Today, April 23, is my father's birthday. He would have been 103 years old. He was born in Buenos Aires, but his parents took him very young to his father's native Sicily. He grew up in the aftermath of World War I's carnage, saw the rise of Mussolini's Fascism, the Great Depression, fought in and lived through World War II. He fled southern Italy's postwar poverty (as well depicted in HBO's My Brilliant Friend), landing first in Australia (where I was born) and then in the United States. He saw the rise and then the fall of the Soviet Union, witnessed assassinations, riots, revolutions, wars and deprivations, he lived with the threat of nuclear holocaust and saw men walk on the moon.
What period of his life, I now wonder, was "normal"?
I ask that, today in his memory, of all of those who demand that we "return to normal," from the Barker-in-Chief to those overweight guys in Michigan looking, I guess, to stare down the coronavirus with semi-automatic weapons. https://www.nbcnews.com/politics/politics-news/lock-her-anti-whitmer-coronavirus-lockdown-protestors-swarm-michigan-capitol-n1184426. They remind me of Denethor in The Lord of the Rings, who jumps onto a pyre (in the movie, off a cliff), after telling Gandalf, "I would have things as they were in all the days of my life . . . [or] I will have nought." They would rather get sick and die than to have things be other than how they were. They will learn, those who survive the viral pyre, that they can't go back to their imagined 'normal.'
What does "normal" mean, anyway? In plain parlance, "normal" means no more and no less than whatever you are used to. To "return to normal" implies that you can resume old ways of doing things as if nothing happened. The aftermath of this pandemic is hard to see, but we can be sure that it will not be as if nothing happened. That's not how pandemics work, and it's not how life is.
If "normal" is just how we are used to doing things, then there is a more precise way to think about it. The way we are used to doing things is what our habits are. Research shows it takes from 18 days to 9 months to form a habit, depending how complex it is. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.695.830&rep=rep1&type=pdf. We've been forming new habits for well into two months already. By the time there's a vaccine for Covid-19, we will have had time to form many new habits. Those new habits, once embedded in our lives, will be what we will call "normal." Already, I have gotten used to working from home and meeting people as disembodied faces and voices on a screen. Once in a while, I miss going to a bar for a drink, and to a restaurant for a good meal. I miss seeing friends, and I miss Manhattan, the crowded, noisy one of my memory, not the apocalyptically vacant one I now see on TV. I miss my corner office overlooking Grand Central. On the other hand, I've finally mastered sourdough, and I've gotten to see birds do what birds do while they do it (but not bees, yet). Yes, I know how lucky I am to be stuck out here in the hinterlands and not in a cramped City apartment. But still, much of this is starting to seem very "normal" to me. Just like when it began to seem "normal" to show IDs to enter buildings and to be electronically strip-searched before boarding planes.
Institutions, too, are breaking old habits and forming new ones. An employee of a client -- a major bank -- called me a couple weeks ago with an odd question. SEC Form 144 dates back to the early 1970s. It must be filed by certain sellers of restricted stock in order to comply with SEC Rule 144. The Rule says this form must be filed on paper, in triplicate, by mailing it to the Secretary of the SEC. You could file it electronically on EDGAR, but no one does -- and if you've ever had to deal with EDGAR access codes you would understand why.
So my client, working from home, wanted to know how she could file Form 144s without risking an infection by going to her local post office. She said she called the SEC, and the person she spoke with, probably also working from home, didn't know what to do. So I gave her the email address of the Secretary of the SEC, told her to scan the Form 144 and send it to him, in essence daring the SEC to do something about it. Desperate times, and all that.
The point is that "normal" is not some static thing writ in stone. Normal is what you're used to, what your habits are. So when you get used to something else, then that becomes "normal." All that's needed to drop one habit and form another is a catalyst, an event that forces you to change. That's what Covid-19 is. That's what pandemics always have been.
I never knew why my father's parents left Buenos Aires for Sicily, and I wonder if my father himself even knew. But now I think I do know, thanks to reading some pandemic history. My father was born in April 1917. In October 1918, when he was 18 months old, the Spanish Flu reached South America, landing first in Brazil and soon spreading across the continent. From late 1918 and through all of 1919, mortality rates in Buenos Aires from the Spanish Flu exceeded 50%. But by then, the Flu had already passed over Europe. Knowing all this now, it is not a stretch of the imagination to think that it was the pandemic of 1918 that spurred my father's family to leave South America.
Harry Truman said, "The only thing new in the world is the history you do not know." Pandemics are so far removed from our collective memory that to read about them really is to learn something new. Disease outbreaks have changed the course of events for all of human history, as much as or more than personalities, politics, wars, economies, or any invention. They force people to change habits, to redefine how they live and what they think of as "normal." Our grandparents and great-grandparents knew that first-hand. Now we will learn it too.
Aegis Frumento is a partner of Stern Tannenbaum & Bell, and co-heads the firm's Financial Markets Practice. Mr. Frumento represents persons and businesses in all aspects of commercial, corporate and securities matters and dispute resolution (including trials and arbitrations); SEC and FINRA regulated firms and persons on regulatory compliance issues and in SEC and FINRA enforcement investigations and proceedings; and senior executives of public corporations personal securities law and corporate governance matters. Mr. Frumento also represents clients in forming and registering broker-dealers and registered investment advisers, in developing compliance policies, procedures and controls, and in adopting proper disclosure documents. Those now include industry professionals looking to adapt blockchain technologies to finance and financial market enterprises.
Prior to joining the firm, Mr. Frumento was a managing director of Citigroup and Morgan Stanley, a partner and the head of the financial markets group of Duane Morris LLP, and the managing partner of Singer Frumento LLP.
He graduated from Harvard College in 1976 and New York University School of Law in 1979. Mr. Frumento is a frequent author and speaker on securities law issues, and is often quoted in the media on current securities law developments.
NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of BrokeAndBroker.com Blog.