From a New York Times piece by David Leonhardt headlined “It’s 2022. What Does Life Look Like?”:
It’s 2022, and the coronavirus has at long last been defeated. After a miserable year-and-a-half, alternating between lockdowns and new outbreaks, life can finally begin returning to normal.
But it will not be the old normal. It will be a new world, with a reshaped economy, much as war and depression reordered life for previous generations.
Thousands of stores and companies that were vulnerable before the virus arrived have disappeared. Dozens of colleges are shutting down, in the first wave of closures in the history of American higher education. People have also changed long-held patterns of behavior: Outdoor socializing is in, business trips are out.
And American politics — while still divided in many of the same ways it was before the virus — has entered a new era. . . .
With help from economists, politicians and business executives, I have tried to imagine what a post-Covid economy may look like. One message I heard is that the course of the virus itself will play the biggest role in the medium term. If scientific breakthroughs come quickly and the virus is largely defeated this year, there may not be many permanent changes to everyday life.
On the other hand, if a vaccine remains out of reach for years, the long-term changes could be truly profound. Any industry that depends on close human contact would be at risk. . . .
The changes that I’m imagining in this article are based on neither an unexpectedly fast or slow resolution, but instead on what many scientists consider the baseline. In this scenario, a vaccine will arrive sometime in 2021. Until then, the world will endure waves of sickness, death and uncertainty. . . .
It could easily be the most important global experience since World War II and the Great Depression. Events that hold the world’s attention for long stretches — and that alter the rhythms of everyday life — do tend to leave a legacy.
“It’s only when the tide goes out,” Warren Buffett likes to say, “that you learn who’s been swimming naked.”
His point is that companies with flawed business models can look healthy in good times. Out of habit, many customers continue to buy from them. But when the economy weakens, people have to make decisions about where to pull back. They often start with products and services that they find the least valuable or that they can replace with a cheaper alternative. . . .
Local newspapers will be one casualty. They were already struggling, because Google, Facebook and Craigslist had taken away their main source of revenue: print advertising. Between 2008 and 2019, American newspapers eliminated about half of all newsroom jobs.
The virus has led to further declines in advertising and more job cuts — and could end up forcing dozens more papers to fold or become tiny shells of their old selves. If that happens, their cities will be left without perhaps the only major source of information about local politics, business, education and the like. . . .
Now the virus has interrupted in-person shopping and caused many consumers to shift even more business online, to Amazon, Target and Walmart. “The retailers doing fair to poorly are absolutely not coming out of this,” said Mark Cohen, a former executive at Sears and Federated Department Stores who teaches at Columbia Business School. “Many, many of them are going to fail, have already failed or will fail when they reopen.”
If they do, they will create spillover victims — the hundreds of malls that rely on department stores for rent and foot traffic. The roughly 250 fancier malls around the country, like The Westchester in suburban New York and The Galleria in Houston, are likely to survive, Mr. Cohen predicted. Some will convert old stores into spaces for experiences, like dining, bowling, medical care or a golf driving range.
But many of the country’s remaining 1,100 or so traditional malls are at risk of failing. Even before the virus, Amazon turned two former malls near Cleveland into warehouses, a physical manifestation of changing shopping habits. . . .
Of course, business failures can be healthy. They are part of the “creative destruction” that the economist Joseph Schumpeter famously described, allowing more efficient and innovative rivals to rise. The disappearance of many old department stores won’t be a tragedy if they are replaced by stores people prefer.
But some of the virus-related destruction will have damaging side effects. When local newspapers close, corruption and political polarization tend to rise, while voter turnout tends to fall, academic research has found. Cuts to higher-education budgets could make it even harder for poor and middle-class students to graduate. . . .
The biggest source of uncertainty about the post-virus American economy is political. Past crises have transformed the economy, but almost always because of government policy.
The Civil War allowed Abraham Lincoln and his allies to create a transcontinental railroad and a national network of public universities. The Great Depression led to a raft of federal laws that reduced inequality. The housing crisis that began in 2007 helped elect a Democratic president and Congress that extended health insurance to millions of people. . . .
One of the key post-virus implications could be further consolidation in many industries, with big companies becoming even bigger. Early signs indicate they are surviving the lockdown better than smaller rivals, in part because they have more cash on hand, better access to loans and an easier time switching to online sales.
Consolidation, in turn, tends to increase income and wealth inequality, in part because the largest companies are run by highly paid executives, typically based in major metro areas, and the companies’ stock is disproportionately owned by the affluent. . . .
In less than 15 years, the United States has suffered the biggest two economic crises since the Great Depression, the worst pandemic in more than a century and the election of two presidents unlike any before them — and diametrically unlike each other. If there is a single lesson of the current era of American politics, it’s that change can happen more quickly than we imagined.
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David Leonhardt writes The Morning, The Times’s main daily newsletter. Previously at The Times, he was the Washington bureau chief, the founding editor of The Upshot, an Op-Ed columnist, and the head of The 2020 Project, on the future of the Times newsroom. He won the 2011 Pulitzer Prize for commentary.
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