The 5.6-percent 'loss of income' narrative as foolish as the COVID-19 lockdowns

By John Tamny
RealClearWire

It was difficult not to chuckle last week when reading headlines about a projected 5.6% drop in future income for Americans who saw their education stunted during the coronavirus lockdowns. About the lockdowns, it would be difficult for anyone reading this to find someone who has written more criticially more often than yours truly about them. Mindless doesn't do justice to how criminally wrong they were. In 2021 I published When Politicians Panicked: The New Coronavirus, Expert Opinion, and a Tragic Lapse of Reason. The lapse of reason was the panicked, economy and life-sapping taking of freedom in response to the virus. It never made sense. Ever.  

At the same time, the fact that politicians responded in incredibly foolish fashion to a spreading virus doesn’t give those who properly critiqued the lockdowns the excuse to try and match the political class in terms of foolishness. And it’s incredibly foolish to tie an income number to lost time in school thanks yet again to lockdowns that idiotically kept kids at home.  

Indeed, if analysts had a clue about the future income of school-aged youth in 2020 and beyond, they most certainly wouldn’t be analysts. Instead, they’d be earning billions as investors based on an ability to see years and decades into the future. The kind of talent it would take to see so far ahead is otherworldly.  And it almost certainly doesn’t exist.  

It doesn’t simply because an ability to forecast income years and decades into the future would be an expression of an ability to divine the kinds of work that virus-era youth will do in the future. Except that anyone capable of predicting the work of tomorrow would similarly be capable of predicting the jobs of tomorrow, and by extension the kinds of companies that will employ us tomorrow. Such a skill would arguably transform one into a trillionaire in rather speedy fashion.  

That is so because as history tells us, the dominant companies of today (and the jobs they provide) are rarely the dominant companies of tomorrow. Figure that when the 21st century began GE was the most valuable company in the world, Tyco was the next GE, Enron had the smartest executives, and AOL/Yahoo were neck-and-neck for internet-sector prominence. Just the same, Apple was limping out of near bankruptcy, Amazon was Amazon.org (non-profit, get it?), Google was a largely unknown private company, Facebook didn’t exist (Mark Zuckerberg was in high school), nor did Tesla since Elon Musk was still working feverishly to keep PayPal afloat.  

Please keep this in mind with the projections about education loss top of mind. What could they be projections of? Those making them can’t possibly know the kind of work we'll do or for whom it will be for, and the fact that they can’t allows us to easily dismiss projected income declines simply because they presume a correlation between learning in the classroom and education. See the previous paragraph to realize the foolishness of the presumption. Since the nature of economic activity is relentless changing, and it is, there’s no way for educators to teach skills for a future that they haven’t a clue about. See the previous paragraph again.  

It’s a reminder that the work of the future is all about surprise, and certainly not surprise that those predicting the future of income have any knowledge of. To be clear, the lockdowns were terribly wrongheaded. So was the closing of schools. Let’s not compound what’s foolish by presuming an income connection.   

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, a senior fellow at the Market Institute, and a senior economic adviser to Applied Finance Advisors (www.appliedfinance.com). His latest book is "The Money Confusion: How Illiteracy About Currencies and Inflation Sets the Stage For the Crypto Revolution."