Taking it on the chin…

A few months ago I, somewhat tongue in cheek, told a coworker the best thing that could happen for my hopes of eventual retirement would be a few years of a bear market to suppress prices and let me “back up the truck” to buy shares at deep discount prices. As long as I can keep working and manage not to drop dead of the Andromeda Strain or whatever the appropriate name for this bug is, I suppose I’m technically not wrong… but boy is it a great big case of be careful what you fucking ask for.

The US economy is currently suffering through a system-level shock the likes of which almost no one alive has personally experienced. For those of us above a certain age, the closest we’ve come is listening to grandparents or family elders tell their stories – and wonder uncomprehending about why all those years later they still saved their soap slivers in a mason jar or insisted on getting three cups of tea out of each bag.

I like to think this isn’t the start of Great Depression 2.0. The fact that the economy was roaring along at breakneck speeds just a couple of weeks ago gives me enormous faith that it can be resuscitated… eventually. Once they’ve exhausted all other options, Congress will push through bailout plans to pour trillions of dollars through the front door of the Treasury. The Federal Reserve has committed to buying government debt with reckless abandon.

Even with herculean efforts, a host of businesses will fail. No economic recover package ever passed through government can prevent that. Cash flow is the life’s blood of business and with that flow stopped, even temporarily, many won’t have the deep reserves it will take to emerge once we’ve arrived at the new normal. The best we can manage in the moment is likely following a “harm reduction” strategy – of propping up what we can and finding as soft a landing as possible for those in the workforce who are displaced.

It seems that President Trump is determined to take a short cut through the amount of time science says we need to keep the clamps on the economy. That’s a foolish and stupid take, but in some ways, I can understand the instinct. Even those who get through the pandemic with little or no ill effects will feel the unnatural consequences of an economy gone to hell in a handbag.

There’s a point where declaring business as usual will make sense. I don’t think that’s this week. I don’t think it will be next week. If you believe science, and you should, it’s not even likely to be in the next month.

As you know, I despise the media obsession with calling this the “war against COVID-19.” Even so, I take a degree of comfort in knowing that historically, the United States almost always loses the first battle of every war we’ve ever been in. We take a punch right to the chin, get knocked down, and then get up off the ground angry and looking for payback.

Today we’re still on the ground, but we’re going to get up, and when we do, we’re going to be collectively pissed the hell off and ready to do what needs to be done.

Election 2011…

As you know from time to time I like to look at the searches and keywords that bring people to my humble home on the internet. OK, so technically I obsess over that kind of thing on a pretty much daily basis, but that’s beside the point. I was looking at my analytics this morning (yes, I check every morning before I go to work, now stop smirking). I think yesterday gave me my new all-time favorite search term: did jeffery tharp win the election-2011. For some reason, this blog returns to top two spots on Google for that group of words all crammed together in the search box. Other than that, there’s not much record of Jeffrey Tharp running for anything in 2011, except a dead link to a local news program in Indianapolis.

If I did run for election in 2011, there’s almost no chance that I would have won. Setting aside the whole telegenics issue for the moment, it’s way too likely that at some point during the campaign I would come unglued and tell some well-meaning, but stupid constituent that they were simply too dumb to vote. I’d have been overcome by compulsive honesty and told a group of concerned citizens that the worst possible thing the government could do for them was try to create jobs out of thin air and deficit spending. I wouldn’t have kissed babies or pandered to old people and I’d have walked off stage at the debate when someone tried to drag religion into the discussion, because believing in Jesus or Jehova or Vishnu or the Supreme Order of Jedi Knights makes you any better at administering the levers of government than the guy next to you who believes in something else.

I wouldn’t have made campaign promises I knew I couldn’t keep. Nope. I’m not going to lower your taxes. We have bills to pay. And no, I’m not going to increase your benefits, because guess what, we have bills to pay. We got twenty years of good times and now we’re getting the lean. That’s how the economy works, people. It’s a cycle. 10 years from now when we’re somewhere north of Dow 20,000 you’re going to forget all about The Great Recession. If four cable news networks weren’t cramming the economy down your throat and telling you how bad it is out there every night, would you know there was a problem? I sure wouldn’t judging only by the number of cars parked at the local shopping mall or the number of flat screen TVs rolling out the door at Best Buy.

That’s my long way of saying that I don’t think there’s much of a chance a guy named Jeffrey Tharp got elected in 2011… But if he did, I hope he’s got the guts to call it the way he sees it and not the way that’s going to make a great quote for the local newspaper.

New Deal Revisited…

A member of Congress with a famous family name is proposing a simple solution to the bringing down the unemployment rate: Put approximately 15 million people on the federal payroll with a $40,000 a year salary. The proposal would revive concepts that saw a Civilian Conservation Corps plant trees, build dams, and forge roads and a Works Progress Administration that built airports and paid authors and photographers to ply their trade on behalf of the US Government. As fanatical as I am about the proper role of government, even I have to admit that the CCC and WPA probably represent the best instincts of government. Maybe I have a soft spot for the concept because I grew up swimming and camping at a place built by the CCC in the late 30s. Say what you will about it having been a “make work” project, but their efforts have held up pretty well under 80 years of continual use.

Maybe more importantly, the CCC and WPA made constructive work part of the requirement to receive federal assistance. In the 30s, your options were pretty much work or starve. I wonder, though, if those concepts would still hold up. How many people receiving federal assistance would be willing to go to work camps in the wilderness, to sweep their cities streets, or to lift a hand to earn what we now think of as entitlements? As a result of their experiences during the Depression, my grandfather saved soap slivers that he eventually pressed together into a new bar and my grandmother used the same teabag for cup after cup of tea despite the need for them to do these things being long past. When’s the last time any of us even thought about doing something like that?

I never in my life thought I could be convinced to line up with Representative Jesse Jackson Jr on an issue, but I think this one at least has academic merit. I don’t necessarily agree with all his reasoning or the total numbers he’s talking about, but I have to admit I really like the concept. Let’s face it, we’re going to pay unemployment, welfare, and a raft of other “entitlements” anyway, so why not make productivity a requirement for receiving unemployment and other funds from the government?

This is probably the point where someone is going to come to my door to collect my Republican Party membership card.

The “R” Word…

I’ve been watching this on the news for the last several weeks and think we need to clarify the fact that there is a definition to what a recession is and is not. By definition, a recession is 2 consecutive quarters of negative growth in gross domestic product (GDP). This week’s report shows growth for the first quarter at .6%. That’s GROWTH (i.e. GDP increased). If you’re a talking head and go on television talking about the current recession when the last two quarters show economic growth, you look like an idiot. Suck it up and face that fact that the American economy is simply robust enough to endure the “shock” of high oil prices, the collapse of the housing bubble, and increasing prices on commodity and manufactured goods while continuing to grow. Stop looking like an idiot. That is all.