The COVID Effect | Shepley Wood Products
News & Articles

The COVID Effect

This has been a year with enough ups and downs to make anyone’s head spin. COVID-19 has taken a heavy toll not only in human life, but also in its many spin off consequences. If you take a look at life during COVID from the balance sheet perspective, we have a lot of entries for each side of the ledger.

On the negative side, you certainly have the fear, the uncertainty, the statistics of new cases, and loss of loved ones going the wrong way as the weather pushes us back indoors. We have the social unrest and short tempers of those tired of limited social contact. You have the darker side of human nature with people more worried about their own enjoyment than following the protocols of quarantine, social distancing, and proper hygiene to keep themselves and others safe. We also have the tragedy of many small businesses and restaurants closing, and even major retailers at real risk and some like 200 year old Lord and Taylor going, going....gone...out of business. You have a Federal Stimulus plan that falls on both the plus and the minus side. The first phase, earlier this year worked well and kept America afloat, but the necessary second phase is still in political limbo. The issue of our Federal debt moved from front and center focus, out of the foot lights and into the background for now, comforted by historically low interest rates, but still an economic grenade with the pin pulled out. Supply chains have been disrupted world wide. Whether it be raw materials or finished components, everyone seems behind on parts, pieces, and labor. Delay has become the standard and the COVID Effect is rippling through every industry. The New Normal feels a little more like the Para-Normal! The world is not on your schedule or my schedule. It’s on COVID schedule, for now and well into next year.

On the plus side, tough times make tough people and give us the push to make the difficult calls. A recent article by a good friend of the lumber industry, Greg Brooks, had some very interesting statistics I will paraphrase here that make up our first plus:

  • Blame what you want on the Presidential Election but there have been many crazier times, such as the election of 1800. Alexander Hamilton swayed enough votes to break an electoral tie and hand the victory to Thomas Jefferson over Aaron Burr. However, Burr got even and killed Hamilton in a duel a few years later. In 1860, 11 Southern States seceded from the Union over Lincoln’s victory. There began the Civil War. In the 1876 election, Samuel Tilden won the popular vote by a good margin but came up 1 electoral vote short and the election wasn’t decided until the following March, in favor of his opponent Rutherford B. Hayes! In 1933, US Marine Major General Smedley Butler was hired by a number of Wall Street big shots who controlled a number of major corporations such as Chase Bank, GM, Maxwell House, Dupont, Standard Oil, and Goodyear to put together a private army to remove FDR from the Presidency to which he had been elected in 1932. Viewing FDR’s New Deal as a “slippery slope to Bolshevism” they felt that outright revolution was necessary. General Butler went to the Feds early on and the plot never got off the ground. Nothing should surprise us today!
  • We think that we as a country are hopelessly polarized but in fact there are a number of points on which we agree regardless of party. 96% of Americans say that Social Security is the most important program that the government supports. Two-thirds or Republicans and three quarters of Democrats polled say we should add a 1% surcharge on corporate income over $100 million plus roll back the tax cuts for people making over $1 million per year and tax capital gains as ordinary income on the $1 million and up per year earners. On other topics from Social Security to increasing our competitiveness with truly fair international trade rules, Americans agree much more than they disagree. A majority of Americans of each party are in favor of a government run health plan. Maybe we need to focus more on the things that we do agree on rather than the things we don’t, but what politician worth their salt wouldn’t want to whip you and me into a frenzy over what we’d like to fight?

So if we can agree on this not being the craziest period of history, we can think of some of the other plusses. We have the potential of a vaccine or vaccines in the pretty near future. We have a stock market hitting historic new peaks. We have a housing market that is poised for a good strong run, perhaps the strongest of our careers over the next ten years, to make up for high demand and short supply of housing available. We have interest rates at historically low levels. We have the most powerful free market economy in the world. If you are reading this, you are almost certainly connected with the construction industry and that is yet another plus to remember. We have had the great good fortune to be classified as an essential industry through the pandemic so far and we are an important part of the economic engine that will help this country get past our current challenges. We are tougher than we look, we have been through most of this before and we historically respond well to crisis. It all brings to mind a wonderful quote by educator Nido Qubein, “Your present circumstances don’t determine where you can go, they merely determine where you start ”.

Time to get started! Half full, half empty...make mine half full and the ‘n top it off for good measure!