5/8/2020 - If You Open It, They Won't Come

[MUSIC PLAYING] CARRIE NORDLUND: Hello and welcome to Mark and Carrie. We're back, continue to be socially distanced. Mark has an exciting new background that I'm sure we'll talk about. How are you doing?

MARK BLYTH: Shameless self-promotion.

CARRIE NORDLUND: That's what we need more. How are you doing?

MARK BLYTH: I'm doing fine. The book behind me, virtually, is, of course, coming out June 17th, available at good bookstores everywhere, we hope. So run out and get a copy. Other than that, I desperately need a haircut.

CARRIE NORDLUND: Yeah, I hear you.

MARK BLYTH: And we were talking about this before we started, but just to get into this now, it tells you a lot about humans that this is the perfect time for us to not drink, to not eat carbs, to exercise obsessively.

Because after all, you're in lockdown, and you don't need to be anywhere. And none of us are doing what we should.

CARRIE NORDLUND: Zero.

MARK BLYTH: Zero.

CARRIE NORDLUND: I buy vegetables. I eat pasta, and the vegetables rot in the refrigerator, I have such good intentions for myself everyday. Future self of being in a pandemic is awesome. Is it working out, eating vegetables, calling mom everyday. But present Carrie in pandemic? Not so great.

MARK BLYTH: Not so good. So is this perhaps a little metaphor or tool we can use for our discussion going forward, that the best laid plans of mice and men and all that sort of stuff? We keep planning. We keep planning to open, we keep planning to stimulate, we keep planning to do things, and it never quite seems to work as planned. Where do you want to start this week?

CARRIE NORDLUND: Well, there are so many ways to take that, but we'll start on the political side of staff. And one angle on that, of course, is the debate around a third relief bill by Congress.

I think we have brought back the average age 9 billion, which is the senators of the United States Senate. They seem to be the people we shouldn't be bringing back to work, because they're the ones who are most vulnerable, because of course they're very aged, and probably have all sorts of underlying health problems.

But they've now called back. There is a bunch of back and forth, whether they were actually going to come back to DC or not. But the big debate is around what the content of that third relief bill really looks like.

I'm sure all of our listeners will recall everything in the other two relief bills has gotten totally screwed up. Shake Shack got like $10 million that should've gone to small businesses, et cetera. But I mean, the two things that I noticed out of the debate for this third potential relief bill is that, of course, now Republicans are saying we don't need it, and then the actual content of it is, should we be writing more relief for state and local governments, which seems like they all have huge, huge deficits.

And then infrastructure, which seems to make a lot of sense, if we want to have a works progress sort of thing started. And that would be something that would fulfill the president's campaign promise about building infrastructure, so that sounds really good. But of course now the Senate Republicans are saying, "no, thank you. We don't even think that we need a third relief bill."

So the politics on this are not lining up. And I think as long-- I mean, the unemployment numbers came out this morning. I mean, I don't remember the exact percentage, but now basically everybody's unemployed who was actually able to file. And so I wonder if those numbers will start driving the Republicans more towards a third bill.

MARK BLYTH: Well, it depends. I mean, I think the Republicans are completely correct on this, if you define "we" as the interests of the Republican Party and their donors.

CARRIE NORDLUND: Yeah.

MARK BLYTH: "We" don't need this bill, because the Fed, as we said last time, has put a floor under asset prices by buying everything.

CARRIE NORDLUND: Mm-hmm.

MARK BLYTH: The first bill that they did for relief basically gave huge amounts of relief to corporations that had no savings and bailed them out from all their buyback decisions and other decisions. And ultimately, the stock market's going up as the unemployment indicator is going down.

CARRIE NORDLUND: Yeah.

MARK BLYTH: We know that Trump and the rest of that side of the House and many Democrats do not measure the health of the American economy by things like the well-being of workers, but actually measure it by the volume of the stock market.

So the stock market is going up. My investments are fine. I don't think we need another bill. Now sell it to me, right? So you've got Pelosi and everyone else saying we need a huge Franklin Roosevelt style thing.

CARRIE NORDLUND: Yeah.

MARK BLYTH: First of all, what is it with the Democrats and the only imagination they can ever grab on to is 90 years ago and it's Roosevelt? And is that even plausible today? I mean, yeah, think of the Works Progress Association-- Administration.

What are we going to do? We're going to basically get 50 to 60,000 unemployed young men and put them in tents in the middle of the desert and build a dam? Is that what we do these days? I mean, the world has moved on a bit, right? So speak to that. What's going on in that imaginary--

CARRIE NORDLUND: No, but I'm laughing, because it's a fundamental problem the Democratic Party is that we-- it's like with Lincoln and Roosevelt, you're exactly right. And I think the life support of the Democratic Party is simply like, why is it that we can't move past some old ideas? Why can't we?

