{"id":158104,"date":"2023-09-11T14:34:45","date_gmt":"2023-09-11T20:34:45","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=158104"},"modified":"2023-09-11T14:34:45","modified_gmt":"2023-09-11T20:34:45","slug":"introduction-to-the-great-update","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/introduction-to-the-great-update","title":{"rendered":"The Great Update: A Changing Economic Order"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">If your cell phone is like mine, it wants to update itself seemingly every other week. And if the notifications are to be believed, it is critically important to your well-being that it be updated immediately. Or it\u2019s critically important to your phone\u2019s well-being. Or something. It\u2019s not exactly clear.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">My tendency is to ignore the notifications for a number of days until it issues me a sort of ultimatum, minus Liam Neeson\u2019s calm yet foreboding tone: \u201cWe will update you whenever we want, unless you do it right now.\u201d&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Ugh. Right in the middle of an office meeting.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If \u201cBig Update\u201d was ever an interest group, I have to assume this is how they\u2019d behave. Defeated, I permit the update.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">I&#8217;m not entirely sure what changed from system 6.2.1b to 6.2.1c, but I have a hard time imagining it was terribly important.<\/span><\/p>\n\n\n\n\n\n\n  <div class=\"lg:block\" x-data=\"{ ad_block_block_64ff7918c15e9: popAds(1) }\">\n      <template x-for=\"ad in ad_block_block_64ff7918c15e9\">\n        <a\n          :href=\"ad.linkURL\"\n          class=\"no-underline text-black\"\n          x-on:click=\"adClicked('https:\/\/www.biggerpockets.com\/blog\/introduction-to-the-great-update', ad.sponsor, ad.title, ad.id, 'blockAdClicked', 'blockAd', '')\"\n          target=\"_blank\">\n          <div\n            class=\"py-4 border-b flex flex-col flex-nowrap text-sm border-t px-0 rounded-none\"\n            x-init=\"\n              analytics.track('blockAdLoaded', {\n                referrer: 'https:\/\/www.biggerpockets.com\/blog\/introduction-to-the-great-update',\n                sponsor: ad.sponsor,\n                ad_title: ad.title,\n                ad_page_location: ''\n              })\n            \"\n            x-intersect:enter.once=\"adViewed('https:\/\/www.biggerpockets.com\/blog\/introduction-to-the-great-update', ad.sponsor, ad.title, ad.id, 'blockAdViewed', 'blockAd', '')\">\n            <div><span class=\"text-xs text-slate-light block bg-slate-50 p-1 inline-block rounded-md\">Sponsored<\/span><\/div>\n            <div class=\"flex items-center text-sm space-x-4\">\n                <img :src=\"ad.imageURL\" :alt=\"ad.imageAlt\" class=\"h-10 w-10 object-cover rounded-full\">\n\n                <div clas=\"text-sm\">\n                    <span class=\"font-bold block\" x-text=\"ad.sponsor\"><\/span>\n                    <span class=\"text-slate\/80\" x-text=\"ad.description\"><\/span>\n                <\/div>\n            <\/div>\n\n            <div>\n                <span class=\"font-bold\" x-text=\"ad.title\"><\/span>\n                <p class=\"mt-2 text-slate\/80\" x-text=\"ad.body\"><\/p>\n                <span class=\"mt-2 text-themeBlue block mt-2 underline\" x-text=\"ad.linkTitle\"><\/span>\n            <\/div>\n          <\/div>\n        <\/a>\n      <\/template>\n  <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Operating Systems of the World<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Civilizations have operating systems as well. Institutions, laws, and cultural mores change over time. Robust operating systems feature built-in mechanisms to audit and edit themselves as needed. Changes take place, usually slowly, sometimes rapidly.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The last time we experienced a period of rapid updates was nearly 100 years ago. Today, we are going to take a look at that update\u2014specifically, in terms of the economy.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The 1930s. The Great Depression. The nation went from a euphoric stock market run to 25% unemployment in a few short years. As you can imagine, the superlative concern for policymakers (and the dismal economists who informed them) was ensuring that unemployment could be managed down to as low a level as possible. Economic theory of the time focused on the intersection of production factors (predominantly labor and capital) yielding an economy&#8217;s maximum possible productivity.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">He was younger than his contemporaries, but <a href=\"https:\/\/en.wikipedia.org\/wiki\/John_Maynard_Keynes\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/en.wikipedia.org\/wiki\/John_Maynard_Keynes\" rel=\"noreferrer noopener\">John Maynard Keynes<\/a> was widely acknowledged as the most clairvoyant and savvy economic theorist of the era. His groundbreaking idea? Government should accrue tax revenues during times of economic growth and then increase spending,\u00a0<\/span><em><span data-preserver-spaces=\"true\">specifically<\/span><\/em><span data-preserver-spaces=\"true\">\u00a0in times of economic recession\u2014the idea here being that the government would be accumulating a surplus during good times. Then, in times of economic downturn, the government would draw from this surplus to increase its spending.