A big question is: How much of the decline in the economy is caused by government orders versus how much by consumer choice?
Consider air travel, which is usually treated as an essential service so it remains legally open. But domestic air travel is down 96%. This in part because of government-mandated shutdowns of accomodations, but also in part because of voluntary choices made by travelers and those they would visit.
For example, some traveling salesman would prefer to stay home, while some would prefer to hit the road again. But of the latter, many wouldn’t find it worthwhile to travel now because their customers are shut down by government order or their customers would rather deal with them over the phone than in person.
By Gregory Wallace
Updated 3:02 PM ET, Thu April 9, 2020
Washington (CNN) The number of people traveling by plane has dropped by about 96% amid the coronavirus pandemic, according to multiple metrics.
On Wednesday, Transportation Security Administration officers screened just shy of 95,000 people at airport checkpoints, a dramatic drop from the 2.3 million who passed through on the equivalent day in 2019. The numbers are at a 10-year low, according to the agency.
The drop in passengers and orders across much of the country to stay at home have caused airlines to cut 71% of their capacity, according to Airlines for America, an industry group that represents carriers such as American, Delta, Southwest and United.
Only about one in every 10 seats on the US domestic planes that do fly are occupied, the group says.
In other words, if all government agencies lifted all restrictions tomorrow, how much air travel would come back the next day, the next week, the next month, and the next year?
Difficult questions …
My impression is that getting the economy going again can be helped by businesses taking steps to reduce the chances of infection and publicizing what they are doing.
As I pointed out in my latest Taki’s column, the golf industry is suffering under probably overly-enthusiastic government rules banning fun, but it already has a set of plans for how to reduce the already low chance of infection on the golf course even further, so golf courses will likely once again appeal to old customers soon after government bans are lifted.
In contrast, the ski industry’s reputation as high risk for getting infected is only going to worsen as more data is collected on ski resorts’ role as superspreaders in February and early March. To successfully come back next winter, the ski industry needs not just government permission but a lot of intelligent technical reforms to reduce risk, plus a marketing campaign to communicate to potential customers how much safer skiing will be next year.
What this implies is that there is going to be a lot of randomness in which businesses recover first: e.g., optometrists might have a better second half of 2020 than dentists. It’s not fair some businesses will come back in customer favor faster than others, but that’s likely how it’s going to be.