Power Tends to Corrupt and Absolute Power Corrupts Absolutely, Part II — Michael McTague

Michael McTague  |

Image: Wellfleet Drive-In Movie Theater. Source: Massachusetts Office of Travel & Tourism, CC BY-ND 2.0.

October 2020 — Myth Buster

The Puritans are back in full force. Now secular, they take inspiration from the same love of aggression that spurred Oliver Cromwell. In the first installment (September 2020), we looked at the absolute, insistent demand to overdo everything despite huge logic gaps. For a few governors, it is OK, for example, to purchase and use marijuana and liquor but not to gather in groups of two or more. With the election right around the corner, they are at fever pitch. Meanwhile, Facebook, Twitter and others track people’s contacts to help determine future coronavirus hot spots, thus abandoning previous apologies for invading personal privacy.

We have been looking at the nature of this new Puritanism: Whenever people fixate on the wrong cause of a problem — despite the evidence — it strongly suggests either superstition or fanaticism. Baseball players believe it is bad luck to step on the foul line running across the field. Many people hold onto harmless superstitions. Fanaticism is closely related. Gatherings of two or more people are out and they should all stay six feet apart. The major supermarket chains — Walmart, Kroger, Whole Foods, etc. — and the banks fell into line, following all directives. Makers of duct tape are enjoying the profits including Shurtape Technologies and Manco (owned by Henkel), not to mention the makers of police and hazard tape and other safety equipment — Emedco, Seton (both owned by Brady Corp.) and Uline.

How about the neo-Puritans? How did so many leap to the worst-case scenario so quickly? The coronavirus is new and deadly; there is almost no relevant experience, except for a few general references to the Spanish flu pandemic of 1918. Recall that Puritans believe they own the truth and that anyone who disagrees is not only wrong but evil. A peculiar disconnect is at play. If a group of government-appointed scientists wearing white coats pronounces a likely scenario – such as the probable number of coronavirus deaths -- they are believed. The modern Puritan aligns with scientists and defends all such pronouncements with the phrase, “The science says…”

Sometimes, however, the science isn't foolproof. It was thought by scientists early on that tens of millions in the US would be infected over the course of the epidemic and that millions might die. Those early projections from sincere scientists were way off. And yet, the Puritans do not back off. They charge ahead.

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Science Predicts?

Scientists project the future, and they sometimes make mistakes. In 1996, enthusiastic studiers of outer space thought they had found evidence of ancient life on Mars. Life on Mars offers some real business opportunities! But they often have nothing to do with science. During the coronavirus shut down, millions shuttered at home watched old movies about fictional “men from Mars.” Netflix is on a tear enjoying a revenue burst. Everyone laughs or scoffs about monster movies, which certainly do not rise to the level of seriousness of a group of people in labcoats predicting millions of deaths. Although scientists thought they had “evidence” of life on Mars in 1996, it turned out to be no more credible than the claws on a 1950s monster movie.

Let’s look at the real revenue possibilities.

Monster movies from the 1950s are doing pretty well financially right now. Drive-in movie theaters are making a comeback with their ability to distance people socially. Huge numbers of people at home are watching television, including these old movies.

Among the most successful “monster movies” ever made, according to an article in Forbes and based on current dollars, was “It” (2017), which took in $327 million. In constant dollars, “Jaws” (1975) tops the all-time list at $1.2 billion revenue, followed by “The Exorcist” (1973) with $996.5 million. The Godzilla series of an amazing thirty-six movies generated over $800 million worldwide. TriStar, now owned by Sony, is one of the big monster movie specialists. As of early September, Sony is near its fifty-two week high. Can you believe there was actually a Godzilla-Mothra TV channel? The SyFy Channel, owned by mighty Comcast, has also done pretty well through the first half of the year.

None of this pile of revenue was generated by scientific pronouncements or requirements to wear a mask while watching.

In line with our discussion of Puritans, this means billions of dollars have been spent by millions of people who do not really believe —or care — whether the giant shark, the rubber Tyrannosaurus or Stephen King’s sewer monster are real. But when scientists declared evidence of life on Mars, they were believed by the Puritans and others — until they admitted they were incorrect. [Editor's note: Subsequent to the author's submission, scientists have discovered evidence of phosphine gas in the clouds above Venus, a possible sign of life.]

In the current pandemic, the worst case predictions were accepted and some states acted on them. Showing respect for a projection is one thing, but shutting down a whole state means that government officials took action based on what was said and what they accepted without much investigation. The conventional wisdom from so many inside the Beltway and some state capitals holds that there is a duty to shut down everything because there is no downside to “an abundance of caution.”

This second entry of the series raises some interesting insights into the natural tendency to suppress everyone and everything. The next installment will delve into additional insights into the brief but enthusiastic run of neo-Puritans.

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Michael McTague, Ph.D. is Executive Vice President at Able Global Partners in New York, a private equity firm, and author of Secrets of Effective Business Plans

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Equities Contributor: Michael McTague, PhD

Source: Equities News

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