Andy Kessler

WSJ: What Shape Will the Rebound Take?

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https://www.wsj.com/articles/what-shape-will-the-rebound-take-11587930592

For all us former at-home meteorologists turned self-appointed epidemiologists, predicting everything from barely a flu to an epidemic apocalypse of infection rates and ventilator shortages, I’ve got some good news. As the corona clampdown is (please) coming to an end, there’s a new parlor game sweeping the nation. Now, as newly minted armchair economists, we all get to predict the shape and span of the economic recovery. You’re in luck: I’ve got your buzzword-compliant cheat sheet and a few tips, sure to impress your isolation circle and both flatter and flatten their curves.

OK, we’ve clearly fallen off a cliff. There have been 26 million new unemployment claims in the past five weeks. The jobs chart looks like someone dropped a fishing line in the water with a dead whale attached. Same for oil prices. This means the drop in second-quarter gross domestic product will be . . . well, nobody knows exactly. Estimates are still in flux. Sixty economists surveyed by The Wall Street Journal predicted an annualized decline of 25% on average, which works out to about 7% for the quarter alone.

But a fishing line down should mean a Polaris missile right back up, right? President Trump has even said the post-virus economy will take off “like a rocket ship.” That’s the essence of a V-shaped recovery. If we’d had a two-week house arrest—three, at max—maybe a V it would be. The unemployed return to work, stores open, new cars crank out and voilà, just like old times. Unfortunately, that ship has sailed. Sad, because a short lockdown could have been enough to scare the corona out of us, instilling enough fear that we self-enforce social distancing, wear masks, distrust strangers. Mission accomplished weeks ago.

Now there’s no going back. With airplanes idle, hotels empty, theaters going bust, stores like Neiman Marcus threatening chapter 11 and oil going subzero last week, all signs suggest serious damage to the economy.

So many economists now think we’re in for a U-shaped recovery. It’s the next one down the list, though not a bad bet. But there are lots of different types of U shapes. The letter U. Then there’s the Miami Hurricanes’ “The U” hand signal with a little more time in the basement. And for true pessimists, there’s the bathtub with a long time underwater before emerging. Short sellers like to talk about L-shaped recoveries, meaning things will never come back—but ignore them. Still, any of these U’s are possible.

But economies often don’t recover symmetrically.

WSJ: Upgrade Our 8-Track Government

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https://www.wsj.com/articles/upgrade-our-8-track-government-11587317309

I’ll admit to using this line all the time: “The Howard Stern Show” asked Ringo Starr, “What did you do with the money?” “What money?” “The money your mother gave you for singing lessons.”

Earlier this month, Johns Hopkins surgeon Marty Makary told Tucker Carlson about a much-needed Covid-19 antibody test developed in January that was under review by the Food and Drug Administration. Dr. Makary noted, “And we lost precious time when one of the original scientists submitted an application and was told that he had to submit it also by paper mail with a CD-ROM with the files burned on it.” CD-ROM? They might as well have asked for applications on a deck of IBM punch cards with audio on 8-track tapes. The FDA budget is around $5.8 billion. What did you do with the money?

Last week, New Jersey put out a call for Cobol programmers to update its unemployment-benefits software, which runs on mainframes installed 40 years ago. Cobol was invented in 1959. New Jersey has a $39 billion budget. What did you do with the money?

I grew up in New Jersey (Exit 14), but this ineptitude is everywhere. A 2018 study revealed that only 42% of all state and local government computer systems were implemented after Oct. 25, 2001. The rest are “old or broken,” including two-thirds of those used for child support and half of those used for unemployment or vehicle registration.

The feds, who spend $88 billion a year on information technology, are worse and notorious for ancient systems. The Pentagon’s control of nuclear missiles and bombers until very recently ran on 8-inch floppy disks from the 1970s. Some of the weather-tracking systems of the National Oceanic and Atmospheric Administration and the National Weather Service were programmed in Fortran, as far back as the 1950s. Or the National Institutes of Health, which stopped buying fax machines . . . in 2019. And—yikes—remember the 2018 false alarm? “Ballistic Missile Threat Inbound to Hawaii. Seek Immediate Shelter. This Is Not a Drill.” And don’t forget how HealthCare.gov imploded in 2013.

According to the Government Accountability Office, as of May 2016 two different Internal Revenue Service computer systems used for tax data and refunds were written in “low level” assembly language 56 years prior.

