2020
Human beings are by nature social creatures, and when they finally emerge from isolation after the COVID-19 pandemic has run its course I expect Americans will party, party, party like there’s no tomorrow because, well, it turned out there was a tomorrow after all. It’s going to be the Roaring Twenties all over again, 21st Century style.
Exactly 100 years ago the nation, along with the rest of the world, celebrated the end of muddy and bloody World War I that slaughtered 22 million soldiers and the Spanish Flu pandemic that ravaged the planet from 1918-20 and killed anywhere from 50 to 100 million others by ushering in a decade that became renowned as the Roaring Twenties. Culturally, it was a transformational period marked by uninhibited behavior and unbridled hedonism. Women had just earned the right to vote and were expressing their moral freedom, and many other boundaries of convention were being broken. Prohibition was the law of the land, but people largely flaunted it by patronizing illegal speakeasies and consuming alcohol in quantities that were unimaginable to temperance advocates before the 18th Amendment to the Constitution was ratified. The American public was overjoyed to be alive and at peace, and it was party time from coast to coast.
I foresee the same celebratory behavior when this scourge is past, the Roaring Twenties Redux. But I say 21st Century style because I sincerely doubt the euphoria will last for a decade, or even longer than a few weeks. I predict the roar will be closer to an exclamatory shout because while the timing is the same as a hundred years ago, economic circumstances are not. The joie de vivre will not, cannot endure.
The COVID-19 pandemic has triggered a recession. The stock market has plunged, all consumer-driven businesses except those deemed essential by governments have been shuttered, and people are filing for unemployment benefits every week by the millions. Some economists are predicting the recession will be a short one, others not. I am reminded of an episode of the TV show “The West Wing” where the country’s most respected economists have been summoned to the White House to address economic turmoil and are arguing among themselves. An exasperated Toby Ziegler finally cries out something along the lines of: “Can’t you agree on anything? Alchemists from the Middle Ages have a better track record than you guys!”
Admittedly I am not an economist. But I’m siding with the group with the pessimistic outlook; the pandemic will end long before this recession does. The longer enforced isolation rules remain in place, the more likely small businesses that have operated on small profit margins just to remain viable in good times, such as restaurants and hair and nail salons, will never reopen, even with stimulus money. Employees who worked there will never get their jobs back.
One thing economists do agree on is that 70% of the nation’s economy is driven by consumer spending. People who do not have jobs do not have money to spend. One researcher at the Federal Reserve Bank calculates that the unemployment rate could soar to nearly 33%, higher than at any point during the Great Depression. A significant number of families that have lived from paycheck to paycheck will suffer even more, if they’re not already.
A survey by the Federal Reserve Bank a year ago found that 40% of American families do not have as little as $400 set aside for emergencies, and 12% of those families would not be able to pay their monthly bills if they dipped into the small savings they do have. It’s conceivable that families whose breadwinners have been laid off for just a couple of weeks now are already unable to meet their monthly financial obligations and quite likely maxing out their credit cards. The $1,200 stimulus payments for individuals, $2,400 for couples, plus $500 for each of their children, is a commendable gesture but in a reality a pittance that can only keep them afloat financially for a few weeks at most … and those funds haven’t even been distributed yet. By the time the pandemic is under control and those who do have jobs can begin working again, tens of millions of Americans will likely be so deeply in debt it will be years before they’re flush again, if ever. And while they’re living on even tighter budgets and spending less money than before, the recession worsens and lengthens. Those who have lost their jobs permanently will be even worse off if they’re not working by the time their unemployment benefits run out.
I would love to be wrong about such dire predictions, but I fear I’m not.
So when the pandemic is history, and the restaurants, bars, and clubs that have survived the crisis re-open, it will be party time in America … at least for those who can still afford it. And the Roaring Twenties of the 21st Century will not last a decade but a few weeks at best before harsh reality sets in.