No society can safeguard public health for long at the cost of its economic health.
The Editorial Board, WSJ March 19, 2020
Pedestrians walk through the Oculus transportation hub in New York, March 17. Photo: Demetrius Freeman/Bloomberg News
Financial markets paused their slide Thursday, but no one should think this rolling economic calamity is over. If this government-ordered shutdown continues for much more than another week or two, the human cost of job losses and bankruptcies will exceed what most Americans imagine. This won’t be popular to read in some quarters, but federal and state officials need to start adjusting their anti-virus strategy now to avoid an economic recession that will dwarf the harm from 2008-2009.
The vast social-distancing project of the last 10 days or so has been necessary and has done much good. Warnings about large gatherings of more than 10 people and limiting access to nursing homes will save lives. The public has received a crucial education in hygiene and disease prevention, and even young people may get the message. With any luck, this behavior change will reduce the coronavirus spread enough that our hospitals won’t be overwhelmed with patients. Anthony Fauci, Scott Gottlieb and other disease experts are buying crucial time for government and private industry to marshal resources against the virus.
***
Yet the costs of this national shutdown are growing by the hour, and we don’t mean federal spending. We mean a tsunami of economic destruction that will cause tens of millions to lose their jobs as commerce and production simply cease. Many large companies can withstand a few weeks without revenue but that isn’t true of millions of small and mid-sized firms.
Even cash-rich businesses operate on a thin margin and can bleed through reserves in a month. First they will lay off employees and then out of necessity they will shut down. Another month like this week and the layoffs will be measured in millions of people.
The deadweight loss in production will be profound and take years to rebuild. In a normal recession the U.S. loses about 5% of national output over the course of a year or so. In this case we may lose that much, or twice as much, in a month.
Our friend Ed Hyman, the Wall Street economist, on Thursday adjusted his estimate for the second quarter to an annual rate loss in GDP of minus-20%. Treasury Secretary Steven Mnuchin’s assertion on Fox Business Thursday that the economy will power through all this is happy talk if this continues for much longer.
If GDP seems abstract, consider the human cost. Think about the entrepreneur who has invested his life in his Memphis ribs joint only to see his customers vanish in a week. Or the retail chain of 30 stores that employs hundreds but sees no sales and must shut its doors.
Or the recent graduate with $20,000 in student-loan debt—taken on with the encouragement of politicians—who finds herself laid off from her first job. Perhaps she can return home and live with her parents, but what if they’re laid off too? How do you measure the human cost of these crushed dreams, lives upended, or mental-health damage that result from the orders of federal and state governments?
Some in the media who don’t understand American business say that China managed a comparable shock to its economy and is now beginning to emerge on the other side. Why can’t the U.S. do it too? This ignores that the Chinese state owns an enormous stake in that economy and chose to absorb the losses. In the U.S. those losses will be borne by private owners and workers who rely on a functioning private economy. They have no state balance sheet to fall back on.
The politicians in Washington are telling Americans, as they always do, that they are riding to the rescue by writing checks to individuals and offering loans to business. But there is no amount of money that can make up for losses of the magnitude we are facing if this extends for several more weeks. After the first $1 trillion this month, will we have to spend another $1 trillion in April, and another in June?
By the time Treasury’s small-business lending program runs through the bureaucratic hoops—complete with ordering owners that they can’t lay off anyone as a price for getting the loan—millions of businesses will be bankrupt and tens of millions will be jobless.
***
Perhaps we will be lucky, and the human and capitalist genius for innovation will produce a vaccine faster than expected—or at least treatments that reduce Covid-19 symptoms. But barring that, our leaders and our society will very soon need to shift their virus-fighting strategy to something that is sustainable.
Dr. Fauci has explained this severe lockdown policy as lasting 14 days in its initial term. The national guidance would then be reconsidered depending on the spread of the disease. That should be the moment, if not sooner, to offer new guidance on what might be called phase two of the coronavirus pandemic campaign.
That will surely include strict measures to isolate and protect the most vulnerable—our elderly and those with underlying medical problems. This should not become a debate over how many lives to sacrifice against how many lost jobs we can tolerate. Substantial social distancing and other measures will have to continue for some time in some form, depending on how our knowledge of the virus and its effects evolves.
