Second quarter of the coronavirus; where do we stand economically?

By Michael Randle, EDITOR

During tough times, my father has advised me several times during the almost 40 years of owning this and other media assets: “There’s got to be a pony in that massive pile of s#%t somewhere,” he would say. We have entered the second quarter of this once-in-a-lifetime virus. So, how are we doing? Is there a pony in the midst of this catastrophe?

The answer is that no one knows. Sure, we are in double-digit unemployment, that we know. We are in a recession as of February, after a record-long recovery of more than 10 years. GDP has fallen, but I am not sure anyone knows how far it will fall or when it will recover. I take that back; I am sure no one knows where this economy is heading. If they say they know, they are merely speculating.

At the beginning of the second quarter, businesses opened up to a degree, and then the virus set record numbers of cases for some states as the summer began. This is a tough one. . .not the slow, dull, starve by an inch at a time like the Great Recession. This was the most sudden crash this nation has ever seen. One day we were doing fine. Within a week or two, everything came down. Everything closed.

One thing we do know — this nation was completely unprepared for this virus. That is not a political statement. You can make it one if you like, but it doesn’t change anything. The U.S. was completely unprepared for a pandemic. If you disagree, then why does our nation, with less than 5 percent of the world’s population, have more than 25 percent of COVID-19 infections?

Regardless of all that, we can certainly speculate about where the South’s economy is headed. The economy is, as we cringe, completely dependent on the virus and how many people are getting infected as we watch rates rise and fall daily, weekly and monthly.

There is only one driver to this economy right now — the virus and how our governments respond to it. When it wanes, we will have sports and an economy that is recovering. Until then, we have lots of work to do.

That pony may just be this: I have been writing about reshoring of the supply chain back to North America from China since the Boston Consulting Group published “Made in America, Again.” That report cited how the U.S. had become more competitive due to many factors, the main one being low energy costs. It also cited how China was becoming less competitive, mainly because of rising labor costs in what has become the “factory of the world.” Yes, reshoring is a thing and has been since 2010. Not convinced? Go to the Reshoring Initiative at reshorenow.org.

While President Trump tried without much success to woo plants from China and elsewhere to the U.S. through tariffs, there is no question reshoring will happen and in great numbers because of this virus. The virus has crashed worldwide supply chains for just about everyone. Now, they will be repositioned in time, to what I call “make it where you sell it.”

The virus has hurt everyone. Yet, in time, reshoring to the tune of thousands of companies both large and small will be the pony that will emerge in this meltdown.