Articles by Grady Means

If there was one piece of useful stock market advice this year, it was “buy the dip” — that is, assume that the market value will form a “V” with a steep and deep decline and then a sharp and strong recovery. So, many bought into the market in mid-March, after the deep decline, with the confidence that government bailouts plus underlying economic strength in many key parts of the economy (e.g., high tech and professional services) would be lightly affected by the coronavirus lockdown and bounce back fast. They made a lot of money.

Certainly the political fortunes of President Trump have followed the first part of that curve so far this year and his poll numbers are down. But I’d argue, buy the dip.

Honestly, who can forget Joe Biden’s economic strategy during the 2008 campaign? The solution, he said, is “a three-letter word: J-O-B-S!” Putting aside another spectacular Biden gaffe, and his continued divisive pandering (they’ll “put y’all back in chains”), his white-splaining was right on this point. With painful racial strife in America, the most promising long-term solution remains jobs.

The horrific killing of George Floyd, and other fatal incidents involving African Americans, have given rise to large demonstrations for police reform. Many government bodies at all levels have moved to consider or enact police reforms, including increased training; eliminating certain police tactics such as use of chokeholds; more transparency on records of abusive behavior or excessive force by individual police officers, to put more focus on true police accountability; and more forceful prosecution of police abuse. Almost certainly, normally stubborn police unions will need to give ground on many of these issues.

No one likes private equity; just ask Mitt Romney, the Utah senator who made his fortune at Bain Capital in the 1980s and ’90s. But private equity does change the world, sometimes for the better. Private equity firms buy distressed and undervalued companies, reorganize their systems and processes, restructure their finances, lay off redundant workers, bring in new and more efficient technologies, leverage them to the hilt, and then, exit — sort of like what the novel coronavirus is doing to America.

During the past couple of weeks, Americans have seen unprecedented authoritarian behavior on the part of many governors and local government leaders, and the chilling possibility that the Obama White House intentionally weaponized the National Security Agency, FBI, CIA, IRS and other federal agencies to attack domestic political opponents. At the same time, the government and the tech community have made huge strides in expanding the surveillance state, often termed fascism. The concepts of democracy, personal privacy and property rights are rapidly becoming quaint concepts from a bygone era.

The coronavirus has led to the greatest economic catastrophe in our lifetimes. Record losses in the market, record bankruptcies, record unemployment and, soon, record insolvency of local governments. This social and economic firestorm will lead to massive shifts in political alignment. The question is, which way will politics shift this year and over the next several years?

Many in Washington are shouting “follow the science.” With the novel coronavirus, while there is significant confusion over effective medical treatments to prevent or cure COVID-19, one key piece of scientific evidence is beyond dispute: Those at the highest risk of extreme illness and death have underlying conditions such as obesity, diabetes, heart disease or high blood pressure. In some studies, up to 97 percent of people dying of COVID-19 have these conditions.

Another sudden and unexpected factor will transform this year’s elections. Many states, cities and counties are about to, suddenly, run out of money. Wages won’t be paid. Services won’t be delivered. Institutions will shut down abruptly. Many state colleges may fold. And yet most state and local political and administrative leaders just sit and watch. Voters will not be pleased.

America will never be the same. The coronavirus pandemic has had an economic and social impact on America that ranks with the Revolutionary War, the Civil War, either World War, or the Great Depression. America never has been hit so hard and lost so much, so quickly. It has put millions out of work, has cut several trillion dollars out of the market, and endangered the survival of hundreds of thousands of American companies. In a very short period of time, it has been devastating and transformational.

The economic and social impact of COVID-19 has been the fastest and largest single shift in our lifetimes. Many will lose jobs, incomes, homes, savings and retirement incomes, overnight. America may go from the lowest unemployment rate in our lifetime to the highest, within weeks.

Which leads to the most important question: What will America itself be like in a few months as it recovers from the virus? Americans should prepare for a “Post-Pandemic Age.”

The COVID-19 crisis is attacking and killing people with the weakest immune systems. The same will be true for the impact of the pandemic on the Bay Area’s counties and cities. It will kill those with the weakest fiscal immune systems.