And I have my questions about some sort of Green New Deal. Why can't we move towards where some of the younger representatives, and younger meaning in your 50s representatives and senators that are pushing on this sort of stuff?

I mean, I think when we think of like bridges and public transportation, that all makes sense to us, but you're right. What part of the workforce are we actually bringing into it, if we have people, young, strong people building bridges?

MARK BLYTH: Right, and the whole mess of mobility in the United States, like when jobs closed down here, people move over there, it just simply isn't true. We're incredibly immobile. Mobility has completely broken down.

CARRIE NORDLUND: Yeah.

MARK BLYTH: We have huge numbers of people with obesity as a preexisting condition. How are you going to mobilize them?

CARRIE NORDLUND: I think it's such an interesting question, because it speaks to where the leadership of the big D Democratic Party is, which is to say that it's been the same for so long that it's just--

MARK BLYTH: Right, right.

CARRIE NORDLUND: And, I mean, this speaks to every political party, but they've really kept out any new ideas, because of course it's a threat to their own power.

So even thinking about the gang, the four or five women representatives, that they were have been kept on the outside of leadership. And of course, they're junior members, et cetera, but even that, I mean, a threat to the core leadership really speaks to "we don't have any new ideas, because we don't want any new ideas."

MARK BLYTH: Right. Now, if I'm the Republicans and I know exactly what I want, I want to protect my assets, my income, and I define that as the national interest, then once again the Democrats fall right into the playbook.

Because to anticipate something else we'll talk about, Trump's re-election strategy has become crystal clear.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Which is, I'm going to blame China.

CARRIE NORDLUND: Yup.

MARK BLYTH: Right? And I'm going to dump it all on the governors.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And if it works, then I win, because ultimately, see, you guys were all scaredy cats, and I was right, and the economy came roaring back. And if it all goes bad, then I'm going to blame China and the governors. And you're banging on about a new deal that's never going to happen.

So let's go to the other issue. You've got states that are going bankrupt because they rely on taxes and revenues. All of those are going down. Unemployment's going up. They've been handed the responsibility of fighting the COVID pandemic as their budgets are collapsing.

CARRIE NORDLUND: Mm-hmm.

MARK BLYTH: Any other country in the world would be like, we need to do something about this. From the Republican point of view, let them go bankrupt, because they're not endangering my assets. I don't give a damn.

CARRIE NORDLUND: But that's a great point. I 100% agree with you. It is sort of the President Ford telling New York City to drop dead, by at a much larger scale.

But that's what I don't understand, Mark, is that the stock market is going up, but everything else is going down. Is that just a fake confidence, or is it just artificial confidence that for better days ahead? I mean, that seems like two things that just can't go in opposite directions.

MARK BLYTH: Well, think about it this way. A lot of stuff that goes into markets is what we might call involuntary money. News of that is, if you're still in work, and you work at Brown as I do, Brown's about to make a pension contribution.

CARRIE NORDLUND: Mm-hmm.

MARK BLYTH: And so are you. And that has to go somewhere. Now, if you put it in cash, it's not doing anything. So you want something better than cash. The Fed has basically said, I'll buy everything. It means that nothing will go to zero.

So that means that there will be a recovery, albeit partial. So do you want to sit in cash, or do you want to basically get some of that recovery? So everybody piles on, and it becomes self-fulfilling.

CARRIE NORDLUND: Mm-hmm.

MARK BLYTH: Now, does it have any real legs? Well, I'll refer to a graph that Adam Tooze posted on his Twitter feed a while ago. I don't know the calculations behind this, but it was mind blowing. That basically, if you factor out companies buying their own shares back, there has been no stock market rally. That's responsible for about 90% of the moves over the past decade.

So in a sense, this is an insider game for people who are fortunate enough to have equity. And everybody else can go to hell.

CARRIE NORDLUND: So we have no new ideas, and we're just buying our own stuff.

MARK BLYTH: Yes.

CARRIE NORDLUND: I mean, companies are just buying their own stuff to inflate their and show something on the books that they look much stronger than they may actually be.

MARK BLYTH: Right. Meanwhile, we're not giving small business the loans that they need to survive. We're opening up, and we're really pretending that there's been no behavioral change, which is crucially important. So I'm writing a piece just now. I'm calling this the Inverse Field of Dreams Problem.

CARRIE NORDLUND: Yeah.

MARK BLYTH: You can open it, but will they come? And the evidence so far from the states that are beginning to open up is, no, they won't, because it turns out, people are smart. And they don't listen to politicians, and they trust their governors more than they trust the government. At least the federal government.