But no society can safeguard public health for long at the cost of its overall economic health. Even America’s resources to fight a viral plague aren’t limitless—and they will become more limited by the day as individuals lose jobs, businesses close, and American prosperity gives way to poverty. America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lockdown.
I don’t have a wife, children or grandchildren. There are more people in my position than most people with happy families realize.
Even the Duke of Windsor, of all people, pointed out that that was the case with him in his famous abdication speech. Of course, he got more social invitations than I do.
As the British say, “I’m all right, Jack: screw you all!”
I am now in Central Italy , halfway between Bologna and Florence , in the Apennines mountain range. The situation is very calm, I cross maybe 4 persons when I go shopping for food every three days , I wear a biker mask with anti-pollution filter , wash hands often, and that’s it . Fortunately we have a garden, a large open field, a piece of forest where we can walk nearby . The real problems are in the cities where people are under house arrest , and it will get worse when the weather turns hot . Now the statistics show the virus is growing deadlier as time goes by . From a 2% fatalities in February we are are now near at 12% . Lombardy region ( Milano – Brescia – Bergamo provinces ) is totally shut down , Lombardy is 50% of the industrial output of Italy . Without vaccine in short time , the whole country is toasted as an economic reality .Prevention is the only practicable path : all senior citizens above 65 must stay at home . All younger citizens must wear a filtering mask but they are not available at all . This is the real scandal : how the 7th industrial power is unable to produce quickly millions of surgical mask is beyond imagination .
@ adamdalgliesh:
Adam, you said,
“You have to distrust authority in order to lead a happy life and avoid excessive worry.”
No you don’t. My wife and I lead a happy life, largely oblivious to what the authorities say. Here’s another scripture:
Prov.21
[1] The king’s heart is in the hand of the LORD, as the rivers of water: he turneth it whithersoever he will.
We try to get a good walk in every day, to stay healthy; and I must say, my wife is a great cook and not hard to look at. I also tell her as much, which is good for my health. We also read the Bible together every day — it’s the one book we will never finish nor fully understand, and also the best, fairest and most accurate “news commentary”. Crap happens all the time; so we pray about it every day, starting with singing psalms and thanking God profusely for his many, many, many blessings. This is good for keeping up our singing voices, as well as our spirits. In the evening, we like to WeChat with the grandchildren. That’s how we stay happy. We pray for President Trump, President Xi and all our leaders; also Israel, America, our family, our neighbors and friends. I even pray for Laura and Edgar, and Ted. If I did that every time I post here, life would be better for all; ; but that doesn’t always happen.
Trust my leaders? God put humans in charge of the universe, starting with Adam; and when I say “humans”, I mean glorified worms, which is what we are. HE chose to do it; in fact, He planned to do it before He even created the universe. He made the universe to contain, sustain and entertain us; but we were His focus: He wanted to get to know us, and He wanted us to get to know Him. Worms! I’m glad He did it. President Trump is one of those worms. President Xi is one of those worms. Would you trust a worm to rule your country? God did, so I can too: I trust them to be worms, and let God take care of the rest.
Reported infections in Italy rose to 53,578 from 47,021, the Civil Protection Agency said. There were 2,857 people in intensive care, up from 2,655.
Late on Friday the EU Commission moved to formalise a deal reached by EU finance ministers on March 5 to suspend EU budget rules that limit borrowing, giving hardest-hit Italy and other governments a free hand to fight the disease.
Italy’s failure to reduce its huge debt of 134% of gross domestic product would normally have drawn a rebuke from the EU executive, but von der Leyen said there were now other priorities.
From Reuters via the Jerusalem Post.
No what’s really going on begins to come into perspective. Reminds me of the movie “the counterfeiters of Rome,” in which the crooks, released from jail, dress up in Santa suits during Christmas season, ring handbells, and solicit money for “a charity that helps the children of convicts.”
“On Thursday, Italy’s coronavirus death toll of 3,405 had made it the country with the highest recorded amount of coronavirus deaths in the world, surpassing China’s officially reported death toll, as the Chinese communist government has claimed a total of 3,245 deaths from the virus that originated in Wuhan, China.
