Over half the adult population in the United States has received at least one dose of the vaccine. Daily infection and hospitalization rates are dropping fast almost everywhere; some states are even reporting zero daily covid deaths. Of course, there are still dangers. Vaccination rates are slowing down, and new variants are cropping up.
Yet even with those caveats in mind, we can look at the United States and imagine life after covid. The forecast is mostly sunny.
The most striking aspect of post-pandemic America is likely to be a big economic boom. Unlike the 2008 financial crisis, the pandemic paralysis will probably be followed by a sharp rebound. That’s partly because of the differing nature of the crisis, but largely because Washington has flooded the economy with money, so both businesses and individuals have cash to spend. The last great pandemic, the 1918 influenza outbreak, was followed by the Roaring Twenties. It is too soon to tell whether this one will usher in that kind of sustained growth, but there are reasons for optimism.
The most important of these is innovation. Crises always lead people to find new ways to do things, adopt new technologies and cast away old practices. In the United States, the ability of large parts of the economy to function and excel in the digital realm — when the physical economy was broadly shut down — has surprised even techno-optimists.
These gains could endure. A salesperson told me, “I miss being able to meet with people in person. You lose something important. On the other hand, I have used the new technology to make literally 10 times as many sales calls every week compared to before covid. It’s opened up a whole new world for me.”
We understand innovation mostly in hindsight. Few predicted in the early 1990s that productivity would rise sharply because of the widespread use of information technology; nor did they foresee that it would taper off just as mysteriously a few years later. But at a micro level, we are watching so many businesses, governments and people adapt to the covid crisis, abandon old ways and optimize for the future that productivity gains seem likely. Add to that the possibility of massive new investments in science and technology, and we could see a virtuous cycle.
Europe is one step behind the United States because its vaccine rollout became mired in bureaucratic problems. In many ways, Europe’s vaccine debacle looked like America’s stumbles in the first phase of the pandemic. Now Europe has gotten its act together. Meanwhile, it has actually made a far more consequential decision: to borrow money backed by the continent’s strongest economies — Germany and France — and let all countries spend it on covid recovery. This suggests Europe might soon look like America in its own second phase, marked by widespread vaccinations and a soaring economy. The Europeans’ bold fiscal innovation could also mean a stronger European Union in the future.
The dark side of this picture right now is the developing world. Covid is ravaging India, and it may also surge in places that so far have been largely spared, including much of Africa. But even then, it’s still possible to imagine benefits. The crisis has jolted India to its core, shedding a harsh light on the country’s sprawling, corrupt and badly run government. The country has flourished in the past few decades not because of its public sector but rather because of the rise of a dynamic and efficient private sector. The pandemic is a wake-up call that might force real government reforms, particularly in public health, which could then trigger change in other dysfunctional sectors such as education. As it searches for growth and faces challenges in borrowing, India is already enacting long-delayed economic reforms. Another sign that India might bounce back is its stock market, which has been stunningly resilient in the face of the covid catastrophe.
I’m trying to look at the bright side of a terrible situation. There are real grounds to be optimistic that, grim as the pandemic has been, it could open up progress across the world.