A Pessimistic Realist's Perspective
New York City is a ghost town. They've been on lockdown for a week. The Vegas strip went dark last night. No one is there. Conferences and trade shows have all been canceled. Hotel occupancy rate is near zero, so why keep anything open? The Dow crashed several days in a row last week, the sell-off triggered by the precipitous drop in commerce. My social media feeds are riddled with news from people who got laid off this week. The only businesses hiring right now are grocery stores and Amazon.
Several Amazon warehouses have a growing infection rate. Their bustling communities have become a hotbed of virus transmission. Soon they'll be shutting down distribution centers, debilitating an important arm of the supply chain. What else will follow? If the virus is ravaging the warehouses isn't it only a matter of time before truckers catch it? Then each stop along the supply chain - the wholesalers, distributors, food producers. Around and around we go.
How long will it be before we no longer have the labor necessary to keep churning out products? The bread makers, the manufacturers of canned goods, the meat packaging plants, the farmers. Is it inevitable? Seems to be. We also seem to be in denial of the possibility. No one wants to think about it because no one has any solutions for how to slow the infection rate without crippling the economy. We're already seeing unprecedented economic disaster, compounded by additional long-term disaster they're calling a "bailout" for the millions of people and businesses that have been forced to shut down because of this virus, but more of the money is going to bail out big businesses and line the pockets of special interest groups. Billions up in smoke and a debt burden that will be shouldered by our children's children.
3.3 million people filed new unemployment claims this week, and we're just getting started. I'm not sure if you'd call this week one or week two, but it's early. I think an 8-week shutdown is optimistic. Four weeks is a fantasy. With the current social distancing measures in place, coupled with pockets of the country that are on total lockdown, the infection rate is projected to peak in early May. That's at least 6 weeks away, and what if social distancing doesn't work and we need to go on total lockdown? The infection rate isn't distributed evenly across the country, it's progressing in waves. NY, CA, and WA have been hit the earliest but they will begin recovering as the virus spreads asymmetrically across all regions at different rates of speed.
How will we handle it? We're going to discover shocking levels of interdependence among industries, businesses, and people. It's likely that new partnerships will develop while others crumble. The silent but ever-present "just-in-time" inventory system will get scrutinized and contingency plans will be implemented. Too late for this crisis, but lessons learned. No one wants to pony up for a solid contingency plan until lessons have been learned the hard way. That's just how it goes, whether your products are toilet paper or ventilators. Always the hard way.
National Guard troops are already in place or are being mobilized. I saw two sources today that showed a massive volume of tanks being shipped out of the LA area on railroad cars. The explanation is "training exercises." My ass. Not when the military is withholding infection rate data among their ranks because they don't want to alarm the public. They are social distancing, not running training ops.
Tomorrow will be the first Friday millions of people miss their first payday. Some who got laid off got a severance package. Most service industry workers didn't. We're all playing nice and helpful right now, but what happens when those millions of people run out of money? Will that be next week? The week after? That's why National Guard troops are staging. A lot of people are on the verge of becoming desperate.
I don't have any answers. I started hammering away at my keyboard just to get it out of my head, but these are the challenges we're going to be facing really soon. I hope leaders in government and business start acting like leaders. Too many of them think pointing fingers is "leadership." The best leaders are great because they aren't afraid to tell others they don't have all the answers. Vulnerability like that opens worlds of new insight and perspective. Seems we could use more of that right now.