Now, as of Saturday, Italy is nearing 5,000 coronavirus deaths nationwide.On Friday, the Italian government decided to call in its military to help enforce the lockdown in Italy’s worst-infected northern region of Lombardy, as people have been ignoring the government’s quarantine rules as the nation’s death toll continues to surge.” – “Coronavirus: Italy Sees Worst Day Yet, 793 Dead in 24 Hours” https://www.breitbart.com/europe/2020/03/21/coronavirus-italy-sees-worst-day-yet-793-dead-in-24-hours/?fbclid=IwAR1oMml57laXxdtNMa1IJotE9TyMFQ8q2JRoWru6hTHve7rC9XVeRNsAHLA
@ adamdalgliesh:
“No one panicked in 2017-2018. Yet in 2020 we shut down America because of an epidemic that had killed less than fifty people. The CDC estimated 45 million people in 2017-2018 were stricken with influenza in the U.S. Currently, 200,0000 people are victims of COVID-19 worldwide.”
Because in 2017-18 it didn’t serve the politicians’ purposes to stream the floodlights at the flu epidemic, and in 2020 it did.
We don’t know what these purposes are, and they certainly will not tell us but I suspect if they did, it would make us very unhappy.
The US politicians are the cunningest in the world (if you don’t count the British) and they are very successful in all their endeavors, and their constituents are some of the most naive and brainwashed.
What makes you think that the powers that be give a damn about “the people”? Other than being sure to properly control probably the most heavily armed population in the world.
@ adamdalgliesh:
Please! The sky is not going to fall.
Michael, I am glad that you and your family, and also Buzz, are well. Thank you for praying for me. I am praying for you, too.
The quotation from Isiah is also greatly appreciated. We need to read the scriptures during hard times.
There has been a rapid increase in reported cases. It always takes a while for reports of illnesses by physicians, hospitals and nursing homes scattered over a wide area, to reach the disease-control centers that do the counting. So these statistics do not mean there has been an exponential increase in the number of cases in “real time.”–only a “sudden” increase in cases reported by the disease-control authorities. In any case, if you read the fine print, the published counts are often just “estimates” not of actual confirmed cases.
The number of cases of infectious disease always increases “exponentially” in flu season, then decreases exponentially beginning in late March or early April. That is exactly what is happening in China in relation to the “novel” coronavirus (four other closely related coronaviruses have long been known to immunologists. No one has ever bothered to check how many people who contracted them became seriously ill or died).
You have to do a little critical thinking to figure out what is going on.
You have to distrust authority in order to lead a happy life and avoid excessive worry. 99% of what they tell us in s____t.
Every Year an Epidemic: Say Goodbye to Normal Winters
We all remember the horrible fall and winter of 2017-2018, when a terrible epidemic ravaged America. Schools closed, restaurants shut down, and sporting events were canceled to control the monster, but it still killed 90,000 men and women.
You don’t remember the closings and cancellations because they never happened. But the epidemic did occur. According to CDC statistics, during the 2017-2018 flu season influenza killed 46,000 to 95,000 people. (The CDC estimates deaths in a range because a definitive diagnosis of the cause of death via respiratory failure is often impossible.)
Ninety thousand deaths is the high end of the estimate, but it is still a quite possible death toll. CDC suggests that the most likely death toll was 61,000. An average year statistic for influenza deaths in the U.S. over the past decade is about 40,000.
No one panicked in 2017-2018. Yet in 2020 we shut down America because of an epidemic that had killed less than fifty people. The CDC estimated 45 million people in 2017-2018 were stricken with influenza in the U.S. Currently, 200,0000 people are victims of COVID-19 worldwide.”
From an article by Justin Jeffries in American Thinker.
“Reducing Covid-19 Fever
In the end, this flu season will be of greater interest to social psychologists and social and political historians than to virologists and epidemiologists. Among an innumerate and paranoid population obsessed with its health, and which believes that the role of the government is to solve all problems, it was easy for the media to trigger a panic that would take down the markets and capsize the economy. No public official or CEO can risk being viewed as irresponsible, and the decisions they’ve felt obliged to take have had devastating economic consequences for the majority of Americans.
