“But on the submarine, Boris wasn’t as cheerful as he could have been.” – The Bullwinkle Show
If it’s a missile sub, you could say, “Okay, Boomer.”
In most submarine movies, there is a scene where the submarine is hit. One of the forward compartments is being flooded, but the submarine can’t surface because the enemy destroyer is lurking on the surface like Nancy Pelosi lurking at the clinic where they reinject her with blood from the young. The captain must make the fateful decision: do I try to save the team in the forward cabin and perhaps lose the ship? Or do I close the bulkhead door and assure the safety of the ship and the remaining crew?
Time is always of the essence. When the movie is particularly well made, one of the people on the other side of the door is someone you know the captain cares about. It’s often a nephew, or a new, innocent crew member that is doomed to death. You can tell you’re supposed to like him, because he actually has a name; something like Ensign Timmy McFarmboy instead of Dead Crewman #3.
One memorable variant of this theme was in Star Trek II: The Wrath of Khan™. In that particular scene, Captain, Kirk doesn’t order Spock to go in the reactor room, Spock just does it to save the ship and crew from Ricardo Montalbán’s massive pectoral muscles. “Logic clearly dictates that the needs of the many outweigh the needs of the few,” are among his last words to Kirk. Thankfully, Spock has as many lives as a cat, and kept returning to Star Trek® movies because his agent couldn’t get him the lead role in Die Hard.
Spock said my mother was so fat, that she outweighed the needs of the many.
Presidents don’t generally have the luxury of behaving like captains of submarines or starships in the movies, especially in 2020. The world of politics won’t allow it. Political enemies keep attempting to frame both sides of the equation so that whatever happens, the president loses.
If he acts too soon in closing the bulkhead? He’s being irresponsible – overreacting. If he acts too late and loses the submarine? He was fiddling while America burned. Regardless of his decisions, each one will be held up to the scrutiny of the perfect knowledge that only the future will bring.
That’s the burden of the mantle of command: you own the decisions. I won’t second guess President Trump – I wasn’t in those rooms when the decisions were made. I don’t have the facts that he does. And I don’t have to take responsibility.
He does.
However, to continue to use the submarine analogy, the front compartment is flooding. In many ways, the political opposition on the Left is thrilled: they feel that they have a winning issue against Trump, even if it took a crisis that will either kill Americans or wreck the economy to do it. Either is fine with them, which is a function of how polarized the country is now.
The crisis, however, is huge. And it’s far more than Corona.
Easter sheep: ready to wool the world.
I would bet that the reason that Trump said that he wanted the country to reopen for business at Easter was that he was given information about how the COVID-19 measures are wrecking the economy. But I think the information he was given was overly optimistic. I don’t think anyone told him we’d see 3.3 million initial jobless claims – no one expected that we’d see the largest numbers in history. The expectation is that we’ll see another 6.0 million next week. In a labor market of 160-some million Americans, that’s a 6%* unemployment increase. (*edited for an incorrect figure and updated unemployment with 4/2/20 numbers)
In two weeks.
No, his advisers didn’t tell him that.
“We’re the first nation to go to the poorhouse in an automobile.” – Will Rogers
The personal pain and tragedy that level of unemployment represents is astonishing. In previous posts, I told you the economic fallout would be Great Depression bad, but this is worse. The Federal Reserve Bank is projecting 32% unemployment at the high end. 25% was the highest unemployment rate during the Great Depression.
At the height of the Great Recession in 2009, the unemployment rate hit 10%. Total. Not 10% additional two weeks. The Great Recession is the biggest economic emergency that many people remember, and this is projected to dwarf it.
The jobs we’re already losing aren’t all low-paying jobs, either. Oil has dropped in price to $20 and I don’t think it’s done dropping. Oil production companies, the folks that drill the wells for the sweet, sweet oil? They’ll be shedding jobs nearly immediately. The average oilfield job pays $100,000 per year, but $20 per barrel won’t pay for $100,000 per year jobs. Or pickup trucks. Or houses.
