20 March 2020

[Fred Wheeler] - The World on the Other Side

So much for globalization.

If we survive the eschatological angst over the Wuhan Virus there will be life on the other side of this. The question is: what will it look like?

First, it's not like we weren't warned. The 1953 movie, "War of the Worlds"  based on the novel by H.G. Wells from 1887 pointed to the peril. In the movie aliens from space invade our planet and, because of their superior technology, overwhelm all the armies of the world. On the very eve of final destruction, all of the aliens mysteriously die, succumbing to the plain ole pathogens  in the Earth's atmosphere for which they have no immunity. 

The more technologically advanced we are, the more complex our society is and the more interdependent our economic systems are, the more vulnerable we are to the sudden introduction of a new variety of germ.

This thing probably will end sooner than we think. But, in the meantime there will be dislocation. It's going to be rough. Some folks will lose their jobs. But, MMM, GE and Honeywell will be hiring because they will be manufacturing protective masks and ventilators. Home Depot in Covington is hiring. I bought two shirts on line the other day.

We are discovering that, yes, nations need borders. Converting your economy into a service economy and out-sourcing your manufacturing--especially to a country that has an unfriendly authoritarian government is not a good idea. There are certain things such as steel, strategic materials and now we're discovering, medicine, which should not be processed in foreign countries.

If you are an individual company, perhaps you should re-examine your  supply chain. Yes, China has cheap labor, but dealing with them is  equivalent to riding a tiger.

What will life be like post Wuhan? Pantries will be fuller. Students and schools will move toward on-line courses. More box stores will close and more on-line business will be done. There will be more working at home. By applying tariffs we will be doing more manufacturing domestically. Individual companies will alter their supply chains. Restaurants will be more likely to have take-out windows. Home delivery of food and groceries will become more popular. We'll go to fewer movies and watch more television. Perhaps families will grow closer together. People will play more golf.