There are two ways of looking at the case fatality rate of Covid-19.[i] Originally, some high rates were reported: 3.2% (this figure, from WHO, was repeated by Bill Gates in an alarmist New England Journal of Medicine editorial), 2%, and 1.4%. By the end of February, as the virus moved out Hubei province, estimates of the mortality rate were much lower. As Anthony Fauci, et. al. reported in the NEJM on the 28th, “the case fatality rate may be considerably less than 1%.” The authors go on to conclude that “this suggests that the overall clinical consequences of Covid-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to SARS or MERS, which have had case fatality rates of 9 to 10% and 36%, respectively.” ”
From the March 21 edition of American Thinker, by someone named Jeff Lipkes. The American Thinker seems to be the only consistent voice of sanity on this subject in the U.S.
@ Bear Klein:
Bear,
I agree that our leaders are doing the best they can; and I imagine things will clear up in a few months. We are all (the whole world) under a curse, though, so this will certainly not be our last calamity. My country is living like Sodom and Gomorrah. If we don’t think God will punish us the way He did them, we don’t know the God of the Bible (and for the most part, we don’t and we don’t).
Interesting days ahead. We are enjoying our quarantine — great family time. God bless and keep you and yours 🙂
@ Michael S:
Oops. 48,000 total CASES, six days from now. Sorry 🙁
Trump in his news conference was to the point that the whole idea is to save as many people’s lives as possible. That is what Israel is trying to do also and other countries as well. Some are better it at than others. Israel’s efforts so far have been effective.
I applaud the Israeli leadership and Trump’s team for giving a supreme effort in this great effort at great economic sacrifice to try and put human lives first and foremost.
Some may not understand or agree with the effort and that is okay. There are always people with different points of views, and/or motivations. The intellectual capacity to grasp a subject so complex is not within the grasp of some.
Certainly at a later date in history we will be able to judge the efforts of various leaders.
@ adamdalgliesh:
Hi, Adam.
My daughter and grandchildren have been living in China for the past 20 years. They are still restricting contact with people, along with the whole country. The children are all doing school online, and my daughter is teaching online. My son-in-law has been working on getting the business (importing) moving again.
Buzz is in a different part of China, where he has been for, I believe, some 15 years. He also went through quarantine, and reports things starting to get back to normal.
These have been interesting times; but for the Chinese, they are not all that unusual. My daughter nearly died, in the run-up to the SARS epidemic several years ago. My son-in-law was born during the Cultural Revolution. Business has had many ups and downs since 2014/15; and they lost everything at one point. They moved his parents out of Hong Kong because of the increasingly violent demonstrations. We are talking about a very, very resilient people.
Those latest figures you quoted at 6:53 PM have gone up to 24,116 total cases (up 4,733 in the past 24 hours) and 288 total deaths (up 32). The world doubling time for deaths is about 6 days. I don’t know what the rate is in the US, but that means about 48,000 total deaths six days from now, and 96,000 six days after that. New Caledonia has two more cases, Papua New Guinea has one; the Vatican has one; Greenland has 2, the Central African Republic has 3, etc. It has literally spread everywhere, in the space of four months. China reports 41 new cases and seven new deaths, and this jibes with what our China connections report: Outside of Wuhan itself, things are returning to normal.
Those figures are from
https://www.worldometers.info/coronavirus/
It is reassuring, that the disease has not spread much in what one has noted is the “malaria belt”. If we have a hellish, mosquito-biting summer, that might clear things up a bit. Then, hopefully, we will have time to make the vaccine.
You mentioned the economy. Some DJIA figures:
17. COVID-19 Outbreak
• DJIA decline: -35% from 2/12/2020 to 3/20/2020
14. Lehman Brothers Collapse and the Great Financial Crisis
• DJIA decline: -53.7% from 10/9/2007 to 3/9/2009
9. 1973-74 Stock Market Crash
• DJIA decline: -45.1% from 1/11/1973 to 12/6/1974
4. Recession of 1937-38
• DJIA decline: -42.6% from 9/4/1937 to 3/31/1938
3. Wall Street Crash of 1929
• DJIA decline: -46.6% from 9/16/1929 to 11/13/1929
2. Panic of 1907
• DJIA decline: -45% from 1/07/1907 to 11/15/1907
This is big league stuff, but we’ve seen worse.
