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> ... I can go on and on... Just let me know. :-)

Please do! :). And please let me know when you have that blog post up, I'd love to read it. My mail is in the profile.

Oooook, if you insist. :-) I'll repeat my points to make this a fuller response. The numbers here correspond to the original numbers above... Beyond that, the rest of the numbers are not in a good order yet. I'll fix this in the blog post.

(1) Erosion of international trust. As I mentioned earlier, this is a big issue. However, I think it's actually going to get worse after the COVID-19 crisis. EU member states are closing borders and not collaborating on a EU-wide solution; this is after having annoying post-Brexit budget debates where they struggled to agree on an EU-wide budget. How do you come back to the table in a post-COVID-19 world and trust each other to rebuild the EU? It will be tough.

(2) We've already seen TRILLIONS of dollars pumped into national economies. We're seeing countries with deficits and huge debt-to-GDB ratios printing money or committing funds they'll have trouble paying off. No one is questioning how Italy, Spain, etc. will pay for their financial support... The same goes for the US. I don't think it's important to question all of this in too much detail right now, but we'll have to figure out how to recover economically in the longer run.

This is even worse for individual companies. Airlines, airports, travel companies will all have to be bailed out. What other industries will suffer? Performance and ticketing companies, retail... These are industries that are always on the brink of collapse from a financial perspective, and now you'll have one or two quarters of significant drops in revenue. They might not be able to recover.

Case in point, we have nearly 5 million Americans working in retail. Retail isn't feeling the hit of COVID-19 in the short-run, but just wait until everything is locked down[1].

(3) Small businesses. They will receive some support -- loan obligations might be deferred, employment insurance might help their employees, etc... There are 50 million Americans employed in firms with 99 employees of less[2]. How many of those will be put at risk.

(4) The dynamics of the economy itself will likely change. The challenge with a lot of the debates around helping people today is, "How do we operationalize this?" For example, you can't simply let people not pay their mortgages; this will lead to lenders struggling financially.

The WSJ was reported that the Fed is considering buying Mortgage Backed Securities (MBS) to help those with mortgages get some relief with regards to payments and interest rates. The Financial Times reported that the Spanish government is considering buying factories and businesses to support the economy. There's been talk that the Fed might buy shares in companies as well.

Think about how much of a HUGE change and precedent this is... Especially given the vitriol around State-backed enterprises in China. I'm not arguing for or against, but this is a big change.

(5) Supply chains. We're going to see companies invest in more resilient supply chains, risk monitoring, etc. This will lead to tons of interesting opportunities.

(6) WHO becomes less relevant. Given that no country is following WHO guidelines -- the WHO guidelines they all negotiated together -- I wonder how this will end for international organizations like WHO? The same goes for the EU, given the issues above. Play this out and you have an erosion of major alliances and thus, I believe, more conflict.

(7) Aggressive governments will take advantage of number 6 above... Think about the oil price war right now. Is this really necessary right now, or is this simply a fantastic opportunity to hurt certain countries' oil interest and businesses? Kick industries while they're down, so to speak.

The scary part here is if someone decides to use COVID-19 as a pretense for a foreign armed conflict or invasion... Or simply starts a war because they know other countries don't have the necessary willpower to defend the invaded/wronged party. I'm not saying this will happen... But if I were an aggressive world leader, I'd be considering my options here.

I'll stop but will let you guys know when I write a formal post. :-)

[1] https://www.bls.gov/ooh/sales/retail-sales-workers.htm [2] https://www.bls.gov/web/cewbd/table_f.txt

Thanks for elaborating!

The war angle worries me. In particular, there's one thing I expect to happen that you didn't cover: to the extent Chinese numbers are accurate - and I don't have a reason to doubt the rough accuracy - it seems to me that after all this, China will emerge as the dominant global power. The US is about to get economically devastated by it, and if the UK plan fails, they'll be in deep trouble too. Meanwhile, China seems to be already recovering and they're scoring points with Europe by sending aid. Then, there's Russia, which is a great unknown to me - they fell off the media cycle pretty much immediately as the pandemic started. With the balance between these three powers upset, the tensions may grow significantly.

RE supply chains, I've recently discovered this little-known subreddit: https://old.reddit.com/r/supplychain/. Its daily updates on COVID-19 give tons of insight on how supply chains are affected by the pandemic.

Yes, 100% agree with you. The geopolitical trajectories this is changing (or setting) are very different from what we were on before.

And that is an AWESOME subreddit!! Thank you for sharing that.

I realized you're Polish, after I responded. What's up with us Poles being into geopolitics? :)

I'll reach out to you soon either way because your blog is great!

> What's up with us Poles being into geopolitics? :)

Perhaps being pawns of various powers over the past few hundred years makes us interested :). Or maybe it's just fascinating.

Why do should we spend on small businesses? I know this sounds a little harsh, but do we really need to keep them from shutting down? A lot of big businesses today had their start during an economic downturn. If a small business shuts down, the owner often ends up working in another more robust business and gets a good ride up.

I don't think it's harsh -- I think it's a good attitude to question this stuff.

I put myself in the shoes of the gym, coffee shop, or restaurant owner... The businesses that contribute to our communities but likely won't be consolidated into bigger companies. They add value to our communities without necessarily being hugely profitable. I think it's good to support those businesses.

I wish I had a stronger economic argument but I don't, right now.

After responding to a few other posts, I came across an important number -- about 50M Americans work for businesses that are 99 people or less in size. That's a lot. Even if a small percentage of these businesses go under during this entire crisis, that'll lead to a big shock to the financial/economic system.

Diversity and locality are healthy. An economy made of only large companies is less resilient and more likely to stagnate. For an extreme example, look at Boeing.

yes but you can't have a mom and pop jumbo jet manufacturer.

Because our economy shouldn’t collapse because we paused for 2 months.

And 2 months is optimistic.

I don't think that the EU closing their borders is at all an issue between the member states. it is seen as a reasonable precaution and, what we are really talking about is stopping tourism.

Germany is confiscating medical transports intended for other EU countries at the border.

source?

Re/ 1. I think the conclusions are false. If anything there is more open collaboration; china released sequences of the virus very early and ppl around the world are working openly. Trump’s brainfart about the vaccine aside , distrust doesn’t seem to have caused issues (china is even sending aid to Italy).

The EU border crossing is not real sign of distrust, it’s prudent and to be expected, its simply an extension of domestic containment measures (esp. in Shengen countries which dont have any border controls). Also, there isn't a european health Organization because frankly it hasn’t been needed , and is not needed now either.

It's easy to send aid and researchers, but those are minor investments in a relationship and at worst, actually just tokenistic actions. The WHO has specific guidelines for pandemics[1] and these include things like NOT closing borders, NOT preventing exports of medical supplies, and reporting transparently on infection rates. All of these things are not being done.

Don't get me wrong -- it's great that researchers are collaborating, but it's precisely the sort of small gestures that enable a state to build an argumentative defence around actions that aren't conducive to solving the problem properly (or the way we all said it should be solved).