Reflections on the COVID-19 global pandemic– some ideas on dealing with the economic fallout.
It seems very clear to me that the COVID-19 global pandemic and its impact on the world economy will be unprecedented. As the world grapples with how to deal with the medical implications by closing everything from retails shops to country borders, millions of people are finding their income threatened, reduced, or lost.
For the last week I have been thinking about all these waiters, artists, freelance consultants, concert and sport venue workers, start-up employees and their bosses, people working in retail, supply chain and so forth and I keep wondering about how we will recover from this disaster.
I am sure that people far smarter than me are grappling with this issue this very minute, but for my own sanity I wanted to commit to paper a few ideas to perhaps start a discussion or at the very least get others to reflect. I am not suggesting for a minute that I have the right solutions, or that everything I suggest in practical or even beneficial, but I do strongly believe that unprecedented times call for unprecedented measures and out of the box thinking.
Dealing with the economic fallout.
It seems very clear to me that we will need heads of states to come together and create a worldwide response to this crisis. Last time I checked; viruses do not have nationalities. They can start anywhere in the world and spread. Since this is now a pandemic the response must be global, and we need to see an unprecedented amount of global cooperation in an era where multi lateral institutions are under threat from nationalist governments and public sentiment.
- Set aside ideological and economic competition in favor of cooperation and a coordinated response that will have to include massive fiscal stimulus.
- Find ways to identify and protect people who are most at risk from financial ruin – financial help must get in the hands of those who need it most.
- Borrow massively or divert funds from other areas to help employment and consumption
Big Businesses, Big Finance and the Rich
While governments need to show leadership, big business has a key role to play too. Some companies have taken measures already to protect their employees, but all must follow suit. More specifically big businesses will have to:
- Sacrifice profitability (and spend money) for the good of their employees, partners, suppliers and the public at large
- Put a moratorium on the pursuit of quarterly results and profitability and open their purses to protect wages, and make purchases and investment when the time comes
- Think about halting stock markets and freezing stock prices until the right time is decided to resume trade
- Halt the repayments of loans and interest for a period
- Be willing to help foot the bill for astronomical medical costs
The public at large
For us that have some money saved in various types of retirement plan and a job
- Be ok to see the value of our savings diminish – at the end of the day part of the pressure on big business to make money is our ever-growing appetite for returns on savings and retirement investments
- As soon as the green light is given, be willing to go out there and spend money in restaurants, movie theatres, sports shows, and concerts to help small businesses and their employees
- Provide help, financial support to family members who need it
The Silver Lining
The silver lining in all this is that the reduction in global economic activity is leading to small ecological wonders. My Italian wife, who studied university in Venice, was astonished to see pictures showing crystal clear water and visible fishes in the Venetian canals.
The slow down in everything from automobile use to the cancellations of thousands of flights will also provide the environment with much needed relief. Various reports indicated significant drops in air pollution in Italy and China due to reduced economic activity.
As we learn to live in a virtual world by speaking to others via various telecommunication means as opposed to taking long road trips and flights, we may want to think long and hard about the lessons of the Coronavirus pandemic and apply them to a post-pandemic world.