Breitbart Is Wrong This Time -- August 23, 2021

I apologize. The subject line is incorrect. I don't know if Breitbart is wrong or not; all I can say is I disagree with their op-ed today.

I don't often disagree with Breitbart but in this case I definitely don't agree with them.

Again, to make things perfectly clear, I don't agree with the thesis below.

The most important message coming out of this year's Federal Reserve powwow in Jackson Hole, Wyoming, is that it will not be coming out of Jackson Hole, Wyoming. 

The Federal Reserve Bank of Kansas City, which is officially the host of the annual monetary policy conference, announced on Monday that the conference was going to be all virtual. Teton County, where Jackson is situated, has recently gone into the high-risk category for covid infection. There were only an average of 16 cases per day reported in Teton recently, but that is a 76 percent increase from the average two weeks ago. Even fully vaccinated people are supposed to wear masks, which is not really a great garb for communicating intricacies of monetary policy during half-hour speeches. 

This is a microcosm of what is happening all across the country. Conventions are being canceled or made virtual. Airline and hotel reservations are being canceled. Dinner reservations are suddenly easier to come by. Convention centers, which pick up business in the fall, are finding events called off. For many urban economies across the country, these crucial sources of income are drying up. The hand-off from summer leisure travel to autumn business travel is almost certain to be fumbled.  

The resurgent virus showed up first in the spending data for the south but is now spreading across the country. The good news is that the rate of Delta variant infections is likely cresting in the south, according to Dr. Scott Gottlieb. But that means that the rest of the country has weeks or months to go. Businesses that have pushed their office reopenings from September until October will likely have to announce further delays. As long as infections keep rising, there will not be a full reopening. 

While the reality of the Delta variant has already hit consumer confidence and retail spending, the broader implications likely have not. Namely, only a small share of the public and approximately zero of the punditry has acknowledged the risk that the Delta variant surge may not be the last but the first. There are many variants, and there will be many more. And there does not appear to be any plan—for businesses, for the economy, for society—for what will happen if the future holds a nearly endless series of covid tides. 

The stock market, in particular, is priced for covid fading into the shadows of memory. If that doesn't happen, a lot of the more aggressive valuations of the summer of 2021 will look foolish.

– Alex Marlow & John Carney
Breitbart News Network