1. Pandemic preparedness
It is curious how the general media seems to think that every nation should have sufficient medical resources available to deal with the strains of a pandemic. Investing in five times the average daily demand for medical resources in case a pandemic happens is both suboptimal and ludicrous.
The US spends 18% of GDP on health care. If a pandemic requires 5 times this amount of medical resources then the US would be spending 90% of GDP. Comfortably coping with the rare pandemic event means that the US would almost always have beautiful but empty hospitals , a lot of doctors and nurses standing around doing nothing and little money left for anything else.
Some countries can be criticized for not having a plan to deal with a pandemic but none can be criticized for not having idle resources.
2. Governments are not good at letting go
Lockdown is a hard decision to make but unlocking is even harder. China is tenuously relieving its restrictions in Wuhan with little fanfare while the rest of the world bunkers down. But what is the path back to normalcy? What milestones trigger relief? Very little guidance is coming from governments on these questions.
If you think policy errors have been made dealing with the rise of the pandemic, just wait for the policy errors that are about to happen as the virus abates. The UK’s 3-year procrastination over Brexit – how to leave the EU? – is the prototype for the pending policy procrastination over Covid 19 – how to restore civil liberties?
Governments are good at passing laws and regulating activities. They are the wrong people to put in charge of deregulation
3. Air travel will never be the same
It took a decade for the government to allow proper cutlery on aircraft again following 9/11’s policy requiring that airlines use plastic only knives and forks. What is air travel going to look like post-Covid 19?
The main issue for every country in the future will be ‘imported’ cases of the virus. This means detecting and excluding passengers arriving from another country carrying the virus. Controlling virus importation will probably require every passenger to present medical proof that they are Covid 19 – negative before checking in.
Once this policy is put in place, how long do you think it will take before the government will let you book an air ticket without a Covid19 negative test in hand at check in? So long as the Covid 19 virus remains in circulation the answer is ‘probably never’. So here’s a business opportunity – develop a simple yet accurate Covid 19 test and market it through vending machines in airports globally…
On thing is for certain, gone are the days of a quick trip to Bali for the weekend. The days of mass-airline transportation are similarly gone.
Movement restrictions on labour spill over into movement restrictions on capital and future trade transactions are similarly reduced. The world is taking a backward step towards Autarky, the extreme case where each economy is self-sufficient in producing what it needs and the gains from trade are left unexploited. Robinson Crusoe made do on his desert island but pined for civilisation and a friend or two.
Trade could be the biggest resource cost of the Covid-19 in the long run. The Wealth of Nations just got smaller…
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