Watch how it all comes together: Recession (probably), Uber’s demise (probably), and a hard Brexit (probably)

Gig economy

There is a new blog post entitled “Proof of investor irrationality: The case of Uber (and Lyft).” Remember that my argument has been that a recession—see below—might provide the company a psychological push off the cliff.[1]

Richard Durant, “Uber’s Profitability Problem Is Structural,” Seeking Alpha, August 21, 2019, https://seekingalpha.com/article/4287055-ubers-profitability-problem-structural

Shirin Ghaffary, “DoorDash is still pocketing workers’ tips, almost a month after it promised to stop,” Vox, August 20, 2019, https://www.vox.com/recode/2019/8/20/20825937/doordash-tipping-policy-still-not-changed-food-delivery-app-gig-economy

Stephen Wilmot, “Uber’s Long Road to Profits,” Wall Street Journal, August 22, 2019, https://www.wsj.com/articles/ubers-long-road-to-profits-11566471068


Recession

Murphy’s Law dictates that “If anything can go wrong, it will.” MacGillicuddy’s Corollary suggests that it will do so “[a]t the most inopportune time.”[2] Some might say that with an utterly incompetent president who is utterly unprepared for a recession and an utterly incompetent administration,[3] so many reasons to worry,[4] and this president’s and this administration’s only answer amounting to scapegoating the media and the Federal Reserve,[5] this might be the time.

I suppose that might be true if you support Donald Trump.[6] For the rest of us, it’d probably be after he’s re-elected (assuming that happens). On the other hand, even if the neoliberal party, which worries a lot—seemingly even more than the Republicans[7]—about deficits and the accumulated federal debt, wins the 2020 presidential election, it still might not be able to do much about a recession.[8]

Rebecca Ballhaus and Nick Timiraos, “Officials See Few Options if Slowdown Hits,” Wall Street Journal, August 21, 2019, https://www.wsj.com/articles/options-dwindle-to-boost-u-s-economic-growth-11566431581

Jeff Stein and Jonnelle Marte, “With deficit rising, worries grow the U.S. may be out of tools if recession hits,” Washington Post, August 21, 2019, https://www.washingtonpost.com/business/2019/08/21/us-deficit-expand-by-more-than-billion-over-years-than-previously-expected-cbo-says/


Brexit

One of the recession concerns I’ve listed among many[9] has been rather specifically about spillage from a hard Brexit.[10] That remains on track[11] as, really, Europeans remain unyielding on the Irish backstop. Angela Merkel is making sure it’s Boris Johnson who gets the blame[12] and Emmanuel Macron argues (correctly, and understating it[13]) that the backstop would preserve Irish stability.[14]

Steven Swinford and Henry Zeffman, “Backstop protects stability in Ireland, Macron tells PM,” Times, August 22, 2019, https://www.thetimes.co.uk/edition/news/find-an-alternative-to-irish-backstop-and-brexit-deal-is-possible-angela-merkel-tells-boris-johnson-dmtfzf9gz

Henry Zeffman, “Brexit: Angela Merkel’s 30-day gambit piles pressure on Boris Johnson,” Times, August 22, 2019, https://www.thetimes.co.uk/edition/news/angela-merkels-30-day-gambit-piles-pressure-on-boris-johnson-ch559t90r


