The first proclamation of Memorial Day occurred in 1868 by General John A. Logan as Decoration Day to honor fallen soldiers during the Civil War. With Memorial Day upon us, we should give thanks to all those military men and women who have served to protect the freedoms guaranteed in our Constitution. Unfortunately, today, many people believe some of our political leaders are superimposing restrictions on the citizens which is contrary to our Constitution. Civil unrest and protests are happening across the country. We witnessed similar unrest during the ill-conceived Prohibition era in the 1920’s. Rules and laws not respected by the populace will be broken or circumvented -not good. Fortunately, as was then, this too shall pass.
In a recent Wall Street Journal article titled, “Freedom and Sweden’s Constitution”, Lars Jonung, Professor Emeritus at Sweden’s Lund University and Steve H. Hanke, economics professor at Johns Hopkins University point out how important individual freedom is to their citizens. Sweden! Wasn't the nascent America the birthplace of liberty and freedom? Maybe not the first, but we set the bar against government tyranny and authoritarian rule in 1776. A balance between economics and science must be attained.
It is no longer a question of when the country should re-open. The economic lives of tens of thousands of small businesses and their employees are threatened. Like Sweden, who never imposed a lockdown of its economy, our people have shown they can maintain social distancing and sanitary personal habits. The compromised over-age 65 citizens still have to self-quarantine themselves. Does anyone believe they will not? The constant mixed messages from our government-run Centers for Disease Control and Prevention (CDC), have successfully scared the population to a point where normalcy will be a long-term pursuit. Behavioral scientists will tell you fear is stronger than logic. Fortunately, most states have reopened their economies. Personal responsibility has taken root.
As such, new consumer behavior has emerged that will change the investment landscape going forward. Investors are bidding on the future as equity markets continue to show promise again and credit markets have stabilized. Investors are looking past 2020 as we slowly regain our economic footing. As FS Investments economist Lara Rhame points out, Gross Domestic Product (GDP) does not correlate well with the Dow Jones Industrial Average. Many investors are looking at growth in 2021 and even 2022 which is quite extraordinary.
So, let us all take a deep breath, BBQ some hamburgers this weekend and honor our thoughts to someone we know who has served to protect our liberty.
To the fallen and the living.
Happy Memorial Day!
George N. Luciani