WSJ: Coronavirus Shatters Complacency

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https://www.wsj.com/articles/coronavirus-shatters-complacency-11586717230

With 30 minutes’ notice, I got invited to a dinner with the writer Tom Wolfe in dot-com era Palo Alto, Calif. Oddly, I arrived first and was led to a corner table for four, where I grabbed the best seat, overlooking the restaurant. Wolfe arrived late, dressed in white, naturally, and sat opposite me—his back to the restaurant. He asked questions about Silicon Valley and then told stories of trying out for the New York Giants as a pitcher and getting cut because he only had a sinker and no fastball. Great metaphor, actually. Eventually other diners figured out who was in the house, and I watched with delight as the chirping in the room grew deafening.

I recalled this recently while rereading his December 1987 American Spectator article, “The Great Relearning.” In 1968, San Francisco’s Haight-Ashbury Free Clinic was observing all sorts of long-gone diseases. That’s because hippies had become prone to “sweep aside all codes and restraints from the past and start out from zero,” and thus were “relearning the laws of hygiene by getting the mange, the grunge, the itch, the twitch, the thrush, the scroff, the rot.” There was a long postwar economic expansion, and it was almost as if everything useful had already been invented. Heck we were exploring space and going to the moon. It meant an entire generation could spend their parents’ money, drop out and rewrite the rules.

Sound familiar? The long boom that ran from the 1980s until last month, with a few temporary interruptions, created chronic complacency. Everything was so easy. No one really knew where stuff came from anymore. The internet just worked, without even a dial tone. Click and a book showed up at your house. Click again and a car picked you up. Again and someone rented you a spare bedroom. Too easy. Medicine just showed up at pharmacies. Milk and cookies overflowed store shelves. Some dreamed of utopia.

Soon modernity was swept aside to “start out from zero,” as many Americans old and mostly young embraced socialism and demanded big government and the end of capitalism. People got their political views from comedians and Teen Vogue. Just one short month ago, 1,548,025 Californians actually voted for avowed socialist Bernie Sanders. Amazing. Like “Night of the Living Dead,” antimodernity took over parts of the body politic. How stupid—a mental grunge, mental scroff and mental rot.

We were a rich culture obsessed with a climate “crisis” based on centurylong models that are as pie-in-the-sky as current doomsday pandemic models. Activists insisted that housing, health care and college were human rights. A cancel culture viewed the world, as Jeffrey Tucker of the American Institute for Economic Research writes, as “marred by appropriation, microaggression, identitarian denialism, and structural racism/sexism/imperialism.” Take your pick. Yes, awareness is important for those slandered, held back, disadvantaged. But should “social justice” decompose America’s entire $22 trillion economy? No thanks.

When times were good, this swept-away thinking was given free rein, and then it ran wild.

WSJ: Ode to American Toilet Paper

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https://www.wsj.com/articles/ode-to-american-toilet-paper-11586112316

A few weeks into the lockdown, let’s assess where we are. First, we’re all germophobes now. Handshakes are so yesterday. We’re caught up on “Tiger King” episodes on Netflix. We appreciate Amazon same-day delivery now that most orders take a week. We miss sitting in restaurants and milking a table over meaningless conversations. Same for sports, which provided a great background noise to life. Grocery supply chains still seem to work. And given which shelves are bare at Costco and most supermarkets, we see clearly that Americans have a weird fascination with not running out of toilet paper.

This last one should come as no surprise. It’s part of what separates us from the, err, “unwashed” masses. Anyone who has traveled outside the U.S. knows exactly what I’m talking about. I was warned not to shake hands in India.

But why are Americans different? We obsess because, like French wine or Italian coffee, we have the best, so we flaunt it. Be thankful for the glories of two-ply—my kingdom for a 12-pack of 1,000-sheet rolls, still hard to come by. No surprise that in what was definitely not a slow news day on Wednesday, there was national coverage of an overturned 18-wheeler near Dallas because its load of thousands of rolls was burning.

Sure, toilet paper may be controlled by the patriarchy: the Scott brothers, Clarence and Edward, and ol’ Mr. Whipple, who insists that you “don’t squeeze the Charmin!” But once you go two-ply, you can never go back. No wonder Americans hoard.

The first commercial toilet paper was introduced in 1857 by a New Yorker named Joseph Gayetty. It was sold as Gayetty’s Medicated Paper—with aloe. It even had his named embossed on the flat sheets. Rolls were first patented in 1891. By 1935 Northern Tissue started advertising that its toilet paper was “splinter-free”—another reminder that you really didn’t want to be born before then. Two-ply was invented in England in 1942, around the same time as electronic computers.

But take a trip to parts of Europe or Asia or especially South America, and you’ll learn quickly that they’re stuck in the past.