Common Cents & Economic Battles on December 18, 2020

Recently, for some reason, the Battle of Passchendaele during World War I came to my mind when I was reading an article about the continued economic shutdowns in various states (specifically California). This battle was more of a campaign of battles than an individual battle itself, and is one of the biggest bloodlettings in recorded history. Although casualty totals are little more than ‘best guess’ estimates, the numbers are astonishing, ranging from 400K-800K (combined both sides) depending on the source. All of this for the Allies (mostly the British) to gain, a few kilometers of territory in the Ypres Salient in Flanders, which is in Belgium. That is right, a few kilometers…seriously.

Ultimately, the Battle of Passchendaele almost bled the German Empire white in 1917. However, since the Americans had entered the fray by declaring war against Germany that April, the Allies still had relatively vast stores of troop reserves and material. In other words, Germany’s losses were more unsustainable than the Allies.’ As such, you could argue the campaign indirectly expedited the end of the war later the following year.

Although the Canadian poet John McCrae wrote “In Flanders Fields” in response to a friend’s death in the Second Battle of Ypres in 1915, the following words sum up the lives lost at Passchendaele, for such insignificant territorial gain, beautifully…if that is the right word.


In Flanders fields the poppies blow

Between the crosses, row on row,

That mark our place; and in the sky

The larks, still bravely singing, fly


Scarce heard amid the guns below.

We are the Dead. Short days ago

We lived, felt dawn, saw sunset glow,

Loved and were loved, and now we lie

In Flanders fields.


Take up our quarrel with the foe:

To you from failing hands we throw

The torch; be yours to hold it high.

If ye break faith with us who die

We shall not sleep, though poppies grow

In Flanders fields.


In preparing for a battle, military leaders have to assess their potential losses. You can think of it as a simple cost/benefit analysis, only with human lives. What is an acceptable amount of loss, or damage, an army is willing to accept in order to meet its objectives? At Passchendaele, British Field Marshal Douglas Haig, 1st Earl Haig, apparently thought 200-400K Allied casualties were, well, acceptable over a few months of fighting on one section of front. What the heck, he wasn’t in the trenches.

What if one of those acceptable losses was your child? Wouldn’t you want to know their life was worth it, the benefit to the greater good? That they died or were maimed for something more than, again, a few kilometers. I know I would.

Now consider the impact the various economic lockdowns are having on small business owners, especially during this 2nd (or 3rd) wave.

That everyone should want to see an end to the pandemic goes without saying. However, what economic loss is acceptable? What number of business failures is okay in order to slow the spread of COVID19? Job losses? Problem loans? Government deficits? Because these things will happen, a virtual guarantee, if politicians issue ‘stay at home’ orders, put restrictions on business capacity, and prevent certain industries from even operating? After all, when the money isn’t coming into the register, it doesn’t go out into the community…if you catch my drift.

Has Gov. Gavin Newsom done the math? Cuomo in New York? Pritzker in Illinois? Etc.? If they have done so, I must have missed it, because I have yet to hear or read anyone say anything remotely close to the following: “if we enact these economic restrictions, for every X jobs temporarily lost, we can save the lives of X people,” or “for every dollar we lose in economic activity, we save (some amount) in COVID related healthcare expenses.” That sort of thing, and I am certain you can come up with an example of your own.

IF you were a business owner, wouldn’t you want to know the math? If you are losing your job, wouldn’t it be nice to think the powers that be had crunched the numbers, at least a little? Hey, you might be the most right-brained person in the world, but wouldn’t it give you some small measure of solace to know someone actually put some pen to paper before making decisions which ruined your life? Made you an economic casualty? A number on a weekly report? An acceptable loss? Wouldn’t you like to know the powers that be were doing more than just ‘winging it’ with your economic well-being?

To be sure, there are plenty of people who believe we should do whatever it takes to stem the tide of the virus until we can vaccinate enough folks. I can’t blame them or question their motives, because they undoubtedly have the best of intentions. However, I would be willing to bet the majority, the majority, of these folks have never had to make a payroll. Never put their personal guarantee on a line of credit for their business. Never had to look someone in the eye and fire them. Never watched their balance sheet evaporate because a politician determined they had to appear to be ‘doing something’ in the court of public opinion.

That is the thing about Americans, and arguably what much of this year’s strife was about We like transparency and we expect fairness. Hey, we can handle the truth, but you need to tell me what it is. We can play the game, but we have to know the rules. “Do as I say and not as I do” isn’t acceptable, especially when we are the ones bearing the brunt. It can’t be arbitrary, it has to apply to all, and it has to be evenly enforced. You have to know what in the [heck] you are doing before you make decisions which negatively impact me. Show me the numbers, again, show me the numbers.

Here we are at the beginning of the end of this particular pandemic, and not the end of the beginning, with vaccines hitting the streets. Unfortunately, small business owners in a number of states are still fighting for their economic existence due to various lockdown orders and the like. It seems so unfair to me, because I don’t believe anyone has truthfully done an adequate cost/benefit analysis on these restrictions. They haven’t told us what an acceptable loss might be. What’s more, the people making the decisions don’t have to suffer the economic consequences of their actions. Someone else does.

In the end, perhaps it was/is a little unusual I thought of the Battle of Passchendaele when I was reading articles about small business owners in California, that state’s ongoing economic restrictions, and the growing movement to recall Gov. Newsom. However, the thing is history hasn’t been kind to the Allied High Command due to its willingness to take enormous losses for little territorial gain, and to do the same thing repeatedly and expect different results. This is especially true of Douglas Haig and the British general staff. So much so, the historians have commonly used the phrase “lions led by donkeys’ to describe the relationship between the British infantry and its generals during the Great War.

In 2020, the same could be said of small business owners and their politicians in many states today.


Take care and have a nice weekend.

John Norris

Chief Economist


As always, the opinions in this newsletter are mine and mine alone. I am subject to change them at any time and without notice. Further, nothing in this newsletter should be construed as an offer to buy or sell financial services (or products) of any kind and in any way, shape, or form.