While the economy has been in lock-down mode, and we’ve been adjusting to the quarantine life, there has been much discussion about how difficult the road ahead will be.
There are the companies filing bankruptcy and laying off workers. There are the 30+ million unemployed and the unpaid credit card bills and mortgages.
Because of this, you may have missed the story that is now bigger than any of those and the one I am feeling more and more certain of—an incredible economic explosion as we move into and out of the 4th quarter of this year.
That’s right, I said “this year” as in 2020. Not next year or the year after.
Before we go through this, please know that I do not own a pair of rose-colored glasses. In fact, I can be downright sour as I was after the 2008 Great Recession. I told my design clients then to cut fast, cut hard, and cut deep because the recovery was going to be measured in years, not months.
But that was an economic recession, this is not. This is an arbitrarily imposed shut down of an entire economy. It has nothing to do with any sort of “recession” we’ve ever experienced before.
I’ve noted more and more articles alluding to the surprising resurgence of the economy already. Hotel reservations are up and Las Vegas is reopening next week. Air reservations are up and Southwest is adding business routes. Not cutting…adding! Even cruise ships are seeing a new surge in reservations.
Let me share what Harvard professor Jason Furman wrote in the Wall Street Journal just this week:
“This is not a downturn as a result of the economy, and thus is nothing like 2008. Rather, it should be viewed as how the economy reacts to and recovers from a natural disaster. This is the first “forced closing” of the economy in history and the recovery will be swift and sharp.”
“…we will see the most explosive growth in employment and GDP ever experienced by this nation throughout the 4th quarter of this year!
In fact, he continues, “…we will see the most explosive growth in employment and GDP ever experienced by this nation throughout the 4th quarter of this year! The recovery will be a very sharp “V,” not the gradual “U” that others predict.”
Even Paul Krugman, the Princeton economist, New York Times columnist and Trump-hater, fears that the economy will be exploding (in a good way) by election day.
One long-time member of The Edge called me two months ago when things were looking bleak. He’s probably one of those I advised to cut fast and deep after 2008. But two months ago I had different advice; I told him to do nothing. To make no decision yet because we didn’t really understand what we were facing.
I told him I didn’t think his high net worth clients would be negatively impacted and he should try and keep his hard-earned team together so as not to lose the capacity to handle their large-scale jobs.
I heard from him this morning as he reported that things in LA are loosening up, he kept his team together, and he has landed three of his prospective whales and has a harpoon in the fourth.
What if the 4th quarter brings more business than he has ever imagined? Will he be ready? What then?
I wrote him back that I couldn’t be more pleased, but I also issued a warning: What if the 4th quarter brings more business than he has ever imagined? Will he be ready? What then?
I know that falls under the heading of a “good problem,” but it could still be a problem all the same.
What will you do if the economic tsunami is closer than you think?