  1. [1]David Benfell, “Uber appears to be going down,” Not Housebroken, August 11, 2019, https://disunitedstates.org/2019/08/11/uber-appears-to-be-going-down/
  2. [2]Originally Sod’s Law, author unknown. Raanan Avidor, “Murphy’s laws,” Murphy’s laws site, n.d., http://www.murphys-laws.com/murphy/murphy-laws.html; Raanan Avidor, “Murphy’s laws origin,” Murphy’s laws site, n.d., http://www.murphys-laws.com/murphy/murphy-true.html
  3. [3]Aaron Blake, “Maybe it’s time for Larry Kudlow to stop making predictions,” Washington Post, August 19, 2019, https://www.washingtonpost.com/politics/2019/08/19/maybe-its-time-larry-kudlow-stop-making-predictions/; Catherine Rampell, “Trump has a dream team for mismanaging a recession,” Washington Post, August 15, 2019, https://www.washingtonpost.com/opinions/trump-has-a-dream-team-for-mismanaging-a-recession/2019/08/15/0254451c-bf98-11e9-a5c6-1e74f7ec4a93_story.html
  4. [4]Rebecca Ballhaus and Nick Timiraos, “Officials See Few Options if Slowdown Hits,” Wall Street Journal, August 21, 2019, https://www.wsj.com/articles/options-dwindle-to-boost-u-s-economic-growth-11566431581; Jon Hilsenrath, “After Record-Long Expansion, Here’s What Could Knock the Economy Off Course,” Wall Street Journal, June 3, 2019, https://www.wsj.com/articles/after-record-long-expansion-heres-what-could-knock-the-economy-off-course-11559591043; John Kemp, “Global economy is probably in recession,” Reuters, August 7, 2019, https://www.reuters.com/article/uk-global-economy-kemp/column-global-economy-is-probably-in-recession-idUKKCN1UX1OF; Colin Kruger, “‘Insane levels’: Can a world where profitless companies are flying last?” Sydney Morning Herald, August 10, 2019, https://www.smh.com.au/business/companies/insane-levels-can-a-world-where-profitless-companies-are-flying-last-20190808-p52f3d.html; Damian Paletta, Thomas Heath, and Taylor Telford, “Stocks tank as another recession warning surfaces,” Washington Post, August 14, 2019, https://www.washingtonpost.com/business/2019/08/14/stocks-tank-another-recession-warning-surfaces/; David Scutt, “The ‘doom loop’ that could bring on a global recession,” Sydney Morning Herald, August 15, 2019, https://www.smh.com.au/business/markets/the-doom-loop-could-bring-on-a-global-recession-20190815-p52h9v.html; Jeff Stein and Jonnelle Marte, “With deficit rising, worries grow the U.S. may be out of tools if recession hits,” Washington Post, August 21, 2019, https://www.washingtonpost.com/business/2019/08/21/us-deficit-expand-by-more-than-billion-over-years-than-previously-expected-cbo-says/; Tim Wallace, “‘Very real’ recession risk as economy contracts for first time in seven years,” Telegraph, August 9, 2019, https://www.telegraph.co.uk/business/2019/08/09/recession-risk-now-real-economy-contracts-first-time-seven-years/; Tim Wallace, “World economy faces a risk that’s far bigger than Trump’s trade war,” Sydney Morning Herald, August 9, 2019, https://www.smh.com.au/business/the-economy/world-economy-faces-a-risk-that-s-far-bigger-than-trump-s-trade-war-20190809-p52ffs.html
  5. [5]Stephen Collinson, “Fretful Trump goes on attack as economy fears cloud 2020 hopes,” CNN, August 19, 2019, https://www.cnn.com/2019/08/19/politics/donald-trump-economy-2020-election-china-trade-war/index.html; Jeff Stein and Jonnelle Marte, “With deficit rising, worries grow the U.S. may be out of tools if recession hits,” Washington Post, August 21, 2019, https://www.washingtonpost.com/business/2019/08/21/us-deficit-expand-by-more-than-billion-over-years-than-previously-expected-cbo-says/
  6. [6]Andrew Restuccia and Rebecca Ballhaus, “Any Economic Downturn Could Scramble Trump’s 2020 Strategy,” Wall Street Journal, August 15, 2019, https://www.wsj.com/articles/any-economic-downturn-could-scramble-trumps-2020-strategy-11565898073; Philip Rucker, Damian Paletta, and Josh Dawsey, “Trump, banking on strong economy to win reelection, frets over a possible downturn,” Washington Post, August 15, 2019, https://www.washingtonpost.com/politics/trump-banking-on-strong-economy-to-win-reelection-frets-over-a-possible-downturn/2019/08/15/04a85352-bf67-11e9-b873-63ace636af08_story.html
  7. [7]Charles J. Sykes, “Whatever happened to the party of fiscal responsibility?” Los Angeles Times, November 10, 2017, https://www.latimes.com/opinion/op-ed/la-oe-sykes-gop-fiscal-20171110-story.html
  8. [8]Rebecca Ballhaus and Nick Timiraos, “Officials See Few Options if Slowdown Hits,” Wall Street Journal, August 21, 2019, https://www.wsj.com/articles/options-dwindle-to-boost-u-s-economic-growth-11566431581; Jeff Stein and Jonnelle Marte, “With deficit rising, worries grow the U.S. may be out of tools if recession hits,” Washington Post, August 21, 2019, https://www.washingtonpost.com/business/2019/08/21/us-deficit-expand-by-more-than-billion-over-years-than-previously-expected-cbo-says/
