One of the favorite parts of my job is thinking about issues in ways other people often do not. That often includes identifying business problems, implications, and providing recommendations to clients that can assist them in moving forward. Even for financial issues we fully understand that we cannot underestimate the impact other factors (black swans) can have on the overall economy.
Currently a large proportion of the population has protected themselves (and their loved ones) from Covid by getting vaccinated. Although the vaccination roll-out in BC has been slow it has been an overall success with 80% of the population being vaccinated for at least one dose, the local economy is booming and the stock market is at all-time highs. But… the adoption rate is slowing throughout North America. At the present pace, it will take many more months to cover the population needed for herd immunity.
Which leads to the bad news. North America is now fighting three simultaneous Covid related battles, and not doing well in any of them:
Variants/Mutations are increasingly infectious/deadly;
Vaccinations have become politicized;
Provinces and Cities with low Vaxx rates have higher infection rates.
So far, the Markets and the Economy are acting as if the pandemic is over. But these concerns raise the risk of an unanticipated economic slowing or even a contraction (and possible market effect) over the next 12-24 months. The probability of things getting worse could easily be caused by a number of factors including the Delta Variant and other mutations.
The biggest risk factor is the unvaccinated individuals. They are the fastest-growing proportion of new cases thanks to Q-Anon, Fox News, OANN, NewsMax, and other random media sources, large swaths of the population now believe that Vaccines are problematic. What was once a bizarre and self-destructive movement has become a full-blown public health and economic threat. However it is not just a USA problem, Anti-Vaxxer propaganda is spreading in Canada with individuals who lack formal education.
In the USA, there is a hypocrisy problem: Rupert Murdoch was vaccinated in December 2020 and he never promoted that on Fox News. Donald Trump got his vaccination in January 2021. What these folks have been saying about vaccines and what they did personally are polar opposites. Republican regions with lower vaccination rates have higher infection rates and the variants are pummeling unvaccinated people. The numbers are pretty staggering since unvaccinated people now account for 99.7% of new corona virus cases. Even worse, every unvaccinated person is a chance for the virus to mutate again. The unvaccinated are “variant factories.” They do more than risk their own health and safety, they put the lives of everyone in the community at greater risk.
The risk here is not a new mask mandate, but regions selectively shutting down stores, restaurants, offices, and local businesses. Worse, once people in a local high infection area come to realize what has happened, they will engage in a quarantine or lockdown, local economies could crash, and people may begin to panic creating future economic turmoil.
Since 2000, we have been through 3 major economic crashes: The ending of the 1990’s dot-com implosion, the Great Financial Crisis, and now Covid-19. We are so close to putting this pandemic behind us, it would be a shame that if we do not get a handle on this, the repercussions will be serious and very expensive for future generations.