Ongoing Lockdowns: The End of Our Society

Undeniable Permanent Damage

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Lockdowns caused the cancellation of Easter, put 51 million kids out of school and 30 million adults out of work. The Olympics were postponed. New York City’s Columbus Day Parade, the largest ethnic parade in America, was cancelled. Yes, they claim it was not cancelled, it was virtual, but the reality is, it was cancelled. The same is true of the Thanksgiving Day Parade. And for the first time in 160 years, Santa will not be at Macy’s. Because of lockdown rules, Americans were prohibited from attending weddings, funerals, graduations, birthday parties, recitals, celebrations, holidays, or even church or family gatherings. In short, they were forbidden from engaging in those very basic and very private rites and traditions that form the backbone of our culture and which separate humans from animals.

In addition to the destruction of the American family done by these lockdowns, they are a violation of the First Amendment of the Constitution. And this damage was done in the name of “fighting” the Covid epidemic, a disease which has a mortality rate of less than 3% and where 80% of deaths are among senior citizens, who could easily be sheltered while the rest of the world went about its business. Politicians robbed us of our freedom, claiming to be concerned for our health. Meanwhile, around half of all US deaths each year, are related to obesity, and yet not a single politician has suggested a national jogging mandate.

This year, for the first time, state governments are already announcing the cancellation of Thanksgiving and Christmas. And Dr. Anthony Fauci says that we may not return to normal until 2022. By then, will anyone remember what “normal” was? Or, will citizens be so used to having their rights stripped that they will be grateful for limited permission to go outside their homes for an hour a day, like inmates in a maximum-security prison?

In addition to the complete disruption of our families, society, and culture, the economic damage will be permanent. The US GDP in 2018 was $20.58 trillion USD. And that was with everyone working. With rolling lockdown orders we have had periods where as many as 30 million Americans were told they could not go to work and earn a living. Additionally, because no one was working, the government has already spent $2.59 Trillion on coronavirus stimulus and relief. This number represents about 12.6% of GDP. And with no end of rolling lockdowns in sight, there is no hope the economy can ever recover or that the deficit and growing national debt can be repaid.

The End of the World as We Know it

Fauci said even with the vaccine and rolling lockdowns, mask requirements may be needed. This means the end of restaurants, travel and tourism, concerts, holidays, fairs, festivals, plays, symphony, orchestra, museums, campuses, sports, family gatherings…in-person friendships.

Lockdowns killed restaurants, and they will not be coming back. Many states have 25% occupancy rules for restaurants. In a “normal” economy, if a restaurant’s business dropped off by 75%, they would move to a smaller location to save money on rent, insurance, heating, and electricity. Under corona rules, however, if they did that, they would be forced to reduce to 25% of the capacity of the newer, smaller location. This means the lockdown rules are forcing restaurant owners to pay for real estate and utilities that they do not need or use. At that point, it would make sense to close down permanently.

Even at full capacity, about 80% of restaurants fail and those that survive have a profit margin of about 2-6%. This means that the profit for the entire year is equal to about 14.5 days of revenue. Therefore, a lockdown of just over two weeks wipes out the profit for the year. With ongoing lockdowns, restaurants have endured and are still facing months and months of lost revenue, totaling years and years of profits. No reasonable investor would put their money in a restaurant, knowing that a single word from the governor could bankrupt them.

Events are now a thing of the past. The Macy’s Thanksgiving Day Parade costs between $11 million and $13 million dollars. Rock concerts cost millions. Broadway shows, symphony performances, sporting events, festivals, street fairs, and other large scale events cost incredible amounts of money, requiring up to a year of planning and can be cancelled in an instant. No sane person would be willing to undergo the financial risk of investing in such an event, only to have it cancelled. And even if it takes place, how would you comply with rules on masks, social distancing, and contact tracing?

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They said “man wasn’t meant to fly.” And they have been proven right. The average airline made nothing on those $150 tickets from New York to California, and about 9% on the $355 tickets. How much are they making on flights which are half full? These lockdowns and travel restrictions will result in a dramatic increase in the price and a reduction in the frequency of flights. Some states are considering having mandatory quarantine for out-of-state visitors. Similarly, many countries have mandatory quarantine requirements for new arrivals. This means if you plan a two-week vacation in another country, you have to add up to 21 days of expensive quarantine to your time and budget estimates. Some countries are charging as much as $250 a day for quarantine, and some require you to submit a cash bond to cover potential costs if you become infected in the country. Others are demanding that you carry international travel health insurance.

Travel and Tourism are Done

The days of just jumping on a plane and going are gone. If you sign a work contract to spend a year in another country, the country has to accept that they have to pay you for two weeks of quarantine. You will no longer be flying to international meetings for short visits or vacations. Even if you accept the restrictions and fees and fly to another country and endure quarantine, you may face another quarantine when you return to your home country. So, your two-week vacation will take 21 days of quarantine, 14 days of vacation, plus 21 days of quarantine. In total, a vacation will cost you 56 days.

Add to this that any time you travel now, you are running the risk of being trapped at your destination, either because the destination state or country will impose a lockdown after you get there – which will not only ruin your vacation or cancel whatever business conference or event you were meant to attend – but also prevent you from leaving. Or, your home state or country will close their airport, and you won’t be able to get back.

When deciding whether or not to invest in a business, investors consider the risks that business faces, assign a likelihood of that even occurring, and estimate the worst-case scenario economic impact of that risk. With Covid lockdown, there is no way to predict when it will happen and the worst-case scenario could be a 100% ban on conducting business. Investment in any brick and mortar business now, apart from grocery stores, will be too risky because you will never know when arbitrary lockdown restrictions will be imposed. Investment in events will be completely out. This means that any career in these fields is also a poor choice for young people, as their income could be erased overnight.

An obvious conflict of interests is that the politicians imposing the lockdowns – and government workers – are guaranteed their salary, even during a lockdown. So, working for the government seems the best option for about 60% of the population who do not have degrees in STEM fields or finance. Furthermore, government-owned restaurants and businesses wouldn’t need to earn a profit. Maybe the government will open restaurants and haircutters and gyms, so those businesses could survive the rolling lockdowns. And those who can’t work in a government-owned shop could stay home and collect money from the government…as an economist, we have a name for that type of economic system: communism.

Ada Nestor
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