Thinking About Things: The Next New Normal

By John DeQ. Briggs

Child in home quarantine standing at the window with his sick teddy bear wearing a medical mask against viruses during coronavirus and flu outbreak. Children and illness COVID-2019 disease concept

Having been under house arrest for many weeks now, I have in recent days been thinking about what it might actually mean for all of us, as a practical matter, when the Governors of the various states decide to “open up” things. But I get ahead of myself.

The stock market, while down by some indices more than 15% (having come back from being down plenty more than that), seems to have to a significant extent shrugged off the reality that economic activity in this country has substantially declined and in some segments disappeared. Aerial photographs of highways show few cars and no trucks. The skies are eerily silent, almost reminiscent of the time after 9-11; restaurants are closed. While some stores are open, JC Penny and other big-box department stores all seem headed for chapter 11 bankruptcy. Amazon beat them up and the quarantine seems to be pushing them off the cliff. Layoffs are everywhere. A lot of the jobs will not come back any time soon. Maybe millions.

And then there is oil. In a flash, oil prices are near zero. There is no place left in the United States to store oil or other petroleum products. Just a week or so ago oil had a negative value. People would pay you to take millions of gallons of oil if you could. It reminds one of the Sorcerer’s Apprentice. Saudi Arabia declared oil war on Russia and the two of them declared oil war on the entire U.S. oil industry. The glut of oil is unprecedented at a moment in time when there is little demand. The owners of the assets used to produce oil from small wells and fracking operations may be in bankruptcy before summer. Just the situation in the oil industry alone is astonishing in more dimensions than I can process. Strangely, the left seems to applaud the assault if not the demise of this business segment, perhaps being unaware that the industry employs more than two million people and indirectly employs many times that.

Meanwhile, so far as I can tell there really does not seem to be any news on the news anymore except that Kim Jung Un seems to have disappeared. Everything else on the news programs makes my eyes glaze over and for me boils down to one of three things: (1) constant blabbering and data about Covid-19 which have become mind numbingly irrelevant to people who are quarantined at home; (2) vicious attacks on the administration for its handling of the crisis by people who would be viciously criticizing the administration for other reasons in the absence of this crisis; and (3) efforts by various camps to blame each other, prior administrations, or China for the lack of adequate testing or masks in this country. It is all quite baffling. At least in the mainstream press and media, and on social media too (in other words basically everywhere) vast amounts of time and energy are being spent by educated adults with bylines or a microphone trying to fix the blame rather than fix the problem. This aspect of the current normal is just like the old normal in other words.

One thing, however, has come through the Coronavirus cacophony with a mild degree of clarity. You may remember that just a few weeks ago we were told it was a matter of life and death that we “flatten the curve.” One had to read reliable sources of information to appreciate why this was so important, but it was. The point was to avoid overwhelming the medical community with a tsunami of infected patients who could not be handled all at once. Well, if one looks deep enough, one finds that throughout most of the United States the curve has been flattened! This should be a stunning victory, right? Not so fast. Flattening the curve, it turns out, does not mean the problem is over. It just means it goes on longer, but without overloading the capacity of the healthcare system to deal with infected individuals. The same number of people (or maybe more) will become infected, but under the blanket of a nicely “flattened curve.” How much longer? Nobody, and I mean nobody, knows. What does this mean? I am not sure but I think It means that the economy will stay weak and endangered for much longer and that when the dust settles, a lot of our old favorite places might not be in business. .

When our Governors say it is safe now to go “back to normal,” will people travel on airplanes? Will they go to crowded restaurants? Will they go to sporting events? Concerts? Any place where there are lots of other people in close contact? I do not know, but I kind of doubt it. Maybe social closeness vs. strong remnants of social distancing will become a highly visible differentiator between generations. Older people (either because they are smarter or more vulnerable) may continue living under looser version of today’s social distancing rules – making exceptions for socialization with a small circle of friends or acquaintances who, by all appearances, are certifiably virus free.  The younger generations, naturally perceiving themselves immortal, might return to conduct somewhat resembling the old normal. This is what college students did during spring break before Florida finally closed the beaches. The younger generations will probably behave this way again. Immortality is after all very cool. But that may not last after some of them end up becoming infected and dropping dead from the blood clots, which now appear to be the real silent danger of Covid-19, not the lung problems.  

There are also some weird data buried in the economic picture. The medical health professionals have become the faces and the heroes of the crisis, just as the fireman and first responders were the heroes of 9/11. But here’s the thing: many hospitals are on the edge of financial danger and some will fail. This is at first not intuitive but is on second glance obvious. Elective surgeries are not happening. Routine doctor visits are not happening. People who used to rely on the emergency rooms as their primary care source are not going to the emergency rooms. Hospital capacity (beds) is greatly and uncharacteristically underutilized almost everywhere. Health professionals are being laid off in some fairly substantial numbers my relatives in the field tell me (this does not seem to have made it much to the news delivery systems, so maybe it is not true, but I think it is).

So, why has the stock market not gone into a much larger collapse? Nobody, and I mean nobody, seems to understand why. Experts like Bill Gates and Warren Buffet do not seem to understand what is keeping the market afloat given the bloodbath going on in the real economy on the ground. Since much of my life savings is bound up in the equity markets I am not right now complaining. But I feel as if I have to pinch myself every now and again. After all, unemployment seems to be approaching depression-era levels and more than one and five Americans has recently become unemployed. The Government’s multi-trillion bailout is not much more than a really expensive (and necessary) Band-Aid but it cannot keep enterprises afloat where they are not even open for business or where there is no demand for their products or services. The trillions of dollars shoveled into the system presumed a reasonably fast return to “normal.”

So, to return to where I started, what will our community and our business environment look like when we come out of our quarantine into the warmth of Spring? The “old normal” has been around for decades. Social activity was the norm. Today’s normal is quarantine and social distancing. Antisocial. Not normal. Life post-Covid-19 will be different. Companies will operate differently. Offices will become less essential. Interesting sidelight: I learned recently that it is harder to buy an affordable webcam to use with Zoom, Bluejeans, Skype or other audio-visual social or business events than it has been to buy good toilet paper! This is surely an indicator of one aspect of the next normal. It will involve more connections by way of audiovisual technology and fewer connections by way of actual physical presence.

This will not just be a personal change, but a change in the way enterprises do business. My doctor now has a fully equipped audiovisual capability for appointments via Zoom or some such platform. My financial advisor has the same capability. My lawyer has the capability. I am on a not-for-profit Board. We have been meeting via Zoom video conferences and it seems to work very well. This does not bode well for the commercial real estate business, which might find itself under stress from technology-facilitated conference spaces. My liquor store and my grocery store accept telephone or internet orders; accept payment by credit card without any personal contact; they leave the goods in a box or bag for pickup near the parking lot. Believe it or not, even CVS now delivers in Easton, just like the family-owned drugstore did when I was growing up in the 1950s!

But when the things finally do “open up,” attendance at sporting events, concerts, plays, political rallies, the nominating conventions, and a host of other such events will signal the direction of the next new normal. I have a pretty strong belief and expectation that it will be really different from the old normal. I hope it is better than today’s normal.

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