The sudden and rapid implosion of the global economy has disarmed Big Government’s and Big Business’ ability to react and adapt. Even the most credible governments are struggling with containing the social and economic chaos. Most ominously under the present-day unprecedented dysfunctional American leadership at all levels distracted by the presidential elections weeks away, neither political party is able to halt the socio-economic freefall.
Homelessness is Helplessness
The exploding homelessness continues unabated sweeping up those citizens who earlier in 2020 earned a decent living wage. The following chart is entitled The US Cities with the Most Homeless People compiled by US Department of Housing and Urban Development and presented by Statista, an online statistical firm. It captures America’s disturbing rises homelessness through 2019 (pre-pandemic) in ten cities, 6 of which are in California which grew 16.4% between 2018 and 2019.
Below are additional figures indicated in the report whose particulars can be accessed through the aforementioned link:
· Of the 567,715 homeless nationwide only 63 percent live in sheltered accommodations.
· Half the homeless are in the country’s 50 biggest cities.
· About 25% of the nation’s homeless population live in two cities: New York and Los Angeles.
· Despite New York City’s large homeless population, most have sheltered accommodation with only 4.4% living on the streets vs about 72% who are unsheltered in California.
The Emergence of the American Favela
The projected surge in homelessness whose new “members” will be the newly permanently unemployed from the lower and middle classes and non-violent criminals released to minimize Covid-19 spreading in prisons millions of American are at risk to living in a Brazilian-inspired favela-like environment. The trend points to squatters taking over and occupying the oversupply of luxury residences and empty office buildings converting them into high-rise vertical slums.
The de-gentrification process begins with ever enlarging encampments. They become shantytowns and finally American-version of favelas replete with a self-governing albeit violent power-sharing arrangements with local warlords. As long as the crime and violence are self-contained, law enforcement will let them be.
It will be politically and operationally more difficult to remove the homeless squatters because unlike the neighborhood-specific police raids such as on the East Village squatters in the late 1980s, gentrification sprouted in many neighborhoods in each city.
Soylent Green Level Food Insecurity & Riots
According to the New York Food 20/20 report, “Even before the pandemic, more than 11 percent of Americans endured food insecurity. California and New York accounted for the greatest number of homeless individuals in the country, at 22 percent and 16 percent respectively. In New York City, 40 percent of residents there—or 2.5 million people—lacked “self-sufficiency,” or the ability to cover basic necessities including food, housing, healthcare, and childcare.”
Furthermore the report added in the section entitled “Diet Quality Covid-19 influenced the Healthfulness and Affordability of New Yorkers’ Diets” (pages 46-47) emphasized that diet related diseases such as adult obesity (25%), diabetes (10%) and hypertension (29%) make residents more susceptible to Covid-19. The diet-related health risks are far more onerous for the lower- socio-economic residents who are mostly Black and Latino.
The food banks’ largest expense is nutritious food particularly fruit & vegetables that offset the poor yet only affordable diets of many residents who don’t have health insurance.
Underscoring this dilemma according to The Gothamist article 27 September 2020 entitled “More Than 6 Months After the Pandemic Hit, Flushing’s Largest Pantry Still Overwhelmed By Demand”, Pedro Rodriquez, executive director of La Jornada food bank in Queens explained that gentrification is one of the causes creating food insecurity through unaffordability. For example the cost of food in a gentrified neighborhood could be 25%-50% higher than in a nearby non-gentrified neighbor which puts extreme financial pressure on senior citizens, low income residents including undocumented residents.
With demand outstripping supply, mostly due to logistical shortcomings not actual available supply of food, it’s conceivable that we can have nationwide food riots as depicted in the classic movie Soylent Green (1973) which at the time it was filmed seemed like a ludicrous futuristic fantasy given that America was (and still is) the world’s breadbasket. Future fine dining for millions of Americans may look like the “luxurious” dining scene between Charlton Heston and Edward G. Robinson in the aforementioned movie.
The Mad Max Lifestyle
It may be a macabre projection however the present-day trends in homelessness and food insecurity are leading to a dystopic landscape this fall through next spring as millions of Americans lose their shelter and have no money or access to food. For this reason a new criminal “industry” might emerge to fulfill this need.
Every supply chain is as strong as its weakest link. With respect to food distribution it’s the transition between the source (storage facility) and the end points (supermarkets and bodegas).
In bold Mad Max inspired style product-laden food trucks are hijacked, are driven to a location where smaller trucks await for loading and eventual sale on the black market.
The other more complicated yet potentially more lucrative option is stealing empty 18-wheelers. With impeccable Ocean’s 11 precision the hijackers meet their colleagues at a cold storage facility whose security has been breached resulting in a massive yet rapid loading of foodstuffs. From there they drive to a third location where a convoy of smaller vehicles are loaded for future black markets sales.
A less complicated method is small organized groups who food-jack customers overflowing with prepper foods in the parking lots of supermarkets or super-stores like Costco. They can also follow the customers to their residence for immediate or future home invasions knowing they have the financial resources to buy food.
Economic Restoration is the Vaccine
Only a powerful economic restoration can reverse these ominous trends that will play out locally, regionally and nationally. The first stage is psychological, the distribution of a reasonable safe Covid-19 that will provide hope that a certain level of normalcy can be achieved which I project occurring in the spring 2021.
The second stage is ironically far more difficult because the economic timetable is far more challenging than the development of a vaccine. A credible, new leadership can provide a psychological buffer and a foundation for socio-economic stability and growth.
Copyright 2020 Indo-Brazilian Associates LLC
Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.