And they actually think this is the real thing, and nobody wants to say, hey, honey, let's have a great day. How about we abandon our masks, go to a small restaurant filled with people, and eat barbecued, which is running out, and is made in a COVID-filled factory? Then we'll go grab a movie at an air conditioned place that recirculates all the air, and then we'll fly to Vegas and go gambling." It's just not happening.

CARRIE NORDLUND: Well, and it's fascinating that-- well, two things of that. So we talked about this last time, but the protesters in the state capitals. What's interesting, I've been watching this, you know Michigan, my home state, is that the governor didn't move. She didn't change her position on anything.

And so I mean, thinking about the polls, and thinking about the responsibility of governors is that they know, governors now. I mean, well, some of them do at least, right, through their policies that this isn't what people want. And so they're continuing their stay-at-home orders, or they're continuing a very conservative phased in approach to things.

And so I mean, that's right for all sorts of political stuff, but it is interesting that they're listening-- that the polls show that we don't want to go out and do all the things that you just listed, and that governors are listening to that, at least some of them, to keep things in somewhat lockdown or a partial lockdown.

MARK BLYTH: Although I think it was Illinois or it may have beaten Ohio today basically said, if your employer asks you to go back to work and you don't, you'll lose any and all benefits.

CARRIE NORDLUND: Yeah, I mean, that's--

MARK BLYTH: So we're forcing people back into an unknown set of risk factors. And of course, what's the one thing the Republicans want to do? Give legal indemnity against the employers, so that they can't get sued for that. I mean, this is so one-sided it's unbelievable.

CARRIE NORDLUND: And of course, those are not the jobs at an academic university, where if you were forced to go back, you have your office or you have some protection against people sneezing on you.

MARK BLYTH: But if you worked in, let's say for example, cleaning the dorms.

CARRIE NORDLUND: Yes.

MARK BLYTH: Right?

CARRIE NORDLUND: Yup.

MARK BLYTH: If you worked in food services, if you worked in security, right? That may well be the case, even in these more privileged sectors.

CARRIE NORDLUND: Yeah. So there's an article that I was reading about whether the US is a failed state. And I always think that's an interesting argument to have, but I mean, the premise of it was that in a non-failed state, you have a government that actually has policies, that regulates testing, you have a government that has economic and fiscal policies, and that the US has does not have any of that, and so therefore--

And I thought that was an interesting article, because I often, as a political scientist, think of failed states as being Equatorial Guinea or something like that.

MARK BLYTH: Yes, other things.

CARRIE NORDLUND: As opposed to the US. And so I was both depressed, and I thought, well, wait, is this true? And I was persuaded by it, I have to say.

MARK BLYTH: Yeah, I mean, it depends on what you mean by a successful state, right? So I mean, again, it's those sort of annoyingly both efficient, humane, just, and equalitarian Scandinavians that usually get held up, right?

CARRIE NORDLUND: Yes.

MARK BLYTH: And there you've got a really fascinating pair of comparisons. Because you've got the Danish lockdown, which is very restrictive, very severe, right? And they really crushed it, and now they're opening up the schools, right?

CARRIE NORDLUND: Yes.

MARK BLYTH: Route number one, right? With very few deaths. And then you've got the Swedes. And the Swedes are like, we're just not doing a lockdown. It's bullshit, and basically we're just telling people to wear masks, and be careful, and sensible.

And their numbers are going up, but they're nowhere near Britain, which is halfway between the two. Now, what is it that makes these societies work? Let's not think about them as failed states. Think about one of the things that makes states work is that people trust their state.

CARRIE NORDLUND: Yes. Yup, trust in government is key, yeah.

MARK BLYTH: Both of these things, if you do survey after survey, you'll find incredibly high levels of social trust and social capital. So when the Swedish government says, this is how the virus works, and we're not going to tell you, we're not going to lock you in your houses or whatever, we're just going to tell you this and expect you to be grown-ups now, and don't be idiots, don't be stupid. Wear a mask and go home.

And they do. "Yeah, OK, fine. We'll do it." Same as New Zealand. Exactly the same thing happened, right? You go to the United States, and it's like, "I need you to wear a mask in Costco." "To hell with you! To hell with you!"

CARRIE NORDLUND: Yes. Yeah.

MARK BLYTH: It's like, "whoa, what's going on is a conspiracy! Everything's a conspiracy!" And we have absolutely no trust in our own institutions. Now, the interesting question is, how this has come about. My hunch and research basically suggests that a lot of this has been politically engineered by people who really want dysfunction rather than order.

CARRIE NORDLUND: Yeah.

