Restaurants in a pandemic are like beachfront properties in a hurricane. Their devastation is both a tragedy and an omen of greater havoc to come. Already operating at paper-thin margins, restaurants face the loss of their entire dine-in business, but they will still have to make rent. In the same way, hotels, airlines, and the entire face-to-face services sector are looking ahead at several months without customers, yet they will still have to make regular payments on corporate loans.
This is our great economic crisis in a nutshell: Consumers are vanishing, but financial obligations are not. Without a major intervention, the entire global leisure and retail economy—and soon, perhaps, the entire economy, period—is facing mass layoffs, mass bankruptcy, or both.
There is only one solution to this problem: The public sector must step in and play consumer for several months, until the virus passes. Salis calls for a comprehensive financial-aid package that can help companies “[subsidize] labor, vendors, loans, rent or mortgage, and other payments through these significant disruptions so businesses can come out on the other side empowered to move forward and not shut down operations indefinitely.” Perhaps this will require a one-time $1 trillion infusion of cash to U.S. households to protect people from the inevitable downturn. Perhaps it will require hundreds of billions of dollars in grants or cheap loans to affected businesses. Very likely, it will require a bit of both. As with social distancing, economic solutions that sound rash and extreme today may sound conservative and inevitable in 48 hours.