Markets Are Finding Ways To Survive the COVID-19 Shutdowns

Even after government had imposed an almost unfathomable level of intervention on the economy, the markets are chugging along much better than expected.


A funny thing happened on the way to the next Great Depression. The government forcibly halted economic activity, shutting most Americans indoors and robbing millions of people of their chance to earn a living as a means to prevent the spread of coronavirus. Yet many of the nation's economic indicators remain remarkably steady.

"By the day after Memorial Day, though, Wall Street had regained some stability, far more than many expected in the darkest days in late March," the Detroit Free Press reported on Wednesday. "The Dow was only a few points shy of the 25,000 mark—right around where it was on March 10 before the market would tumble to coronavirus-lows two weeks later."

Since the stock market's initial post-DOVID-19 drop, I've been afraid to check my 401k account given that I'm already running low on blood-pressure medicine. Sure enough, the balance wasn't far off from my last check-in. The nation's housing markets, which analysts expected to head into a freefall after the shutdowns halted open houses, were as boisterous as ever.

"Believe it or not, the economic turmoil inflicting the United States could send home prices soaring," argued British-based journalist Simon Chandler. Low interest rates, fewer listings and a reduction in housing starts means less supply and continued strong demand. The market is rapidly adjusting to—and I despise using this term— the New Normal. Everything is volatile, but there's no indication of a repeat of 2008's meltdown.

Let's remind ourselves about the meaning of "markets." Progressives think of them as an evil conspiracy by capitalists to enrich themselves and keep others in penury. Even some populist conservatives are convinced that "unfettered capitalism" is a plot by greedy "plutocrats" to place filthy lucre above the nation's "culture." There's nothing unfettered about our highly regulated economy, but whatever.

In reality, markets are simply the sum total of the myriad decisions made by individuals. In a relatively free economy, people adjust their behavior based on their own priorities. We bid for things we want. If I'm eyeing a house that is worth $400,000 to me, but someone is willing to pay $425,000 for it, then that buyer gets it. If I'm selling a house for $400,000 and the best offer that I get is $375,000, then that's what it's worth in the market.

"Underlying most arguments against the free market is a lack of belief in freedom itself," wrote free-market economist Milton Friedman. It's not about greed, but freedom. "Is there some society you know that doesn't run on greed?" Friedman asked. "What is greed? Of course, none of us are greedy, it's only the other fellow who's greedy. The world runs on individuals pursuing their separate interests."

When government tries to ameliorate "greed," it only distorts individual choices by artificially limiting (or increasing) supply or demand. Even with such distortions, markets are amazingly nimble. Plus, government officials and the groups that elect and lobby lawmakers are just as greedy as anyone else. More so actually, given that these groups will use the power of government, rather than the principles of free exchange, to get what they want.

I often complain about government growth controls, subsidies and regulations that tangle up our housing markets or impose unreasonable costs on private businesses. Nevertheless, buyers and sellers figure out ways to keep buying and selling despite those interventions. Now, even after government had imposed an almost unfathomable level of intervention on the economy, the markets are chugging along much better than expected.

That doesn't mean that those shutdowns were necessary or aren't painful. People have lost their jobs, businesses and a great deal of income. That will play itself out somehow. We're already seeing that governments are expecting great losses of revenue (note California's $54 billion deficit). I don't lie awake at night worrying about budget cuts, but they are looming.

The pension funds will dodge a bullet if the stock market stays high, but these aren't market problems. They are problems caused by government officials who refuse to live within their means. California's outrageously generous public pensions had been consuming local budgets and were frighteningly underfunded even before the recent unpleasantness.

There are plenty of doom-and-gloom scenarios, circulating on social media and elsewhere. Remember the analysts who forecast that oil prices would explode and our entire system of moving around goods would collapse, destroying suburbia in the process? Gas prices are lower than ever. Or the pundits who have long predicted a coming "Greater Depression" that would leave the economy in shambles?

We shouldn't be surprised if the encouraging news turns sour. Markets go up and down, and understandably are uncertain after this government-imposed craziness. But I would caution against fretting about dystopian predictions without first thinking about the resiliency of relatively free people operating in relatively free economies. Markets are amazing things, which is more than I could say about governments.

This column was first published in the Orange County Register.

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  1. Blame trump

    1. Everyone knows Trump and other white men are responsible for all the wars and problems in the war.

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  2. Yet many of the nation’s economic indicators remain remarkably steady.

