The New Normal

Zoom and other online platforms are working out pretty well.  Teaching class this way is better than many people expected.  Many types of doctor’s appointments are much easier logistically and are more satisfying than driving, waiting, etc.  Social get-togethers using these platforms are not as good, but they are much better than social isolation.

Once we have tamed the pandemic, will the new normal be the same as the old normal?  I am doing much more cooking than I have ever done before.  The meals are satisfying and much less expensive.  An evening cocktail on my balcony is quite enjoyable and also much less expensive. I realize that this is not good news for the 11 million people employed by the restaurant industry, but I imagine that I, and many others, will eventually reacquaint ourselves with our favorite pubs.

Other aspects of our economy are more problematic.  I cannot imagine ever going on a cruise, although I am in the age group that dominates cruise passengers.  Actually, I love ships and the ocean, but don’t like being with so many other people.  I guess I should invest in a yacht, but I can far from afford that.

I enjoy sporting events, but cannot imagine attending them in the future; same conclusion for symphony and theatre.  Growing up outside of Newport, RI, I went to many seasons of Folk Festivals and Jazz Festivals.  Louis Armstrong, Ella Fitzgerald, Duke Ellington, John Coltrane, Joan Baez, and Bob Dylan are great memories, but crowds are off my agenda.

Transportation may be an issue.  I have not owned a vehicle in many years.  Subways, busses and, more recently, Uber are how I get around.  These means are much less expensive than owning a vehicle.  I will likely be reluctant to join the occasional crowds on public transportation, but I expect that I will eventually re-engage.

One of the side effects of the pandemic has been the enormous reduction of pollution.  The photos from India — before and after — have been amazing.  Who knew that India had blue skies?  This provides dramatic evidence of how human activities affect the environment and, over time, climate.  Given this clear evidence, we need to act.

What does this mean?  We need to address the connections in our complex world.  A recent example illustrates this point.  Who would have expected a negative price for oil?  The reason was that all storage capacity was full.  What do we do with the oil produced today?  Someone has already paid for it and used their capacity to ship it, but nobody wants is.  We never expected this.

The pandemic and our response to it have enabled better understanding of the dynamic complexities of our world.  Perhaps everyone focused on maximizing quarterly earnings is not the best overall strategy.  Maybe a multi-faceted strategy would be better.

The idea is to let companies seek maximum profits within a regulatory framework that does not allow them to exploit people.  Further, establish corporate tax rates that enable creation of a strategic reserve that enables recovery from the unfortunate outcomes and failures of pure profit maximization.

These funds could not be used to bailout companies.  Instead, these funds would be used to bailout society when things go wrong.  They could also be used to invest in capabilities to hedge against the downsides of profit maximization, e.g., capacities needed to address a pandemic, both in terms of health and economics.

Some would be against this strategy, arguing that corporate taxes, and regulations, should be minimal so that companies will invest in jobs and technologies to increases workers’ productivity.  That certainly is a possibility but, as Carnegie, Morgan, Rockefeller, and Vanderbilt showed, entrepreneurs, if left to their own devices, will simply put the money in their own pockets.

Society needs to look out for the interests of society and not rely on the potential largesse of titans of industry.  They are too busy maximizing profits.  The market does many things very well.  However, anticipating the longer-term downsides and consequences is not one of them.  We need mechanisms and resources to manage the inevitable failures that are almost always beyond the planning horizon of the market.

Leave a Reply