MARK BLYTH: But that's perhaps another conversation.

CARRIE NORDLUND: But I think you're right, I mean, to sow those seeds of functionality and sew those seeds of total skepticism, of total pessimism. I mean, this is a topic-- this actually weaves well into our next topic, which is the conspiracy theory that now has moved from conspiracy theory to regular, generally accepted by the Trump administration, is that COVID started in a Wuhan lab and then was released by the Chinese government.

I mean, I was watching the Sunday shows, and our Secretary of State said that there is significant evidence to show that started in a lab. And I thought, there isn't significant evidence for that.

MARK BLYTH: Well, I mean, he's not showing the evidence. If there's evidence, show the evidence.

CARRIE NORDLUND: Correct.

MARK BLYTH: It's simple as that. I mean, there are certain things that don't add up, irrespective of whether local cadres covered it up, so that when the central government were saying that we've only got n number of cases, they didn't really know because everybody's incentive is to cover their arse. All that sort of stuff, entirely plausible that there's that type of dysfunction.

All the scientists. I've spoken to basically say, look, if you know what you're looking for, you look at this thing, you know that it's natural. It's not manipulated.

But, and this is the interesting thing about the Five Eyes report that came out last weekend in the Australian newspaper The Telegraph, I think it was, that essentially that lab has been taking bat viruses and genetically manipulating them, and making them more lethal on the ostensible-- well, lethal, more transmittable.

On the ostensible grounds that doing so allows you to research how you would defeat them if they became wild, right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: So basically right next door to the place where you're saying it happened, you are doing pretty cutting edge and very risky research on the very thing that caused the pandemic.

CARRIE NORDLUND: Right, yeah.

MARK BLYTH: The genetic match to the existing strains that we have out here in the wild are causing a problem to the one that they had in the lab was 96%. Now, that sounds a lot, but remember, you and I are 98% the same as a chimpanzee. So when it comes to genetics, small differences matter.

So that sounds like it proves something, but maybe it doesn't actually prove something. So there's a lot of kind of smoke swirling around. The type of coronavirus apparently that we're looking at is bats that exist on the other side of China.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So how did they end up in a wet market? It's far more likely they came out of a lab, right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: And labs make mistakes, right? Now, let's assume-- this is a conversation I've been having online with a friend of mine called Doug. Hi, Doug.

Let's assume that all these conspiracy theories are right. Let's not even call them conspiracy theories. Let's say there was a huge screw-up in the lab. Now what do you want to do? Do we invade?

CARRIE NORDLUND: Yes, yes.

MARK BLYTH: Do we nuke Wuhan? What exactly is the consequence of this? And the only point in doing this is electoral.

CARRIE NORDLUND: Yeah.

MARK BLYTH: It's simply to blame China, so that when it goes south here, as it continues to seem to do, then it's not my fault. I mean, talk about this one. Weren't they about to disband the virus task force?

CARRIE NORDLUND: Yeah. Well, then the president then said, no, we're not. It was so popular. It was like a band. We're going to keep it going. Contradicted himself just a few hours later.

But on the China part, I mean, I have been thinking about the political calculus of this a lot in that, on one hand, it makes sense, to blame China for doing this, it started in a lab, Xi Jinping didn't tell-- all that stuff.

And on the other hand, though, you need China for this economic recovery. You need them for masks, and you need them for Lysol wipes, and all this. There's a million other things.

So how does one both make them the political enemy as well as continue to have some sort of diplomatic rela-- and economic-- most importantly economic relationship with them.

So I don't know that for the Trump re-election campaign it can be as clear as, point the finger at them, and then if they win, "just kidding. Let's now be friends." The needle seems so difficult to thread on that one.

And one of the interesting things that I thought to your point, and doubling down on things, is that the Trump campaign just did like a multimillion dollar ad buy hitting Biden on China. So you can see that this is probably going to be the next couple months of just hitting Biden on China for-- I don't know for what exactly, but underlining the China part of things.

MARK BLYTH: Yeah. Wow.

CARRIE NORDLUND: Trump has-- I looked this up as I was prepping for this-- $244 million. That's between the Trump re-election and the RNC, compared to Biden, $57 million between the Biden campaign and the DNC.

I mean, the cash-- I mean, I don't even know the amount more that they have is just a gazillion dollars more.

MARK BLYTH: So what do you do with that? Because here's the thing, if you're relying on turnout, particularly in the context of a pandemic, where places might be in a second lockdown, and we don't even know if this thing is going to go ahead, let's be perfectly frank, I guess a lot of that's going to be on TV spend.

CARRIE NORDLUND: Yes, yeah.

MARK BLYTH: Now, who the hell watches TV?

