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VIEWPOINT: The not-so-quiet revolution

By David Rogers. May 10, 2020. BLOWING ROCK, NC – At this pandemic time when men’s hairstyles are trending toward “Fabio” – or “Grizzly Adams” – we have a lot to think and talk about.

These days, we live in a world of muffled communication. Orthodontists cringe at the thought of beautiful smiles crafted over the course of two or three years now covered every day and much of the night by masks. Upon greeting one another, we share no handshakes, no hugs. Just faux high fives and elbow bumps – and nervous smiles – through unsettled air.

Nearly all of America is running scared, whether in the roasted Big Apple, sheltering at home among the stars in Hollywood, sobbing with the sick and dying in New York, Florida and Seattle nursing homes, or weaving – one way – up and down the grocery store aisles at Publix, Harris Teeter, and other supermarkets. At some big box stores, we are channeled to the entrance doors via what amount to livestock chutes.  We stand patiently behind a two-inch-wide “barrier” taped to the floor, some six feet behind the person in front of us at Blowing Rock’s U.S. Post Office.

The callous among us want to throw the elderly and infirm under the proverbial bus as expendable.

Here and there, America is also a nation with “Spring Fever.” Locally, go to the Greenway in Boone and it more closely resembles folks on a two-month holiday. Many are on rollerblades, bicycles, or skateboards.  Then there are the hordes of runners and walkers huffing and puffing individually or in groups, some with dogs, others pushing baby buggies. This is a time to forget the masks, it seems by consensus, because we are in the great outdoors, after all.

On the Greenway’s bordering athletic fields and patches of river bank grass, even weekday sunbathers bask and bake to their favorite tunes, whether from “ghetto blasters” on the blankets beside them or, more subtly, through earbuds attached to an iPhone. Social distancing is more of a distant, fading memory for the winsome lass laying her head on the chest of a hunky beau, stretched out in the grass. There are picnickers spread out on blankets and, of course, football and soccer games – perhaps inspired by the recent NFL Draft or a virtual World Cup match on xBox.

Ah, yes, these can be beautiful and sunny, late Spring days in Mr. Rogers’ neighborhood.

But at what cost the state-mandated lockdowns and what are the long-term implications of big government’s intrusion into our daily lives?

Across the nation, whole cities have elected to return to business as usual, a Governor’s stay-at-home orders be damned. Perhaps the stir-craziness reached full zenith a couple of weeks ago when armed “militiamen” protected a mob of protesters’ invading the Michigan state capital.

Depending upon from whom you solicit an opinion – or whether you view national and world opinion through the eyes of Fox News or CNN –  President Donald Trump either gets credit or blame for the mounting number of protesting crowds around the country. Some “agitators” call the nationwide economic shutdown unnecessary. Others among the “dissidents” even assert that the government-imposed lockdown is unconstitutional.

Because the vast majority of U.S. deaths attributed to COVID-19 are of Americans over the age of 75 and most are afflicted with other serious health issues, the callous among us want to throw the elderly and infirm under a proverbial bus as expendable, even though they pay taxes, too. To be perfectly blunt, that at-risk demographic has contributed to the economy for many more years (and many still do) than the tens of thousands of college kids who defied coronavirus restrictions to party hardy on the nation’s beaches for Spring Break, not to be denied their coming-of-age frivolity. Perhaps they drank too much of their own Kool-Aid when suggesting that enough alcohol consumption will surely sanitize oneself and prevent infection of, by, and from the virus.

A relative few Americans challenge the wisdom of the Draconian early steps when the human costs of this novel coronavirus were unknown. If nothing else, those early steps added to the mainstream American vocabulary: “social distancing”, “self-quarantine”, “shelter at home”, “stay at home”, “wear a mask”, to name a few. Each of those steps or “tactics” are aimed at “flattening the curve” of deaths caused by this wildcard disease that nobody knew anything about. If you didn’t fully understand the meaning of the word, “pandemic” back in December, you do now, including its modern consequences. Our lexicon will never be the same.

It’s more likely that Neil Armstrong’s walk on the moon so many decades ago was actually on a North Texas movie set than to think that Bill Gates or George Soros cooked this thing up for their personal gain.

But at what cost the state-mandated lockdowns and what are the long-term implications of big government’s intrusion into our daily lives? Is it fair to disenfranchise a whole national population? Take out New York and New Jersey, and for much of the rest of America this has just been a bad case of a more vicious flu.

These are weighty concerns and finding a balance requires delicate considerations.