    “Other than that, Mrs. Lincoln, how did you like the play?”

    1. yep. this.

    2. Unemployment is something like 20% now. I don’t know the exact number because my 401(k) is fine. Nothing to see here but petty peasants. Let them eat ice cream

      1. *checks news*
        “Employment stunningly rose by 2.5 million in May and the jobless rate declined to 13.3%.”
        Markets rule!

        1. I’m finding this news hard to believe but we’ll see.

  3. this is hilarious we are doing everything we can to adapt and the gov is doing everything it can to fuck us and prevent adaptation. You know what would ensure a level of growth in prosperity unseen in two decades? canceling property and income taxes for the year.

    1. “What?! And have the public sector take a haircut?!”

  4. I despise using this term— the New Normal.

    We need an alternative. “The Temporary Normal”? “The Elitist Imposition”? “The Newest Abnormal”? “The New Fucked”?

    1. especially when describing volatility … which can’t be normal

  5. I’m gonna make a prediction. These riots aren’t ending, they’re just beginning, we’ll see them again as soon as there’s a proper catalyst (I believe that it will be focused in the liberal states, NY, IL, CA, MI, PA, etc. That’s not exactly a hard prediction to make, at least with regards to liberal riots). The liberal “protesters” have been shown that they can get what they want through violence and so won’t hesitate to do it again. More importantly though, the conservatives and moderates in the liberal states still aren’t allowed to open up their stores, work, feed themselves, etc. De Blasio’s number one priority currently, with his city burning and his daughter being arrested assaulting cops, is to make sure the Orthodox Jews don’t hold religious services. They were mocked and branded evil and terrorists, and then watch actual terrorists burn down what they had left after the lockdown. Conservatives tend to be, well, conservative when it comes to protesting. They usually have more assets, and so have more to lose. This is no longer the case, and the governors/mayors of these places have shown that they only will listen to violence. I think we’re going to see conservatives & moderates act accordingly, first through individuals who’ve lost hope and everything else via the lockdown and are doing essentially “suicide runs” in order to exact some sort of revenge, and then more organized violence by groups. And once that happens, expect stuff to spiral.

    1. *The “they were mocked and branded evil” is in reference to conservatives, not Orthodox Jews. Bad use of pronouns, me

    2. Or how bout this is all bullshit and standard politics. The democrats are pulling out all the stops. I’ll give them the benefit of the doubt and say this was about covid for the first two weeks and than morphed into being about punishing republican and trump voters. Can’t have small business open, can’t go to church, old folks forced to die alone on the other hand we can have protests for blm but no protests for business owners can pay gov workers but can’t pay blue collar business owners because they can’t work. This whole thing works like a charm to destroy and punish working class people who voted for trump.

      1. That is what this is all about. They know they can’t win with Biden, and are doing everything they can to, as you said, pull out the stops. They aren’t just forcing old folks to die alone, in Whitmer’s case she’s actively trying to kill them (yes, she is. She has renewed an order similar to Cuomo’s in NY where people sick with Covid were put in Nursing homes, the difference is that 1. We have actual data to show how deadly this is now, and 2. Cuomo’s order was just returning elderly folks to their nursing home even if they were sick. Whitmer’s puts ANYONE into the nursing home, including the asshole they caught on tape beating up gramps. She is putting in sick people who are not at risk into the most high-risk group). The media is protecting them with 24/7 gaslighting, and I’m afraid it might be starting to work. They’re wrong if they think I’ll accept any Democrat nominee for president.

        1. We are also one of only two states that still won’t let barbers and hairdressers open, even though everything else will be opening soon. I’m sure that has nothing to do with the barber in Owosso that got all the attention for defying her orders.

          1. You’re up in Michigan? Shit man, I’m sorry for you. How is that bitch still in power, she can’t have many supporters.

      2. And this so-called “libertarian” enterprise is 100% behind every single line item in your post.

        1. Yep. Don’t worry, I won’t forget.

    3. Agree. It’s liable to get very scary.
      Leftist thugs are resorting to violence as they’ve always done throughout history. I hope it stays in the metropolises and doesn’t morph into the rural regions.

