🗳️Election 2024: A Reckoning with Economic Inequality

🎧 Listen to this on the S3T Podcast!

In this Edition of S3T:

• 🗳️ Election Results bring Economic Reality Check
  Fed cuts rates amid anticipated policy changes with the new billionaire-backed administration ushered in by voters seeking relief.
• 🏠 Families Struggle in Housing Market
  Institutional investors driving up home prices, leaving families competing with corporations for housing in an increasingly unaffordable market.
• 🏡 Homebuyer Trends Shift
  With down payments at a 25-year high, the average first-time homebuyer age is now 56, reflecting wealth gaps in the housing market.
• 💻 Work-From-Home Companies Outperform
  A University of Melbourne study shows higher stock returns for companies offering flexible work options, backed by data from FlexJobs.
• 💸 Crypto Politics & Election Impact
  Crypto-friendly candidates gained traction as a large crypto-owning population leaned towards candidates opposing strict regulations.
• 🤖 Musk, Misinformation & AI Deregulation Risks
  Musk’s support for deregulation could lead to unregulated AI growth, a risk emphasized by experts urging responsible development.
• 🧶 Change Leadership Insight: Life as a Tapestry
  Success isn't only about focusing on essentials; weaving together diverse life experiences creates a more fulfilling journey.

Opinions expressed are those of the individuals and do not reflect the official positions of companies or organizations those individuals may be affiliated with. Not financial, investment or legal advice, and no offers for securities or investment opportunities are intended. Mentions should not be construed as endorsements. Authors or guests may hold assets discussed or may have interests in companies mentioned.

Election results: economy not what it seemed

Almost lost among election headlines: Rate cut

The Federal Reserve cut rates by a quarter percent Thursday, as the prospect of a new administration with radical policy changes raised concerns across multiple sectors of the global economy. The Haver Analytics Global Economic Policy Uncertainty index is ticking up (chart below, full set of related charts here):

Markets hit new all time highs, as did Bitcoin - at time of writing was above 76K, as the US enters a new era with a government that will - quite literally - be a government of the billionaires, by the billionaires and for the billionaires. Americans voted for what they believe will be economic change - there is quite a risk that the change will not be net positive for anyone below millionaire status.

Much has been written about the surprising (to some) results of the US election. As noted in many previous editions of S3T, the Federal measures of inflation fail to materially reflect the actual lived experience of working families. (Paying members have access to inflation and economics explainers that go in depth on this, and what needs to be changed - click the Subscribe button and select the Paid option to sign up).

Relevant: This organization of Pro bono financial advisors helps people learn financial literacy and manage their money. We need more like them.

Families compete with Investors for homes

Institutional investors who buy up homes by the thousands are having a disturbing impact on the housing market:

• Avg downpayment reaches a 25 year high
• Average age of a US homebuyer is 56
• The average wealth gap between renter and home owner is 390K

Digital tech backed by advanced analytics tools has made it easier for institutional investors to transact and manage large portfolios of dispersed housing units. For a deeper dive on how this investor activity drives up the price of homes and forces more families to rent, see this HUD evidence paper on the impact of institutional investors on the housing market.

WFH correlates with higher stock returns

This new University of Melbourne study of top work-from-home companies between 2014-2020 shows that workplaces with flexible options enjoy higher share prices over both short and long term periods. The study used data from Flexjobs which tracks the top 100 companies with remote jobs.

Crypto & AI center stage

Democrat ambivalence on crypto comes back to haunt them

As noted in multiple previous editions of S3T, the Democrats misread of crypto always had the potential to cost them an election - or be one of the contributing factors. One frequently quoted figure holds that up to 40% or approximately 93 million Americans own crypto in 2024. Many of these individuals listen regularly to a set of podcasters (NLW, Bankless, Unchained, Pomp etc) who for the past 2+ years have been doing play-by-play reporting on Elizabeth Warren and Gary Gensler's predatory and misguided “war on crypto”.

In response the crypto industry spent aggressively on candidates who supported crypto. Coinbase users and those who signed up for the Stand with Crypto alliance likewise saw scorecards showing top of ballot Republicans as highly supportive of Crypto and Democrats candidates as "against" or "unknown."

Above - screenshot of Stand with Crypto text messages sent to supporters.

As this Candidate Scorecard shows, not all Democrats are against crypto. But the overall optics likely swayed some voters toward GOP candidates.

Musk uses X as misinformation megaphone

Musk's far right political narratives - most of them blatantly false - generated 17.1 billion views between July and the election. By deploying a wall of falsehood to boost Trump, observers believe Musk is cozying up to Trump hoping to "insulate his companies from regulation or enforcement."

“Elon Musk sees all regulations as getting in the way of his businesses and innovation...He sees the Trump administration as the vehicle for getting rid of as many regulations as he can, so he can do whatever he wants, as fast as he wants.” - former top SpaceX official

Musk and Trump both have made statements about radically deregulation and downsizing of government. In some ways they are just singing along with the roar of a wind that has been blowing for some time already: governments, courts, regulators, utilities, local planning authorities have all been struggling to keep up with the rapidly accelerating change driven by emerging tech and transforming global economy.

As noted previously in S3T, generative AI has obsoleted the 20th century's quest for productivity, by unleashing tools that can in a single day produce more output than humans could possibly scrutinize in a month.

It's rarely a bad idea to consider how to rightsize government. But its also rarely a good idea to completely remove accountability and guardrails.

The specter of deregulated AI

One of the more worrying prospects of this is the potential for the Trump-Musk duo to embark on a reckless deregulation of AI, unleashing AI capabilities we are not ready for, or do not have full abilities to contain or control. See this NAIAC report on Potential Future Risk of AI (PDF) which recommends a multi-stakeholder approach that includes regulation & research. See Multi-disciplinary application of AI segment below for a real world example of an AI healthcare solution that illustrates the proper approach.

🇺🇸 BTW: AI regulation is an important topic to take up with your elected representatives.

Working Example: Multi-disciplinary application of AI in emergency room contexts

Choreo-ED - is a new working example of a real world AI solution for healthcare, helping emergency department staff be more proactive about care, while also reducing wait times for patients with most critical needs. The Choreo-ED solution listens to patient data, physician orders, and lab results as they are recorded in the EMR and combines this with rich historical data from a patient’s prior visits to recognize when they are likely to be admitted from the ED.

When this likelihood of admission exceeds a certain threshold, the model enters an Anticipated Decision to Admit (ADTA), indicating to the admitting team that the patient will, with high confidence, be admitted soon, and allowing them to proactively initiate the admission process.

What's different about this AI solution is how it was developed. Rather than using third party foundational models, a cross disciplinary team of hospital leadership, physicians, and clinical staff worked along side the Choreo AI engineering team to refine and build the deep learning model at the center of Choreo then integrate it seamlessly into the ED workflows. This kind of careful approach, held accountable by multiple disciplines is key to safe effective AI, and is a model that AI regulations need to consider.

"I get excited about this use case because it is an improvement for all the people it impacts, improved patient experience, reduced stress on the care teams, and improved patient flow." - Mitch Quinn, Choreo-ED

The solution relies on an LLM trained on Clinical and Claims data, following the same ethical AI approach Mitch Quinn pioneered for the original CarePath AI platform.

This week's Change Leadership Learning Segment: Life is a Tapestry

We’ve been conditioned to believe that focus, and prioritization and getting rid of the non-essentials is the way to succeed - and there's an element of truth to that. But how you apply this principle makes all the difference.

Ready to learn another transformative element of the Change Leader mindset? Click here to dive in!

Thank you for reading and sharing S3T! Have a great week!

Ralph