The Un(settling) Normal

Many refer to the current conditions as the “new” normal.  I think of this as the “un”-normal. There is nothing normal about what is transpiring.

We have a novel virus-induced public health crisis that was known since January.  Medical and public health professionals know exactly what is needed to prevent its spread, especially when there is no immunity.  There was and still is a missing national and unified response to mitigate community spread and promote good and necessary individual behavior.  Just think, at this stage we are still debating the efficacy of wearing a mask.

We finally cobbled together a painful national lockdown and endured the economic and psychological pain and yet we failed to prepare and take the necessary actions during that time (45 days) to test, trace and isolate.  Now we have a rolling reopening that is based on state and sometimes local policies. The first wave crests again with an economy unsure of the next step.  Until we comprehensively and uniformly address the public health crisis, we will continue to be un-normal. 

The disconnect between Wall Street and Main Street will continue as Wall Street is based on hope and the future while Main Street is based on the past and the current.  Most observers are placing too much confidence in getting a vaccine this year and have a naïve understanding of the limitations of a vaccine. Also, the success of a vaccine is more impactful to the old economy than the new.  A big slice of the population has buckled down, taken precautionary steps and adjusted their expectations and habits.

The longer we do not conform, the bigger this slice of the population will grow.  This will make returning to normal unlikely, and ultimately, we will move from the un-normal to a new-new normal. We will live in a lower interest rate, lower aggregate demand (GDP), higher unemployment, less productivity, higher taxes, and a “universal income” world - a more connected world with less abundance and equality.

Related: The Future of the Financial Markets; After COVID-19