The economy is crashing faster than at any point in recorded history. Daily. Based on JP Morgan’s™ recent estimates, it will be $4 trillion smaller (a drop of nearly 20% overall) this year. That’s assuming that the economy returns to astonishing levels of growth in the last half of 2020.
I hope I’m wrong, but I consider an immediate rebound highly unlikely.
Why?
Dear Diary, Today the stock market didn’t crash.
This is far worse than 2008 – at this point, it’s projected to be eight times worse. At the maximum rate of growth the economy has seen in the last fifty years, it will take a decade to get back to where we are today. That’s a decade of lower employment. A decade of people having to do with less, not more.
I’ve heard it said that all of the economy is still there, waiting to be re-occupied. But it’s not. The stock market has dropped by a third. How much of that was in the average person’s 401k? Spending habits will change. And the people who have been fired – will they come back to work for a company that fired them nearly immediately? Will businesses start as usual the instant the stay-at-home orders are lifted? Will oil zoom back up in price to $60 a barrel?
No. Spending isn’t being deferred – in many cases spending is being cancelled right now. If this goes on until May, that will be at least six weeks without the usual wages for millions of people, perhaps as many as 20 million people. For the majority of households not capable of handling a $1000 emergency, what will happen to their spending profile?
And the people won’t be the same, either.
Most of my jokes about unemployment don’t work. Oh, except for the one about the unemployed classical musician. He’s baroque.
Think about that for a second. Are people going to emerge like cave dwellers from the basement, and start consuming like they used to? No. They won’t have the money, having spent it all on toilet paper. They’ve had bills. Food. Electricity. Rent. Sure, they’re not getting kicked out of their house or apartment during the crisis, but someone has to pay the rent at some point.
Corona has also hit economies all around the entire world. As we speak, the world stock markets have lost trillions of dollars as well. Sure, that impacted all of the Greek shipping tycoons who wanted to buy a yacht, but it also impact all of the people who were thinking of buying a new car this year. Not only will demand be down in the United States, demand will be down globally.
For a decade.
If we’re lucky.
We sit at the crossroads of a country experiencing increasing polarity, year after year, and have just had the greatest financial catastrophe anyone living has seen. The submarine is still taking on water, and the hatch isn’t yet closed.
Expect even more surprises.
Soon.
I’m guessing the Hospitality and Professional Sports sectors will take it hard in the shorts for quite a while while this levels off to acceptable level. (I’m not convinced this will end completely, just go in cycles much like flu season). So sports arenas, hotels, convention centers will have a very hard time getting started again. Time shares will likely be affected as well.
Schools may become much more ‘learn from home’ as they become more accustomed to on-line courses. So teachers and professors may have some new challenges. Administrators will be decimated – we won’t need nearly as much of them in the New Normal. Will this affect property taxes, as the burden of public school buildings diminishes ? High school sports and music too will feel the hit. Shucks – colleges may have to begin again as a learning institution.
Careers associated with the above will likely change in a small or large part. How much ? Quien sabe.
The second paragraph sounds so positive, I actually smiled!
“Administrators will be decimated”
They’re going to kill every tenth school administrator?
Remind me to pick up some popcorn on my way home this evening.
One in ten ? It needs to be nine in ten.
But, right now? Every single administrator still has a job. But parents are learning that school instruction takes about two hours a day.
Hmmm.
Education will change.
I hope you are wrong, but I cant argue with your assessment. We are not in a good situation, and it is just the beginning.
I wish this was all and April Fools Day joke.
Ditto.
Well, there is good news. Tomorrow’s work commute is about two minutes.
John, you silly giggling optimist, you are absolutely using the wrong submarine metaphor. We are not at the should-the-hatch-be-closed-because-there’s-still-some-hope-for-the-rest-of-us part of the movie. We are at the stuck-on-the-seabed-with-no-hope-and-how-long-does-the-oxygen-last part of the movie.
