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COVID Fallout is Just Beginning

May 15th, 2020 by dk

I fear we may look back on the last two months as the easy part. We’ve shut down society to avert a medical catastrophe. It seems to have worked, at least here, at least so far. But getting back to what we knew as normal may be impossible.

The socio-economic ripples will amplify over the months and years ahead. Those waves will come crashing over many people, especially the most vulnerable. Without heroic interventions, life in America may become unrecognizable.

Front-line workers will return to their jobs as soon as they’re allowed. When you’re living paycheck-to-paycheck, skipping a few is inviting disaster. But businesses are looking to automation to make themselves less vulnerable next time.

National Bureau of Economic Research estimates that 100,000 businesses have closed in the past two months. Bankruptcy courts are bracing for a tsunami. The National Restaurant Association reports that 3 percent of restaurants nationwide have closed already. Uber laid off 3,700 customer service employees last week — on Zoom.

Forty percent of small businesses are owned by Baby Boomers who were approaching their retirement. How many will return with enough stamina and ambition to rebuild their business from a standing restart?

Food prices spiked last month in record fashion, while crops are being plowed under.

The governor has halted evictions for 90 days, but what happens on Day 91? The state has no funding to make up those delinquent rent payments. Some mortgage companies have forbearance policies, but few include outright forgiveness for missed payments. The piper must be paid, eventually.

We saw in 2009 how foreclosures produce more foreclosures. A glut of distressed housing drives home values down. Once a home is worth less than what’s owed, banks scramble to keep borrowers from handing them the keys.

The middle class will not be spared. Now that business owners and managers see how telework functions, many jobs will become expendable. Work travel becomes a luxury. Hotels, airlines and conference centers will suffer for years.

Sixth grade teachers for the next five years will know the socioeconomic status of each child coming into their classroom. Children who had two teleworking parents at home in 2020 might be ready for sixth grade learning. Most other kids will be nearly a year behind. It’s not easy making up for a lost year of learning.

A high school science teacher I know estimates that 15 percent of her students have not logged in for remote learning at all. Another 15 percent are not doing serious schoolwork or are struggling to work from home. Her top performers are stressed that their work may have no rewards. Those disparities will widen as consequences cascade. Graduates will have fewer and less attractive options.

States and cities are on high alert, but emergency funds will eventually run out. Taxes will go up or services will be cut — probably both.

The federal government has been printing and spending money, but that can’t go on forever. Financial markets will eventually respond to the mounting national debt. Inflation may be unavoidable at that point, which will produce its own miseries.


Don Kahle ( writes a column each Friday for The Register-Guard and blogs at

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