COVID-40: What if you knew?

Do you remember that scene from the "Planet of the Apes" movie, when it is suddenly revealed to the audience that the planet was Earth all along? Sometimes I feel like that is what post COVID-19 will be like. That the world will be both familiar and alien - and that after a time we will forget where we came from until some big reminder. That we will experience some form of mass amnesia of the event, and then, 20 years from now, be amazed that we have been condemned to another pandemic lock-down.

We know why this might happen of course. People in general and various special interest groups (also known as unions, the wealthy, the powerful, the governors) want to go back to normal - want to restore what they had before COVID-19. In wanting to do that - it is easier and quicker to pretend that this will never happen again. Even those that want to change will tend to lose steam after 1, 2, 5 years of efforts. Folks start talking about low probabilities, about improved systems that would insulate us from future harms, about advances in healthcare that would neutralize the impacts of a new virus and so on. And so any systems that are immediately put in place post-COVID-19 would begin to wane, would be regularly de-funded, contingencies would be "thinned" out and so on.

Reflecting on this, I wanted to propose a thought experiment of a kind - what if we knew that another virus or other major event (major volcano explosion, asteroid etc.,) would hit us in about 20 years? All we know for sure about this event is that it would require a full economic shutdown - much like what we are now experiencing - that would need to persist for at least 18 months in some format (pending a vaccine development and mass inoculation programs for example). And then maybe to layer in just a small bit of uncertainty - that we can't absolutely know the year that this event would hit - but it is say plus or minus 5 years on 20.

With this question posed it is helpful to first think - what would I as an individual do differently if I knew this with certainty? For me - such a new event would hit right in the tail end of my 50s - peak earning years and the time when you want to "feather the nest" for retirement purposes.

Here are some quick thoughts on what I will do differently under such a scenario:

1. The WHO would be a frequently reviewed website or whomever is "keeping watch" for potential viral outbreaks (I hope there will be someone);
2. New life goal will be to have a "place in the countryside" that is provisioned or possible to provision on short notice - as a means of escaping urban centre "density";
3. My house will have a bidet;
4. I'll have my own store of PPE and related goods like sanitizer. It'll be in the back of the coat closet or somewhere like that - half forgotten - but it will be there;
5. I'm unlikely to wait for the "governors" to declare a state of emergency/pandemic - I'm likely to be working from home "more often" if a viral outbreak or epidemic has been declared elsewhere in anticipation of the change in status in my home country; and
6. But perhaps most critically, I'm going to be saving more as a rule - trying to have up to 1 year of salary (or there about) in liquidity. Combined with taxes, debt repayment and retirement savings goal, I suspect there will be very little discretionary spending until the liquidity goal is achieved (and maybe that would take upwards of 10 years in of itself).

Now try to consider the implications if "everyone" also had similar goals and what type of government reaction might be necessary as a result. For my list of six I consider the following:

1. The WHO might be able to get funded by advertising revenues (and in general may need to think about charging for premium services like "analytics" for the curious, if funding were to be cut....);
2. Not everyone will be able to afford a countryside retreat - but what type of policy will be necessary to prevent the "hollowing out" of urban centres and returning the downtown areas to ghetto-ization as the middle classes seek out more space and are will to work from home more - changing the commute dynamic. All those high rise apartment blocks - will they be populated with the young professional in the future?;
3. Plumbers will continue to be in high demand and bidet providers may be accused of price gouging;
4. For a time PPE and hand sanitizer will be precious stock - but eventually this will be much like any "emergency kit" package that can be picked up in a convenience store;
5. How do you restore the public trust in governors and experts? There will be a need for hyper-transparency in the future. The need to be able to trust the news (and the integrity of the news) will return, potentially leading to more state funded TV again. And the need for continued policing of the internet for fake news will persist - with the companies that have that assurance brand being very valuable;
6. How do you promote discretionary spending post COVID-19. You need to solve #5 for sure, but broad based debt restructuring may also be necessary. Smaller government (through smaller taxation spending on services) may also be an inevitable result of the COVID-19 stimulus spending today (with tax being used to repay debt). That is unless, there is a widespread debt forgiveness solution - which in of itself with tear at the fabric of capitalism as our model. So pretty simple stuff eh! And that is without really exploring the concept of retirement age, basic income, inequality and so much more.

The thought experiment gets even more interesting when you begin to consider what a government might/ought to do differently under this the "certainty event" scenario. Here are some more things to think about:

• While governments will have a "shutdown" play book, will they implement "practice drills" every 5/10 years and test the resilience of the system to a temporary shut down (2 weeks / 4 weeks etc)? If planned shutdowns were actually considered - what rules would change in terms of taxation, accounting policies, reserve policies and more to ensure economic resilience in key sectors. Would shareholders demand that businesses hold a certain amount of operating cash on hand much like my own liquidity preference? Or would a lot of industries need to be nationalized/subsidized?
• Will governments continue to invest in long term care homes or start to create more robust policies to encouraging aging in place?
• Will governments continue to fund schools at the same level. And if not - what about daycare? What about alternative education approaches.
• Will vaccines be optional?
• Will everyone be allowed to commute everyday and at any time they like - or will some restrictions be implemented to maintain consistent congestion volumes and social distancing as a norm (e.g. not allowed travel/commute/go to school or daycare on x day(s) if your birth month is y)?
• Would PPE access become a basic human right?
• Would broadband access become a basic human right?

Now reflect that we do actually know, that this will not be the last virus to attack humans. We know this with 100% certainty. We also can probable prevent another virus attack turning into a pandemic - but only by taking measures much like we have seen for COVID-19. And so by extension we can be 100% certain that we are likely to shut down our economy again at some point in the future.

Add what we don't know to the equation and it gets a little scary though. We don't know, if or when, lawyers, accountants, consultants and educators will be displaced by things like artificial intelligence, or if accounting, tax and cash transactions (and so everyone involved therein) will be replaced by things like blockchain, or if autonomous vehicles, drones etc., will displace drivers and transit systems in every sense and so on. The list of things we don't actually know is far more challenging and complex than the idea of actually shutting down the economy in a control manner (at least we can control the shutdown and start up). Normal societal disruption (that we don't really control) is not expected to slow down.

So listen to the special interest groups - and it's probably better to have mass amnesia and forget this ever happened........