Via Wolf Street

The eeriness of the whole situation may leave permanent marks on consumers and business-decision makers.

By Wolf Richter for WOLF STREET:

OK, this is it. The big moment. We the 6.7 million people in six San Francisco Bay Area counties have been ordered to “shelter in place,” with “the only exception being for essential needs,” starting Tuesday just after midnight through April 7, “or until it is extended,” the directive by the San Francisco Office of the Mayor said. The counties are San Francisco, Santa Clara (southern part of Silicon Valley), San Mateo (northern part of Silicon Valley), Marin (north of the Golden Gate Bridge), Contra Costa and Alameda (both East Bay).

All travel from place A to B is prohibited “except to perform Essential Activities, operate Essential Businesses, or to maintain Essential Government Functions.” Among the prohibited forms of travel are walking, biking, driving, or using public transit.

All businesses have to shut down – except a very very long list of “Essential Businesses” which are allowed to remain open.

I get that the directive – and we’ll look at it in a moment – is not an effort to shut down the economy, far from it, but an effort at thinning out the crowds so that there are fewer people on the street and in offices and shops that come into contact with each other, and that these people are further away from each other. This will slow the transmission rate. That’s the goal, so that not everyone shows up at the hospital at the same time.

What has happened before the lockdown is eerie enough.

And it impacts your mood and your thinking. For two weeks now, traffic has thinned out, most of the tourists are gone, and the whole City of San Francisco has quieted down. Tonight, as I’m writing this, it feels like the first few nights after 9-11 when we were living in Manhattan. Everything has changed. The quiet is eerie and disconcerting.

The only exception to the quiet were the grocery stores, where a tsunami of shoppers has emptied out the shelves.

The first time you walk into an American grocery store, normally loaded up with merchandise, and you see empty shelves, something happens to your mind – and one of the things that happens is that you too become a panic-buyer once you see something that you can actually buy.

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Empty shelves in a grocery store leave a lasting impact. People won’t forget that for a long time. There is a traumatizing aspect to it. We’re used to excess supply and gluts – and the resulting discounts and sales and 50% off signs – and not scarcity. And when this switches from glut to scarcity, it hits you between the eyes.

But grocery stores will remain open, and businesses in the supply chain will continue to operate, and transportation enterprises too – they’re all exempted as are many others. So there won’t be shortages once people stop panic-buying, and the supply chains can catch up.

So now we will get the lockdown as of midnight. “This measure is necessary to slow the spread of novel coronavirus (COVID-19) in the community,” the directive said.

“Essential Businesses” are excluded.

They include: Grocery stores, farmers’ markets, pharmacies, gas stations, vehicle parts and service operations, healthcare operations, work on essential infrastructure, housing construction, transportation (that’s the Uber driver), utilities, banks, garbage collection, hardware stores, plumbers, electricians, educational institutions but only for “distance learning,” laundromats, dry cleaners, delivery businesses, childcare facilities that allow “Essential Employees” to go to work, and businesses that perform work that allows “Essential Businesses” to operate, such as payroll services or security services.

“Essential Activities” are excluded.

OK, we can go out to walk our dog or to take a walk or jog for exercise, but if we do, we have to maintain at least six feet of “social distancing” to anyone else. We can also go out and buy groceries, if anything is on the shelf, and supplies. And we can go to the doctor or an ATM, and care for a family member living in another household; and we can care for “elderly, minors, dependents, persons with disabilities, or other vulnerable persons.”

People who work for an Essential Business or Essential Government Function can go to work. And since there are a lot of essential businesses – including all the grocery stores and supply chain and transportation businesses – and essential government functions, there will still be plenty of people going to work. But there will be a lot fewer of them.

“Essential Government Functions” are excluded.

These government functions that are to remain open include “all services needed to ensure the continuing operation of the government agencies and provide for the health, safety and welfare of the public.” That includes mass transit, police, fire, and healthcare services.

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What about the homeless?

The many homeless people in the Bay Area are not required to “shelter in place,” which is more or less obvious since they don’t really have a place to shelter in. But they are “encouraged to seek shelter.” So bunk beds three feet from each other? Maybe it’s healthier to sleep out on the street in your own corner or in your car.

No public or private gatherings.

“All public and private gatherings of any number of people” outside the home are prohibited, with some exceptions, such as the essential businesses and government functions. That’s the end of baby showers, birthday parties, weddings, sports events, political rallies and fund-raisers during election season, business meetings, and conferences – but most of this stuff had already been cancelled before the lockdown.

What does it mean?

We went jogging tonight along the shore, through Fort Mason, along the Marina Green, and out to Crissy Fields. It seems everyone had the same idea, which is to get out of the house and enjoy the setting sun and the Bay. I don’t think I have ever seen this many people out on a weekday. It was not always easy to maintain at least six feet “social distancing.” But everyone seemed glum. The exuberance was gone.

My wife, who works for a refrigerated-food company, which is in the supply chain business and therefore an Essential Business, will continue to go to the office. The commute has been a breeze for a couple of weeks already, getting easier by the day, but now she’ll have the normally congested streets and highways essentially to herself. Many people are in the same boat. The supply chains are being maintained – unlike in China, where they collapsed.

My WOLF STREET media mogul empire is not on the list of “Essential Businesses.” But it doesn’t need to shut down. Its vast headquarters campus is located in what used to be the master bedroom of our home, and it will continue to operate as before, while I’m sheltering in place.

Many people who used to work in an office now work from home. This includes many tech workers. They have already been working from home for days. Teleconferencing is now a big thing. Skype works too. Even the phone does. Other people have always worked from home. So lots of people keep working.

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But people working for retailers or restaurants, cafes, or bars, or yoga studios or beauty salons or myriad other businesses, they’re not working. Many of them at the lower levels are out of a job. Others are out of commissions or tips. Musicians are out of gigs. While taxi and rideshare drivers can work, there isn’t a lot of business.

If this were just a short disruption of several days, it might be manageable for many people. But April 7 is three weeks away, and that’s a long time, and it could be extended. For many people, this will turn into a financial fiasco. Landlords and mortgage lenders are going to have to be flexible for their own sake. Now is not the time to try to find a new tenant or run a foreclosure auction – because there is no housing market at the moment, period. It’s shut down.

Then there is the psychological aspect of it. People are resilient, and tough, and they’ll get through this somehow, and business owners and managers are resourceful and will try to survive this. But the psychological impact will likely be permanent. For many consumers and business-decision makers, this will draw a line through their lives, with a “before” on one side, and the “after” on the other side. And these consumers and business-decision makers – and the companies they lead or own – will not be the same afterwards, which may impact all kinds of things in unforeseen ways.

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