COVID-19 has taught some hard business lessons. Can the economy recover?

Six months into the great COVID-19 disruption — it was in mid-March that the orders went out to shut it all down and abandon ship — what have we learned?

There was no right answer. Maybe there never will be.

We as Americans like tidy endings to our stories. See a problem, solve a problem. We should be able to Google it, find a YouTube video on how to fix it, move onto the next situation.

The coronavirus has defied such neat resolution. It seems we know less now than when this saga began. We certainly seem to know less about how to control its spread

Now we are now engaged in the great sport of finger-pointing and blame-hurling, castigating everyone for not knowing or immediately coming up with the right mix of measures that would simultaneously disarm the coronavirus and minimize the economic impact.

It might well turn out that there was no single right answer or preparation, that COVID-19 was so fast-moving and powerful as to defy measures to slow it or counteract its effects.

That’s not what anyone wants to hear, not only because of the psychological satisfaction derived from being able to say, “See, I told you so,” but because it implies that we will not solve this problem so much as stumble our way through it and out of it.

It might be a combination of measures, varying from place to place, and it might be that we never know for certain when we’re done with the pandemic. This isn’t like a war where one side surrenders, ending the conflict. It’s also not like a sports competition; yes, we’re keeping score (with statistics like new cases and tests administered), but the clock does not run out and there’s no definitive winner.

Expect more closings

Businesses are reaching the tipping point on how long they can hold out.

The recent stories in the News Tribune about longtime Tacoma restaurants throwing in the towel are sad in and of themselves, but they’re also worrisome signals of deeper trends.

When the economy went into shutdown mode six months ago, many businesses hoped for a quick resolution. When that didn’t work out, some figured they could survive through a mix of slashing costs, draining savings, tapping whatever loans or stimulus payments were to be found and trying to hang on until the pandemic broke and the economy reopened.

Six months later, those temporary survival tactics have been depleted. What financial reserves there were are gone, what further stimulus funding programs might be coming won’t be enough to sustain business for very long, especially if there’s no certainty as to when there might be a resolution.

At some point those business operators will decide that clinging to hope is unrealistic and will simply drive up the cost of the inevitable. The deeper we get into fall, the more we will see businesses give up the fight. If we have no better than a sluggish holiday retailing season, still more will go.

Boeing won’t help

We won’t be able to count on at least one of our economic mainstays to keep us afloat.

The aerospace sector can be the cause of a regional economic downturn (the post 9/11 era), but it also can dampen or even counteract the impacts of recessionary forces in other sectors. That’s what happened in the housing-finance debacle and the resulting Great Recession. The Northwest didn’t escape that downturn, but it would have been a lot worse without Boeing and the aerospace supply chain enjoying a surge in orders and overall growth.

Aerospace won’t save the day this time. Boeing was already in the soup because of the grounding of the 737 Max. The global pandemic clobbered worldwide air travel, so, in response, the airlines canceled orders for new planes, so, in response, Boeing is slashing production and employment, and in its latest move plans to consolidate production of the Everett-built 787 in South Carolina.

The effects of that will be felt long after COVID-19 is done with, and far beyond Everett. This time, instead of being a life raft for the regional economy, aerospace will more resemble a boat anchor.

Entrepreneurs to the rescue?

Entrepreneurial ventures took a clobbering in the pandemic. Entrepreneurialism is what will save the American economy.

All those restaurants and bars and salons and small stores that have fallen victim to COVID-19 started as someone’s entrepreneurial dream and ended in disappointment. Starting and running a business is a challenge in the best of times. In the worst of times, which this would seem to qualify as, they are the most susceptible to going under.

Yet those are the ventures that hold the most promise for an economic rebound. Major corporations — the type that spanned the globe and have tens of thousands of employees — are slicing payrolls by the tens of thousands. Only a portion of those jobs will return when the economy does.

Even Amazon, with its seemingly unquenchable appetite for adding employees, can’t hire everyone displaced from a job by the pandemic. Thus the burden falls on the entrepreneurial sector to generate jobs, by a handful here, a dozen or so there.

The good news is that this country used to be pretty good at entrepreneurialism, and it still has a strong entrepreneurial culture. As long as were talking about permanent change resulting from this episode, here’s a big policy change to keep that culture thriving: Schools from college on down need to put much more emphasis on encouraging students to venture out on their own. Can you teach entrepreneurialism? We’d better learn how to.