      1. It won’t, because unlike new York, Detroit, and Chicago. Handguns aren’t illegal in most suburbs

        1. Yeah, Michigan is a swing state, but all the liberals are in high density areas in a few small areas of the state. Once you leave those areas, almost everyone owns guns, and lots of them own lots of guns. And this has us already talking with each other about the possibility of needing to be prepared.

      2. A saw a video clip where one of the protests had clearly made its way into a suburb somewhere, and in front of the property was a long line of people standing in front of the property defending it with rifles.

        These anarcho-terrorists don’t really have the balls to actually start the civil war that they secretly long for. At their core, they’re total fucking pussies that are only going to attack the softest targets. As soon as people start shooting back at them in self-defense, they’re going to run away fast.

        1. totally this.

          1. Yucaipa, California.

            The domestic Antifa terrorists had tweeted about how there were so many rich white people out there, and that they needed to have some businesses torched too. The leftist guerrilla wannabes moved on Yucaipa, only to find that the locals were not having it. They were reduced to butthurt tweets about how terrible people in Yucaipa were, to try to defend their town from violent domestic terrorists who were only trying to protest the murder of a black man by moving from town to town, burning neighborhoods and businesses (whose owners and residents had nothing to do with the murder) as they went. It apparently never occurred to them that burning businesses and neighborhoods based on the race of those who owned them and lived there wasn’t fighting racism, but practicing racism.

            The would-be Weathermen were tweeting things like “note to self: never move to Yucaipa,” which I gather was supposed to be an insult, but I think the people of Yucaipa would agree with Antifa types resolving never to move there.

      3. That’s the thing though. Many of these metro liberals are going to be forced into the suburbs due to either the riots or COVID killing their jobs. They won’t be able to afford fancy smancy NY apartments. And quite frankly, it’s gonna get to the point where conservatives say enough is enough and act. Historically, when that happens, things go from bad to real bad, because Conservatives don’t do these things by half measures. And quite frankly, I’m not sure I’d disagree with them if it comes to that. I’m tired of being constantly gaslighted, being told I’m evil because I’m a straight white male, and because I don’t Seig Heil to Liberal ideology.

        1. I’m sick of it too, constantly being bombarded with this crap. Me and my family never had a hand in oppressive actions against blacks, but according to them I’m literally Stonewall Jackson.

          1. Yep. I hope you’re not in one of the states that’s likely to turn into a hotzone. I don’t have anyone to watch my back here, but at least I’m somewhere that shouldn’t catch fire over night.

          2. There’s a lot of people who are tired of the notion that they have something to atone for. The “show contrition or be attacked” mentality of the mobs will be met with resistance from people who don’t hate anybody, but are sick of woke bullshit. Could get ugly, but it could fizzle out. I can’t imagine riots in rural areas.

  6. Never mind the unemployment rate artificially being force multipled by around 5 or 6, and the annual deficit going from the good old rate of $1 trillion a year to $2 trillion a year, I guess we’ll worry about all that stuff later on, down the road.

  7. the markets are chugging along much better than expected.

    Amazing what subsidizing interest rates can do. Why – it’s almost as if central planning of the monetary system is exactly the sort of central planning that capitalism needs

    1. That doesn’t explain the biggest growth in jobs since the recovery from the actual Great Depression. Leftists were “bracing” for an increase in the unemployment numbers to perhaps 20%, but instead, it fell to 13.5%.

      Centralized government control is not the cure. It’s the disease.

    2. Why – it’s almost as if central planning of the monetary system is exactly the sort of central planning that capitalism needs

      What capitalism needs is for large numbers of bloated and inefficient companies to fail, for people to get laid off where they aren’t needed and rehired by companies that actually need them, and for the government-created bubble to pop. Artificially propping up the markets makes things worse; it’s done for purely short term political gains.

  8. That better not be a plastic bag.

  9. 27,000 today. go, money!

  10. Free people are incredibly resourceful and politicians are unbelievably stupid. The stupidity comes from shutting down their brains in order to rationalize their desire to control and destroy. No one can predict the outcome of market action.

  11. The total US stock market is worth about $30 trillion. Between the different government programs, the US has injected upwards of $5 trillion into the system. Consumption and production is down, so the only place that extra money can go is into the market. There is nothing mysterious about this, and it’s not actually a good sign.

  12. Duhai kasih tambatan hatiku …

  13. Stop gouging customers. They buy cheap crud from China and 3rd world countries that take advantage of their workforce, and then sell it at HUGE markups! Evan

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