A few days ago, I mentioned to family and friends that we were about to witness a preference cascade for canceling large gatherings and switching to remote work as much as possible. I did not expect how quickly it would occur, nor its magnitude. As I write this, the NCAA has cancelled March Madness, Major League Baseball has cancelled Spring Training and delayed Opening Day, the NBA, the NHL, and MLS have all suspended their seasons, numerous events from Coachella to SxSW to E3 have been cancelled or postponed, schools and universities throughout the country have closed indefinitely, and even Disneyland is preparing to shut down. Governments and organizations, seeing what has happened in Italy over the past two weeks, are taking the COVID-19 outbreak seriously and looking to contain or at least slow down the pandemic.
No matter what happens with the virus, these cancellations are already going to leave a mark on our economy. Think about all the industries that depend upon events and travel to survive. March Madness is a huge part of the income for hotels, restaurants, bars, and drivers in the cities that host each game. For some vendors, events like E3 or SxSW are the linchpins of their entire revenue stream. No matter what steps the government or Federal Reserve take to mitigate it, we will see a significant economic contraction over the next year.
Our nation has had recessions before. Recessions are necessary in a healthy economy, like a forest fire is occasionally necessary to burn away the deadwood and leave room for new growth. Like a fire, recessions can harm a lot of people in the process. However, once we come through, we can enjoy another long period of growth and prosperity. More interesting, I think, are the long-term societal changes that will occur due to this outbreak.
Working from home is going to become more socially acceptable. We have had the technology to enable telecommuting for decades now, but many companies have resisted thus far. Working from home means an employee is out of sight of management, which worries some bosses. Employees at home can be distracted, and collaboration is more complicated. With the COVID-19 outbreak forcing businesses to move to a work-from-home model, I think both employers and employees are going to decide that it is not so bad. Telecommuting means less traffic, and less gasoline usage. It means less eating unhealthy food for a quick lunch before getting back to your desk. It means less disease transmission. It means less overhead for office space, electricity, janitorial services, etc. Rather than paying for an entire office, a company can rent some space at a server farm and have all their workers connect remotely from the comfort of their own homes. Working from home also changes the paradigm for childcare. Rather than having to make arrangements to send children to daycare or a babysitter when school is out, they can just stay home with their telecommuting parents.
Speaking of school, this outbreak is also going to make a lot of people realize how obsolete the public school system really is. Homeschoolers have known this for years, but even normal folks are going to see how much easier it is for children to learn at their own pace using online resources than it was to send them to a seven-hour prison sentence every day. Even as local officials throughout the nation considered closing schools to try and slow down the pandemic, they hesitated. Not because they were concerned about the education of America’s children, but because the public school system has become a de facto daycare and meal service for millions of children. For a child who wants to succeed, public schools are often a hindrance. While school closures might be temporarily inconvenient, they will be a demonstration of how well a driven student can learn when he can go at his own pace and has the sum total of all human knowledge at his fingertips.
This outbreak is also going to put a dagger in the heart of globalism. For nearly thirty years now, corporations have been cutting costs by outsourcing work to developing nations. It’s cheaper to pay Chinese factory workers pennies, to manufacture products and then ship them back to America, than it was to pay American workers prevailing wages. Yet this outbreak is exposing the flaws of this design. It was bad enough that outsourcing took good jobs away from American workers, but now we see the dangers of having our supply lines controlled by a foreign, sometimes hostile, nation. With China basically shut down for two months, we are starting to see shortages of goods that we once took for granted. More than just our cheap trinkets, China supplies us with many of the raw materials we need for vital industries.
President Trump has been warning against entanglement with China for many years, even before he ran for high office. As president, he has been trying to disentangle us from China, using tariffs and new trade deals to bring manufacturing back to our own shores. This outbreak is just a minor stress test compared to what could happen in the future. Imagine if China suddenly declared war on us; what happens to our vital industries if their factories are all in enemy territory? Divesting from China and making our own stuff again will be a positive effect of the COVID-19 outbreak.
Nationalism and national borders work. Nations that closed their borders early have seen only mild outbreaks, while nations like Italy that remained open have borne the full brunt of this pandemic. Viruses do not respect borders, but they require human hosts, and humans can be contained. The very concept of the quarantine is about keeping viruses immobile by restricting the movement of the people that carry them. People who use this crisis to demand open borders are dangerous ideologues who should be ignored. People who say it is racist to say “Wuhan virus” or complain about bigotry toward Asians are not serious about saving lives, rather they are just using this outbreak as an excuse to attack their political enemies and push their globalist agenda. Nationalism saves lives, while globalism kills.
If nothing else, the outbreak has been a reminder to us all about the basics of hygiene and controlling disease transmission. Antibiotics and other advances in modern medicine have left us complacent about the power of disease. In the old days, disease was a constant terror, something that could strike without warning and decimate entire nations. The Black Death killed more than a third of Europe’s citizens in the 14th century, returning several more times before fading into history. Just over a century ago, the Spanish Flu killed more people than both world wars combined. Now more than ever we should take steps to keep ourselves and our families healthy, so that when we do inevitably get this or any other viral outbreak, we are prepared to survive it.
The next few months are going to be interesting. We are going to see many companies flirting with bankruptcy, as their planned revenues go up in smoke. We are going to see new industries rising to fill the gaps as people change their daily lives to contain this outbreak. We are going to see government clumsily attempting to keep the stock market from cratering, which will probably only prolong the inevitable crash. This is all just a taste of what the future holds. The decline and fall of America is not going to look like the zombie apocalypse, but will be a series of sudden changes like this followed by eventual acceptance of the new normal. Don’t freak out, don’t panic, but do keep your head about you and be prepared to adapt and overcome.