CARRIE NORDLUND: Nobody.

MARK BLYTH: It's just old people, right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: So basically you're going to go to Fox, and you're going to get the one million people that watch Tucker every night or 1.3 million, because that's the most watched show, I think.

CARRIE NORDLUND: Yeah.

MARK BLYTH: CNN's figures are like 800,000, maybe a million. This is a drop in the bucket. And you're going to spend all that money, money, money, money, reinforcing what are already partisan divides.

If you are on the Trump team, you're not watching CNN.

CARRIE NORDLUND: Yep.

MARK BLYTH: Right? And there's absolutely no point in putting on Fox a Biden soft on China thing, because you're not going to be watching Fox. The whole thing seems to be just bizarrely pointless in a way.

CARRIE NORDLUND: I mean, it's just showing that he's just trying to invigorate and keep his base engaged.

MARK BLYTH: Right, exactly.

CARRIE NORDLUND: And so it's not moving the voters in the battleground states, who are like, who gives a crap about China? I don't have a job.

MARK BLYTH: Right.

CARRIE NORDLUND: None of my family have a job. We're all underemployed or unemployed at this point. We can't leave our house. They don't give a crap about China. So you do wonder how they can move from that, from the base.

MARK BLYTH: But if you can basically keep that base anger going and say, look, the real reason you're like this, and the reason things aren't coming back and all that, it's China's fault. Then you're able-- and you've already proven that you don't really care about getting medical equipment from anywhere to your medical professionals. We fire people for being whistleblowers in hospitals, for God's sake.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So you've proven you don't care about that, then this, in a sense, makes perfect sense. Just basically release all the people that have caused trouble, corrupt the Justice Department.

You jailed somebody I don't like? He's out. Michael Flynn, out you get. And we'll just double down on the strategy of basically China and blame the governors. And that's pretty much it.

CARRIE NORDLUND: Well, Trump, the campaign is so good at creating an enemy. I mean, that's what their successful playbook has been, is creating an enemy. And there's no enemy for Biden. I mean, and the enemy here will be all of those different things that we've listed for the re-election campaign.

I have a very serious question for you that I've been thinking a lot about, Blyth.

MARK BLYTH: Go ahead.

CARRIE NORDLUND: So all the numbers show that the US economy and China's economy has shrunk by like a zillion percent.

MARK BLYTH: Right.

CARRIE NORDLUND: So but where does that go? I don't understand. I don't actually know the question to ask you, but where does that go?

MARK BLYTH: Where does it go?

CARRIE NORDLUND: I mean, I understand it. So for example, at Brown University, we have thus far, no one's been furloughed. No one's salary has been cut. So I'm more conservative in that I'm not spending money at lunch or coffee and that sort of stuff. But I still have the same amount of money coming in.

So I understand it on a very personal level, but I don't understand it on the big level of where does all that capital or consumer spending, where does that stuff go when the economy shuts--

MARK BLYTH: All right. No, it's a totally fair question. So it's not that it goes anywhere. So I've actually been trying to write something along these lines that goes something like this.

So in physics, they say that energy can neither be created or destroyed. It's just there, right?

CARRIE NORDLUND: OK, I'm with you.

MARK BLYTH: And it holds its form in matter at some point.

CARRIE NORDLUND: OK.

MARK BLYTH: So that's it. Now, what happens in the economy is that we have capital. That can be buildings. That can be machinery. It can be software.

And then we have labor that basically works it. And we sent all the labor home.

CARRIE NORDLUND: OK.

MARK BLYTH: Now, we talk about, there's been a war against the virus. It's a very unusual war, because in a war, people die. The virus is killing people, too. But in warfare, the real gig is to destroy the other person's capital.

CARRIE NORDLUND: OK.

MARK BLYTH: You blow shit up.

CARRIE NORDLUND: OK.

MARK BLYTH: All that sort of stuff. This war, nothing has been destroyed. All the planes are still parked at the airport.

CARRIE NORDLUND: Right.

MARK BLYTH: All the hairdresser salons are still intact. Nothing has happened to them. So what we have done over the past two months is essentially take the demand driver for all of those things, which is people spending, and sent it home.

And when you make them unemployed, you crush that spending even further. So what you're basically doing is taking, if you will, the fuel for consumption out of the economy, and sticking it at home.

And then as businesses fail, more and more of that fuel is leaking out of the system.

CARRIE NORDLUND: OK.

MARK BLYTH: So that when you try and get back to work and open up the capital, even if no one's behavior has changed, even if everyone's like, "let's go to the mall. Let's do everything", then there's just less spending fuel around. There's less consumption.