The “real median per capita income” of Americans above the age of 15 was roughly $33,000 annually in 2018. That means that half of the employable population earned more than $33,000 and half earned less than $33,000.

Although some are in multi-paycheck families, many among those earning less than $33,000 are living paycheck-to-paycheck to make ends meet. If you think the lower income masses who are also Americans shop for basic necessities at Nordstom, Bloomingdales, Macy’s, Dillards, and Belk, think again. You will more likely find them searching for discounts at Walmart or Target – or combing the aisles for something still useful for their purposes at Goodwill, Salvation Army, and ReStore.

Could COVID-19 spark a resurgence in drive-in movie theaters?

Up until recently (with a healthy domestic job market), weekly initial unemployment claims have been around 210,000 nationwide, according to an April 23, 2020, report from MSNBC, citing numbers from the Bureau of Labor Statistics.

U.S. weekly jobless claims published by the U.S. Labor Department now have the 7-week total of new unemployment claims at more than 33 million, a number that CNBC explained two weeks ago when it was 28 million “…has now surpassed all of the job gains since the Great Recession (of 2008-2009).”

In this not-so-quiet revolution, can you blame the unemployed for grousing a little bit about the stay-at-home, social distancing, and close-my-employer’s business orders when they see dozens of the more affluent lined up to tee off at their local golf course? So many of the jobless are worried about paying their monthly rent or feeding their families a next meal, and the greatest concern of that guy lining up his putt on the 12th green is saving par? The lockdown wouldn’t meet Rotary International’s “4-Way Test” because it is NOT “…fair to all concerned.”

Blowing Rock Civic Association recently wrote a letter to the Watauga County Board of Commissioners asking that the requirement for arriving seasonal residents to self-quarantine for 14 days to be lifted, the sooner the better. Frankly, they have a point – not because they have been following Stay At Home orders in their off-the-mountain homes prior to arriving in Blowing Rock, but because the nationwide lockdown may be hurting more people than it is helping.

What if our current existence is meant to be finite, to have an end, just one step in His larger plan?

Even though the Draconian measures were understandable when we didn’t know much about COVID-19, maybe it is time to take another look at what the lockdown is accomplishing. With the nation’s food banks and poverty-targeting non-profits scrambling to help an ever-increasing number of Americans faced with food insecurity, how many people must starve from hunger – or commit suicide because they see no way to make ends meet – before what is a mostly quiet revolution morphs into a groundswell of outright rebellion?

I turned 29 years old – for the 40th time – last week, so I am fast-approaching the sweet spot of that at-risk demographic. At least a few might think I have exceeded my “sell by” date. Nonetheless, I know enough to understand that there are no easy, simple answers to this mess we are in because there are arguments favoring both and all sides.

RANDOM THOUGHTS:

