15 May 2020 The Brief – Then and Now
Way back in June of 2001 I introduced Beacon’s first Friday Brief. Its purpose was to communicate, educate, and occasionally console as in a one-on-one conversation. On that inaugural day, there was a lot of worry and deep concern about our country, our safety and our personal finances. But there were not enough hours in the day to talk to each one of my clients as often as many needed and deserved. Out of that need came the Friday Brief.
In June of 2001 our economy was in recession, brought on by Fed tightening to reign in what then Fed chairman Alan Greenspan termed ‘irrational exuberance’ fueled by dot com and Y2K technology booms, their subsequent crash and the terrorist attacks of 9/11. The technology sector as measured by the NASDAQ index lost 70% of its value and took 15 years to regain those valuations. Unemployment peaked at 6.3%. The recession of 2001 proved to be a relatively short and shallow one.
Today, we are in what promises to be the deepest recession in our lifetimes. In the first quarter, gross domestic product (GDP) shrank 4.8% with 36.5 million people out of work. The unemployment rate currently stands at 14.7% and is likely closer to 20%, when those ‘temporarily unemployed are counted. It is the worst unemployment situation since the Great Depression. Some 40% of workers who make under $40,000 a year are unemployed in this pandemic, disproportionately impacting some of our most vulnerable.
Back in 2001 the talk was about a ‘Y2K’ bug – a name given to the fear that mission-critical mainframe computers and servers would crash, bringing our technology-dependent economy to its knees one second after midnight of 12/31/1999. It was feared that older computers, designed with two digits to express date years rather than four, would flip back to 1901 rather than 2001, causing most of the world’s population to be ‘unborn,’ stoplights, electric grids, nuclear plants, air traffic controllers, missile silos to go haywire, all with unpredictable bedlam, chaos and disruption.
Despite all the hype and worry, most of our nation partied like it was 1999 on that fateful eve, watched the ball drop and woke up on 1/1/2000 to be greeted by nothing more than millennium-sized headache. Clocks and mobile phones reported the correct time and date, coffee makers steamed their morning brews, TVs came on with New Year’s Day parades and footballs were kicked off on schedule all across this great nation.
Today’s bug is a completely different demon than the Y2K bug. Covid 19 physically attacks us, not our technology. Y2K was over in a second, just one tick into the New Year. We have no idea when the war with Covid 19 will be over.
The terrorist attacks of 9/11 were physical and emotional, like Covid 19, but in 2001 we united as a people against an unprecedented and emboldened enemy in terrorism. Today, we are divided on every front against this enemy – whether mask-wearing, working/re-opening, sheltering in place, testing, PPE’s – all have become political banners or weapons to cut us apart.
Bipartisanship on the Hill was relatively easy when everybody was ready to spend money for the purpose of helping those damaged through no fault of their own with multi-trillion-dollar relief measures, but the latest 1,800 page campaign platform from the House of Representatives compromises any unity that remains. And the Fourth Estate (the media) seem fully on the side of ‘science’ and the doctors, while demonizing the Trump Administration, serving to further divide us in this ongoing war.
The original deal was to ‘flatten the curve’ of the virus – to reduce the numbers of infected people so hospitals would not be overwhelmed. We’ve largely accomplished that, but many policy makers and media outlets continue to move the goalposts, decrying safety first, but at what cost to economy and to livelihoods? We’ve moved from PPE’s, to ventilators, to testing, and more recently a growing number advocate for vaccines for all before reopening.
Whether these positions are based on concerns for safety, ignorance or indifference as to how the economy works, or worse, for political gains, voters will decide leaders’ fates in November. For now, we each must make the best personal decisions we can with clear minds, bias-free information, and with as much concern for others as possible.
It was said in the early days of this pandemic, when we were expecting only a few weeks of voluntary pause, that the economic and market recovery would resemble a ‘V’ – a quick drop followed by a quick recovery. As the shutdown continued, the picture looked more like a ‘U.’ Today, we are probably looking at something more like a ‘W’ but the right upstroke flattened substantially. The recovery is likely to be more labored with more negative surprises than earlier hoped because of the fast-rising number of businesses closing for good each day the shutdown continues.
Covid 19 is a battle fought on many battlefields including; international, national, governmental, institutional, business, family and personal. But the battlefield each of us should be most concerned with is the one between our ears. How we fight this enemy and ultimately declare victory will have an enduring emotional and economic impact on our lives; our well-being, our faith, our relationships, our ideas, our goals and values, and our jobs. No aspect of our lives has escaped the impact of this plague for better or for worse.
Victory will not come on a date with a signing of surrender. It will be measured by each one of us in our own way. For many, it will be escaping infection for themselves and their loved ones. Others will feel blessed to have kept their lives and/or their jobs. Millions of others will find victory in keeping their businesses alive after wrestling relentlessly with government agencies, banks and their everyday creditors to stay afloat. And for millions of doctors, nurses, and first responders, victory will look like normal sick and injured people in far fewer numbers than the current normal.
This virus will pass. In the meantime, we remain open for the business of helping you make the best decisions you can in one of the most challenging times in our lives. Let’s keep the conversation going – Zoom for now, then mask-to-mask, and sometime soon, face-to-shining-face.