So it just shows up essentially as, you have less consumption, and that less consumption means less demand, less demand with basically a capital stock isn't doing anything just means that economic activity as a whole just guh, just falls. And that's basically what we're seeing.

CARRIE NORDLUND: But I mean, OK, so back to the mall analogy. So the malls are back, and we don't do what we've been doing, which is to stay home, and we're like, "OK, I do you want to go to the cheese factory and buy a sweater at the Gap." There is just not enough of us doing that to?

MARK BLYTH: So far, there's not. And also when you've made-- I think the figure is 15% of the labor force. It's probably closer to 20 unemployed. So imagine-- let's call it 20%.

So let's say that before all this happened, the American economy is ticking along, and we'll call that level 100, right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: Well, by making 20% of people unemployed, let's forget about whose income skew and all the rest of it, essentially, you've just taken 20% of the purchasing power and said, that's not going to happen anymore.

CARRIE NORDLUND: Right, and then there's--

MARK BLYTH: So that means rather than five people in the Apple Store, there's four.

CARRIE NORDLUND: Right, right, right. And then for the people who are unemployed, that means the service workers, some who are most vulnerable, they actually tend to outspend versus like Warren Buffett. I mean, they spend at a higher level of their income.

MARK BLYTH: Yeah, they spend everything. That's the classic paycheck to paycheck. So they are really high consumption drivers.

CARRIE NORDLUND: Right, right, right. OK.

MARK BLYTH: So I mean, Warren Buffett is not going to go on a spending splurge individually with his money and buy 30 million fridges. So what you need is housing starts, and then people building homes, and then they buy fridges.

CARRIE NORDLUND: Right.

MARK BLYTH: If all those people who were about to, before this happened, were thinking about buying a home this year, they'll probably not. And that's going to impact building and construction, and that's one of the industries we're beginning to see is really hit now. And they hire a lot of temporary and hourly workers.

So the shock ripples through all these different bits of the economy in different ways.

CARRIE NORDLUND: So when you think about people turning the economy, opening the country and all those bullshit phrases, what do you see economically for the following calendar year? I mean, the whole-- every time someone does-- like, J, V, S shit, whatever it is. What does it look like?

MARK BLYTH: So I think there's basically two stories, and we don't know which one's right, and I hope that my friend Mike is right.

CARRIE NORDLUND: Hi, Mike.

MARK BLYTH: Hi, Mike. And my friend Mike basically has this analogy, which is Cape Cod Rentals.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So if you look at Cape-- you can do it for Rhode Island as well. So if you want a Narragansett beach house for the summer, well, in January that thing basically rents down here. Nobody cares. And then the closer you get to summer, then you effectively rent it for this very brief period and make all your money, and then it goes down again.

So essentially what he's saying is, what we've done is, we've turned the whole economy into a Cape Cod rental problem. At the end of the year, the Cape Cod rental is still worth the same. It might have even gone up.

The capital is still there. But you only really use it for three months. So in a sense, what we've done is we've treated the whole economy as a Cape Cod rental, right?

CARRIE NORDLUND: Yeah.

MARK BLYTH: Right now nobody's making any money, but when you open it back up, hey, it's the summer and you want to go to Cape Cod. We're fine. That's one story. That's a very hopeful story.

The other one is the one that I'm more afraid of, because I just talk to myself and other people, and they say things like, "am I gonna go to Vegas anytime soon?"

I just think what happens then is, the longer you do this, the more that people's behaviors shift.

CARRIE NORDLUND: Yeah, yes.

MARK BLYTH: And we basically build up-- this tends to happen after pandemics. You see this rate of return on assets falls, and people become much more conservative. They build up cash buffers. They save more. There's much more precautionary savings.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And that inevitably leads to a kind of a permanent downshift in the level of economic activity.

CARRIE NORDLUND: Right.

MARK BLYTH: So I think the longer-- the shorter this is, the more likely it is the behavior doesn't shift. The more it's a Cape Cod rental problem. The longer it goes on and the more that we destroy the economy in the process, because that is what we are doing, in terms of all that demand that isn't being pumped into economy.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And all those people being made unemployed, et cetera, et cetera, the more that you get that kind of problem of a behavioral shift, and you get stuck down at a very much lower level, and then everything has to adjust to that.

CARRIE NORDLUND: Well, and to your point just about travel, I mean, thinking about corporate travel, that's probably been on the cutting block for a long time. I mean, all the stuff that props up the corporate travel, business travel, I mean, that's just got to go away.

Just because as businesses and big corporations now see, you don't need that.

MARK BLYTH: Right.

CARRIE NORDLUND: And so that's an easy thing for them just to start to eliminate.

