Reality Check
Dirk Bischof
Chief Executive Officer/ Founder @ Hatch Enterprise UK | Entrepreneurship
Its been 4 months roughly since the world became aware of COVID19, it hit the UK in February and affected businesses and households from March, leading to the shuttering of tens of thousands of businesses and people working from home or not working at all. Let's look at some of the negatives and positive effects of the current situation. These are generalisations, exceptions will be the rule.
On the negative side:
1. 1 million people are now infected with COVID19 and over 50,000 people have died (as of 03/04/20). Expect actual infections in the tens if not hundreds of millions over time as very few tests are being done currently across the world. I expect this to get worse before it gets better as more tests are being carried out.
2. 1 million people claimed unemployment benefits in the UK in the space of 2 – 3 weeks in March 2020. At the same time, 10x that number in the US being laid off. My prediction, real unemployment rates across the UK/ US will reach 20-30% if the situation continues as is, for another 3 - 4 months. US household debt tops $14 trillion for the first time, whilst household savings have declined from 10.6% (1960s) to 7.6% (2020) with much fewer households having any savings at all.
3. Governments have implemented draconian powers across most of the Western world; in Hungary, president Orban has become sole ruler of the country, effectively shutting down democracy, as we know it. The UK has suspended the 28-day renewal process of emergency legislation and new powers are here to stay (indefinitely?). Rioting and war-like circumstances in parts of Israel and Nigeria (how come we don’t hear these reports?).
4. The economy is in freefall (still) and most stock markets lost between 20 – 30% off their highs in early 2020. The US FED has added $2 trillion in liquidity (unlimited QE essentially). Stimulus packages so far mainly benefit Wall Street not Main Street. Various support schemes are being implemented (see chart). This is different to 2008, where only Wall Street and banks got bailed out, this time, people are being assisted too. Problem is, many businesses won’t be around to even benefit from the stimulus. Also, who’s looking after gig economy workers? As many as 36% of US workers are now in the gig economy and as many as 10% in the UK (roughly 5 million people).
5. US president Donald T continues to be one of the biggest environmental disaster after suspending or relaxing EPA rules, meaning corporations are now free to pollute water, soil and air at their heart’s content. 1bn tons of additional CO2 will be added through vehicle emissions alone. Again, this benefits his donor base and especially major gas & oil corporations.
Here's an overview of emergency measures (from one of my Japanese friends)
On the positive side:
1. Whilst individual members of our communities, mainly elderly and those with pre-existing health conditions, are affected by COVID19, humanity as a whole will become more resilient as a species. Remember, individual members of our species are fragile, humanity as a whole (up to this point) has been antifragile, allowing total domination of this planet (and wrecking it in the process).
2. We’re seeing people and companies become very resourceful and supportive (e.g. making PPE equipment at home, in universities, at corporations), we are spending more time together in our homes, building and re-building closer relationships with loved ones.
3. The environment gets a temporary breather. Air travel is down by 80% across most of the planet. Fish stock globally has a chance to replenish itself as trawlers and fisherman are staying home due to a collapse in demand (no restaurants) or stay-at-home laws. NO2 levels in Milan and other parts of northern Italy have fallen by about 40%, elsewhere pollution is at a decade low (not seen since 2008).
4. Long-term effects of this crisis might be a total reduction in air travel for meetings, yes, we don’t have to travel/ fly to meet other people, video calls are totally acceptable.
5. A concerted effort as we see now across countries to fight COVID19 gives us a glimpse of what would be possible to fight #climatecrisis, if only there was a willingness to make it an emergency.
It's anyone's guess where this is going. Some people and organisations are (were) more optimistic (Goldman Sachs, now having changed their stance from "A light at the end of the tunnel" to "A light at the end of the tunnel or an oncoming train", in the space of 7 days) and others are outright pessimistic (Zero Hedge article "Gundlach, Marks, Rogers All Agree: It's Going To Get Much Worse")
What are your predictions? What are your key insights?
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4 年Here's an answer from one of our star #ImpactWomen, Leila Ben-Gacem in Tunisia - https://www.ogunte.com/blog/profile/leila-ben-gacem-2/ "We Will Come Out Economically Destroyed but Humanly Stronger!"