I’m in “circuit breaker” with my wife and two of our three kids, which means that we we stay at home and I work from home, with our only trips outside being for the purpose of exercising, walking the dog or going to the grocery store. I spend most of my day on zoom calls with colleagues or working on my laptop – reviewing and commenting on documents, reading about our customers, suppliers, investors or competitors, and answering questions from some or all of the above. We’re re-writing our strategy for 2020 and beyond to account for the changes that are sure to come when cities and economies begin to open up again. We’ve seen down turns before – demand shocks like 9/11 or the Gulf War, or liquidity shocks like the global financial crisis, but this is different: more severe, faster, and far less predictable. If we go back to some semblance of normal, will we have to shut the system down again to stop the spread of COVID?

I work for an aircraft leasing company, and all of our airline customers are experiencing unprecedented disruption. Most are either shut down completely or are operating 5-10% of their usual schedule. The revenue environment is a disaster – no one can travel even if they wanted to, and many are afraid to travel. Fortunately, our company has the resources to ride this out – we have prepared for a downturn in the market – we knew it was coming, but honestly none of us thought it would be like this or for this reason. But in any case, we have the capital structure to survive it and maybe even to exit COVID in a stronger position.

What I see around me in the market is the impact of COVID on those who were not prepared – they had lots of short term debt (which is now very difficult to refinance) or they bet on high risk customers who are not able to make any payments. One leasing company has already reported that they have to renegotiate their bank lines or they won’t survive.

But these are business issues – there will be some jobs at stake, no doubt, but our industry is small. What I see in our industry is playing out everywhere right now – and in most places with a more severe impact. Small businesses are closing, laying off or furloughing workers, the unemployment rate will go through the roof. There are so many stories right now about everyday people facing incredible challenges that the government seems ill-equipped to address. It will get very bad before it gets better, I’m afraid.

I read in the New Yorker about a restaurant worker who was laid off. After two short weeks, their bank account balance was US$0.73. They checked, re-checked, and checked again on line for the US$1,200 stimulus deposit to hit their account – thankfully it did, bringing the new balance to US$1,200.73. I listened to the story of a college senior at Haverford who was working to finish her degree from home – a crowded apartment with little space to work, especially with her parents unable to work from their food truck and with no office worker customers even if they could go out. How will they make ends meet? Will she find a job when she graduates?

What truths does COVID lay bare? Our whole economy – the inequality, the lack of basic safety nets like health care and universal unemployment assistance (including for the gig economy) – is built on sand. We’ve managed to squeeze every bit of fat out of the system, or apply it to things that turn out to be useless against the enemy we are currently fighting. Did the US need to spend US$12 trillion on defense since 2000? Did we need the massive tax cut in 2017 that benefited big companies and wealthy people and ran the deficit up to new heights when the economy was booming? Could we have spared a little resource for basic health care and benefits? I really think we need to ask ourselves these questions (and more) as we see how little it takes for our neighbors to tip over the edge – in less than a month, many people have used what little they have in their bank account or used up what little remaining room they had on their credit cards and now are facing the abyss. Meanwhile others of us have a cushion to fall back on. The differences are stark, and have become more pronounced in the last ten years. The average worker – now known as Essential Worker – has seen very little in the way of pay increases. Benefits have also not improved in a meaningful way.

I truly hope that when we exit COVID we will pause to consider whether we can spare a little more resource for our neighbors… does the cost of every good or service have to be driven down to the lowest possible level so that the hourly workers (many of whom, it turns out, are quite essential) are paid so little that they can’t build up savings to tide them over in the tough times? Do the for profit hospitals and health care providers really need to squeeze all unused capacity out of the system to deliver a slightly higher dividend to their shareholders? Do the higher wage earners really, really need those tax cuts, or could they manage to pay a bit more in taxes so that we can build up our health care infrastructure for the next pandemic, when it comes as it surely will? And maybe we can consider the individual choices we make…how we invest our money, how we interact with our neighbors, how we consume, and how we give in our communities.

There very well could be some good to come out of this pandemic, if we so choose.

[submitted on 5/6/2020]