Can Andrew Yang Save The Malls of America?
I don't know much about JCPenney at all since I don't shop there. Nonetheless, I couldn't help but want to talk about it a bit. Recently, we have seen how Sears is struggling with its own survival, and so it is not a surprise for us to see JCPenney may fall into this same situation as Sears. Basically, if JCPenney isn't able to modernize its own business model to fight against online giants like Amazon, JCPenney may as well eventually be just a memory.
I look at JCPenney's stock today and I'm seeing it's being listed at around $1.28 a share. This used to be $80 stock back in 1999 and in 2006. So, the question is, what has changed?
Has JCPenney fallen victim to online giants like Amazon? I partly think so but not really 100% convinced that it is 100% the fault of online giants. If you take a look at Walmart, it doesn't have to beat Amazon on the online platform to stay profitable! So, why do Sears and JCPenney look so outdated?
I notice Kohls has done a very good job through its online platform, and so I think JCPenney could learn a thing or two from Kohls. Then again, Walmart still does rather well with its traditional bricks and mortar stores. So, perhaps it's the combination of well-managed both offline and online that could save brands like JCPenney?
Then we also have to look at the bigger picture such as why people don't go to the mall as often as before! Sure, we can say it's the online giants that kill off the malls! Nonetheless, the malls do have benefits such as entertainment and so forth. I notice in other countries such as China, the malls are still very vibrant! Furthermore, the Chinese do buy stuff through online platforms a lot. So, why malls in China are vibrant still?
I guess, if the malls are vibrant, stores like JCPenney and Sears could survive since they locate inside most malls! Nonetheless, as malls are closing down or getting empty, I don't see how JCPenney and Sears, and so forth could stay profitable when customers don't even show up!
Here is the shot in the dark part! Could it be that our economy is doing poorly, people are no longer having a job for life but a job for a gig, and they shop online more -- all of these factors come together to form a perfect storm that is killing off malls across America? The bigger issue is of course why are people no longer able to have a job that they could work without worrying about being replaced by automation? Yes, automation is going to replace more people from their jobs!
Andrew Yang, 2020 presidential candidate for the Democrats, suggests that soon truck drivers, cashiers, burger flippers, lawyers, call center operators, and a lot more will be replaced by AI and automation. Sure, things don't look dramatic now since your neighbor may still have a normal job. Nonetheless, if the trucking business could save $160 billion of dollars per year by just automating the trucks and getting rid of all of the truck drivers, why do you think this is not a good idea for them to do so? Perhaps, even Lyft and Uber drivers in the future will be replaced by self-driving, smart AI cars too!
So, if it's true that machines and software will eventually kill more jobs, then people will, of course, have less money to spend at shopping centers and malls. Do you think this will affect online platforms eventually? To me, it's common sense that online platforms will also be affected by a poorer economy! Nonetheless, online platforms like Amazon could survive better since they got convenience on their side. For example, frequent sales are just a few clicks away!
Sure, we can say that we like to blame the economy for our problems, but the truth is that the advance in technology and the convenience of shopping through online platforms have created a formula in which we are now seeing the decay of our economy. So, if we have a poorer economy, how can we not blame it on the problems that we see, right?
Andrew Yang suggests that through the "Freedom Dividend" the government can help prepare the economy for a soft landing when the advance of AI and automation gets worse in the coming years. Of course, you can go on YouTube to watch his videos and see a fuller explanation of his Universal Basic Income "Freedom Dividend" idea. Here, my shot in the dark is that I think even outdated stores like JCPenney could survive in a good economy! Perhaps, "Freedom Dividend" may offer people more options so they could wander their way into one of the JCPenney stores!
Andrew Yang said that "Freedom Dividend" will not be able to solve the bigger issues that AI and automation spring forth. So, he also suggests in addition to "Freedom Dividend," he also wants to see Medicare for all. Furthermore, he wants to abolish the usage of GDP as a measuring stick for how healthy an economy is. Instead, he wants to create a better measuring stick for the economy which measures environment sustainability, nutrition health of children, and so forth to capitalize on human well-being instead of capitalizing the market caps, stock prices, and so forth. He thinks as AI and automation spring forth, the GDP number could go to the moon but more people will get fired from their jobs. Think about this, machines produce more things that will be counted toward the GDP number but humans are not going to be able to participate in producing this number!
In summary, can Andrew Yang save the malls of America? If he can save the malls of America, this means he can save JCPenney and Sears and eventually the economy itself! Can his idea of a "Freedom Dividend" provide a soft landing for the future economy where humans won't be able to participate in producing things that can be counted as a contribution toward the GDP number? I'm very curious about all of this!