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Experts Hope Pent-Up Demand Will Revive Pandemic-Hit Industries


The pandemic destroyed jobs that require people to be face to face. But vaccines bring hope of recovery. And history offers encouragement. Here's Greg Rosalsky from our Planet Money podcast.

GREG ROSALSKY, BYLINE: 1918 should have been a great year for baseball. A young player named Babe Ruth started the year as a pitcher but began morphing into a home run-hitting powerhouse.

JOHNNY SMITH: And here, what we see is the transformation of Babe Ruth from a dominant pitcher to a slugger just beginning to happen.

ROSALSKY: That's Johnny Smith, a historian at Georgia Tech who recently co-wrote a book that tells this story. It's called "War Fever: Boston, Baseball, And America In The Shadow Of The Great War." In addition to World War I, there was a pandemic in 1918, the Spanish flu. So even though Babe Ruth had a breakout year, many people weren't there to see it. Baseball game attendance fell over 50% from the previous season. Purdue historian Randy Roberts, the other co-author of "War Fever," says Boston became an epicenter of a second and more deadly strain of the Spanish flu just days before the Red Sox made it to the World Series against the Chicago Cubs.

RANDY ROBERTS: And so it's during the games in Boston that the flu really expands to the civilian population.

ROSALSKY: Boston's Fenway Park could hold 35,000 people. But by game six of the series, the day the Red Sox clinched the title, only about 15,000 people were at the stadium. By the next season, in 1919, the war and the pandemic were over. And people wondered if things would go back to normal - they did, and then some. A tidal wave of baseball fans swelled stadiums. The Claremont McKenna College economist Richard Burdekin says game attendance in 1919 more than doubled.

RICHARD BURDEKIN: Not only is the 1919 baseball attendance higher than 1918 by a very strong margin, but it's actually 37% higher than it was in 1917, the year before the pandemic.

ROSALSKY: It's a good example of what economists call pent-up demand. When constraints prevent people from consuming something, when those constraints are lifted, people ravenously consume what had previously been out of reach. Now that the end of the pandemic is in sight, investors and executives are hoping pent-up demand will revive industries that have been hammered by COVID-19. One place that might be predicting that, the stock market.

BURDEKIN: I think there's evidence that stock market participants believe that there's pent-up demand that's going to be manifested in 2021.

ROSALSKY: After news broke that COVID vaccines work, stock prices of airlines, cruise ships and other companies surged. Burdekin says there's growing evidence that pent-up demand could help the economy recover this year. Look back at 1919, he says. Pent-up demand didn't only boost baseball, it boosted the entire economy.

BURDEKIN: Based on my observations, I think you could talk about the roaring 1919.

ROSALSKY: But before you get your hopes totally up, the short boom that followed the Spanish flu ended in a largely forgotten crash in 1920. It was only after that we got the roaring '20s with the flappers and fedoras and all. As for Babe Ruth, in 1919, he broke the American League record for home runs in a single season. But then the Red Sox traded him to the Yankees. They wouldn't win another World Series until 2004. One season delivered a pandemic and the next, the curse of the Bambino. Ouch.

Greg Rosalsky, NPR News.


Since 2018, Greg Rosalsky has been a writer and reporter at NPR's Planet Money.