December 21, 2020 | The Lockdown

No vax talk today. Promise. (But I will be checking your shoulders for wee pricks in the future. And watching for the little pricks, too.)

But, sheesh, the virus stuff just gets worse. The UK is ostracized. Now Ontario’s going dark. All of it. The hospital dudes have been screaming for a circuit breaker, saying the 2,000-a-day new case count will become ten grand without it. Elective surgeries are kaput. Women are no longer getting screened for breast cancer. Cardiac patients are being sent home. And now virtually everyone in the most populous province, home of the biggest cities, highways, real estate prices, highways and egos is being iced until the end of January.

Do not underestimate the impact of this. Fifteen million people are impacted. And this comes along with lockdowns, quarantines, closures and restrictions from Montreal to Winnipeg to Vancouver (where YVR traffic is off 95%).

So, let’s ponder this. Pandemics may be temporary (this will end, trust me), but some people think the implications this time will be forever. The longer it goes on, the more imbedded changes become. And did you think back in April – when the first lockdown happened – that Christmas would be cancelled?

Nah, me neither. Too many cases. Too many dead. Too long. The whole world is being tested, and we are failing. The comment section of yesterday’s blog post proved that. If you missed it, go and read. Wear your PPE. The failure of modern leadership, and its poisonous effect, is on full display.

Now, what next?

Yeah, this will end. The vax (oops) will do that. Just wait. However there are a few trends gaining strength with every day that this hellish situation continues. Will they last?

First, less human contact. It’s what governments are trying to accomplish. No contacts = no virus. So we have shutdowns of offices, stores, eateries, churches, schools and events. In a social way, it’s incredibly destructive, leading to alcohol and drug dependence, Netflixitis, increased suicide and the kind of toxic breakdown in personal responsibility so evident here yesterday. I lament that. On a positive note, there are almost no shelter dogs left for adoption in Canada.

Second, less human contact means way more WFH. Back in the spring almost 40% of workers were sent home. This time even more. Surveys show a majority never want to go back, especially whose under 34. This is a recipe for conflict.

Third, the pandemic has exacerbated the wealth divide. Look at financial stuff, for example. Investors with balanced portfolios or exposure to stock markets have had a great year. But people depending on risk-free GICs and collecting interest have had their incomes crushed.

The divide is even worse between the WFH crowd and those whose livelihoods do not allow it. More than 80% of the people smugly Zooming in their undies and collecting full wages are in the education, government, insurance or financial sectors. (Let it be known I am wearing a tie while I type this. And pants.) But whacked have been folks depending on jobs in tourism, hospitality, travel, food service, transportation or most personal service industries. You may still be creating online lesson plans and being paid for it, but the guy who cuts hair or the saleswoman at The Bay are hurting bad.

Fourth, pandemics, less contact, lockdowns and a changing society may well lead to more automation. Machines don’t get viruses. Self-driving trucks, either. Some people think we’ll be coming out of this morass with way fewer jobs than we did before, as corporations in Canada deploy a mountain of $80 billion in cash to replace people with technology.

Fifth, this virus is slaughtering small business. Bad public decisions abound. Why let Costco and Wal-Mart stay open in red zones when hairdressers, corner stores, vets and indy clothing stores are hobbled or shuttered? It’s estimated ten thousand restaurants will not survive this. The CFIB says 160,000 small mom-and-pop businesses won’t be here in the spring. And recall that this sector creates over 90% of total employment. Do we know what we’re doing?

Sixth, odds grow the virus and public policy may kill some industries for a long time. Will Porter Airlines ever fly again? Will Toronto’s pro sport franchises return? Will there be cruise ships in Halifax or Victoria in a couple of years? How fatal will the closed US border be to tourism – one of our major industries? Will Amazon, Wayfair, Etsy and the other onliners mean local retail is finished forever?

And, seventh, what profound, lasting impact will the pandemic have on real estate? So far the worse things get the more house prices have risen, as central banks try to rescue the economy with cheap money. Family debt is exploding. Property is less affordable. Escalating real estate is also making wealth inequality more acute. The suburbs have exploded with WFH, nesting and fear of others. Urban condos and rents have been clobbered. Locals in Zoom towns where life was once rational and measured are being priced out by Covid refugees.

This is our world now. Locked down and dirty. And some still say it’s just flu.

Okay, time for a scotch.

Garth Turner December 21st, 2020

Posted In: The Greater Fool

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