The COVID-19 Long Haul

We could be in for a long haul with COVID-19. Here are a few predictions for what that might look like.

As COVID-19 numbers continue to climb around the world, researchers are raising the possibility that we could be in for a very long haul: instead of weeks of isolation, we could be in for up to a year and a half. If normal life has to be put on hold for that long — albeit with pauses to release us from our seclusion — the effects on society will be far-reaching and fundamental. Here are just a few of them.

Commercial real estate vacancies increase as small businesses go under.

  • Small businesses cannot endure being shuttered for months on end: we’re already seeing the effect. Most are struggling to survive, and unfortunately many won’t. As the spectre of bankruptcy looms, much commercial real estate will become vacant. In order for owners to try to keep revenue from those properties flowing, many will be flipped to the residential rental market, especially in cities with rock-bottom residential vacancy rates, such as Toronto and Vancouver. Commercial real estate is generally more valuable per square foot than residential, so owners won’t want to see these properties stay residential forever; they just want something to continue to generate revenue for the length of the downturn.
  • Since they’re already as tight as a drum, residential vacancy rates in cities such as Toronto and Vancouver won’t skyrocket as a result of this, even with the usual recessionary pressures.
  • As  people lose their jobs, many will have to make tough choices, moving back in with parents or relatives, or subletting or share their units to make ends meet. This will further increase the inventory of rental properties, and rents will decline even further. In Toronto and Vancouver, this will be seen as a rebalancing. In other places — especially those already reeling from the collapse in oil prices — another blow to already beleaguered landlords and investors.

Whole sections of the economy will need to be put on life support.

  • Anything that caters to groups of people (airlines, bars, restaurants, gyms, etc.) might fail if not thrown a lifeline. The government will extend that lifeline to many, because of the potential disruption to society and the economy if they don’t, not to mention the enormous cost of rebuilding whole industries from scratch if they collapse.
  • Some of these industries are essential to the functioning of our society (airlines, for example) and some aren’t (gyms). The ones that aren’t will, unfortunately, be allowed to contract indefinitely, as scarce resources are allocated to keep the essential ones treading water until they can swim again in 2021.
  • Unfortunately, this risks creating resentment, as the government picks winners and losers among industries. This will inevitably breed resentment among employees of the “losing” companies, who will increasingly feel like victims of an economic system stacked against them. This will result in a bump in support for unionization and left-wing parties associated with them, such as the NDP in Canada.

Pop-up shops become an essential part of the economy, opening up during quarantine gaps.

  • Businesses can’t afford an 18-month lease if they’re only going to be open 1/3 of the time, so many will pop up for a couple of months during gaps in quarantine, and go back into hibernation.
  • The public will become accustomed to this cycle, even after COVID-19 is beaten, and the trend will continue well past the end of the crisis. Pop-ups won’t threaten the eventual resurgence in permanent brick-and-mortar shops in 2021, but will become a bigger part of the retail landscape.

The death of malls accelerates as people avoid open spaces.

  • They’re already reeling, and unfortunately COVID-19 will accelerate the process.
  • These spaces are are already being reimagined for residential and other uses, and this trend will continue.

Industries that have resisted delivery embrace it

  • Previously in-person businesses such as dry cleaners will move to a 100% pickup and pick-up/drop-off model to survive. Athletic trainers, music teachers and others are going online, some permanently. Most things that involved dreaded face-to-face human contact will either be delivered (such as meals), move online (trainers) or be learned (haircuts) so that people can do them on their own without the much-feared human contact. If you want a template for this kind of self-resiliency, check out the 1930s.

Robots replace more and more farm workers

  • Closed borders around the world, possible reductions on inner-state travel, and workers getting sick en masse will reduce the labour supply during harvests. Harvesting robots will see a surge in demand to compensate, and some laid-off workers from other industries will fill the gap.
  • In the short term, until robots can be manufactured and deployed in greater numbers, harvests will become a stressful time for supply chains, and rely more on displaced human employees than on robots.

Businesses, individuals and our economy will face enormous challenges if social isolation drags on, even with pauses built in. The good news is that many societies such as Canada’s have the financial stability and health to be able borrow or print enough money to make it through even an extended period of economic strife. Other economies that are more heavily indebted and slower-growing, such as Italy’s, face a far more uncertain future. In the end, COVID-19 will bring a financial reckoning unlike any we’ve seen for a very long time, followed by a period of austerity, as many countries try to bring their balance sheets back into line, even if only partly. Austerity may not be the best prescription for a recovery, but many countries will adopt it.

It’s important to remember that the world will make it through the crisis. The main question will be what it learns in the aftermath, and whether it’s willing to commit the resources and planning to ensure this doesn’t happen again.

The Curious Case of the Thing That Wasn’t There

We’re in danger of losing our world.

An addlepated madman is in charge of the world’s most powerful nation, while the (formerly) most open and progressive nation in Europe has decided to shoot itself in the foot. Countries are rushing to create autonomous death machines while lining up for war with one another. Global warming is now a locked-and-loaded catastrophe that threatens our very existence. In short, everything is unraveling.

How did we get here?

We’re a wise species. It’s how we got our name: homo sapiens, literally “wise (hu)man.” We’re the species that invented writing, space travel, universities and iPhones. We’ve been to the moon and the bottom of the ocean. We wrote Hamlet, the 9th Symphony and Madame Butterfly. We may even conquer death this century.

So how did we become so stupid? The answer may be simple: a belief in things that aren’t there.

Donald Trump rode a wave of populism based in no small part on a belief in the sanctity of the white race, and gripping tales of the minorities threatening it. Vladimir Putin enjoys the acquiescence of the Russian people by tapping into their insecurities, allowing them to project their egos onto his image of the archetypal Russian strongman. Chinese leaders continue to channel memories of western domination to legitimize their militarism.

In short, the world is unraveling because of a belief in things that aren’t true, whether it’s the sanctity of a given skin tone, fears of vulnerability, or a belief in the inherent superiority of your civilization. None of these things are real: they’re ideas, and ones that are easily deflated. Race is a construct. Vladimir Putin is not a strongman: he’s an autocrat whose opponents have a habit of dying in suspicious ways. Britain is leaving the European union because of made-up crap. A misbegotten belief in a God that wants you to vote Republican put Donald Trump in power.

Telling you what you want to hear.

How does a species of wise men and women come to believe in things that aren’t true. And what can we do about it?

The answer is that people have a tendency to believe in things that make them feel good, regardless of any reality associated with said things. Want your God to tell you to get rich and carry guns? You’ll find a way to believe that, even though his son came to earth as a dirt-poor pacifist. Think you’ll feel safer the bigger your military? So do lots of other people. Want a father figure to make you feel stronger than everyone else out there? There are no lack of world leaders willing to step up to that challenge.

Unfortunately, the antidote to a belief in things that aren’t there is neither palatable nor easy to swallow. Educating people out of their ignorance is a long process, and not at all guaranteed to deliver results. Humility is a tough sell; being powerful and bullying others can feel a lot better. Vulnerability is uncomfortable, and not exactly something nations are willing to embrace.

The solution.

As with all socio-political change, turning our backs on these phenomena will happen only if and when brave souls are willing to step up and challenge the societal norms and authority figures that perpetuate things that aren’t there. Then, after a few decades of broad-based public education, societies stand a chance of developing the maturity and self-knowledge to disavow things that simply aren’t true. It happened in the 1950s and ’60s across America. It set the stage for a defeated and angry post-war Germany to emerge as Europe – if not the world’s – current champion of freedom and democracy.

It can happen. It’s uncertain whether it will.