Superforecasting - there will be a sustained boom, as the virus captures the imagination of the political class

This is a period of great tumult. But, despite the sense of foreboding, and the swathe of bearish forecasters who predict negative growth, it's possible quite the opposite will happen? Why? Because the world's politcal class, a millionaire elite, actually personally fear and understand the virus.

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So, things like global warming, or inequality, or the state of public transport, don't always capture the imagination of the world's political class.  They are often a relatively wealthy minority in relation to the rest of the population.  For instance, they are generally millionaires in the US.  For those who seek to be ethical, or true, they also have to wrestle with very hostile pressure groups who seek to capture and twist important debates along the lines of corporate interest.  The elite hide away from inequality, or transport issues.  They live in a privatised world.   It's easy for them to believe that the poor deserve to be poor due to their own failures.  Or to believe that global warming is a hoax.

But the virus is different.  The world's elite, who are highly social, tactile and mobile, are amongst the biggest super spreaders.  Every other day a Tom Hanks, or a football club owner, or even a President concedes they are having to self-isolate.  The elite are also middle aged, 50 plus, and therefore get worried about the virus.  Victims of the virus are considered to be innocent, unlike the poor.  They are considered to be deserving of help.  But crucially, what is different this time, is that the elite also have experience of the virus, personally and through their networks.  Therefore, they are likely to act.  

The world's elite, despite the recent takedown of international organisations, will seek to mitigate the virus.  The reason why?  Because they can imagine themselves as victims to its unscrupulous march.  In fact, many of them will get it.  So, there is an equalising aspect to the virus.  This creates a sense of empathy between national and global citizens, rich and poor.

The elite will carry out a huge multi-trillion pound Keynesian investment programme, investing in public works, renationalising hospitals and airlines, and many other things.  The will show largesse with their cheque books in a way that has never happened before.  The money will not be directed to bankers, but to the general public and small companies as well as larger companies.

This fellow feeling will result in a huge economic stimulus.  In 12 months time, this will result in a ramp in demand, growth and employment.  It's very likely that the current doomsday scenarios regarding employment, will therefore not materialise.  In 12 months time, interest rates will rise, to slow the economy, and many of us will have been touched by the power of national and global collective action to tackle a crisis.  But, it's important to remember, that the response to this particular crisis is due to emotional and psychological impact the virus is having on the elite.  Despite their private gates, and private jets, and endless hand-wipes, the invisible virus has got under their collective skin.

Ajay Khandelwal PhD

Ajay Khandelwal is an experienced psychotherapist and consultant. He welcomes contact and enquiries and is accepting new clients via zoom during the shut down.

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