Carnes: Though expected, this still sucks
The proverbial “they” have been expecting it for a few years now.
The so-called “experts” kept repeating it’s not a matter of if but when.
“When” happened last week.
Our house of cards economy (not simply the stock market and unemployment numbers), which is long overdue for a correction, has spent the last few years being made less stable by tax cuts, increasing national debt, trillion-dollar deficits and irresponsible policies, teetering on the edge, just waiting for the perfect catalyst to pull out one of the bottom cards.
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One of those bottom cards got pulled last week and, no jokers required, it was an ace in the form of the coronavirus. That’s when the house started its inevitable collapse.
And this is not necessarily a bad thing.
Don’t get me wrong, the coronavirus is a devastatingly horrible pandemic, and depending upon how long this worldwide ordeal takes to conclude, could have serious consequences for each and every one of us for years to come, especially in a resort area so heavily dependent upon the travel industry.
But our American economy was due for a correction. The recovery period from late 2009 to early 2020 has been the longest period in history without at least a mild recession, and recessions are needed from time to time to keep an economy from overheating and collapsing into a depression.
The enormous tax cuts for the wealthy a few years ago provided a wave of corporate stock buybacks (completely ignoring fundamentals), combined with the Federal Reserve’s insistence on keeping rates at historically low levels and price-to-earnings ratios through the roof have all resulted in what we are witnessing today.
After partial paybacks with interest, the 2009 bailout of the auto industry cost American taxpayers about $12 billion, but it saved an industry key to our economic viability. The $28 billion (so far) bailout of American farmers will have zero payback and was caused directly by foolish trade and tariff wars, with the net result at this point being a huge increase in farm bankruptcies and delinquency rates on credit card debt increasing over 25% since 2016.
The coronavirus has caused the Chinese economy to come to a standstill, forcing factories to shut down and worldwide supply chain shortages just now beginning to have a domino effect across the planet.
Our local ski industry is preparing for individual and, more importantly, inevitable group cancellations which will have negative trickle-down effects across the board in Eagle County.
This turndown has nothing to do with political party agendas or whether or not Bernie Sanders wins Super Tuesday, as both sides are desperately trying to score political points with superficial claims.
And having a science denier who tried to pray away the gay in Indiana and claimed smoking does not kill apparently wants a “thoughts and prayers” strategy to pray away the virus.
Preacher Pence is merely a patsy being set up for an election year fall in case things become exceptionally nasty.
Either way, this recipe for economic disaster has been cooking for a while now, and the inevitable recession will be tough, hurting many right here in Happy Valley, but it will make for a stronger American economy in the long run.
And IMPOTUS? Well, he’s simply Kevin Bacon at the end of “Animal House,” standing on the sidewalk, waving his hands frantically and shouting, “All is well … All is well!”
As you’ll recall, within seconds his trampled body was all that remained.
Hopefully, the rest of us will fare better.
Richard Carnes, of Avon, writes weekly. He can be reached at firstname.lastname@example.org.
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