Yep, those jokers in the torpedo room drown first:
https://www.zerohedge.com/s3/files/inline-images/low%20quality%20jobs.jpg?itok=wLtv_aUu
But we are all goners:
https://www.zerohedge.com/s3/files/inline-images/GDP_3.jpg?itok=ZjN1R2Zw
and you are absolutely right, nobody knows what happens next.
Well, except for Sec Tres Mnuchin and his trophy wife, they get to pose for a new currency-sheet picture…
https://twitter.com/NorthmanTrader/status/1245047444058058758
While we are all stuck at home talking about subs, I can absolutely recommend the fantastic show Das Boot on Hulu. In German with English subtitles, but very watchable. Thankfully, our current mess is not the 1942-occupied-France level mess depicted in this great story. Yet.
https://www.youtube.com/watch?v=yndRSqA69Kc
I got into this story so much I tracked down a walkthru of an actual U-boat now on display in Europe. You think YOU’RE cramped right now? Start at 3:45…
Ack. Sub walkthru, start at 3:45…
https://youtu.be/yXiSWPGy_gg
The ‘trophy wife’ is Scot attorney Louise Linton.
She and her brother volunteered in the Afrika country of Zambia during a civil war.
She is grounded, resourceful, well-traveled, intelligent, and interesting.
I would enjoy an extended lunch with her.
In the publicity shot of her holding America dollars, she wears gloves because the vault is kept just above freezing to deter rodents and fungus from destroying the paper.
Could it be called “The Money Shot”?
I have previously researched LL just after she and Steve decided to tour Ft. Knox on a government plane just at the moment of a total solar eclipse, and I totally agree she is a very remarkable woman.
https://www.lamag.com/citythinkblog/louise-linton-steve-mnuchin-trump/
https://www.elle.com/culture/career-politics/a15895367/louise-linton-march-2018/
https://www.dailymail.co.uk/news/article-7220173/Steve-Mnuchin-bikini-clad-wife-Louise-Linton-celebrate-Fourth-July-champagne.html
Whether or not one uses quotes around a phrase like trophy wife can certainly be a subjective thing.
https://i.dailymail.co.uk/1s/2019/07/06/20/15714210-7220173-image-a-20_1562439935805.jpg
2nd the reccy. Though I’m sticking to subtitled happy anime for now.
Huge props for the Northman Trader tweet. I love Sven and his analysis. Clearly, his no-B.S. approach is a toxin to TPTB.
I actually spent the night on a Gato-class sub with The Boy when he was a seven year old Cub Scout. Longest night of my life. Every time I would drift off, I’d start snoring, and he’d shake me awake.
In a moment of weakness I let him live.
Perhaps this will lead to a great re-ordering of our society. Given how many workers are “non-essential” it is worth asking why those jobs exist in the first place, other than as a place for people to do meaningless tasks as tax cattle. Do we really need so many women in the workforce instead of caring for their own children? How do we possibly need millions of third-world migrants to do jobs when so many jobs don’t need to be done at all?
I doubt we will be that introspective, more likely this simply sets the expectation that any downturn or mild discomfort must be met by “stimulus” checks from the government. Less than a quarter of the population is even intellectually capable of understanding inflation as a concept.
Methinks it will be the great “Culling of the Nerds”…
Those that can adapt will eat, those that refuse to adapt will be fighting the rats for the last morsels in a burning dumpster.
And those that try to make it by taking it from those that prepared end up in the big hole near the tractor.
I think it has the possibility of being as introspective as Robespierre.
People are really, really mad about the senators profiting from their advance knowledge.
Apart from the speculation, my ham radio club has been notified by the Mom & Pop restaurant in which we hold monthly meetings that they are done. Not renewing the lease. Been good to know ya, goodbye. I don’t expect that property (one slot in a strip-mall) to be re-occupied for years.
