ARBOR OUTLOOK: The dull aching pain of April
"April is the cruelest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain." — from "The Waste Land," by T. S. Eliot
The shock has worn off, and now the dull aching pain arrives. Within the last 24 hours (of this writing), social distancing guidelines have been extended throughout the month of April. Commensurately, much of American commerce will remain in limbo. Shutter the world's largest economy for almost two months and massive financial disruption will automatically ensue, will it not?
Is this the onset of another Great Depression? One would certainly think not. That era began with the market crash of 1929 and did not end until the outbreak of World War II, in 1939, 10 years later. A vaccine for the coronavirus will likely be available within a year. So that alone should bring a speedy halt to mass fatalities and limit the type of spread that we're experiencing now.
Short term, though, our economic pain is widespread and devastating. In the week ending on March 21, some 3.28 million had filed for unemployment. That's almost five times as many claims as were initiated in 2009 at the height of the Great Recession, when some 665,000 registered for unemployment benefits.
The recently passed stimulus package provides temporary relief for the newly unemployed, for small business owners, and yes, for some large corporations (read airlines) that have been stunted by the virus and its impact on trade. Truthfully, a $2 trillion stimulus package may not be enough to kickstart an economy suddenly stuck in neutral.
The number of Americans who are infected and may ultimately perish will probably not peak until later in April. Sean Payton, Kevin Durant, Debi Mazar, John Prine, Doris Burke, Chris Cuomo, Rand Paul, Jackson Browne, Tom Hanks and Rita Wilson are just a few well-known Americans who have tested positive. Hundreds of thousands more whose names we do not know are and will be equally affected.
Meanwhile, our healthcare system is struggling to keep its own personnel safe, and to acquire enough beds, ventilators, masks and other vital equipment to operate effectively. The sacrifices being made by doctors, nurses, and the medical community will not soon be forgotten. Many are finding ways to help patients in spite of extraordinarily difficult circumstances. They will emerge as heroic figures in this fight in the same way that NYC firemen, policemen and paramedics did after 9/11. We also harbor a new appreciation for delivery and truck drivers, pharmacists and sanitation workers, all of whom are vital to our health and well-being.
The sooner Western countries like the U.S. follow self-isolation policies, the sooner we can control the spread of the virus and return the economy and markets to more solid footing. We need a rebound in global growth, not just a domestic recovery. The good news is that global growth could indeed experience an uptick sooner than previously expected by most economic pundits.
Short term pain. Long term gain.
Margaret R. McDowell, ChFC, AIF, author of the syndicated economic column "Arbor Outlook," is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.