South by Southwest

“Show me the country that has no strikes and I'll show you the country in which there is no liberty.” – Samuel Gompers

With Doomberg, I’ve mostly stayed clear of the Covid-19 political fault lines. I’m not an epidemiologist, nor have I put in the time to study the science in detail. Objectively, the issue around vaccines and associated mandates has become a high-voltage arena reserved for those with strong opinions.

I, on the other hand, have no strong opinions on the matter. I mostly stayed home during the lockdowns. When I did venture out, I wore my mask. When my turn came up, I got my two shots and went about my life. If you pressed me, I’d say people should get the vaccine but forcing them to do so seems a stretch too far – I’m a libertarian at heart, after all.

Regardless of my position on the matter, I am endlessly fascinated with power, how it is wielded, and how it can be lost when bluffs are called. In 3,170 Miles, we wrote about the concept of bank runs as applied to political situations. We speculated that the haphazard pullout from Afghanistan might trigger a run on President Biden’s political power, both domestically and abroad.

While working on that piece, I noted to myself with some interest that Biden’s political team made a hard pivot to the management of Covid-19. This is standard crisis management – any news is better than this news type stuff. I have a distinct memory of one of Biden’s press conferences at the peak of the Afghanistan frenzy. With the entire White House press corps wanting to ask about the pullout, Biden stood at the podium and talked about the pandemic for a good 20 minutes before turning to leave without having fielded a single question.

I wonder whether the Southwest incident over the weekend might be a sign that the push for mandatory vaccinations – analyzed as a political power play – might be a significant turning point as well. For context, more than a thousand Southwest flights were canceled on Sunday in what many believe was a protest by employees about the company’s vaccine policy. You don’t have to search too far on social media to get the sense that this was probably the case, although that’s not the official story we are told now. Here’s how Forbes described it:

“Two days after the pilots’ union at Southwest Airlines asked a federal judge to block the company’s vaccine mandate, the airline canceled 27% of its planned flights for Sunday, CNBC reported, citing issues with weather and air traffic control that have not resulted in widespread grounding at other airlines.”

Such work actions are illegal, and the Southwest Airline Pilots Association (SWAPA) steadfastly denied any direct connection between the flight cancellations and the vaccine mandate – a fact Biden’s team has pounced on to downplay the significance of the incident. My own personal experience in union matters leads me to view such denials with a fair bit of skepticism.

If a client were to ask us to study this situation and make a prediction, we’d start by listing axioms and then speculate on how the logic flow will proceed. Axioms are simple statements of fact that all parties can agree on. Here’s a relevant list for the situation at hand:

• Team Biden would like to force all Americans to take a Covid-19 vaccine but lacks the constitutional authority to order them to do so directly.

• There is a stubbornly high number of Americans that steadfastly refuse to get vaccinated.

• Team Biden has been pressing large corporations to institute vaccine mandates for their employees as a condition of continued employment.

• Southwest Airlines received more than $5 billion on Covid-19 related relief from the government and owes its very survival to such support.

• The problems Southwest experienced on Sunday were unique to them and no other airline suffered significant flight cancellations.

• There is a pronounced labor shortage across the country, including in the airline industry.

• The economy cannot operate if currently unvaccinated Americans are barred from the workforce.

• The economy must continue to operate.

Given that fact set, we speculate the Southwest incident is almost certainly related to vaccine mandates.  We further suspect this marks the beginning of the end of zero tolerance policies by corporations on the vaccine issue. It just won’t work. In the battle between capital and labor, labor currently has the upper hand. If labor refuses to get vaccinated, there can be no mandates. Already, Southwest CEO Gary Kelly seems to be backing down:

“Southwest CEO Gary Kelly had a major announcement on Tuesday about the vaccine mandate the airline recently issued: His company won’t be enforcing it.

During an interview with ABC News on Tuesday, the CEO said that no employees would be fired over the company’s vaccine mandate. Earlier, the airline announced that all employees needed to get vaccinated against COVID-19 by November 24 or face termination.”

Just this morning in an interview on CNBC, Ed Bastian, the CEO of Delta Airlines had this to say about the vaccine mandate:

“The spirit of the vaccine mandate is to get people vaccinated. It wasn’t to try to force people.”

Either Mr. Bastian does not understand the definition of mandate, or the airlines are signaling to Mr. Biden that this effort is not going to fly. Notably, if airline employees can’t be forced, neither can their passengers.

Bank runs happen with surprising speed. We expect resolution within weeks.

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