A sideways look at economics

The good news is that it’s a four-day weekend. The bad news is that it’s probably the least anticipated four-day weekend of my lifetime. Being locked inside isn’t fun: that’s probably why we reserve it as punishment for people that break the law or enjoy cruises. Bill Withers, who sadly lost his life last week, reminds us that “there’s always tomorrow”. Lockdowns will end. No doubt they have been tough for all of us. But I’m sure we can all think of some positives from the experience. You may have been practicing self-isolation ‘for years’ and have enjoyed some alone time, or you may have reconnected with an old friend over video. Here are some of mine:

Running:
In many countries, exercise is currently one of the few permitted reasons to leave your house. For many, this may be the incentive to put on some old trainers and do a loop around their local park. There’s widespread evidence that exercise helps to boost mental and physical health. But it isn’t just a way to make you feel and look better. It can alter your brain positively, too. Research shows that aerobic activity stimulates the hippocampus area of the brain, improving memory and delaying the onset of Alzheimer’s. Google searches for Strava, the social media app for cyclists and runners, spiked after the UK announced its lockdown, reaching levels almost double those experienced in January’s #NewYearNewMe spike. So, if you’re planning a new 5k PB, make sure to post it with a #notsohumblebrag caption. Even if you don’t feel like getting off the couch, you can still give ‘kudos’ to those who do.

Netflix:
We have previously explored the atypical cost curve faced by companies such as Netflix. With variable costs close to zero, the company can service an additional user at almost no extra cost, while still charging the same monthly rate. No wonder its share price is up by over 3000% in the past decade and the company is now worth over $150 billion. Well, the joke’s not entirely on us. With a flat subscription fee and relaxed security controls, users (plural) can consume Netflix’s array of content endlessly without having to pay anything extra. Chill. For some much-needed escapism, I’d recommend Tiger King: a documentary about an eccentric bunch of amateur ‘Big Cat’ zookeepers and their nemesis, Carole. What it lacks in structure, it more than makes up for in endless plot twists. For further free entertainment, scroll through the endless memes that have been produced about the show (spoiler alert, maybe).

A break from politics:
The threat of a global pandemic and potential Great Depression is enough to make even the most tribal of issues look petty. In Washington DC, the US Senate passed a $2.2 trillion stimulus package unanimously — something that several months ago would have appeared even more remote than Joe Biden’s chances of winning the Democratic nomination. But it’s not just elected leaders, people across the world have put some of their political allegiances to one side. There has been a clear increase in support for incumbent leaders, despite huge drops in consumer and business confidence. There will be time in the future to debate the relative efficacy of various parties and the policies they prescribe. For now, the things that bind us are much easier to recognise than those that divide us.

Working from home:
The walk from my bedroom to kitchen takes about three seconds, making checking in for Fathom’s daily 9am Teams call as easy as 1-2-3. Our Italian Technical Director has previously outlined a continental curiosity at the British commuter who, on average, spends an hour getting to work. Some spend double that. He’s right to be confused about why people put themselves through that. International evidence suggests that one of the lifestyle changes that people can reasonably make to improve their happiness is reducing their time spent commuting. Working from home helps in that regard. If you want to get that extra bang for your buck, why not reduce yours to zero by taking morning calls from bed? Remember to leave your camera off.

No more parties in LA:
I was due to fly to LA this evening. Instead of visiting West Hollywood and sampling taco trucks, I will be spending most of the next four days stuck indoors. This is a glass-half-full blogpost, however, and it’s hard to mourn the drop in flights too much. Air travel has collapsed internationally, which will reduce carbon emissions in the short term. While video conferencing will never replace the personal connections formed by face-to-face meetings, it might replace some non-essential business travel, thus helping to reduce air traffic in the medium term. Meanwhile, fewer cars mean that London’s streets are not only quieter but the air is cleaner too. Instead of a carbon-busting foreign trip, use your daily exercise to discover things closer to home.

Home cooking:
Supermarkets are one of the few businesses to weather the storm in equity markets with their valuations relatively unaffected. More importantly, their staff are the heroes of the moment: selflessly putting our needs before theirs, and, in my experience, remaining nothing but positive through trying times. For many, more time at home, has offered us the chance to experiment with new and more complicated recipes. If you can, support your local restaurant by buying a voucher or ordering delivery. But in the meantime, there are worse ways to spend your increased leisure time on than trying to replicate Padella’s cacio e pepe. Maintaining official social distance from the fridge is an impossible task, at least in my apartment. It might make sense to serve this one with a side of exercise.

Thank Fathom it’s Thursday, and happy long weekend!