We are at the inflection point I predicted two months ago would arrive in May. Reopening the economy is the only sustainable option.
Just under two months ago, when the nation was under its first “15-days to flatten the curve,” I wrote that the situation could not hold, that shutting down the economy was not a sustainable long-term plan.
My estimation was that the inflection point would come sometime in May, June at the very latest. I was right. The inflection point has arrived.
I wrote in Ghost Towns USA:
You can’t just stop an economy, and expect it not to tear at the seams that hold society together.
I don’t know when the end comes. I think we’re okay for the current 15-day “social distancing” period. Maybe another 15 days after that. But not for several months.
The approaching cash stimulus to people and business assistance will buy a little time. But not indefinite. The government cannot bail out an entire economy.
At some point, we’re going to have to weigh the risk of a virus against the risk of ripping our societal bonds. I think the economic shutdown inflection point comes sometime in May, June at the latest. Beyond that, the center will not hold.
The initial 15-days was psychologically strategic. That is a time period people could tolerate, a finite end just a couple of weeks away. After all, the expressed logic was that by flattening the curve, we would buy precious days and weeks to ramp up the healthcare system to deal with a projected avalanche of Wuhan coronavirus cases. Those projections and models would proved wildly wrong on the high side.
Had it been announced initially that the shutdown of the economy would go on for months, it would have been much more difficult to sell to the public. Two weeks, yes; two months, no. When Trump suggested the possibility of easing by Easter, the media freaked out that Trump (and Republicans generally) would have the deaths of tens of thousands on their hands. It was a false choice.
So that 15 days turned into another 15 days, and now we’re entering month three.
The terms of the lockdown varied by state, but what did not vary was the evisceration of the hotel, travel, live entertainment, and restaurant industries. In the most cruel irony, a lockdown strategy designed to save the healthcare system has devastated the healthcare system by starving hospitals, medical offices, and related health industry companies of cash flow from ‘elective’ surgical procedures and other medical services. With only a small number of exceptions, mostly in the greater New York City area, hospitals sit almost empty and medical staff have been laid off.
Unemployment has skyrocketed from under 4% to almost 15%, and going higher. Over 30 million people have filed first-time unemployment claims, with at least 20 million on continuing unemployment.
The only thing preventing widescale rioting and violence in the streets is the relatively rapid and massive federal government unemployment and stimulus packages. While there certainly are cases where unemployed people have not received assistance, for the most part these programs have been successful at putting cash in people’s pockets after the government forced them out of work.
But this economic stimulus and unemployment relief cannot solve the problem from the effects of shutting the economy and the destruction of hopes and dreams. The effort to save lives by shutting down the economy is causing real health and mental health problems, and likely will kill tens of thousands of people from the depression, substance abuse, and despair caused by the economic collapse.
At the same time, a fissure has been exposed in society between the class who works with information and can work remotely from home, and people who work face-to-face with other people. The former are doing mostly fine, the latter are suffering greatly. Politicians and media live in the world of information workers and are seemingly oblivious to the suffering around them leading to vindictive, bullying, and arbitrary restrictions on movement that bear no obvious relationship to public health, and every relationship to proving who has the power.
By what healthcare logic is 6-foot social distancing among crowds at Walmart acceptable, but solo surfing in the Pacific Ocean unlawful? These sort of arbitraty powerplays by state and local government have infuriated people who otherwise are not prone to protest or acts of defiance.
People are protesting and defying the lockdown and the police and judges who enforce it. The protests, of course, are derided by the people who work with information as dangerous, but for the people who work with people, these acts of defience are acts of desperation.
In reaction to protests and defiance, there has been an easing of the lockdown in many states. While some governors insist the protests had no impact, the sequence is clear. All but a handful of particularly pernicious bullies (yes, I’m looking at you Governors Whitmer and Northam) recognized that the center was not holding.
Reopening the economy is the only option. A good case can be made that we never should have shut down so much of the economy, that a targeted strategy of protecting the vulnerable (e.g. the elderly, people with preexisting conditions, and those in nursing homes) would have saved more lives without the societal costs. But that boat has sailed.
There is so much more going on here, particularly the media effort to turn everything about the pandemic into an anti-Trump feeding frenzy. First Trump was racist and xenophobic because he was too tough too early by shutting down travel from China, as the media assured us there was not cause for concern. Then Trump was too weak, they claimed, when he didn’t impose national control, then he was too strong again when he suggested he had the power to do precisely what the media had been demanding he do. And so on and so on.
Trump’s instincts to fight the virus while opening the economy are right. Governors are coming along with that view reluctantly.
But back to my original post. We are at the inflection point.
Things fall apart. We don’t want to get to that point, but we’re not far away. Reopening the economy is the only sustainable option.
[Featured Image: Manhattan, Madison Avenue, 3-19-2020, at 5 p.m.]
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