“For The Times They Are A-Changin” - The “New Normal” After The Pandemic

Our lives will not return to the “normal” we lived before the coronavirus. A “new normal” will become our reality. What will the “new normal” be? No one is certain, but there are trends we can discern which may help guide Financial Advisors, including attorneys and accountants, who give wealth management advice.     

We will never again allow our society and economy to be dependent on China or any other nation.

Companies that produce products, medicines, or anything of critical importance to the health, safety, and defense of Americans will begin repatriating to the United States, whether they want to or not.

These corporations will also compel the companies that form their supply chains to move factories to the U.S.

To encourage corporations to do this, the Federal government will both change tax laws as well as designate which industries are critical to national interest, and must manufacture products in the U.S.

Whether they are American owned or not, corporations will be required to have factories in the U.S., which will be able to supply 100% of our domestic requirements for critical products.

The pandemic will create a significant number of well-paid jobs in the U.S. because the new production facilities will need workers. Because we have too many low-skilled workers in the U.S., these repatriations will create thousands of public/private partnerships to train and upskill workers.

Retired Baby Boomers will form a core group of tutors for these students.

Since many of the repatriated jobs will pay more and require significant upskilling of the workforce, you can expect a permanent boost to the economy from higher wagers plus an increase in the overall productivity of U.S. workers.

We will see enormous investment opportunities in new methods of growing food, including massive growth in urban greenhouses and hydroponics on the rooftops of buildings.

Americans will be far more discerning about the origin of foods and beverages they consume. We will favor countries that adhere to the strict regulations on agriculture and food processing found in the First World. European Union (UN) standards are the most restrictive, and American consumers will demand our standards match theirs.

Because of the immense damage to our economy by COVID-19, we will move toward greater integration of our economy with the EU and other traditional American allies to share the burdens and successes. This will also lead to closer political and military alliances with these countries. Look for negotiations of a free trade agreement with the EU to begin within two to three years.

Won’t many of these items cause the deficit to grow bigger? I do not think so. Federal taxes on the wealthy will go up, especially on your Ulta-High-Net-Worth (UHNW) clients. Congress will pass a wealth tax. Americans are in no mood to feel sorry for the wealthy.
Tax cuts enacted since 1980 will be selectively repealed. There will be a significant increase in inheritance taxes in the U.S.

Smaller cities will experience dramatic growth as Millennials move out of large cities because of housing costs, a trend which has already begun.     

Global warming continues, and confronting this issue will demand all the ingenuity Americans are famous for and large government expenditures.

I will leave you with this quote from the Roman author, historian, and philosopher Pliny the Elder, circa AD 60:

“The only certainty is that nothing is certain.”

Resource:

[1] The Times They Are A-Changin’ Written by: Bob Dylan © 1963, 1964 by Warner Bros. Inc.; renewed 1991, 1992 by Special Rider Music

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Contributing Writer: Subject Matter Expert Charles McCain