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Two weeks ago, on a plane

I thought about COVID-19 while I was flying to California a little while ago. This is what I wrote. Please forgive the stream-of-consciousness, but when I re-read it, I thought it was suitable to share.

The world is under-going an event which will long be remembered. I don’t think, ultimately, it will be remembered as a health crisis – the number of lives lost might not turn out to be significant in the long-term – but it could have long-term financial implications.

If countries in Europe and the United States are united in their belief that quarantine is required until vaccines can be developed and administered, there are impacts upon daily life. There are industries that may see an up-tick in demand: Farmers are likely to asked to produce more food for canning, as people buy the stocks that are in reserve and demand more. Similarly, if they can source staff, supermarkets and those that deliver to them, are likely to continue to thrive. In France, there are limitations on who can go to a supermarket, and when, but even with those restrictions, their place in the medium-term, I think, is assured. There is only so much you can buy online.

And buying online will grow. It has grown out of all recognition since the dotcom boom of the early 2000s, but there is room for more. Ocado, and other online supermarkets in the UK, might become models or even able to export their franchises, to the newly cautious US consumer. Stores like Macy’s and JC Penney, which have been struggling recently in the face of a more savvy and demanding consumer as well as – arguably – the internet and Amazon, might not be able to navigate out of this change in societal behavior, even if they survive 2020.

Uber and Lyft – dotcom darlings – might also struggle in a world where people want to be alone more, for their safety. Some people, especially in the USA, will continue to have no choice about how they get around, but people will get around less, certainly for as long as can be predicted today, on March 17th. Even if drivers become willing to drive again, their passengers will be fewer in number, and this can only hurt their businesses.

Companies like mine, which sell IT equipment and IT services to other companies, might also see clouds on the horizon. Even if a lot of the business can carry on from a practical stand-point, with sales completed by telephone, and meetings completed by Microsoft Teams, Cisco Webex or Google Hangouts, might companies have less need for their own equipment as they increasingly rely upon cloud-based services? If all your staff work from home, you might need laptops to help them do that, but you probably need fewer monitors, fewer servers, and many fewer tablets for meetings, and iPhones for when you’re ‘on the road’.

All the people involved in the more informal economy, from waitresses who rely upon tips, to hairdressers who rent a chair in a salon, will find their income streams seriously curtailed. If you teach a dance class, will you see your students return in the coming weeks and months? It seems unlikely now.

More and more people are talking about universal basic income (UBI) as a possible solution to this crisis, at least in the short term. If that is implemented – and some would argue that it may need to be, to stop an economic crisis on the scale of the Great Depression – then it might be difficult to take away. Income tax was a temporary measure in both the UK and the USA. The UK introduced income tax to pay for the Napoleonic wars and it is still manually re-introduced every year.

If people become used to UBI, it could fundamentally change the relationship between citizen and government. We have become accustomed to a society where the people vote for politicians, people work – usually for other people – and they pay a proportion of what they earn to the government so that they can implement things on our behalf. At least that’s the way in Europe. In the USA, the companies control the government through their lobbies, their funding of political candidates’ candidacies, and through their buying power. In any case, that dynamic is turned on its head if governments are required to pay their citizens. A negative poll tax, as you might describe it, frees the citizens from wage slavery, but to what extent it does that depends a lot on how much it is for. If the citizenry get used to it, though, it is not hard to imagine it being increased in the same way as the minimum wage has in the UK.

Once you have a UBI, it seems a lot less preposterous for the government to pay for medical costs. All developed countries pay for healthcare costs through taxation in one way or another except the USA, but COVID-19 could be the event that triggers a change in this.

The 2020 presidential election has looked like a done-deal for a couple of years now, as well. President Trump looked very likely to win a second term not least because the Democrats failed to rally around a competent alternative. These are hostile words, but I don’t mean them to be a value-judgement. Bernie Sanders and Joe Biden are elderly men by any definition, and their ability to talk to anyone but blue-to-the-bone Democrats is far from certain. They, as a pair, look like the John Kerrys, Al Gores, and John McCains of the past. Despite being the most scientifically unaware, the least eloquent, and the most right-wing president if not in living memory, then ever, President Trump looks like a safe election winner in November 2020.

