Predictions

It isn’t too early to start making a few, tentative predictions. I welcome your own predictions in comments. Here are some of mine.

• Even with the strenuous avoidance measures that have been put in place the peak of the curve of active COVID-19 cases in the U. S. won’t be reached in two or three weeks. It may take months.
• There will be plenty of kvetching and even some lawsuits about the attempts by governors, like the governor of Rhode Island, to reduce the flow of people from states with larger numbers of diagnosed cases into their states. Governors do have that power under states of emergency, the Privileges and Immunities clause of the U. S. Constitution notwithstanding. There is plenty of case law to support it. It’s century-old case law but it’s unlikely to be overturned.
• The shortages of materiel (face masks, respirators, ventilators, etc.) will ease over the next few weeks if federal, state, and local officials allow them to. Lots and lots of people want to and are contributing to the effort against COVID-19. It will become a valence issue.
• As testing increases the number of diagnosed cases will increase rapidly.
• U. S. GDP will take a 10% hit. That will ripple across the world. If the strenuous measures presently in place and which will be put in place over the next couple of weeks continue past the end of April, the decline in U. S. GDP will be much, much greater. They sky’s the limit.
• The number of personal and corporate bankruptcies will soar. There will be what amounts to a full employment program for attorneys.
• Enough people in the top 10% of income earners are, effectively, living beyond their means, i.e. month to month, that defaults on loans that were thought to be secure will start happening.
• As I’ve said before anyone who earns their livings through performing personal services will take an enormous hit to their incomes. That doesn’t just include people like beauticians and barbers. It includes dentists and physicians. Physicians who are still sole practitioners won’t be able to pay their malpractice insurance bills. After the dust has settled there will be calls to reorganize the way health care is delivered.
• Companies that will face enormous headwinds due to the “stay at home” directives and fear of contagion include airlines, cruise ship companies, and oil companies. There will be pleas to bail out the airlines. They should be resisted. I don’t know whether Disney’s loss of revenue due to the shutting down of its parks and experiences segment will be outweighed by increased revenue from Disney+.
• COVID-19 will be the straw that broke the camel’s back for the city of Chicago. It is presently spending money in vast amounts that it doesn’t actually have. Its bonds, already rated the worst of any major city in the country, will be reduced to junk which effectively means the city will be unable to borrow. Same with the CPS. There will be calls to bail out Chicago and other cities. These calls should be resisted.
• Urban real estate will decline in value at least in relative terms.
• Amazon and other online retailers will actually benefit from COVID-19. Small retailers other than grocery stores will take an enormous hit. Lots of bankruptcies.
• Zoom’s stock has doubled in price. That will continue to rise. It’s one of the prime beneficiaries of the “stay at home” directives.
• The longer the “stay at home” directives continue, the more workers from Mexico and Central America will return to their native countries. This will evoke a second wave of COVID-19 cases in these countries in the Americas. The same thing may happen in Africa and the Middle East as well but European countries’ more expansive welfare systems may stem that.