Aspen isn’t recession-proof
We are here for another six weeks. We then take up residence in Denver and Calgary, where I am the David Mitchell EnCana Professor of Strategy at the Haskayne School of Business at the University of Calgary. My assignment is to help the government of Canada and perhaps the U.S. government create a business environment that allows us to maintain a steady expansion of oil sand production in Canada and probably oil shale development in the United States. I suspect I will not be welcome here in a few years.
In the meantime, I have been working on a bigger issue: the coming economic collapse. I am in D.C. next week attending and working with the “professionals” trying to avoid a repeat of the Depression. As a graduate student, I read much on the issue.
I think I spent 12 months trying to understand what went wrong. I regret to say we are now repeating the same mistakes.
Based on my experience (limited compared to Mick Ireland’s), I think Aspen needs a contingency plan for dealing with a two or three-year serious recession/depression.
Here are the questions I would ask:
What mountain(s) will Skico close in the event of a serious recession? It is pointless to have all four mountains open when few people come.
What steps can (will) the city take if real-estate assessments drop by 50 percent?
How will Snowmass and Aspen respond when work on the Base Village stops? (The German bank financing the project is going to close.)
Can the city cut its workforce by 50 percent?
How will Aspen respond when half the glitzy stores around the mall are empty and boarded up?
What will Aspen do when the rich do not come next summer?
How will the city respond when bankruptcy judges override city laws to maximize values for the loan holders?
How will Aspen respond to the dust from shale development that will come because economic circumstances force the United States to develop shale oil?
How will Aspen deal with those people who want to sell their homes and retire?
These people are losing most of their other assets. Now their housing assets are gone too. Thanks, Mick.
I could go on. Let me say this is the real thing. I know everyone thinks Aspen is immune. The people in Vermont and New Hampshire said the same thing in 1932.
“The rich are different. They will still come.” Many of those towns are now ghost towns because the formerly rich did not come.
This is the real thing. As IMF economists warn, recessions following financial meltdowns are much worse. Ten percent unemployment, much higher taxes on the rich, and recession are going to hit here late and very hard.
This is no drill.
Philip K. Verleger Jr.
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After nine months of being shuttered due to the COVID-19 crisis, the Wheeler Opera House will reopen for local acts. A touchless reservation system will be open to 53 people for in-person at the venue. Online live streaming also will be available.