\u00a0\u00a0<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This would have a stimulative effect on the economy at the time when it would be most needed. It would also function as a natural stabilizer, meaning lower highs but higher lows. At the end of the day, that\u2019s what consumers and businesses both want most anyway: stability.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Nowadays, that seems kind of obvious, but it was a major update for its time. For instance, consider the <a href=\"https:\/\/css.umich.edu\/publications\/factsheets\/built-environment\/us-cities-factsheet\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/css.umich.edu\/publications\/factsheets\/built-environment\/us-cities-factsheet\" rel=\"noreferrer noopener\">unprecedented proportion of the U.S. population that now lives in urban areas<\/a>. In 1820, less than 10% of the United States lived in an urban area. By 1920, just over 50% did. Our livelihoods were a function of harvest seasons for 99% of human history. Today, we live for manufacturing demand.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The industrialization of the West enabled the surpluses of productivity that would lead to greater cyclical boom and bust. The basis for our economic thought is armies of laborers filling multiplexes of factory buildings. Keynes&#8217;s beliefs have been accepted in economic scholarship as the &#8220;orthodoxy,&#8221; with subscription to alternative schools of thought described as &#8220;heterodox.&#8221;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">And this would be fine, except for the fact that today&#8217;s Keynesian orthodoxy does not apply to the 21st-century American economy. Indeed, while manufacturing was the primary driver of the economy 100 years ago, we&#8217;ve spent the entire postwar period&nbsp;<\/span><em><span data-preserver-spaces=\"true\">de<\/span><\/em><span data-preserver-spaces=\"true\">-industrializing. Today, almost three-quarters of the labor force works in the services sector, with about 15% still working in manufacturing.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">So, when unemployment numbers are down around all-time lows, but consumers appear not to be benefiting from this circumstance, we have to check to see if there are any updates available for our understanding of this issue. That\u2019ll be a topic for another day.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">A Note to Our Readers<\/span><\/h2>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Thank you for reading this first article in The Great Update Series by contributor Dan DiFilippo. Dan feels strongly that institutional and cultural biases have obfuscated our understanding of the changing world, especially in terms of finance and economics. Read along as he delves into an array of subjects that may require a new perspective, including real estate, macroeconomics, domestic politics, geopolitics, demographics, culture, technology, entrepreneurship, and more. Comment below if you have a topic in need of a new perspective that you\u2019d like him to cover.<\/span><\/em><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_461c41329d28708433b8cbbdacd333ee\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_a299544b76dc42f685607a81d21319bd\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-gold-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get the Best Loan Today<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Find trusted, <em><strong>investor-friendly<\/strong><\/em> lenders who specialize in your strategy. <\/p>\n\n\n\n<p><\/p>\n\n\n\n<div id=button-custom-event-block_e70a01caae2fb98e883befe139872dad class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/business\/finder\/lenders\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Lender Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/introduction-to-the-great-update&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Find a Lender<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Marketplace-Blog-Blocks-Lender-v3.png\" alt=\"investor friendly lender, investor friendly real estate loans\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/introduction-to-the-great-update&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The world is changing fast. Real estate investors need to find ways to keep up with the ever-increasing pace of technology, economic change, and societal structuring. Here&#8217;s an introduction to the Great Update.<\/p>\n","protected":false},"author":613695,"featured_media":158108,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4433],"tags":[],"class_list":["post-158104","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/158104","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613695"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=158104"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/158104\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/158108"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=158104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=158104"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=158104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}