MARK BLYTH: But another way to think about it, though, is the way the airlines were making money was basically densification.

CARRIE NORDLUND: Mm-hmm.

MARK BLYTH: So the classic one was, British Airways 777s were becoming 10 across. So it was three, four, three configuration. I mean, just like ridiculous, just getting like this. You know that's done. That's not going to happen.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So how, then, can you afford to fly these things when you're going to have less flyers? You're basically going to have to de-densify the plane, which essentially means premium economy and business are going to become normal, which means the flights are going to become way more expensive.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So people will fly less, anyway.

CARRIE NORDLUND: Yeah, yeah.

MARK BLYTH: Right? So I mean, and all of this is contingent upon whether we get a vaccine.

CARRIE NORDLUND: Yeah.

MARK BLYTH: Right? If we don't get a vaccine for this thing and all we've got is prophylactic treatments, then this becomes part of the furniture. Then you're guaranteed that you will shift those behaviors in a permanent way.

CARRIE NORDLUND: No, I think you're totally right.

MARK BLYTH: So much we don't know.

CARRIE NORDLUND: I mean, just the working part of things, just the really base of going to an office, I think you can't-- I mean, among white collar positions that have that flexibility, until there's a vaccine, how can you do this? And of course universities are thinking about this for the fall.

MARK BLYTH: No, absolutely.

CARRIE NORDLUND: Et cetera, et cetera.

MARK BLYTH: I, mean, what I find fascinating here is the notion of using an executive order to keep meatpacking going. I mean, I just don't understand how you basically decree hamburger, right I mean, you're not going to go in there. And if you do, you will get sick. These are incredibly unsafe places to work.

The only people that could do it are basically marginal, undocumented, and vulnerable. So the very people that you want to throw out of the country are the ones that are going to literally save your bacon.

CARRIE NORDLUND: Well, this is what we talked about in at least one podcast if not two that they're now essential workers, so now they can stay in this country. I mean, that we can't have an executive order in decreeing that a plant makes the swabs, so we can have more testing, but we can do it for meat? I mean, that's when you just--

MARK BLYTH: That's back to your failed state analogy right there.

CARRIE NORDLUND: Yes, yeah. I mean, I want to touch on this just very quickly, and this has to do with the Joe Biden and the accusations by Tara Reid, one of his former Senate staffers.

It has been interesting just as an observational-- not as a partisan, to see the way that the media is-- just coming at this from a media angle, how the media has treated this.

MARK BLYTH: Yeah.

CARRIE NORDLUND: And how it has been-- and you know, the Republican talking points are, of course, double standards, hypocrisy, blah, blah, blah. I do have to say, I have to lay blame at the media and how it has been so clear that the Democrats do not know how to talk about it, do not know how to handle it. They want it to all go away. They have a candidate. Everything's lined up. Just, dear lord, can we just hang on till the very end?

MARK BLYTH: So it's classic, in a sense that these things only work if they apply to all sides.

CARRIE NORDLUND: Yes, yup.

MARK BLYTH: So the Republican side has never accepted MeToo. It just hasn't. So the Democrats, because the Republicans don't accept it, embrace it for ideological reasons. They think it's right. But they also embrace it for practical political reasons. This is a good moral stance that we can embrace fully to show that we are better than they are.

CARRIE NORDLUND: Yes.

MARK BLYTH: OK. Once you do that, you're trapped. You need to follow this through. You need to be consistent. And if that means basically taking the form of everybody who's ever accused of anything is thrown under a bus, you're not going to have too many candidates.

But that's the position you've embraced. So irrespective of the rights or wrongs of the case, they have built themselves once again into a position whereby it simply doesn't apply to the Republicans. They don't care. They can just throw bricks at them all day, and they're going, "well, we embraced this. We need to own it, but we're damn well not going to actually own it on this one, because that's different." Yeah, that's hypocrisy.

CARRIE NORDLUND: But this is one of our starting points of the hollowness of the Democratic Party, which has no new ideas, and that we stand on this moral high ground, and just sort of "well, we're better."

And this is, I think, part of the coastal elites, is that we're just condescending, patronizing jerks.

MARK BLYTH: Yeah, totally.

CARRIE NORDLUND: And that we just-- and like, well, you do it. But you're right. It only works if it applies to everybody. And it just--

MARK BLYTH: It only applies to us.

CARRIE NORDLUND: Yes, yes.

MARK BLYTH: That's the thing about it, it only applies to us.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So then when we don't enforce it on ourselves, it is an act of pure hypocrisy. Absolutely.

CARRIE NORDLUND: You just don't know how to shake the people that need to be shook or whatever, shaken, shook, just to think about this in just a sensible sort of way, and just a sensible sort of response as well.