  • There are plenty of conspiracy theories out there about who is responsible for the origins of this virus. Don’t include me as a believer in any of them. It’s more likely that arrangements were made for JFK’s assassination by the U.S. military-industrial complex or that Neil Armstrong’s walk on the moon so many decades ago was actually on a North Texas movie set than to think that Bill Gates or George Soros cooked this thing up for their personal gain.
  • One of the interesting concepts about this virus, though, is the democratization of humankind. Although lower income demographics seem to have been harder hit because they have less access to quality healthcare to begin with, the virus has not discriminated between its victims just because they are rich or poor. It’s afflicted Americans, Spaniards, Italians, the British, Chinese, Russians, Koreans, Japanese, and Iranians, albeit some countries responded more effectively and expediently than others.
  • Old Testament scholar and author Brent Strawn of Duke University Divinity School covered a lot of topics this morning when he shared his thoughts via Zoom for Rumple Memorial Presbyterian Church in Blowing Rock, including the idea of democratization mentioned above. Another interesting concept: how COVID-19 has brought home the finiteness of humankind, as well as the finiteness of our institutions and economies. He raised the question (to paraphrase): If God is the only infinite being and the “master planner” of all things in the universe, what if God’s long-term plan is not for humans to survive? What if our current existence is meant to be finite, to have an end, just one step in His larger plan? That’s a rather humbling thought, eh, that we may not be as important as many of us seem to think.
  • The press conference held a couple of weeks ago by two urgent care doctors in Bakersfield, California went viral before it was taken down by all of the social media platforms where the video had been posted. They basically suggested that COVID-19 was really just a bad case of the flu, with similar statistics, which they cited from publicly available sources. They acknowledged that the early steps resulting in a lockdown “to flatten the curve” were understandable “…because we didn’t know…” anything about the virus, Dr. Dan Erickson of Accelerated Urgent Care said, but now that we do know it is more like the flu, with similar infection rates, deaths, and recoveries, it is time to open things back up, he opined.
  • Whether you agree with that assessment or not, Dr. Erickson also asserted that emergency room doctors are being “pressured” to attribute the cause of death for many patients as COVID-19, even though it might not have been the actual cause of death. Now of course it is possible that COVID-19 accelerated a patient’s demise, even though they had other “terminal” conditions, such as heart disease or cancer. So should the cause be the earlier diagnosis or COVID-19? When someone feels despondent about the pandemic and commits suicide, is the cause of death COVID-19 or mental illness?
  • Who would be motivated to “pressure” ER doctors to attribute the cause of death to COVID-19 even though there were other factors involved? Well, according to a USAToday report written in late April, hospitals get $13,000 for a COVID-19 patient from Medicare vs. a “garden-style variety” of pneumonia, for which they get $5,000. And if the COVID-19 patient is put on a ventilator, the hospital gets $39,000 from Medicare. Whether or not hospitals and their administrators are gaming the system, it gives one pause to think about the financial incentives. Of course, no one EVER milked the government for undeserved money, right?
  • RESEARCH PROJECT: I have not been able to find – yet – statistics for the traditional leading causes of death for March and April in 2020, but I will continue to watch for them. IF, when published, the data shows significant declines in this year’s number of deaths during those two months attributed to heart disease, cancer, accidents, and such (versus, say, a three-year average for 2017, 2018, and 2019), while the deaths attributed to COVID-19 have skyrocketed, then there is a good chance that today’s hospital reports are inaccurate, whether intentional or not.
  • Lower wage employees are the backbone of all businesses, but especially small business. According to the Small Business Administration, small businesses make up 99.7% of U.S. employer firms, 64% of net new private-sector jobs, 49.2% of private sector employment, 42.9% of private sector payroll, and 46% of private-sector output. When those masses of unemployed, lower-wage workers are earning more for not working as they collect both state and federal unemployment checks, what are their incentives for returning to work any time soon? How quickly can those restaurants, retail shops, personal services, tourist attractions, and the like recover if their employees don’t return to work any time soon?
  • QUESTION: What will be the long-term implications for the government’s $3 Trillion-plus stimulus package, with potentially more coming? In March of 2009, with the Dow Industrials trading near 6600 in the depths of the Great Recession, I wrote in my institutional equity research newsletter that within 10-15 years the Dow Industrials would be trading at 30,000. It had traded below 7000 that week. My rationale: because of the then Democrat-controlled legislature’s passage of the so-called American Recovery and Reinvestment Act ($840 billion) on top of President George W. Bush’s $700 million Troubled Asset Relief Program, I wrote that the government’s printing money to pay for it all would be inflationary.  When combined with what I refer to as the “R-Factor,” as well as the survivorship bias in the stock market averages’ composition, those factors would result in cheaper dollars, but there would be more of them.  So the same level of business activity as, say, produced corporate sales and earnings in 2006 would result in 3x to 4x the sales and earnings in 2019. Applying the same standard multiples with which publicly trade equities are traditionally valued to the higher absolute dollars, even though devalued, results in higher equity valuations. Again, each dollar would not have the same earning power, but there would be more of them, creating a façade of sorts that the country was going gangbusters (Sorry, Donald, but you don’t get credit for Dow 29,500+ in early February of this year because it was already in the cards).  What does adding another $3 trillion-plus of debt (printed money) mean for the economy once the velocity of money is recharged?

Lots of things to think about and maybe even worry about. And that includes if the pandemic does turn out to be more than a really bad case of the flu. If it is and we restart the state, local, national, and even global economies full throttle too soon, how fast before we return to lockdown conditions, to flatten the curve again?

Then there are those other burning questions:

  • Will the playing of football, basketball, baseball, auto racing and all other collegiate and professional sports be forever competed in virtual arenas, on computers? Who gets claim to those joysticks, the athlete or the League of Legends sharpshooters?
  • Is the hospitality industry forging a new Domino’s Pizza-style business model where eateries only offer takeout or delivery? Smaller footprints are enabled, fewer employees needed, could result in higher profits.
  • Could COVID-19 spark the resurgence of drive-in movie theatres? Will that prompt auto manufacturers to start making cars with bigger back seats?

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