The Impact of Coronavirus on our Economy

The total number of coronavirus cases in the United States has now exceeded well over one million. The American death toll, over 60,000 now (that we know of), has surpassed that of the Vietnam War…in just 2 months. But today’s post is not about the horrendous health impacts of the virus so far, but the economic impacts yet to come.

Recent reports about our the future of our economy are hopeful, but are they grounded in reality? Things may never be the same again.

The bad news is that our economy was reported this week to have shrunk by nearly 5% in the first quarter, the worst performance since the recession of a decade ago and probably the forerunner of a much steeper collapse in the second quarter that could be the worst one since the Great Depression, 90 years ago!

But in spite of these things, the White House on Wednesday declared its response to the crisis “a great success story”.

Ladies and gentlemen, it’s time that someone (and I guess it’s going to be me here) spoke reality about the situation we are in and just how all of it is now and will continue to affect us. This isn’t going to be easy to hear and for those who want to believe the “happy talk” being spouted by the president and his at-best misguided spokespeople, then your economic future may be in even more jeopardy than you know.

So how can I tell you what I think in just 1,500 words or so? There will be dozens of books written about all of this in the end, and some of them are even being written right now. So if you are still with me, here it is.

Revisionist History Is Now Boasting About Success over the Virus

Number one, on what planet does the death of over 60.000 people here in the U.S. constitute a victory over anything?

According to the New York Times, in the revised history of the pandemic, Trump and his team say that his actions were not belated and inadequate, but bold and effective. “We did all the right moves,” Trump said Wednesday and “If we didn’t do what we did, you would have had a million people die, maybe more, maybe two million people die.”

Jared Kushner, the president’s son-in-law and senior adviser who has been overseeing efforts to provide medical equipment to states hit hard by the coronavirus, presented a similarly revisionist account of the administration’s record on Wednesday. He said, “We’re on the other side of the medical aspect of this, and I think that we’ve achieved all the different milestones that are needed. The federal government rose to the challenge, and this is a great success story. And I think that that’s really, you know, what needs to be told.”

But the most shocking comments that I saw were these:

Mr. Kushner, echoing the president, said May “will be a transition month” as states began reopening. “I think you’ll see by June a lot of the country should be back to normal,” he said. “And the hope is that by July, the country’s really rocking again.”

That just isn’t going to happen.

So What Will Happen?

The months ahead will be quite volatile and dynamic. It now appears likely that some places will experience a local resurgence as restrictions are lifted and economies reopen. That will influence us and even make it feel like we are returning to some form of normalcy. But many restrictions will continue.

That will include group-based isolation and setting a norm of wearing masks while interacting in public and in the workplace for the months ahead and even, perhaps, that may never disappear. Western Europe’s experiences in relaxing restrictions, and the most successful approaches there, will inform the approaches we will ultimately deploy here in the in the United States and it’s just too soon right now to really know.

While the search goes on for a treatment, cure, and vaccine for this virus, the focus will have to be on restrictions to prevent a “rebound” of what we are going through. Anyone who thinks that the novel coronavirus will just “disappear” is at-best terribly misguided.

What the Novel Coronavirus Has Exposed

In a world of prosperity for some of us and a standard of living that has surpassed almost every place that has ever existed, you might just believe that we are an invincible society. That’s not our reality any longer.

The impact of this disease has opened us up and exposed how unprepared we were and ignorant about the real possibility of a pandemic and what it would do to our healthcare system as we know it. That’s the same healthcare system we have been debating and letting wither for a huge number of our population who either don’t have access to it or can’t afford it when they need it. They really needed it over the past two months and we saw exactly what that did to us.

Here’s a question I just have to ask. Why is it that there hasn’t been enough money around to create a healthcare system that works for everyone and yet somehow, there are literally trillions around at the drop of a hat to help support big businesses because that’s “good” for the economy? Isn’t health important enough or something like infrastructure of our roads and transportation system? It seems we know the answer to that, don’t we?

