One of the things that scares the middle class today is getting their jobs automated by technology. The pace of technology is moving so fast, it’s scaring the bejeezus out of people.
I share this story because yesterday a person said they would like to hear more stories like this from people that have been through it. I am not all the way through but I see light at the end of the tunnel.
Robots, Artificial Intelligence (AI), Algorithms, Software and new hardware are displacing thousands. One push back has been a call from the left wing for Basic Income which I am against. I am for establishing the ethos of the same policy in a different way. Earned Income Tax Credit (EITC) is a far better designed incentive.
Politicians are selling a new brand of fear this election cycle. The truth is, having a well designed immigration policy and well designed trade policies are good for all Americans.The smarter politicians in this election cycle have latched onto this fear in different ways. Socialist Bernie Sanders and Crony Capitalist Hillary Clinton promise more free stuff. Donald Trump talks about isolationism. Walls and busted trade deals are ways to graphically think about isolationism.
Neither of these approaches will work in the long run.
If you are a factory worker or someone like that who has lost their job to outsourcing or to a machine/software, what do you do? It feels like the end of the world.
The elites will say “learn to code”, “get a degree”. It’s easy to say when you are sipping tea in your salon. Learning to code isn’t probable. Getting an advanced degree isn’t a possibility. Ditch digging isn’t either.
Many are like me, in middle age. The lesson for the factory worker is do something-anything. Move to a different part of the country where there is opportunity. That’s what people did in the 1930’s and 40’s. You have to make some breathing room for yourself. Drive for Uber and go back to a Junior College and teach yourself a new vocation. The ability to change comes from an internal fire within-not from people exhorting you to do it.
You can’t sit still. This is why I love companies like Dabble. They give people a way to make some income and generate hope. With consistently anemic GDP in the US caused by really bad economic policy, we could all use a little hope. The idiots at the Fed and White House aren’t going to change.
I understand the fear that people feel when they think about losing their jobs. I lost mine to algorithms. To make a long story short, I was part of a group at CME that saw the world changing around 1995. In 1998, our memberships went from $1M in value to $280k. A small membership was $400k and went to $115K. I bought one because I thought they were cheap and was confident our path was the right one. The day I bought, a friend of mine had sold his. I could hear the fear in his voice, and could feel the panic in my bones.
At that time, CME had virtually no electronic way to trade-it was all open outcry. The Emini started in late 1997, and it was pretty unreliable. GLOBEX was processing 27 trades per second. Well respected smart prognosticators were predicting the exchange would be out of business within a couple of years. At this time I was 36 years old. I am 54 this year.
It took several years of infighting, and it took a few years of restructuring and CME switched from an open outcry private mutual institution to a fully electronic public institution.
For me, it meant not being able to have access to order flow. From 1988-2002, every day when I woke up in the morning I felt reasonably certain that I could make $1000 or more depending on how much risk appetite I had or how the market traded. Even if I was wrong, I could cover the trade fast enough to do little damage. I never traded anyone else’s money. It was all mine. I never had partners or employees. It was all me. People had been doing what I was doing since 1848.
When the market went electronic, instead of making $1000 or more a day. I was losing it, plus commission. At the same time, the 2008 crash happened and every asset I had dropped in value by 2/3rds, or more. CME stock went from a high of $714, to $155. Seats plummeted in value. Neither have recovered.
I had no way to make a living, bills to pay, and 50 years left to live. Everything I worked for my entire life was almost gone. Virtually no one would (or will) hire me. Talk about feeling 1 million percent alone.
I felt a lot of anger. The way I had viewed the future had not turned out exactly how I thought it would. No one in my network would/could help me because they were all floundering themselves. Mentally imagine 10000 fish poured out on a boat deck flopping around gasping for air.
I saw exchanges sell co-location out and got even angrier since I used to have that advantage in open outcry. The playing field was deliberately stacked against me.
I had a gigantic problem because not only did I have family expenses (college and living) but I was also LOSING money every time I turned on a computer and tried to trade. My life was a double drain. Talk about fear.
I reached out for help from people that I thought might help-and no one really did-and some screwed me over. That brought more anger. Sharks sense fear and the prey on you. Others steal your ideas and take it all for themselves. People abandon you.
Anger is a human emotion and you have to give yourself permission to be angry-but you have to get over it. I can still boil up some anger when I want-but it’s better to take a clear eyed view of the world.
I was mentally frozen. I was physically frozen.
It has taken around 7 years of intense soul searching to get to where I am today. Iyengar yoga helps and having a pretty amazing wife helps a lot. A lot of people I know got divorced. Some killed themselves. I read a book by Parker Palmer (recommended by Jerry Colonna) that is pretty interesting.
In 2003, I could foresee the world changing for me. I was a pretty good futures trader and could make educated bets on the future! The Eurodollars flipped electronic that year and I started trading Hogs. 2003 was the first year I ever lost money trading. That was disheartening, but I knew how to comeback from losses. I am very competitive and know how to win.
In 2005, I went back and got my MBA at Chicago Booth. I started Hyde Park Angels in 2007 with the idea of doing a seed stage venture fund. I continue to work toward that goal. Turns out, Chicago was a totally underserved and ripe market for that to happen. You should see some of the incredible shit I saw yesterday at the University of Illinois.
The bottom really dropped out of my life in 2009. Hogs went electronic. One day I walked on the floor and was up $150,000 on a trade. By the time I got out, I had lost $125,000. I was paralyzed by fear. Depression, yup I know it. Being vulnerable-not feeling confident, feeling like the end of the world is nigh, I know it. I have been right there in the trenches with anyone that has lost their purpose in life.
Doing what I did, and being an early stage entrepreneur is very very similar mentally and emotionally. The important thing to remember is this condition isn’t permanent. But, only you can get yourself out.