerald said, “The rich are different than you and me.”  The stupid among them will continue to press for stupid policies.  The unaware will wonder where everyone went.
• The social contract between citizens and cities has been broken.  Cities all over the country are not safe.  They are shuttered.  They are totally mismanaged.  Portland, Seattle, and Minneapolis are perfect examples.  There is no energy or vitality.  More importantly, it’s super tough to build wealth there.  Remember, the millennial generation has been hurt more than once.  2008 hurt them.  Covid hurt them.  It will have a persistent effect on their lifetime wages similar to what the Great Depression did to that generation.  Southern and low tax cities will prosper.  Suburbs will be where it’s at until millennials raise their families and want to move back to the cities.
• The Suburban Office Park will be cool again
• Some are thinking venture valuations come down.  I don’t think so if the stock market remains robust and interest rates stay at 0%.
• Many are saying we will see the return of the office.  I don’t see that either.  There is controversy with the vaccine, especially with the way it is being doled out.  There is so much fear porn on Covid that has been imprinted on the American mind people are living in fear for no good reason.  Some will go to offices but a lot of people will stay remote.  When they go to an office they will want some space.
• I think that the migration out of places like California, Illinois, and New York will intensify.  Especially if there is a Biden Administration that raises taxes and fees. All three will lose congressional seats and won’t the redrawing of districts in those states be fun!
• Silicon Valley remains the citadel of Venture Capital and innovation.  The network effects are still there.  Sure, people are moving away from the Valley to places like Texas, but it will take a few years to tear down and build in another place.  People are moving from SF to the Valley reversing a big trend.  The money is there, and the power is there.  It’s not changing.  However, capital will flow out of the valley to find innovation in other places unlike in the past where capital was about place.
• Capitalism will continue to be dinged by the people that benefitted from it.  They will try to change capitalism, but capitalism will not die.  Businesses that do not follow the classic rules and return money to risk-taking shareholders and servicing the heck out of their customers will lose market share.  Go woke, go broke.  Lose market share if you try and force a bunch of stuff down the pipes of customers that aren’t demanding it.
• If the Republicans hold the Senate, there will be a day of reckoning in states like Illinois that cannot access the debt markets.
• If we get a Democratic Senate, we will see a recession.
• The amount of money that goes into venture deals will increase next year as investors chase yield and opportunity.  As Chicago Booth Professor Steve Kaplan has shown, returns are beating the S&P 500, even with a white-hot stock market.
• Trump will not be President in 2021 despite the fraud that happened in the 2020 election.  We are stuck with Biden for four years and we will have to deal with a very different and more powerful China in 2024.  Trump will have a peaceful transition of power, but will not be moot when he leaves office.  Obama ruined that construct.  It’s over for now.
• Civil Disobedience will become a big trend in 2021.  People will stop listening to authority.  States will opt out of federal mandates.  Cities will opt out of state mandates.
• The public school system is utterly broken in the United States.  2021 will be the rise of alternative learning.  It’s a trend that will not stop.  My friend Temp Keller had a great post about this.  Public schools are all about teacher’s unions.  Covid exposed them.
• Google, Facebook, and Twitter will lose market share to upstart competitors.  Rumble, Parler, Locals and other platforms will arise and grow.
• Congress will try to regulate the big tech platforms, but they will screw it up.  By the way, for this point, it doesn’t really matter which party is in charge.
• As the national debt grows, confidence in cryptocurrency will grow.  The Federal Reserve will be forced with a choice in the next four years.  Grow, or inflate.  Governments never pick the right policies to grow.  This is much bigger than bitcoin.
• Artificial intelligence, machine learning, and algorithms will continue to grow and make processes we don’t think about a lot more efficient.  This will cause goods and services to continue to cost less, but at the same time, it will put pressure on employment because we will need fewer people to do more stuff.
• Factories that were moved overseas will move closer to the US or into the US as the formula for “just in time” inventory changes.
• Journalism will become more and more fragmented.  Alternative news will be a thing.  Mainstream journalism is dead.  No credibility.
• Conventions won’t be back until 2022.  But entertaining yourself somewhere will make a comeback.
• The outdoor craze caused by Covid will not abate and golf/tennis/pickleball will get bigger in 2021.  Gonna be tough to find a quiet fly fishing stream in 2021.
• Big weddings will be a thing of the past.  Small intimate gatherings will be cool.
• People won’t “enjoy” funerals, but they will look forward to attending them to communally celebrate someone’s life.  2020 took that intimacy and reflection away from us and it’s an integral part of the human experience.
• The dinner party is back with a vengeance.
• Exotic food purveyors that used to sell only to restaurants will expand their offerings and ability to try and reach consumers.
• We live in two Americas today.  Get ready for more fragmentation.  This will offer opportunities to people that can “broker” between the various Americas.
• In 2022, we will see the rise of individualistic type political candidates that are willing to break with the constraints of their political party.  More Trump/Tulsi Gabbard style.  Less Romney/Schiff style.  People are sick of career politicians.

What are your predictions?  Leave them in the comments.

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