Our futures are all significantly tied to how we react now and change the broken healthcare system here in the U.S. so that everyone has the same chances. That rebuilding has to start as soon as possible.

Your Job May Never Be the Same

Some of you are considered essential workers at the risk of exposure to the virus. Some of you are now unemployed. Some of you are furloughed. Some of you are working from home. I guess that covers almost everyone and here’s the news: your life may never be as it was when it comes to your workplace. It certainly isn’t going to be rockin’ by July, unless you happen to be someone who works as the president’s “special advisor” and oh, by the way, also happens to be his son-in-law. In that case, maybe.

For the foreseeable future, many industries will be really hurting, depressed, or even destroyed. When do you see hanging out at the mall or going to a concert or a ballgame returning in your area? When do local restaurants and bars resume their traditional business models?

The school systems are in lockdown, traditional summer activities are on hold and just about anything that marked a path to building your wealth now has a roadblock on it. That roadblock can only be removed when the coronavirus is beaten and changes are instituted in our lifestyles that will protect us. When exactly that happens is a huge unknown to us all right now.

Rethinking the Social Contract

In any crisis, the state should play an essential and expanded role in protecting the people and organizing the response. The jury may still be out in some people’s minds, but not in my mind. There has been a real failure here we have experienced. Because of that failure we are required to never let it happen again or it might even be worse. Losing 60,000 or perhaps even 100,000 or more from ineptitude and unpreparedness is intolerable.

Your Socializing Will Be Very Different

Besides dining out and ballgames and concerts, you will depend even more on technology than ever before and socializing by electronic media will expand greatly now.

I’m not sure that it’s such a bad thing either. My original take on depending on phones and laptops to communicate now suddenly takes on a different life. Your travel is limited, but the internet doesn’t set those same limits.

Additionally, you will be spending more time with your family too and actually speaking to each other. Well, again I say, that sounds like a plus that you probably never thought was something you’d ever experience again. You will now.

New Business Will Replace Old Business

Adaptation, it’s always been that way. You will learn new skills at work or even completely new lines of work. You would have had to anyway because of automation (I use the term “you” but I mean all of us as in future you) and who would have thought that “fashion” face masks would be a thing in 2020? By the way, it’s not too late to get in on the ground floor of that.

The list of changes will include learning new skills like cutting hair at home or being educated commonly from a virtual classroom. I haven’t made up my list yet of skills that I’ll be learning (and I will, even at my age), but if you are not yet approaching retirement or even just starting out, start planning ahead now. Learning a new skill and the streaming of many alternate incomes will be a “new normal” in our economy and not just a good idea as we move into the 2020’s and beyond!

Not-So-Final Thoughts

Is there more to say about this pandemic and what will happen? Of course there is. But I have already gone past my self-imposed 1,500 word limit so I will wrap it up here by simply adding this.

As a personal finance writer, I could take the “happy talk highway” and write about coupon clipping and ways to save on your cable bill or how to find the best deal on your new mobile phone and uh, yeah, I have done that and will do it again soon I am sure. But today I just couldn’t do it.

I am so concerned about what I see as a lack of empathy, concern, responsibility, and intelligence for many of the weakest (and that includes the economically weak bigtime!) among us that I can’t avoid saying what I see. There is still something called the truth no matter how much happy talk and spin anyone places on it.

I try to use truth in all of my personal finance advice and observations. I think this community owes that to its readers. I hope that you still will read my blog after you read this and if you don’t, well, it won’t make any difference about what I have written here today. Someone has to say it.

4 Comments

  1. Holly

    I was shocked by how fragile so many businesses are. Life is certainly not returning to normal any time soon. Sorry to hear about the high number of deaths in your country. It’s a scary time.

    1. My biggest fear, Holly, is that life will not be returning to normal for a very long time. More than ever before, the fragile nature of our society has been exposed and it will take everyone all working in the same direction to get back to what we all want to see happen. I don’t think we have that right now, and I think that’s what’s contributing to our serious death totals here in the U.S. I wish you and yours to stay safe and be healthy. That’s all we can ask at this point. Thanks for your comments.

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