Beacon Economics: Don’t Expect a New Normal
“Pandemics have been with humanity for as long as we can remember,” says Christopher Thornberg of Beacon Economics.
“There are people saying that this is going to create a permanent change in consumer behavior. Why? There is not a new normal,” Thornberg, founding partner of Beacon Economics, tells GlobeSt.com.
Thornberg is tossing out the predictions of a new normal based on past pandemics and following behaviors. “Pandemics have been with humanity for as long as we can remember,” he says. “We have been fortunate over for the last 40 years that for a brief period of time public health got in front of it and all of the diseases that used to periodically rip through human populations had largely been subdued.” During periods of disease outbreak, social distancing is common, but people have always continued living their lives normally. “We have a long history of dealing with these circumstances, and history shows over and over again that people social distance when times are bad and then when things are good, they lived their lives again,” he adds.
It isn’t only predictions of a new normal that Thornberg is rejecting, but also the idea of a draconian future and severe economic collapse. These predictions, he says, are not based on reliable data because there is no historical precedent. “As a forecaster, I am using the past as a metaphor for the future,” says Thornberg. “The problem is that we don’t have a recent metaphor for this. The last time that there was a public health-incused downturn was maybe in the 1950s. I don’t know for sure, but I do know that the data from that time isn’t very good and it was a very different kind of economy.
Using data from past recession or even past pandemics isn’t necessarily applicable to the economy today. “It is not an apt metaphor,” says Thornberg. “From a statistical standpoint, it is difficult to do what many forecasters are trying to do, and they aren’t acknowledging that.”