We can all agree that the Covid pandemic is devastating in many ways both in terms of loss of life and health and the economic hardship on so many. Even so, it will eventually be over. Even before that happens, various interest groups will analyze what about it is good or bad in the long term based on their own criteria and agendas.
Let’s start with economics. It will certainly have effects on the insurance and related segments like Social Security and pension systems. Pension systems including Social Security will benefit since the lifespan of a significant number will have been shortened and they will stop paying out sooner than projected. Similarly, contributors to those systems, both corporate and governmental, will be able to reduce their contributions to those systems for a while. Once the economy is back on track, this could help balance the national budget as fewer subsidies will be needed. Similarly, the life insurance industry will suffer somewhat in the near term because the death rate has increased significantly. The premiums have stopped coming in and they need to make payouts in greater number. However, the stock market, where so many assets of the pension systems and the life insurance industry are invested, has done great during the pandemic despite the faltering economy. The gains from these assets will probably offset the short-term losses for the insurance companies.
On a larger scale, there will be a sudden generational shift in wealth. The disease mostly kills old people. Their assets are rapidly being transferred to their children and others. In fact, it would not surprise me if this was a major motivating factor to a few of those who refuse to wear a mask or practice social distancing. No one will admit it, but I think it is possible that some of those anti-maskers are actually trying to infect their parents or grandparents in order to inherit. Perhaps I’m too cynical. The same effect will apply in the workplace, with a number of older executives or small business owners will have died or forced to retire due to bankruptcies or other business failures. This will open up many opportunities for younger workers and entrepreneurs. The new businesses will not be tied so much to old paradigms like large office buildings and personal meetings. They will be more adaptable to work-from-home, hybrid, gig, and other modes of working. From a national and world economic perspective this is good (if we can set aside the personal tragedy). The most efficient economic system is one in which each person works until he or she is no longer productive and then dies, no longer consuming food or other resources. I’m not suggesting any government should strive for this; quite the opposite. But I do think the economy will eventually emerge in a revitalized state.
We can’t pass over the political fallout. It is unclear how the pandemic and its handling will affect voters in the sense of assigning blame. Our American political landscape is split and so poisoned with false information that I won’t venture a guess on that score. On the demographic side it is also unclear. The death toll struck the elderly, a very conservative group, the hardest, suggesting the Democrats would benefit. Yet minorities, a mostly left-leaning group, were hit the hardest when examined on a racial, not age basis. However, minorities tend to be more concentrated than the elderly. In other words, even if the minority population, mostly in the cities, is reduced by, say, 5% more than whites, that is unlikely to change the Democratic dominance. The local Congressmen, mayors, city councils, etc. will probably remain heavily Democrat in most places with large minority populations. The elderly, though, being more scattered, could affect those districts where there is a closer balance such as suburbs. A 5% shift there could tip the scales to the left. I’m sure political analysts are already cranking the numbers.
For small brick-and-mortar businesses, I’m afraid things will be bleak or at least very different. Consumers have adjusted to staying at home. Movie theaters, restaurants, hotels, barbers, nail salons, etc. will all see reduced demand even after the pandemic is long gone. I bought hair clippers and will probably never go to a barber shop again. People are learning or re-learning the joys of cooking and DIY home repair and maintenance. The pandemic will usher in a new era in personal lifestyle, not just economics. The problem of uneven wealth distribution will be exacerbated. We will have to find a way to redistribute it or see skeletal citizens living and dying in the streets. We are living through history.