I live in a college town, which seemed recession-proof as long as students (and their parents) were willing and able to take on more student loan debt. But the students have all gone back to their parents’ houses to finish their studies on-line, and local businesses would probably be closing even if they weren’t closed by order of the Governor.
Speaking on non-essential workers, college and university administrators have to be terrified that people will start to wonder what is gained from being on campus to take college courses rather than just watching lectures online. Other than developing alcoholism and picking up some STDs of course.
Colleges used to have a monopoly on the granting of certificates, diplomas, credentials, whatever you want to call them. Then the tech industry realized that they could require specialized certifications for the specific skills they wanted: Cisco Certified Network Engineer, for example, and the college degree was irrelevant. I suspect that current employers just prefer to hire an over-qualified college-certified liberal arts debt slave. That shows that they know how to follow arbitrarily nonsensical directions, and are less likely to walk off just because they’re bored.
There is a great book on that very topic, “The Case Against Education”. My review here: https://www.arthursido.com/2018/04/book-review-case-against-education.html
And Mom & Pop? There are thousands of them. This could be the final destruction of small business . . . .
If the financial uncertainty has got you thinking about planting a garden, don’t wait until the last minute to get your seeds and fertilizers; they’ll probably be a scarce as respirators, toilet paper, and bottled water any minute now. (I’ve been saving seeds from one season to the next, which turns out to be fortuitous. Or was it just good planning?)
It is almost too late. I ordered a bunch of seeds for Amish ladies over the last week and a bunch of what they wanted was already sold out for the season.
I think it was planning. The Mrs. is ready, but she was planning on seedlings. Wonder if they’ll even show up?
I can speculate on many things, such as cities being isolated by the national guard to prevent them from razing the rural areas. I won’t. The possibilities are almost endless, but one thing is certain: Things will never be the same as before.
Cities versus rural is today’s post.
You’re right – we’re in a chemical reaction, not a phase change.
I just wonder if the submarine in that photo is SSN-706.
SSN 706? Seems to be quite the disingenuous question based on your fascination with WW2 usn aviation…specifically: the resultant nomenclature of a torpedo capable scout plane manufactured by the Douglas aircraft company??
As for the battle of Midway (perhaps it was only a Hollywood creation) was there any mention in “Shattered Sword” that the one Japanese scout aircraft that would have discovered Fletcher’s Flattops was delayed due to mechanical troubles?
I love it! It’s like the joke about the broken submarine.
It didn’t go down well.
JW, this post needed more bikinis stuffed with torpedoes.
Far be it from me to quibble with legal professionals from the dark side. But, Mr. Wilder, if you’re taking requests, let me put a word in for bikinis stuffed with … women. Or one-pieces stuffed with women. Or, you could just go straight to the women. After all, these are times of emergency. If the swimwear models want to decrease their workload by skipping the swimwear altogether, well, we can just make do. Sigh!
Women ahoy. Two today, at least four on Monday!
Bikini for sure on Monday. Country girls tomorrow!
There is a submarine in the harbour in Peru near to Lima, forget the name. Was really fascinating to visit it and see how much stuff you can put into a small space. When the Soviet Union broke down they gave permission to all the inhabitants of Moscow to travel out to the farms and dig up potatoes to feed themsleves. Very few took advantage of this, so I don’t think you will be seeing mass exodus from the cities to steal food.
I don’t think you do. I think most folks from the city don’t know where food comes from. (Not all, but most.)
The oil patch was already hurting *before* Pootie-Poot and MBS decided to play chicken. I was seeing an uptick of certified letters from Mortgage lenders before that. Spending on toys and home refurbs, instead of setting aside some of those six figure salaries, or at least some of the mid to high five figure bonuses (you read that right, and not just for executives, roughnecks, welders, etc) they get in good years. But they didn’t, and at least we have cotton to help Smallville not totally implode. Oh wait, Grand Solar Minimum is calling, and says to bend over.
Yup, I expect we’re going to have the Minimum to contend with. I actually read that in 2005, and it’s right on track.