Saturday, April 11, 2020

Brave New World - After the Pandemic of 2020

Someday the Great Pandemic of 2020 will be over, whether in 6 months or 12 or 18. But we will NOT return to what we considered "normal." It is a certainty that things will be different, but what will the NEW "normal" look like.  This is my opinion of what our post-pandemic "brave new world" will look like - some of my predictions are quite obvious, while others are purely speculative...

Cruise lines and airlines will never fully recover. There will be more government restrictions on international travel, and for decades individuals will not feel safe in international travel, plus the new level of xenophobia and racism will also put a drag on international travel.

Business travel, especially international, will never fully recover. In addition to airlines, this will also impact hotels, rental cars, convention facilities, high-end restaurants and more.

The use of video conferencing will continue to expand rapidly long after the pandemic is over. This will become part of the new "normal." (As an aside, Zoom Video Communications Inc ZM:NASDAQ stock has seen a huge rise during the pandemic, and has, I believe, become overvalued.)

The reduced air travel will impact companies like Boeing even more than it impacts airlines. I predict that it will be years before there is ANY demand for new airplanes. And of course this will impair all Boeing's subcontractors and vendors.

"Destination" entertainment centers will never fully recover. Las Vegas and DisneyLand/World will never regain their previous level of attendance, especially from international visitors.

In-person professional sports events will be quite slow to recover.

Movie theaters are unlikely to ever fully recover.

This pandemic will be the death blow to many shopping malls and their tenants. Macy's, JC Penney and such stores may never reopen. 

Fashion will never fully rebound. A lot of people are going to find that one of the things they like about staying at home is dressing very casually. They may also get used to more casual hairstyles, fingernails, etc.  This is of course further pressure on the likes of Macy's as well as many others.

Our relationship with doctors is going to be very different. We are going to find that we like telemedicine and getting prescriptions by mail. (As an aside, Teladoc Health Inc TDOC:NYSE stock has seen a huge rise during the pandemic, and has, I believe, become overvalued.)

The restaurant business will be unrecognizable. So many mom & pop restaurants will never reopen. I don't have a good guess for what the restaurant landscape will look like, but it will be littered with tombstones.

My guess is that grocery delivery will only see a modest increase after the pandemic ends. I don't see Instacart etc. keeping all the extra business they are getting now.

This pandemic will give a big boost to a cashless society. This is good news for the likes of Paypal and Stripe as well as the big players.

Americans are going to like the idea of getting a monthly check from the government, and aren't going to want it to end. There will be increased calls for something like Andrew Yang's "Freedom Dividend" on a permanent basis. 

The idea of a national identity card is going to get a boost. Whereas Americans used to worry about the government controlling them and taking away from them, the idea of being easily identifiable to the government is going to come to be associated with more easily receiving government money.  I can even see a national identity card doubling as a debit card for instantly accessing government benefit payments. [My recommendation is that the government NEVER REQUIRE a national identity card, but rather just say that if you want to receive government benefits, you need a national identity card.]

This pandemic will add greatly to the calls for free healthcare for all Americans. There will still be heated discussions about the details (personally, I'm a fan of government/private partnership rather than a government takeover), but there will be big changes soon.

US consumer confidence will not recover for decades. Overall, Americans will spend less and put more into their "rainy day" jar (as well as repaying debts incurred during the pandemic).  Among many other things, this means Americans owning their cars longer, buying smaller houses - in general less "discretionary" spending. [and of course I acknowledge the number of Americans who have never been able to make "discretionary" purchases like a new car.]


In addition to the above changes that I predict will happen, there are also some changes that we need to make (and may or may not)...

We need a MUCH better National Strategic Reserve. In addition to the obvious huge and continuously updated stock of masks and other personal protective equipment, we also need a large and continuously updated stock of drugs, especially including those that are typically manufactured overseas, like most antibiotics. In addition to future pandemics, our National Strategic Reserve must prepare us for all sorts of natural disasters and geopolitical disruptions.

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