Five Critical Ways The Coronavirus Could Decide The Next President

Over the last 11 weeks, the world has become a very small place.  Distance is no longer a barrier to disease and we have yet to understand the implications of a worldwide crisis precipitated by the Coronavirus (COVID-19) pandemic that now threatens the world’s economy and social order. Social conventions to include the soon to be launched European travel ban has begun to change how we interact with the world. And in the United States there has already been an impact on our entire political selection process, now get ready for a new norm not just in politics but also in our everyday lives.

The Coronavirus Is Unlike Any Global Crisis We Have Seen In Modern Times

This of course began as a healthcare crisis and thankfully it is not a 1918 supercharged influenza that infected almost 1/3 of the World’s population, killing 50 million people. Still, it is a cruel disease that has caused significant patient suffering and in some cases death. What makes this worse is that we’re still uncertain of what the mortality rate is, we have limited diagnostics to control its spread, there is no cure, a widely available vaccine is 18 months away at the earliest and there is an insufficient supply of ventilators necessary to help the most severely ill breathe. (Even if we did have enough there aren’t enough ventilator techs to support them.)  An appropriate way to think of this pandemic is to think about a mortality rate of a severe flu season, adding the uncertainty of extreme financial market gyrations and unfortunately, the potential of an economic shock equivalent or greater than what we experienced in 2008.

Why Is This Presidential Race Now Different Than All Others?

1.No President Of The United States Has Ever Been Re-elected During A Recession .

These three economic measures say we are already in a recession .

1.   The entire U.S. yield curve has fallen below 1% for the first time ever. This tells us there are no debt investors, just people who don’t want to lose money.

2.   The largest one-day point decline in Dow Jones history has already triggered the NYSE circuit breaker system and we are routinely experiencing record intra-day market swings.

3.   The worst one-day drop in oil prices since 1991 occurred a few days ago and warnings of earnings declines are being announced across the globe. Still the harbinger of real problems are the start of large corporations announcing layoffs.

So what does this mean? It’s evident we are in an economic crisis and as of this publication, we are officially in a bear market. If this recession worsens by the time of the 2020 election combined with dissatisfaction over the way the current administration is handling the coronavirus pandemic, there is likely to be a dramatic upheaval in Congress and the White House.  The United States has never had a Presidential election in the middle of an epidemic. The last great pandemic took place in 1918, in the middle of Woodrow Wilson’s administration, so there was no Presidential campaign, but the 1918 election did have political ramifications.  Republicans gained control of Congress for the first time in a decade.

2. Both The Democratic And Republican Conventions Could Be Canceled. Or Changed To A Virtual Format.

The consequences of these cancellations are unknown even if we have two uncontested candidates going into the convention.  Even if the conventions are not canceled, who would attend?  Large group gatherings, like political conventions, would be breeding grounds for viral disease.  Given the Centers For Disease Control (CDC)’s advice to practice social distancing, and considering that both likely Presidential candidates are more than 70-years-old with comorbidities, exposure to large groups of people will be dangerous to leadership continuity.

3. Campaigns Will Be Different.

Political rallies have already been rescheduled or cancelled altogether. These events will become more than problematic and party leaders and elected officials at all levels of government have begun to understand the risk they will pose – A real time example is Senator Maria Cantwell’s staff member testing positive for the virus. Think of large numbers of leaders becoming sick and how it would hobble all levels of government and further increase the number of cases as participants returned to their homes.  What this means will be more dependence on television commercials, online interactions, robocalls, interviews with reporters and mailings.  Since President Trump relies on rallies to energize his supporters, their suspension could hamper his campaign.  And on the Democratic side, a preview of what will happen will be this Sunday’s debate between Vice President Biden and Senator Sanders before an empty auditorium. Americans will need no explanation to these approaches given the just announced NBA season cancellation and the planned NCAA tournaments playing to empty arenas. As a global aside, how will we adjust for the Tokyo Olympics?

4. There Are Likely To Be Longer-term Political And Social Consequences .

Without opinioning on the electability of Bernie Sanders, there is likely to be increased discussion for one of his proposals. The prospect of a single-payer system, like Medicare, may gain greater support if current healthcare systems fail to meet expectations. With a multi-trillion dollar price tag, such a system would have a disruptive impact on taxes, destroy the insurance industry and change the delivery of healthcare for most people. As any new system that’s put into place, expect attendant implementation problems, but the driver might be a demand for change. And it will be decided by whether people will have more faith in government as a safety net or conversely less faith in private market and institutions. As an FYI in making changes, by just adding mandatory sick leave as a national policy it will add significant cost to every business in America and automatically reduce national productivity.

5. Prepare For Stunning Amounts Of Government Spending, But With What Results?

“Too big to fail” was the rallying cry for corporate bailouts in 2008, because some financial businesses had precipitated a disastrous economic decline in their business models. In 2020, this decline runs the risk of being so broad-based that no one Government support measure may be enough to address the needed assistance. We now have a “Gig” economy that employs almost 36% of the workforce so any suggested payroll tax relief won’t apply to them. The shifting of employees to telecommuting will help slow the spread of the virus, but how will this be implemented by almost 71% of the workforce that is employed in the service industry? And how do we provide financial relief to the new worker demographics with manufacturing era economic solutions?

Waiting For The Other Shoe To Drop

We have yet to see the permanent impact of the coronavirus on the world and national societal norms.  But make no mistake, there will be changes, some positive and some not.  Some changes will be anticipated and some will be total surprises.  Some will be short-lived and some will become permanent.  As with all new social norms, the nimble and adaptable will thrive and as a society, we will have to consider those who can’t.

This article was written by Steve Brozak from Forbes and was legally licensed by AdvisorStream through the NewsCred publisher network.