Who‘s big / well connected enough to be bailed out should be the starting point of every equity valuation in the forseeable future…

JOEL KOTKIN: Who Will Prosper After the Plague? The tech sector and the managerial class will get richer, while the rest of us become their serfs.

The COVID-19 pandemic is likely to widen even further the growing class divides now found in virtually every major country. By disrupting smaller grassroots businesses while expanding the power of technologies used in the enforcement of government edicts, the virus could further empower both the tech oligarchs and the “expert” class leading the national response to the crisis.

In our increasingly feudal society, the small property owning yeomanry who operate the local businesses essential to Los Angeles shopping streets, and New York neighborhoods are already under threat and will be squeezed further by both the pandemic and its aftermath. But even more hard-pressed will be the growing, propertyless serf class that includes laid-off workers and the roughly 50 to 60 million workers in essential jobs, notes a new report from Richard Florida, and of those, 35 to 40 million require close physical proximity as opposed to those who can retreat to safety behind their computers. Roughly 70% of these workers are in low-wage professions, such as food preparation, and often, despite their increased risk, often lack health insurance from their employers.

Plagues, such as in the 14th century, may have wiped out as much as one third of Europe’s population, and devastated great Renaissance trading cities. In the Middle Ages, the wealthy sought safety in their country estates, much like the affluent now fleeing major European and American cities. Diets and survival rates varied enormously between the upper and lower classes. As one 14th-century observer noted, the plague “attacked especially the meaner sort and common people—seldom the magnates.”

But the wreckage also created new opportunities for those left standing. Abandoned tracts of land could be consolidated by rich nobles, or, in some cases, enterprising peasants, who took advantage of sudden opportunities to buy property or use chronic labor shortages to demand higher wages. “In an age where social conditions were considered fixed,” historian Barbara Tuchman has suggested, the new adjustments seemed “revolutionary.”

What might such “revolutionary” changes look like in our post-plague society? In the immediate future the monied classes in America will take a big hit, as their stock portfolios shrink, both acquisitions and new IPOs get sidetracked and the value of their properties drop. But vast opportunities for tremendous profit available to those with the financial wherewithal to absorb the initial shocks and capitalize on the disruption they cause. As in 2016, politicians in both parties have worked hard in the new stimulus to get breaks for their wealthy constituents, whether they are big retail chains, rich California taxpayers, or, in some cases, themselves.

Over time, the crisis is likely to further bolster the global oligarchal class.