I went shopping the other day. The parking lot was full, so I parked more or less illegally by the curb. The two gentlemen were sitting on the bench drinking beer straight from the cans and were in a visible need to talk to someone.
“Don’t worry man, we’ll watch the bike for you.”
None of them was able to drive it away, that’s for sure, so fine, I even left the key in the ignition.
People are just killing time during the corona madness and having a beer on the bench outside is better than rioting in the streets.
Life has changed and I have a theory about it that may surprise you.
When we have a set back, like right now, the real question is - what do we set back to? I am of the opinion, that the corona virus didn’t really change the trends already in motion, it just accelerated them. Like stress, viruses reveal the weaknesses in the system.
China was in turmoil since 2008 and now their main customer is entering a recession. Russia was on the ropes before oil prices collapsed and this is their main source of income (30% of their GDP comes from selling oil), as it is for Middle East exporters.
The point is - oil is going to zero, as there is no storage capacity left.
Europe was fragmenting fast, and the virus scare will only add to the national separation trend. The borders have come up and there is no pretense any longer for a genuine European solution to this problem.
We see food shortages in developing countries, lines to buy something to eat 4 km long in South Africa for example. The developing countries traditionally didn’t do well on their own, they waited for somebody from outside to come and solve their problems. Well, nobody is coming anymore.
US already have the demography younger than China (which is one of the fastest aging societies in the world) and this is crucial, because the young people spend.
But – the US is slipping into the reality that it trades with itself and maybe a handful of other countries (Japan, Korea, Mexico, Canada and the UK). That transition from global trade into “friends and family” arrangement would normally take a few years to accomplish; however the corona will make it happen fast.
In the past five weeks the United States has thrown $3 trillion in new government spending at coronavirus-related bailouts, relief and economic stimulus. In total the US has already spent more on coronavirus-related actions than the rest of the world combined, tripled. And they will throw in another few trillion during the summer.
Which means that price is no object for the Americans, suddenly making this transition within a few months, not the few years.
What will emerge on the other side of it is that we’ll have American security, but not global security as they provided for free up until now. We’ll have American trade network, but not a global trade network.
China can’t possibly interact economically with the rest of the world without the security umbrella provided by the Americans. Their navy can control maybe 2000 mile radius from the ports, no more.
If you look at the history of China in the last 3500 years, they very rarely have been unified. Their unification now comes courtesy of the American’s security protection.
China only works if someone from the outside provides reasons for it to exist – protection of supply lines, availability of resources and open markets to sell to.
Their way to handle this issue is “social management”. There are already more than 600M cameras installed on Chinese streets. Now they can install cameras in private homes to monitor for “corona virus symptoms”. Let’s be real – if people meet to discuss something, the government will know about it.
If this is not desperation, I don’t know what is.
The trade-off associated with the COVID-19 threat has been portrayed as being between lives and money, but the correct way to view the trade-off is between lives today and lives in the future.
Ponder the last sentence and you won’t regret it.
Tom Kubiak is the author of The Traveler