Cumberland Advisors Market Commentary – The Frog & The Scorpion

Author: David R. Kotok, Post Date: December 13, 2020
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We want to paraphrase and update an ancient parable which originated for us along the banks of the Jordan River, as it flows from the Sea of Galilee to the Dead Sea. The Jordan defines the border between modern-day Israel, Jordan, and Palestinian Authority territory. (For the original parable, see https://en.wikipedia.org/wiki/The_Scorpion_and_the_Frog.)


The-Scorpion-&-The-Frog

Here’s the modern American version. The river is the Potomac. The territory is the federal center of government called Washington, DC. There are two actors in our one-act, two-scene play. One is a scorpion; the other is a frog.

Scene 1.

They are sitting, with social distancing, on the bank of the Potomac. They’re outside and therefore not wearing their masks or face shields.

Scorpion says: “The virus is raging; people are dying; many getting sick. Let’s go across the river where there’s less disaster. I can’t swim, so I will get on your back and you can carry both of us across the river.”

Frog ponders a moment and asks, “How do I know you won’t sting me? If you sting me with your poison, I will die.”

“But I cannot swim,” says Scorpion. “And I promise to protect you when you’re exposed while swimming both of us across the river. You need me as much as I need you, and we must both escape this deadly virus chaos.”

Frog and Scorpion reached an agreement in principle. Scorpion mounted Frog’s back, and the pair started across the river.

Scene 2.

Halfway across, Scorpion plunged his stinger into Frog. Frog screamed, “Why did you do that? I will die from your poison. You will drown. What’s in your head? We had a deal agreed to in principle!”

As the two took their final breaths, Scorpion responded, “I had to sting you. This is Washington.”

What now?

Who’s the scorpion, and who’s the frog? McConnell? Pelosi? McCarthy? Schumer? Democrats? Republicans?

Washington politics are callous and disgusting. Tens of millions of Americans are running out of life-preserving funding. Thousands of businesses teeter on the brink of failure. Others claim special liability protection is necessary. Cities are short of funding and are furloughing teachers (while trying to open schools) and staff while the demand for municipal services and public health programs is rising.  Immediate funding is essential for a successful vaccine rollout.

The Jordan River flows in the intractably divided Middle East. The Potomac flows in what we once knew as America, “one nation, indivisible.”

What now?

David R. Kotok
Chairman of the Board & Chief Investment Officer
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