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Imagining a Post Pandemic World

How might a post-pandemic world look and feel? Let’s imagine a creative team at a New York City advertising agency pitching a campaign in 2050 for a new perfume (more than most products, perfumes are sold by attaching to the dreams and aspirations of their times).  The Big Apple, ...

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Afterword to the softbound edition.


The Octopus and the Orangutan
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Silent Partners
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Affluence and Discontent
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The Crisis Six Years On


Friday September 20, 2013

Because the collapse of Lehman in Sept. 2008 serves as such a convenient inflection point, it's easy to forget that the Great Recession started at least nine months earlier, and that the shadow banking system started to unravel more than a year earlier. This also underscores the offensiveness of the many economic and political bigwigs who protested that "Nobody saw this coming" when things really got bad in the fall of 2008. Many credible analysts saw everything that was coming. I wrote about the dire implications of the unfolding crisis at least seven times before Lehman collapsed ( here, here, here, here, here, here, and here). I suspect that many of those who proclaimed to be blindsided actually knew better, but hoped the stock market (which made a new high just two months before the recession began) wouldn't notice. It's also possible -- though terrifying -- that the Federal Reserve Chairman Bernanke, who persistently described the housing crisis as "contained," was so blinkered by non-reality-based economics that he actually didn't see it coming.

A couple of predictions I made back then did not come to pass. Most notably, I predicted that the harsh economy would lead to a new appreciation of safety nets and other protections afforded by the government. Instead, we saw the rise of the Tea Party, whose members call for the dismantling of safety nets and regulations.

So here we are, six years later, with the markets once again at an all time high and the economy still mired in what might best be described as a depression. Margin debt is back to pre-collapse levels, the big banks are bigger than ever, and the rich are richer than ever. Yet the average American household remains tapped out, and struggles with a real income just a bit more than it was in 1973. So, in a few months, get ready to hear, once again, that "nobody saw this coming."

 

 

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Short Take

Relaxing COVID-19 Restrictions will Kill, not Save, the Economy


 

[This is a more developed version of the previous Short Take}

Those who want to relax mandates on self-isolation and social distancing to save the economy have got it exactly backwards. Reopen society too soon, and we risk destroying the economy as well as public order and our shaky democratic institutions. The reason comes down to two words: supply lines.

 Supply lines for necessities such as food are already under stress. Those going to grocery stories encounter random instances of empty shelves and vegetable bins. Smithfield Farms shut down a South Dakota plant that supplies roughly 4% of the pork in the nation after over 500 of its workers tested positive for the coronavirus. Other giant meat processors such as Tyson have also shut down plants for similar reasons. Farmers in the West are having trouble finding workers to harvest the crops now reaching maturity in the fields. And even if they manage to get the crops picked, farmers are out of luck if the truckers fail to show up, or the flow of packaging for their products get interrupted. 

Right now, these disruptions are episodic, but that should be concerning because we haven’t even seen the end of the first wave. What we have seen is that vital front-line workers such as nurses, doctors, EMT’s, and other first responders have had trouble finding protective equipment and maintaining morale. Some have staged walkouts over the dangerous conditions, and these are workers with a sense of mission.

By contrast, for most of the hourly-paid workers who keep supplies made, distributed, and sold, their work is a job that pays the bills. It would be appropriate if society recognized that they played a vital role, but mostly these workers encounter demanding bosses, monotony, and surly customers. If sick, they are not going to work – nor would we want them too. And they are not likely to risk their lives if going to work exposes them to contagion.

Disruption of one link, e.g. the trucker that delivers food the last mile, could halt a supply chain. COVID-19 is a threat to every link. Should a second wave hit before there is a readily available, cheap and effective treatment, it’s a very high probability that many supply lines will be disrupted and filling the gaps could easily overwhelm the nation’s businesses. 

Even today, on the evening news, we see images of vast caravans of cars lined up to get supplies from food banks. Imagine two weeks of empty shelves in the stores that feed our cities. How likely is it that civil order could be maintained in that situation? Will people suffer in silence if they realize that they can’t buy food for their kids because our leaders reopened the economy before a treatment was available because they wanted to prop up the stock market (which is how it will be portrayed)? If we want to look analogues for what life is like once supply chains break down, they’re readily available today in cities like Mogadishu, Kinshasa, and Port au Prince. 

 Thus far, the Trump administration’s response to the pandemic seems to be a mélange of Boss Tweed, Don Corleone and Inspector Clouseau. For the next act, the administration has a choice: Churchill, who bolstered British morale during the London Blitz, or Pol Pot, who sacrificed millions of his countrymen for a bad idea. Let’s hope those around Trump can convince him that the cure for the disease is the cure for the economy.
 



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