  9. [9]Rebecca Ballhaus and Nick Timiraos, “Officials See Few Options if Slowdown Hits,” Wall Street Journal, August 21, 2019, https://www.wsj.com/articles/options-dwindle-to-boost-u-s-economic-growth-11566431581; Jon Hilsenrath, “After Record-Long Expansion, Here’s What Could Knock the Economy Off Course,” Wall Street Journal, June 3, 2019, https://www.wsj.com/articles/after-record-long-expansion-heres-what-could-knock-the-economy-off-course-11559591043; John Kemp, “Global economy is probably in recession,” Reuters, August 7, 2019, https://www.reuters.com/article/uk-global-economy-kemp/column-global-economy-is-probably-in-recession-idUKKCN1UX1OF; Colin Kruger, “‘Insane levels’: Can a world where profitless companies are flying last?” Sydney Morning Herald, August 10, 2019, https://www.smh.com.au/business/companies/insane-levels-can-a-world-where-profitless-companies-are-flying-last-20190808-p52f3d.html; Damian Paletta, Thomas Heath, and Taylor Telford, “Stocks tank as another recession warning surfaces,” Washington Post, August 14, 2019, https://www.washingtonpost.com/business/2019/08/14/stocks-tank-another-recession-warning-surfaces/; David Scutt, “The ‘doom loop’ that could bring on a global recession,” Sydney Morning Herald, August 15, 2019, https://www.smh.com.au/business/markets/the-doom-loop-could-bring-on-a-global-recession-20190815-p52h9v.html; Jeff Stein and Jonnelle Marte, “With deficit rising, worries grow the U.S. may be out of tools if recession hits,” Washington Post, August 21, 2019, https://www.washingtonpost.com/business/2019/08/21/us-deficit-expand-by-more-than-billion-over-years-than-previously-expected-cbo-says/; Tim Wallace, “‘Very real’ recession risk as economy contracts for first time in seven years,” Telegraph, August 9, 2019, https://www.telegraph.co.uk/business/2019/08/09/recession-risk-now-real-economy-contracts-first-time-seven-years/; Tim Wallace, “World economy faces a risk that’s far bigger than Trump’s trade war,” Sydney Morning Herald, August 9, 2019, https://www.smh.com.au/business/the-economy/world-economy-faces-a-risk-that-s-far-bigger-than-trump-s-trade-war-20190809-p52ffs.html
  10. [10]Tim Wallace, “‘Very real’ recession risk as economy contracts for first time in seven years,” Telegraph, August 9, 2019, https://www.telegraph.co.uk/business/2019/08/09/recession-risk-now-real-economy-contracts-first-time-seven-years/
  11. [11]Jack Maidment, “Brexit latest news: Theresa May’s deal defeated again by 58 votes – PM hints at general election to break deadlock,” Telegraph, March 29, 2019, https://www.telegraph.co.uk/politics/2019/03/29/brexit-latest-news-theresa-may-final-push-mps-prepare-vote-withdrawal/; Peter Walker, “Could parliament’s latest amendment stop no-deal Brexit?” Guardian, July 18, 2019, https://www.theguardian.com/politics/2019/jul/18/could-parliaments-latest-amendment-stop-no-deal-brexit; Josh Wilson, “No-deal Brexit odds: Latest predictions on leaving the EU without a deal,” Telegraph, August 2, 2019, https://www.telegraph.co.uk/politics/0/no-deal-brexit-odds-latest-predictions-leaving-eu-without-deal/
  12. [12]Henry Zeffman, “Brexit: Angela Merkel’s 30-day gambit piles pressure on Boris Johnson,” Times, August 22, 2019, https://www.thetimes.co.uk/edition/news/angela-merkels-30-day-gambit-piles-pressure-on-boris-johnson-ch559t90r
  13. [13]Karla Adam and William Booth, “Could Boris Johnson’s ‘no-deal’ Brexit break up the United Kingdom?” Washington Post, July 29, 2019, https://www.washingtonpost.com/world/europe/could-boris-johnsons-no-deal-brexit-crack-up-the-united-kingdom/2019/07/29/b871ebac-b1e6-11e9-acc8-1d847bacca73_story.html; Daniel Boffey, “However you look at it, the logic of a Brexit backstop refuses to yield,” Guardian, June 24, 2019, https://www.theguardian.com/politics/2019/jun/24/however-look-logic-brexit-backstop-refuses-to-yield-irish; British Broadcasting Corporation, “Irish deputy PM Coveney: No deal Brexit would mean customs checks in Ireland,” July 21, 2019, https://www.bbc.com/news/av/uk-politics-49062367/irish-deputy-pm-coveney-no-deal-brexit-would-mean-customs-checks-in-ireland; Amanda Ferguson and William Booth, “Northern Ireland’s politicians don’t agree on much. Except that Boris Johnson’s no-deal Brexit would be a disaster,” Washington Post, July 31, 2019, https://www.washingtonpost.com/world/europe/northern-irelands-politicians-dont-agree-on-much-except-that-boris-johnsons-no-deal-brexit-would-be-a-disaster/2019/07/31/c209affa-b2eb-11e9-acc8-1d847bacca73_story.html; Peter Foster and Camilla Tominey, “Boris Johnson warned that ‘no deal’ Brexit will require return of ‘direct rule’ in Northern Ireland,” Telegraph, July 26, 2019, https://www.telegraph.co.uk/news/2019/07/26/boris-johnson-warned-no-deal-brexit-will-require-return-direct/; Katy Hayward, “Can technology and ‘max fac’ solve the Irish border question? Expert explains,” Conversation, May 23, 2018, http://theconversation.com/can-technology-and-max-fac-solve-the-irish-border-question-expert-explains-96735; Conor Humphries, “Irish PM says hard Brexit would raise issue of Irish unification,” Telegraph, July 27, 2019, https://www.reuters.com/article/uk-britain-eu-ireland-nireland-idUSKCN1UL280; Séamas O’Reilly, “Hard Brexiters’ stance on the Irish border is nonsense – I can tell you, I grew up there,” Guardian, August 7, 2019, https://www.theguardian.com/commentisfree/2019/aug/07/northern-ireland-hard-border-brexit-customs
  14. [14]Steven Swinford and Henry Zeffman, “Backstop protects stability in Ireland, Macron tells PM,” Times, August 22, 2019, https://www.thetimes.co.uk/edition/news/find-an-alternative-to-irish-backstop-and-brexit-deal-is-possible-angela-merkel-tells-boris-johnson-dmtfzf9gz

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