But that could change in the next few weeks and months. As I write this, the COVID-19 pandemic has been getting significantly worse on a day-by-day basis. On Friday, I was not considering a lock-down in New Hampshire at all likely. On Sunday, it seemed surprising that my employer was opening its doors to employees who could work remote, and by Monday evening, they made the same decision that the state’s Governor, and all its other employers that could, made: work remote if you can, travel as little as you can. In the space of one weekend we went from “Things look like they might get bad” to “Things are bad”.

I am currently flying to California to visit friends. This trip has been organized for months, but we have seriously debated whether we should go. We changed our minds one-way and the other more than once over the weekend. For most of the flight, until I started writing what you are reading now, I was trying to think through the implications of what is happening now, and where that could lead us over the next few weeks and months.

It’s easy to think about this at a personal level. Might my job not be safe? Maybe not – we’ll survive that. Might law and order break down? If vast swathes of the population become unable to feed themselves, then looting and other civil disorder are inevitable. The UBI as well as other measures the government can take, would avoid these situations.

But if the government does not make the right decisions, or if people start to notice that a man who does not understand the difference between facts and things he wishes were true, is struggling to understand the crisis, then his future reelection starts to look a lot less certain. He’s already shown signs of this: He claimed, apparently sincerely, that Google were working on a website to help people understand COVID-19. Google rapidly decided they would do that, but President Trump had heard something similar, and misunderstood, or not paid sufficient attention. The infamous Sharpie marks on a hurricane map pale into insignificance when – in an election year – the commander in chief does not look like he’s in command.

And if he is not to win the election, either because of civil disorder, a lack of faith in his crisis leadership skills, or for any number of other reasons that this unprecedented situation could introduce, then who shall be his opposition? Joe Biden looks certain to win the nomination from the Democratic primaries and caucuses as I write this, but the Democratic National Convention could decide that a different face is required. Whatever the future holds in this respect, the Democratic president would have a very different country to lead. Even if UBI has not been introduced, both Democratic candidates, and most of their possible replacements, have promised massive reform to the healthcare system.

As an aside, Joe Biden has been the least ambitious in this key area, so it’s interesting that the Democrats have started to coalesce around him.

A country which is struggling financially might decide that the time has come for the type of fundamental healthcare reform that the rest of the developed world completed immediately after the Second World War.

When I say “a country which is struggling financially” this might make it seem like the United States might be struggling alone, in this way. But the felling of China and Europe by the virus’s impacts suggest that the whole world will be experiencing something similar. Even if some relatively unscathed countries exist, they are going to find their international trade with the other countries seriously curtailed. Unlike at the end of the Second World War, there will not be another country that has done well, to pay Marshall Fund money out around the world.

China, even if it is past the worst of COVID-19 as I type, might only be in a period between out-breaks because of the significant lock-down that is happening there. If the virus cannot be vaccinated against, there is every reason to believe the infections will spread at the same rates as before, as soon as the vice is released. And while the vice is tight, the manufacturers that make almost all of the West’s goods, if they are producing anything, are producing a lot, lot less. This either increases the cost of those goods, or stops those goods from existing at all. Whether the West could or will rebuild its manufacturing capability, taking advantage of automation, is a moot point. The world’s economy will be unsettled equally.

But when everyone is in the same kind of boat, the same kind of treatment can work for all. Massive spending by the government can be done by printing vast sums of fiat money. Making money up, in order to rebuild the world’s economy. When no-one else is worried that country A has devalued its currency because they have too, then there is an increased amount of freedom to make things better. The basis of society on money-first might be about to change. I don’t know whether this is a good thing or a bad thing, but Andrew Yang – former Democratic candidate – painted a very clear picture.

Published inCopyTravel

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