Coronavirus and the Return to Normalcy

Lech Mazur

Lech Mazur, Advameg CEO, City-Data.com founder, AI/NLP Startup founder.

There should be more discussion about how to restart the economy after the coronavirus. First, we need to have widespread rapid testing and a large supply of N95 or KN95 masks for everybody to wear in public. Paid sick leave (which employers encourage employees to use). Numeric gathering limits. Contact tracing likely won’t be practical.

Some activities should be allowed before others. Parks or beaches should probably reopen before nightclubs. Playing tennis before basketball. Working as a real estate agent before working as a museum tour guide. Being able to drive anywhere without restrictions before riding in an Uber without a mask or going on a cruise ship. Working in private offices before working in open office layouts (with or without masks). Going to a movie theater before flying to a work conference.

One problem is that this carries the appearance of picking winners and losers seemingly capriciously, and some parts of the economy are indeed zero-sum.

Should a massage therapist who was previously infected and has a doctor’s note with a positive antibody test result be able to work before one who doesn’t? From an epidemic-prevention standpoint, it makes sense. But does it sound just to the public? Isn’t it encouraging revealing private health information, and won’t there be unintended consequences to such policies (e.g., wanting to get infected on purpose, a la chickenpox parties)?

Europe got hit earlier, so it should provide some ideas worth copying in the U.S. Will they actually be copied, or is each state going to try to come up with their own unique way to take a suboptimal road while ignoring what their non-immediate neighbors do, just as they did while creating restrictions?

Which state will remove restrictions first? Alaska? North Dakota? It seems like a risky move if travel between states is not legally curtailed or reduced through other means like large tolls, gas taxes, or large flight taxes (none of these would exactly be popular). Nobody wants to be known as the state or city that started a second wave.

Public transportation usage, which has quite a positive image among the public, will probably decrease as people now feel safer driving private cars without having to bother with masks inside them. The need for more frequent disinfection will lead to increased costs. These could lead to less frequent buses or trains, making them less appealing again. What can be done about this besides maybe retrofitting them to add plexiglass barriers? Adding such barriers would reduce each subway train’s capacity, and this matters a lot in NYC.

It seems likely that some white-collar workers will just continue to work from home, as companies gained real-world experience with this process and saw that it worked. But since this was all completely unplanned, some companies or workers will instead take a dimmer view of telework than if it was implemented in a proper way.
Telemedicine will probably see a permanent rise. The trend towards automation could accelerate as less human contact can be preferable — advantage introverts.

Will the experience of spending weeks holed up in a small city apartment without the benefits of city life instead of spreading out in a larger house with a backyard cause noticeable shifts in buying/renting preferences among people with the means to choose? It seems that employees who shift to working from home definitely could use extra space.

If the large number of pre-COVID-19 retail storefront vacancies in Manhattan is a good indicator, commercial landlords would rather wait years for high-paying tenants than lower their asking rent. They might have to take their losses now, however, as the number of vacancies will surely jump.

On one hand, lower-end apartments should see decreased rents as fewer people can pay as much as before and the demand curve will shift down. On the other hand, this will make real estate investments by landlords less profitable and carry a higher perceived risk. It doesn’t look like a good time to be a landlord. The higher-end apartments should not see as big of a disruption, as richer people won’t suffer as much economically.

I would have thought it was clear that the coronavirus response was bungled on all levels of government, but apparently the public disagrees and the CDC, for example, is well-regraded. But the status of some professions will be permanently changed nevertheless. Politicians should become even less trusted, while real experts should gain trust. This experience may influence climate change stances. Jobs with high unemployment rates, even if temporary, could be seen as less desirable.

Index investing doesn’t look like such an obvious choice anymore. It was very possible to see trouble coming well before the market reacted. The N-95 masks were in demand before the S&P 500 went down and apparently before anybody in hospitals, retirement homes, businesses, federal, state or local government was really preparing! If you saw it coming before them, would you ever invest your money with someone who couldn’t?

The public is hungry for new guidelines and information about which activities are safer than others. For example, some might think that taking elevators with other people is contraindicated. As would sitting in large university lectures. It might or might not be true (seems like it would be). There should be a significant focus on creating and assigning experiment- and evidence-based risk scores to common activities. We all should want to know these numbers before going back to our routines.

There will be a pent-up demand for some activities. People who put off their vacations will want to take them (though maybe not right away) if still within their budgets and people who haven’t gotten a haircut in three months will flood to hair salons. Some people missed going to concerts and others missed going to sports. Weddings were postponed. We could see a higher density of people at certain places for some time — not exactly desirable.

The companies that laid off their employees will face more friction in resuming normal operations than companies that furloughed employees, tipping the advantage toward companies with large amounts of cash on their balance sheets and low debt. Is it enough to create a permanent shift in company preferences toward a conservative approach, and with what consequences? Canceled expansion plans?

Flawed comparisons about whether Republican-run or Democratic-run states did better are coming. Important factors, like population density, the number of international visitors or public transportation use will be ignored. Will it matter in the elections? It should, though in the presidential election, it will be all about Trump’s performance. Or will the elections themselves be postponed? Where are you PredictIt and Betfair?

Dating will change. All apps can use video-chat features, but it will never be the same thing as meeting in person and it won’t replace face-to-face interaction. The bars might not reopen quickly — not only you are physically close to other bargoers but you also have to practically shout to be understood over the music and crowd noise, which spreads the virus farther. It’s not cheap for restaurants and bars to keep the noise levels down by design.

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About Lech Mazur

Lech Mazur

Lech Mazur, Advameg CEO, City-Data.com founder, AI/NLP Startup founder.


 

One thought on “Coronavirus and the Return to Normalcy”

  1. It’s important to restart the economy in a responsible way. Doing it too soon may cause a bigger problem down the road. It’s best to rid society of this terrible virus once and for all, even if it inconveniences us for a while.

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