“Empty lake, empty streets, the sun goes down alone. I’m driving by your house, though I know, you’re not home”
Don Henley- “Boys of Summer”
This is what comes to mind when I think back to last week. Driving into work and back each day. The highways, streets and stores are empty.
The machine is shutting down. Not unlike my $2000 lawnmower in my garage that died last year when no one remembered to make sure it had oil. (not my fault) It only took the neglect of 1 item, 1 ingredient, 1 piece in an extremely complex machine, with 1000’s of parts to kill it and reduce it to scrap. When it ran it was worth $2,000. I have it listed on Craigslist for $250. Wright stander not running – $250 (Upton) I’ll take $200 and I’ll be lucky to get that. A 90% reduction in value and 100% reduction in output because “somebody” wasn’t watching the dipstick.
Our economic machine is like my lawnmower. I would not consider it fragile, but rather durable and up until last year, reliable. Ignore the dipstick though and it literally grinds to a halt.
As a country we will be facing the same economic consequences for similar neglect. Someone was supposed to be watching for COVID-19 or something like it and have a plan. Someone was supposed to have a quart of oil on the shelf in the garage.
So here we are. The machine, the United States economic machine is shutting down. Many parts have already died and no stimulus, or $1200 checks or, 6 months of unemployment benefits, or paid sick leave or QE is going to fix this. The fed is loaning $1 trillion dollars a day to large banks and the machine is still not running. Remember that the entire GDP of the United States is around $22 trillion per year.
Turn off the news and go take a drive around your city or town and ask yourself how does Main Street survive this? Let me save you some time. It won’t. Main Street is dead and it will not survive. Starve an engine of oil and seizes, starve a business of revenue large or small, for an extended period of time and it too will seize. Businesses will not return and nor will the jobs. Do you know how many cups of frozen yogurt you have to sell just to break even? We are talking 4th grade economics here.
Pop Quiz Time– The stock market is down 30 plus percent, business are shutting down and what is the 1 Blue Chip stock that as of Wed 3/17/20 is still up for the year?
Amazon is close to getting back it’s losses and these two Main Street killers will deliver their final death blow now. The blitzkrieg on brick and mortar, on small business and mom and pop. Even businesses that don’t compete with these giants will die from the surrounding fallout.
The government will keep printing our money at breakneck speed (remember the government does not own anything it can only generate revenue through taxes) and keep the broken engine on life support, but it will not work.
In 2 years the next president might put an ad on craigslist.
Dinner at your house is gonna be a downer, Dish, but it’s hard to disagree with your premise. Our one hope is that a vaccine will be developed quickly and social distancing will put enough of a dent in this thing, to get us back to work in a month to 6 weeks, rather than 6 months.