An era for the history books
How quickly things can change. I have this Wall Street Journal issue I have from mid February, on the state of the US and global economy due to the Coronavirus in China. Let’s note that at this point, this was considered a polarizing pessimistic take by many, and the Dow and S&P would hit all time highs in the following weeks:
China’s coronavirus outbreak will likely dampen U.S. economic growth in the first quarter, according to a survey of economists by The Wall Street Journal.
The monthly survey of economists found 83% of economists expected the coronavirus outbreak will have a small impact on U.S. gross domestic product growth from January to March, or less than 0.5 percentage point. Just 5% of forecasters expected a significant reduction of more than 0.5 percentage point off the quarter’s annual growth rate, while 10% expected no impact.
These brilliant minds were collectively dead wrong
Now in mid-April, it’s been about a month since the entire state of Washington, and billions around world at large, has gone into a social distancing lockdown with effective shelter-in-place orders for months on end (until the end of May here in Washington). This period has created considerable stress for a large number of service workers who are finding themselves out of work for months on end. Massive economic levers are being pulled by policy and political change makers to prevent the economy from collapsing during this period, and for the moment in the US, it seems to be working. But we’re talking about unemployment in the 10-20% range, with a considerable contraction of the US economy for several quarters at a time.
I can’t quite say what the markets are doing, but in the two months since that publication, a recession a given and a depression being seriously discussed as a possibility as the full reopening of the US economy could be 18 months (!) or more. Tens of millions are on unemployment in an effective universal basic income, hundreds of millions of Americans are under legal quarantine and generally buying into the need of it to prevent mass deaths among the population.
Some key sobering moments have encouraged an honest take here — the British PM contracting the disease was quite an episode, with him being admitted to the ICU, it was rather dramatic. I was touched by the relative unity of the political scene there in stark contrast to what we’ve been seeing on the national state in the US.
Beyond that though, daily life has seen some changes. Notably, masks are far more accepted and in some places (and mandatory in others).
Life has also been altered
Travel is completely gone; airline traffic is down 96%, parks are closed, social events of more than a few people are not only cancelled, they are illegal (depends on state, but it is in Washington state). Overall I’ve been okay. I can work remotely. Life goes on. There are lot of things around the house that I needed to do anyway; I’d say I’ve been keeping quite productive. I’m thankful the world has internet; without it, I think it would have gone down very differently.
That it’s happening in 2020 instead of years means a few unique things:
- Air travel and global integration allows for rapid spread of contagion, but also rapid international cooperation.
- Major crises like this can elicit strong reflective reaction from policy makers, but a rational health policy based on statistics and measurements is critical to mitigate the harm.
- With the recent rise of wealth in China, a great deal more has entered the middle class and have been occupying the airwaves. Based on how bad COVID19 is getting in the West, if there’s any basis in reality to Chinese statistics, it seems then that it’s incredibly impressive how quickly they were able to lock down, contain, and restart the economy.
- The internet. It’s not even worth capitalizing the I anymore. Whatever it was before, it’s ever more critical now, to everyone.
- Mobile work is possible for many if not most information-tech occupations; and it works for many. Working from home comes with it’s own set of pros/cons. More later.
- Non-essential service sectors are nearly completely shut-down. The role of central governments and banks couldn’t be clearer in times of crisis.
- It does seem that the US total deaths due to COVID19 will be far less than the worst case scenarios of widespread infection. Those had numbers of Holocaust like 3-5 million dead thrown around. Based on the latest projections (as of April 17th, this being a moving crisis), it seems like the numbers may peak around 60-70 thousand. Still horrific, but a fraction of the scar that a full 1-2% of the US population would have been. Whew.
- The political fallout will be interesting. This is an election year after all.
So there’s too much to be said, and this isn’t meant to be a research blog. For me personally, life goes on. I happen to be able to work remotely, and it’s been an interesting test case of how to get people working across the world still able to function during this time.
I do think there are some positives that remote work offers. For one, there is is no commute. This for many saves hours off one’s day. I had a light commute of 20 minutes, and it was forced source of exercise. I’ve found myself needing to be more deliberate with habits that a workday builds in. Things like a commute, breakfast and lunch are all things that revolve around a cadence.
The explosion of video calling for work has also brought millions of people onboard, including folks from my own family. We’ve been putting Zoom and others to good use:
There’s also like… no traffic anywhere. Except that time in Seattle when that guy jumped off the I-5 and blocked the I-5 — I passed by what looked like a body in a blue tarp and confirmed yeah… some guy did something. (H showed me a later picture that was far too graphic to show here) I should have listened to Google Maps that day.)
But yes, other than that, there’s hardly any traffic on the road or in the skies.
Work is also changed
With everyone, from new hires to CEOs needing to dial in remotely, VCs are an interesting leveler of the playing field of meeting dynamic and team hierarchies. Nobody can have the ad hoc conversations that happen around the office, and every interaction has to be much more intentional. So I’ve found it a reason to be more bold. I happen to have a set up I consider relatively enjoyable, though I still find myself talking a lot of walks around the house before/after/or during stretches of meetings.
A couple weeks ago, a coworker of mine came by the house–quite the surprise, especially since I hadn’t seen almost anyone from the office with my own physical eyes in a month or more. It was nice, able to connect in person again. Social distancing is still good to enforce; just in case, but I think after this period, perhaps normal life will be more appreciated.
Stay safe world!
In the meantime, be inspired by an awesome live performance of the Civilization VI theme Sogno di Volare by Christopher Tin.