Most dangerous risk usually unexpected

David MoonBlog

I don’t know what should worry you most as we enter 2024, but I suspect that for most people, it’s not the thing that most worries them.

I conducted an incredibly non-scientific survey of a couple hundred friends, asking them what three things worry them most about 2024. Although I was hoping for non-political responses, I intentionally included a couple of quasi-socialist University of Tennessee professors and local attorney/political commentator Don Bosch to balance my predictable circle of east Tennessee conservatives.

The answers almost all fell into one of four general categories: the economy, politics, healthcare or a general decay of social norms.

In his recent book “Same as Ever: A Guide to What Never Changes,” Morgan Housel writes of a 1930 poll conducted by members of the National Economic League about what they considered to be the biggest problems of the United States. This poll was conducted less than two months following the stock market crash of 1929, after what we now know was the start of the Great Depression. The top four concerns among the nation’s economic experts were prohibition, world peace, criminal justice, and (just as in my little survey) a general decay of social norms.

What would prove to be the most damaging risk in 1930 – unemployment – was only number 18 on the list. The unemployment rate would triple to 9% in 1930 and eventually peak at 24% in 1933.

Almost always, the thing that poses the most actual danger is something that seems to come out of nowhere. And too often, we focus our attention and energy on something that has already happened, missing an opportunity to avoid or diminish the next crisis. In 2009, the lending and residential development industries underwent a dramatic transformation, aimed at preventing another crisis of mortgage default. Mission accomplished. But in so doing, they created a problem that few people would have anticipated: a massive housing shortage.

In my poll about risks in 2024, the two most common economic concerns mentioned were inflation and interest rates. Yet inflation is currently 3.2%, down from a peak of 9% in June 2022, and the Fed just signaled a series of coming rate cuts. I don’t know what the most damaging economic issues of 2024 will be, but it almost certainly won’t be higher inflation or interest rates.

The other 3 general categories of concern in my survey – politics, healthcare and a concern about decaying social norms – are likely to continue to be areas of general dysfunction, to no one’s surprise. But whatever the real risk is in 2024, it will almost certainly be something that is not widely anticipated

David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.