Friday, February 28, 2020

The coronavirus economy is real

The political belief system that has, for a few years now, exclaimed that “fake news” is everywhere has been heartily engaged in creating and believing its own in recent weeks.

Over the course of February, Rush Limbaugh, Sean Hannity, Laura Ingraham and hundreds of writers on the internet have claimed that concerns over coronavirus are for the most part unwarranted and that focus on the contagion is a conspiracy by major news outlets and the Democratic Party to weaken the economy and/or Donald Trump’s chances of being reelected in November.

Let that sink in.

We’re expected to believe that the massive downturn in the stock market is solely a creation of partisan fear mongering by Nancy Pelosi and Charles Schumer and has nothing to do with harsh economic circumstances.

Sadly, a lot of people do believe that. Just take a look at social media to see how many people are sharing those thoughts.

It’s unfortunate that so many have been duped because coronavirus and its resulting economy are real. Being in the trenches of the global economy as a manufacturer, and someone who consumes actual “real news”, I saw this coming and have been pondering what the rest of 2020 will look like.   

After watching the disease’s reach and power unfold in international news coverage over the span of a few weeks in early-January I figured there would be economic disruptions galore and the potential for a global pandemic. So, I made the decision six-and-a-half weeks ago to move all of my 401(k) – the balance and all future inputs – into my plan’s guaranteed account until the coronavirus was contained.

I’m glad I did. As we saw last week, Wall Street finally caught on to the fact that things are bad. When I wrote this column, the stock market had lost 10% of its value from its recent peak in only a matter of days and the futures for the day showed even more decline. Where’s the bottom?    

In the weeks following my 401(k) gamble and before the stock market collapse, my economic assumptions proved justified in many ways in my day-to-day business.    

A handful of companies contacted me at the factory to see if we’d be interested in manufacturing their products which are currently made in China. The disruption of their supply chain, coming on the heels of painful tariffs, has them reconsidering how and where they do business. As it stands now, they won’t have the products they expect or need for the foreseeable future.

While that might work for the projects we can manufacture for them, there are many more items that the manufacturing sector in the United States does not have the capabilities to make in the near-term. For example, we produce cabinetry for the spa industry in which some players have expressed concern about what they will or won’t produce later in this season because they can’t or won’t have access to Asian-made LED lights, stereos and more that augment modern hot tubs.

Another customer of ours sells products sold in big box stores. One came to him and asked if he might have something – anything -- they could put on their shelves because they’re fearful their stores, and bottom line, will look bare in the coming months because of their reliance on companies that outsource.          

If someone is all-in with Asian suppliers, what does coronavirus and all of its uncertainty do to their financial viability in 2020 and beyond? If someone has reliance in part on the same, what does that do to their profitability this year?

Are consumers ready to deal with lower and even totally different inventories and selections at stores and e-commerce retailers? Will they pay higher prices for domestic goods?

We’re just one company, a little factory in little Niagara County, seeing the impacts of coronavirus in the great big world. Imagine the hundreds of thousands of bigger players who are involved in international trade: What are they seeing? What are they feeling? What are they planning?

So, yes, there are real reasons behind the real concern on Wall Street and Main Street. It’s not some conspiracy.  

That said, I encourage you to get your news from trusted and various sources, not from commentators who pass themselves off as -- and whom you might believe to be -- news. The Hannitys and Limbaughs of the world are well-paid, (in)famous thought leaders, disconnected from the real world, spearheading horrid discussions and instilling groupthink. They are no different from their counterparts on the other side whom they despise (like those on CNN and MSNBC) who also “report” on things with bias and motive.

We’re all in this coronavirus battle together – not everything needs to be politicized. As with all issues, it needs reasonable, thoughtful analysis, study and coverage. Failure to provide that will inhibit adequate preparedness and action, not only in the economy but also in our communities.  

From the 02 March 2020 Greater Niagara Newspapers and Batavia Daily News

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