God bless and keep you and yours 🙂
Isaiah 26
[3] Thou wilt keep him in perfect peace, whose mind is stayed on thee: because he trusteth in thee.
Three million Americans will file unemployment claims next week, marking the highest level of unemployment ever seen in US history according to Bank of America Merrill Lynch. Bars, restaurants, stores and casinos lie boarded up across the US as the nation’s once heaving cities have turned into ghost towns after state-wide mandates have ordered one in five Americans to stay at home. The situation is set to worsen for the nation’s workers as President Trump warned that he may throw the entire nation into lockdown for two weeks, shutting all businesses across the 52 states.
“Three million Americans will file unemployment claims next week, marking the highest level of unemployment ever seen in US history according to Bank of America Merrill Lynch. Bars, restaurants, stores and casinos lie boarded up across the US as the nation’s once heaving cities have turned into ghost towns after state-wide mandates have ordered one in five Americans to stay at home. The situation is set to worsen for the nation’s workers as President Trump warned that he may throw the entire nation into lockdown for two weeks, shutting all businesses across the 52 states.” From today’s Daily Mail.
“There have been more than 19,000 confirmed cases in the United States and 260 people have died.”
According to today’s CBS news.
As usual, no word on how many of these victims were also infected with
influenza, bronchitis or pseomia, how many deaths were attributed to these three diseases, how many people, including those who died, were tested for any of these three ailments, how many deaths all told in the u.S. so far this year.
Taking these figures at face value, .013 people people infected with it in the U.S die of COVID-19.
Flu Season: Up to 19,000 People Have Died; Vaccine Protecting About Half Who Get It
By Ron BrackettFebruary 17 2019 04:34 PM ESTweather.com
A nurse prepares a flu shot from a vaccine vial at the Salvation Army in Atlanta on Wednesday, February 7, 2019. Preliminary figures suggest this winter’s vaccine is 47 percent effective overall in preventing flu illness severe enough to send a patient to the doctor’s office – an improvement from the previous year. (AP Photo/David Goldman)
A nurse prepares a flu shot from a vaccine vial at the Salvation Army in Atlanta on Wednesday, Feb. 7, 2019. Preliminary figures suggest this winter’s vaccine is 47 percent effective overall in preventing flu illness severe enough to send a patient to the doctor’s office – an improvement from the previous year.
(AP Photo/David Goldman)
At a Glance
CDC figures show this season’s flu vaccine is 47 percent effective.
The predominant strain of flu virus this year is H1N1, which is less severe than last year’s main strain.
A CDC official says the number of deaths is “a little bit surprising.”
“But the carnage inherent in this bear market is understandably unnerving. The Dow Jones Industrial Average DJIA, -4.54% dropped more than 17% in the past week for its worst weekly performance since the 2008 financial crisis, while the S&P 500 SPX, -4.33% marked the same milestone with a 15% drop.
The Dow and S&P 500, which both traded at all-time highs in February, dropped from records to a bear market — a pullback of 20% from a recent peak — at the fastest pace on record, and have kept falling. With Friday’s close, the Dow is down 35.1% from its Feb. 12 record finish, while the S&P 500 is off 31.9% from its Feb. 19 record.
And the drop has been accompanied by unprecedented volatility. The S&P 500 saw a stretch of seven consecutive trading days in which the index moved up or down 4%, the longest on record. The Cboe Volatility Index VIX, -8.27%, a measure of expected volatility for the S&P 500 over the next 30 days, closed earlier in the week at an all-time high.
The stock-market volatility is part of a broader market breakdown that saw investors world-wide liquidating assets across the board in a dash for cash that saw even traditional haven assets fall and sent the dollar soaring, creating a feedback loop.
The Federal Reserve and other major central banks responded with a range of stimulus measures and other efforts aimed at shoring up liquidity and ensuring markets could function. Governments weighed a range of fiscal stimulus measures on previously unthinkable scales.” From March 21 Marketwatch.com
Michael are in China right now? Is Buzz@ <a href="#comment-63356000217116" title="Go to comment of this author" Michael, what is going on in China right now? Are you in China? Is Buzz? What have you heard from him?