So I don't know. This is when the demise of the Democratic Party, you think. I am now much more leaning towards, just burn the whole system down, because I mean, we might as well.

MARK BLYTH: I knew eventually, eventually I would get you there.

CARRIE NORDLUND: Yes.

MARK BLYTH: I mean, you started off as kind of a pretty mainstream Democrat.

CARRIE NORDLUND: Yeah, totally.

MARK BLYTH: You're done.

CARRIE NORDLUND: No, the pandemic has done this to me.

MARK BLYTH: It's finally pushed you over the edge.

CARRIE NORDLUND: Yeah.

MARK BLYTH: So let's end with a couple of wonderful, lighthearted stories from this week. What about the flush heard around the world?

CARRIE NORDLUND: So the Supreme Court, average age 90, I think, they're doing all their stuff on basically conference call, all the arguments. It's actually really fascinating to listen to. I listened to part of it the other morning, and just to hear the Chief Justice cut justices off, and just to hear their questions.

Clarence Thomas asked a question for the first time in like 100 years.

MARK BLYTH: I was about to say, this is brilliant, because Clarence Thomas can actually now just lie in bed and ignore the entire thing.

CARRIE NORDLUND: That's exactly right. So there was a toilet flush heard in the background. We don't know whose toilet it was, but all of us that have been like, "put your thing on mute" or seen something in the background that we--

MARK BLYTH: Really.

CARRIE NORDLUND: It was just very lighthearted to think of the Supreme Court as also dealing with this.

MARK BLYTH: It's nice to know that pooping is not a partisan issue.

CARRIE NORDLUND: It's not. And Supreme Court justices, it turns out, have to use the restroom as well, or somebody having to do with them. Yeah.

MARK BLYTH: I don't know if I'm pleased or horrified by that. What about Kim Il Twinkie? Is he dead or alive?

CARRIE NORDLUND: Well, presumably he's alive. He was seen. Either that or a Vegas lookalike, who's out of work in Vegas, moved to Pyongyang. He seemed to be alive. So and they traded fire with South Korea. A few bullets were shot over the DMZ.

So a deathwatch is still on for Kim Jong Un. I mean, his underlying health conditions are enormous.

MARK BLYTH: No, and this is why there is no COVID in that country, because it would get him in a heartbeat.

CARRIE NORDLUND: In a heartbeat, yeah.

MARK BLYTH: All right, one last one. The revenge of Paul McCartney and Wings.

CARRIE NORDLUND: What's that?

MARK BLYTH: Live and let die. What was that all about?

CARRIE NORDLUND: I didn't know there was Paul McCartney.

MARK BLYTH: Yeah, it's Paul McCartney. It's Paul McCartney and Wings. He wrote that in '73 for a James Bond film called Love and Let Die.

CARRIE NORDLUND: I'm so non-educated about music, because I thought it was like an '80s-- I thought it was like a Guns 'n Roses song.

MARK BLYTH: No, Guns 'n Roses covered it. The original was Paul Mc--

CARRIE NORDLUND: But I thought that they were the original. Thank you for not shaming me.

MARK BLYTH: No, no, no. the original was Paul McCartney and Wings. There you go.

CARRIE NORDLUND: Well, Trump visited this mass factory in Arizona without wearing a mask, and pumped in the background of course. So this is not lighthearted, but one doesn't really know what to do with it except laugh, because or else we'll cry, is that Live and Let Die then was playing in the background.

Which I wonder if anyone actually thought about that, or if they did, and it was just seen as irony.

MARK BLYTH: Oh, they thought about that. They thought about that. I will close with this story about someone who I know who will remain nameless, who really doesn't like his future mother-in-law.

CARRIE NORDLUND: Oh.

MARK BLYTH: So they insisted on a church wedding. And when the mother-in-law came in, the following music was played.

[HUMS IMPERIAL MARCH]

All the way until she walked all the way up to the top and took her seat, and then it stopped and went back to other music.

CARRIE NORDLUND: Wow.

MARK BLYTH: Wicked.

CARRIE NORDLUND: And how are relations now?

MARK BLYTH: Oh, they're still married.

CARRIE NORDLUND: Oh, OK.

MARK BLYTH: Yeah.

CARRIE NORDLUND: So it wasn't a total death knell then.

MARK BLYTH: It's amazing what you can get away with.

CARRIE NORDLUND: Yeah.

MARK BLYTH: And on that note.

CARRIE NORDLUND: Well, great to see you. Thank you. We'll be back. Thank you for listening.

MARK BLYTH: Bye.

CARRIE NORDLUND: Bye.

[MUSIC PLAYING]