An historic panic gripped the oil market in the United States Monday sending the West Texas crude oil price spiraling downward to levels never imagined, and again highlighting the extreme vulnerability the New Mexican economy faces.

Murmurs of a developing depression--the first here since the 1930's--are now arising with unemployment expected to soar well past 20 percent of the workforce, businesses preparing to permanently shutter and the state facing a financial existential crisis that can only be alleviated by federal intervention stalled in DC or a miracle recovery when the societal shutdown ceases.

A quirk of trading accelerated the crash in the price of oil for the month of May sending it--for the first time in history--below zero. The "negative" price hit -$37.00 a barrel, meaning that producers would pay buyers that amount to take the oil off their hands. Black gold had suddenly and ferociously turned to black garbage.

Among veterans of La Politica heads shook, shoulders slumped and sighs filled the air as the reality sunk in that New Mexico, already dramatically and negatively changed forever by the long Great Recession of the last decade, confronts another chapter of immense pain and misery that will rip up any remaining notions of what is normal and send the state tumbling into a dark unknown.

The oil price for June is actually around $20 as the markets anticipate a rebound but that is providing little comfort as the relentless crash Monday signaled an oil glut of historic proportions that will very likely keep the price in the cellar for years.

Economy watchers were hitting the digital dictionaries and looking up the definition of depression. A commonly accepted one is a downturn of at least 10 percent in a state's gross domestic product (GDP) or a downturn lasting three years. Without massive federal assistance we face the prospect of easily meeting both definitions.

Unofficial unemployment is already near 20 percent of the state workforce; the city of Santa Fe is forecasting a deficit of $46 million for the remaining three months of its current fiscal year and an unknown number for the next one. ABQ faces similar dire straits with Mayor Keller ordering cost saving measures to try to ward off the most drastic impact. Furloughs have begun in Santa Fe and layoffs are inevitable if the downturn stretches into the fall with no intervention. Government employment is supposed to stabilize the state economy, which is short on the private sector, but even those jobs can't withstand the battering of a Category 5 economic catastrophe.

Even as the economy reopens what's to come is going to deliver more shocks. How can massive numbers swarm to Elephant Butte for the annual Memorial Day gatherings; how can the summer festivals featuring throngs of tourists up and down the Rio Grande be safely held; how can the State Fair go on in September; how can the Santa Fe Opera go forward or the fall schedule at UNM's Popejoy Hall or even Lobo basketball? And that biggest cultural icon of them all--the ABQ International Balloon Fiesta will very likely for the first time go dark, costing governments over $11 million in tax revenue, crippling tourism and depriving the state of joy in a time of such deep sorrow.

These economic and emotional shocks will shake us to our core as our most comforting and recognizable touchstones disappear. The late US Senator Patrick Moynihan often said: "To be Irish is to know that in the end the world will break your heart.” And now all of New Mexico is about to know that heartbreak.

WHERE'S THE PLAN?

Amid this turmoil and tumult eyes turn to the Fourth Floor of the fabled Roundhouse where Governor Michelle Lujan Grisham is presiding over the most difficult economic dislocation in generations.But her attention is laser-beam focused on the coronavirus and ensuring it is contained and lives are saved. She has held back in&talking about formulating an economic plan for when the crisis abates but her time is running out. The fear and foreboding of an increasingly vulnerable population over their prospects of economic survival are about to meet or surpass their fear of the virus.

Thus far the Governor has named no distinguished panel or a sole economic czar to signal that the state is manning all battle stations to soften the blows yet to come. If, as expected, she announces that the stay-at-home order will not expire April 30 but kept in effect until at least May 15th, the pressure will only grow to cease treating the economic recovery as an afterthought and, like other state governors have, begin to establish firm plans for the eventual reopening and recovery. 

As we discussed Monday, a special legislative session is not necessary at this time. That can be done on MLG's mid-June timetable but the economic ship needs to be captained and right now it is adrift and running on empty. This Governor needs to bring to bear the leadership qualities that have won her kudos during the health crisis and apply them vigorously to the economic disaster that so many of her constituents are trying to stave off.

HELIPAD CONTROVERSY

A report out of the Arizona Republic saying Navajos in that state stricken with the coronavirus would be flown to ABQ for treatment was shot down by the city of ABQ which said: "The news article published regarding this was in error. There are no plans to airlift patients from Arizona to Albuquerque."

Eddy Aragon videotaped for Facebook a helipad recently constructed at ABQ's Milne Stadium and where KRQE-TV reported the Arizona patients would be flown to and then transported to Presbyterian Hospital. The video garnered thousand of views, after which came the city's statement.

BAD MATH

In our first draft Monday we misstated the size of the state's budget reserves. The reserves total $1.9 million, according to the Legislative Finance Committee not the $3 billion we wrote. The state budget for the year beginning July 1 is $7.6 billion. Sorry for the error.

OIL CAUCUS?

Can New Mexico US Senators Tom Udall and Martin Heinrich form a caucus with the senators of other oil-producing states who are also getting a double economic whammy from the stay-at-home orders and crash in oil prices? Republican leadership has been reluctant to offer direct aid to resolve the mammoth state budget shortfalls. If the senators from NM, Texas and other oil states can make a case together maybe we would have a better shot at averting an economic debacle.

ALLIGATOR STRIKE

Alligators in attendance at that Saturday Roswell protest where MLG was asked to gradually reopen businesses spotted GOP Mayor Dennis Kintigh. They were quick to point out that Kintigh, a former Roswell police chief as well as a former state legislator, was not wearing a face mask and not practicing social distancing.

A debate over reopening the state when and how is fine but wearing a face mask, keeping six feet away from your neighbor and doing your best to limit travel outside your home is a responsibility.

Mayor Kintigh, for getting caught with your mask down you are the victim of an Alligator Strike. Congrats. . . or something.

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(c)NM POLITICS WITH JOE MONAHAN 2020