As for my calculations, after all, someone should do them. The disease control authorities in hina, the U.S. and everywhere else should have done them before pushing the panic button. But apparently they did not.
@ adamdalgliesh:
Adam, I see you’re busy calculating, so I’m sorry for interrupting you. If you want to know what’s going on in China, you might want to ask Buzz or me — just a suggestion.
If 1.4% of of people who tested positive for COVID-19 died, then that comes to 679 people in a city of 12 million over a three month period. In other words, about .000057 per cent of the Wuhan population mighthave died of COVID-19 during this period. I say “might,” because it is probable that nearly all of those who died were also suffering from other illnesses, such as pneumonia, when they died. You shut down a city of 12 million because of 679 deaths there over two or three months? Insane. And we are imitating the Chines’s insanity.
How many people will die of the SHUTDOWN20 virus. Very likely tens of millions worldwide, and over million in the United States over the next ten years. And probably over six million Israeli Jews, will die because the collapse of Israel’s the healthcare system, the collapse of the economy, the collapse of infrastructure, and the collapse of the IDF, leading to Israel’s conquest by the Arabs and Iran. Of course, the rich will find their way to the United States, Canada and Western Europe before the complete collapse.
“The coronavirus’ death rate may be lower than the World Health Organization (WHO) estimated, research suggests.
With the virus virtually unheard of at the start of the year, experts have been racing to uncover how dangerous it really is and the patients most likely to succumb to complications.
At the beginning of March, the WHO announced the virus had killed 3.4% of patients worldwide, which other experts called a likely “overestimate”.
To learn more, scientists from The University of Hong Kong looked at the 48,557 confirmed cases that had arisen as of 29 February in the Chinese city Wuhan, where the outbreak emerged.
They found the average death rate among patients under 30 was 0.3%, rising to 0.5% for those between 30 and 59, and 2.6% for people aged 60 or above.
Overall, they calculated the fatality rate to be 1.4%.
Although “promising”, experts have stressed estimating death rates in the midst of an outbreak is “fraught with difficulties”.” (Yahoo News).
Since the novel coronavirus is a close relative, or so to speak “offspring” of four varieties of common cold, it may have well have infected over a million people in Wuhan, a city of twelve million. or well over twenty times the number of “confirmed” cases. That in turn would mean a death rate of about .07 of the total number of infections. A similar death rate is quite likely among sufferers from other common cold viruses, including the four previously known coronaviruses, which cause about 25% of all common colds. The common cold can be a dangerous illness for elderly people with pre-existing serious illnesses.
Interesting that none of the supposed medical experts have even considered, or much the less investigated, this very realistic possibility before panicking, and inducing worldwide mass panic.
It is truly depressing for a 71-year-old man that most people in the educated elite classes throughout the world, especially in my own country, have become stark raving mad. Trumpophobia was and is one symptom of the mass paranoia gripping the world’s elites. Coronaphobia is the latest and perhaps worst symptom of this mass paranoia. I have given up hope for the survival of humanity.
“he whom the gods destroy they first make insane” (Euripides).
“Investors are worried that the coronavirus will plunge the U.S. and other major economies into deep recessions. Steps to contain the spread of the outbreak are causing massive disruptions and layoffs. Optimism that emergency actions by central banks and governments to ease the economic damage has waned as investors wait for the Trump administration to deliver on legislation that will pump billions of dollars into hurting households and industries.
“The coronavirus is shutting the economy down,” said Lindsey Bell, chief investment strategist at Ally Invest. At the same time, oil prices are being pulled lower by increased supplies at a time when demand is declining.
“This is kind of a double-whammy for the economy,” she said.
Friday’s selling accelerated after New York Gov. Andrew Cuomo ordered that most workers stay home. The declaration came a day after California announced similar measures. The move leaves restaurants, retailers and other businesses dependent on consumer traffic in economic limbo as they’re forced to close doors and furlough or lay off workers.” (Yahoo).
“The vast social-distancing project of the last 10 days or so has been necessary and has done much good. Warnings about large gatherings of more than 10 people and limiting access to nursing homes will save lives.”
Saving Lives is a good thing! The article is also correct you can not shut down the economy for too long with creating an economic catastrophe.