With economy sinking like a stone, it’s hard to imagine a recovery

When we get to the economic recovery in the post-COVID-19 era, will there be an economy left to recover?

Boeing’s announcement last week to cut production rates and employee counts couldn’t have been a surprise to most. However, the numbers were still jarring and jolting for their size: U.S. airline passenger traffic down 95 percent from a year ago, the 737 Max production rate to eventually work its way up to 31 planes a month (was it that long ago industry analysts were discussing how to squeeze 60 planes per month out of the Renton plant?), the workforce for commercial airplanes and services businesses and corporate functions cut by 15 percent.

That was just the latest piece of bad local business news. Cosmo Specialty Fibers in Grays Harbor County is taking a 90-day shutdown because “the virus has caused a shutdown of the U.S. and European retail clothing industry (who are our customers’ customers),” according to a company statement. The mill employs close to 200.

In a historically significant announcement, Alcoa is shutting down production at its Intalco Works in Ferndale, Whatcom County, which employs 700. That was the last operating smelter in the U.S. portion of the Pacific Northwest; there used to be 10 (Kaiser’s Tacoma plant being one of those). While Alcoa didn’t say the shutdown is permanent, the potential for a restart isn’t promising right now.

The term “ripple effect” is sometimes employed to describe the way one event involving one employer, company or community can affect other parts of the economy, much as dropping a small stone in a placid pond will send out waves across the surface of the water.

These aren’t ripples. This is more like dropping a boulder, nearly the size of the pond itself, in and watching the water, mud, plants, fish and boats go flying. Cosmo is an illustration of the secondary impacts of one sector’s troubles. Already in Washington we’re seeing layoff-warning notice filings from Boeing suppliers, some labeled as temporary, others as permanent, each accounting for jobs in the hundreds. Each of those, in turn, will radiate out to threaten other businesses and families.

The longer this goes on, the fainter the hopes for a V-shaped recovery—deep, but with a sudden sharp fall-off (the phase we’re in now) followed by a sharp and fast return to “normal” conditions. “The aviation industry will take years to return to the levels of traffic we saw just a few months ago,” Boeing CEO David Calhoun warned in last week’s announcement. COVID-19 was the boulder dropped in the pond. Still, the tsunami waves rushing outward are swamping the airline industry, the aircraft manufacturers, their suppliers and all the households and communities that rely on those paychecks. And just to strain the metaphor to the breaking point, there are few prospects for refilling the pond.

It’s not going to come from retailing, or entertainment and tourism. None of those constitutes a rock (back to the aquatic metaphor) of sufficient size to generate something more than mere ripples in our economic pond, but not enough to empty it. But throw those in, along with aerospace, and maybe you don’t have a pond left.

But what about tech? That ought to provide some calming effect on this roiling sea you’re conjecturing —ought it not?

Let’s divide tech into Big Tech (the Googles, Facebooks, Microsofts, Apples and Amazons of the world) and Little Tech, and then explain why neither will save the day. Big Tech can survive economic calamities—it did well enough in the Great Recession—but it needs a sufficient base of economic activity upon which to operate. This downturn holds the potential to affect much more of the economy more deeply than the recession.

Little Tech, meanwhile, the realm of startups and entrepreneurial ventures still in development stage, is finding the spigot of money turned off, and having to cut back staff or fold entirely.

What’s left? Agriculture and food processing have their own issues with the pandemic’s effect on the workforce, as well as the loss of the eating-out and hospitality market. People still need to eat, so there’s some floor of demand. Ag is a big deal in certain regions of the state, but even at its healthiest it won’t carry Western Washington.

That leaves the government, which has been flinging money in an attempt to keep a nominal level of economic activity. But those are one-time events, based on borrowing money from our future selves, not a continual and sustainable flow of money from commercial activity that supports other businesses, families, communities and, yes, government.

Americans understand this, hence the impatience to get out of the house and back to work, even though the virus hasn’t been vanquished and indeed may be gathering strength for another run. A decade ago we were telling ourselves that the financial crisis of the moment was the worst the country had endured since the Great Depression. A mere decade later, we’re facing the grim possibility of topping that achievement.