Retirement in a Post-Corona Reality

The big problems we had pre-Corona may be just as big, or bigger, when we’re past it.   One challenge that many will have will be funding a retirement that - due to medical costs or forced layoffs - is far longer than they had planned for.

This article from Knowledge at Wharton explores some of the public/private strategies and partnerships that many help fill the gap between what many have, and what many will need.  Will you need help from options like these?  Check out “Living to 100: How Will We Afford Longer Lives?”

Our Own "Hail Mary"

In most of our favorite, guilty-pleasure disaster movies, each hero has a “Hail Mary” moment in which he or she makes a daring breakthrough that saves the day. In real life, and especially during this pandemic, we must take comfort in all of us making small changes that will lead to an ultimate victory. It is natural to find hope in news (or rumors) of medical breakthroughs (Remdesivir, the Oxford or Moderna Vaccine projects which hold promise, and false alarms like hydroxychloroquine).   But, real advancements take time and are hard to predict.  The belief that our own “Hail Mary” moment is imminent can seduce us into letting our guard down.

As many states start to re-open, a recent short HBR Blog post warns the “all-or-nothing approach…. makes for great theater. It does not, however, bear much resemblance to how actual big problems are solved… Big problems typically get tackled through a series of small solutions, each of which on its own may not seem particularly important, but that together can have a huge impact.”

A wise executive once said that “good management is consistent pressure, relentlessly applied”. Take a minute to reflect on why “we shouldn’t wait for a breakthrough in the Covid-19 Pandemic”, and what we should do in the meantime to help assure one.

Innovation vs. Coronavirus

Few people have had a greater impact on the tools we use in our jobs than Microsoft founder Bill Gates.  After retiring from Microsoft, he has deployed millions of dollars through the Gates Foundation into fighting disease in developing countries.  Several years ago in a TED talk he warned about the challenge of a pandemic. He’s now backing up his warning with the recent major investments he has made to produce a vaccine to fight COVID-19.

Mr. Gates has a new post on his blog that is worth your time to increase your Corona IQ. Check out “Innovation vs The Coronavirus: The First Modern Pandemic.”  At 13 pages it’s a long read (you can download the pdf) but worth the time.  If you’re short on time, he has graciously published an executive summary of the longer article in the Washington Post.

Earth Day Turns 50

Today marks the 50th anniversary of Earth Day. As many of us remember, 1970s America was a place where industrial plants spewed smoke and sludge into the air with virtually no regulation, heavy and inefficient cars burned through leaded gasoline, and air pollution was commonly accepted as unavoidable. Then came the birth of the modern environmental movement. Thanks in large part to the publication of Rachel Carson’s Silent Spring in 1962, grassroots movements united with students and the support of a few concerned politicians, and the first Earth Day was born. Earth Day 1970 brought 20 million Americans (at the time, 10% of the total population) into the streets and parks to demonstrate agains 150 years of unregulated pollution and greed.

One pioneer who has been at the forefront of the environmental movement around the world is Jane Goodall. Although she is most well known for her work with primates, Goodall is also an avid environmental and animal rights activist. Now she has a new documentary, appropriately premiering today, in which she discusses everything from animal empathy to COVID-19. It is available to stream on Disney+, or catch it live on the National Geographic channel. Give it a watch, and give thanks for one sweet world.

Leadership in the Corona Economy

COVID-19 has now appeared in 81 countries around the world.

As news reports keep coming in about more and more cases of COVID-19 around the world, it’s difficult to obtain reliable and succinct information about something as new, unfamiliar and dynamic as the Coronavirus.  Businesses, consumers and the government are reacting more to the lack of information than to anything that might be described as definite or even probable.

That said, here are a few articles about Corona that you might find thoughtful and if not reassuring, at least somewhat informative.  

The Short Term: Tech Industry Watcher Robert X. Cringely offers the first of two blog postings about the impact of Corona including what similar events in the past have taught us… and what’s different this time.

The Investment Perspective:  Investment writer and economist Bill Maudlin looks at how this is like and unlike the Y2K crisis of 20 years ago: the supply chain impact; the Fed’s role and possible opportunities in his blog posting “Covid-19: A Crisis the Fed Can’t Fix.”

Ready, Set, Fear?:  Stock market reversals this past week make investors wonder if the losses represent a new longer term bear market cycle, and whether the general economy can be far behind.  Economist Brian Wesbury walks his readers through a thoughtful analysis of the impact on stock markets and the larger economy as he explores the question “Is it Time to Fear the Coronavirus?”

An Update from ITR:  Brian Beaulieu, CEO of ITR Economics, wrote the following note over the weekend:

“The COVID-19 outbreak is clearly foremost in the minds of many of our clients and people in general. We are discussing it with our clients, and others, as a means to clear the way for a discussion about economics. We are not MD’s at ITR Economics but we know stats and history. Both are important and indicate that is unlikely a plague was about to be let loose in the US given our prior knowledge of the problem (unlike the Chinese), the status of the health care system in the US,  and the statistics associated with COVID-19 specifically.  Given the non-plague status of the outbreak and acknowledging there is hysteria in many circles, it is probable that the US consumer will perform as always: they will consume. We will watch this very closely. We will alert you if this changes. The correction in the stock market is disconcerting but we think this represents a buying opportunity.  There is time to pause here and make sure the market stabilizes before acting. However, that is the direction we think investors should be leaning.  We are also watching commodity prices, like oil, very closely as a “tell”.  But our assessment currently is that the economy is larger than all of this. The leading indicators in the next several weeks and months will inform considerably. Thankfully our children seem relatively safe, and life goes on. So, let’s plan for our businesses and maximizing profits assuming that the rational behavior and economics will rule the day. The key issues in China appear to be logistics and getting people back to work in their factories following the new year holiday. I expressed confidence in the Chinese to overcome these issues, but it may take 1 to 2 quarters.  Expect supply chain disruptions but expect them to be relieved in 2H20. Demand isn’t going to go away as the US consumer will continue to consume. Longer run, layered on top of tariffs and politics, expect this black swan event to hasten the shift away from China (and Asia in general) as a supply source and expect to see more nearshoring going forward.  While they say change is a constant, the pace at which it occurs is not.  Assess and seize the opportunities.”

Second Order Effects: In a complex system like the world, wise leaders have to go beyond simple cause and effect to further consequences, or “second order effects” down the line.  This short article in the New York Times may help you estimate the unexpected impacts on your business.