Early Lockdown Lifting Will Prolong The Greater Depression
DISPATCHES FROM MOON OF ALABAMA, BY "B"
This article is part of an ongoing series of dispatches from Moon of Alabama
[dropcap]D[/dropcap]espite the so called lockdown the number of new cases of Covid-19 in the U.S. is barely sinking. It is only because the heavy outbreak in New York is now in decline that the number sinks at all. In most other states the numbers are just stable or still rising. But the White House and many state governors are lifting the restrictions and want everybody to go back to a normal life. This won't work.
Source 91-DIVOC
Two weeks after the states declare that everything can be reopened the new cases number is likely to again increase.
But people need to believe that it is secure to go back to normal life before they do so. They will not consume more than necessary unless they feel that it is safe to do so. How can they develop that trust while the numbers and headlines continue to show bad news?
The fear is reasonable at least for everyone over the age of 50 and for the many obese U.S. citizens. Covid-19 spreads easily, there is no medication against it and the infection fatality rate in the U.S. is estimated to be 1.3%, much higher than for the flu, even without accounting for New York County.
A good thing is that fear is the only personality-based variable that predicts virus-mitigating behavior. People who fear to get sick will continue their social-distancing and hopefully wear their masks.
Some 80% of GDP and employment in the U.S. is generated by services. The economy depends on people feeling safe. Who will go to a restaurant, a theater or on a plane as long as the trust that it is safe to do so is not there? The people will learn about the risks in those places and avoid them. That behavior will prolong the crisis.
A better strategy would have been to increase the lockdown measures until the number of new cases goes sharply down. People would then have regained some trust. Lifting the lockdown only when the people feel it is secure to do so would have been much better for the long term economy then the current rush.
The U.S. now has an enormous unemployment problem. To solve that problem as fast as possible the people need security and peace of mind. Only then can the economy spring back.
It is likely that the real unemployment numbers are some 25% higher than the official numbers. Economist Nouriel Roubini is right in calling this the 'Greater Depression'. It is now already larger than the one 90 years ago.
As the U.S. does not have a reliable social safety net the shock its economy will go through will be much longer lasting than the one in European economies. A lot of jobs will take several years to come back if they do so at all. Many people will lose their housing. General education and health will further decline. Crime will rise and more nutters will go crazy.
One current Amazon bestseller is by an anti-vaxxer who claims this is a 'plandemic', that Anthony Fauci funded the Wuhan lab, and that covering your mouth 'activates' the virus. The author is Judy Mikovits, a disgraced 'scientist' who has been caught faking her research and papers. She was fired from her institution when she was caught stealing its proprietary data.
That such a book sells at all shows the deep mistrust the people have in their government.
The U.S. needs a prolonged unemployment program to keep its people out of misery. It needs an enormous infrastructure program to bring the many millions of people back into work and to reignite the economy.
But neither the Republicans nor the Democrats are calling for those measures. Instead they are busy shuffling trillions of dollars to those who already have too much money.
Posted by b on May 8, 2020 at 18:08 UTC | Permalink
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It's not the coronavirus that's killing Americans, it's Western capitalism! Posted by: Barovsky | May 8 2020 18:28 utc | 2 Excellent! The US, and probably the entire world, needs massive infrastructure works. Such programs are cheaper during depressions. We need more: We need fewer: Posted by: James Speaks | May 8 2020 18:30 utc | 3 It would work if we had a competent federal govt that had standard guidelines that 1. we trusted, and 2. were close to optimal, but no and no on both counts. Trump is such a narcissist that two years from now he will be bragging that he made Social Security great again (because a good portion of the recipients will be dead). Regarding the death rate, it's bad, very bad. You only get the really low percent if you measure total number of people infected / death, but if you look at the total number of people who develop symptoms by death its well over 5%. If you measure death rate by total number of people recovered / death it might end up being closer to 10% but those numbers are not in yet. Posted by: Christian J Chuba | May 8 2020 18:36 utc | 4 Already several US states, where caring about human life has always been something of a joke- a quaint memory from The Enlightenment or the times before theologians had wrestled christianity into a practical form- what passed for 'lockdowns' have already been lifted. It won't be long before the whole country is back to herding the poor to work and piling up mountains of wealth for the oligarchy- and hundreds of thousands of deaths are ignored, explained away or accepted as a proper tribute to the great god of Finance Capital. All of which is rather worrying up here in Canada, because it means that 'the longest undefended border in the world' is going to be open to the passage, along with free trade and tourism, of the coronavirus. Making a mockery of Canadian efforts, and sacrifices, to get the epidemic under control. Posted by: bevin | May 8 2020 18:42 utc | 6 Welcome to America's Shock Doctrine event. Some sort of economic reset/restructure will either fundamentally change the way the world works or it will be made to look like that happened. IMO, the virus results to the population pale in comparison to the economic/social contract evolution aspects. Early lockdown lifting is a feature, not a bug. Posted by: psychohistorian | May 8 2020 18:50 utc | 7 Here in OC, CA, there is an air of try-hard optimistic frivolity as lock-downs are lifted. There is a sense that "opening up" seems forced, a charade to act as if things are "normal." You can now go to the store and sit in your car while your little consumerist urges are sated while an employee brings you your package. We're opening up! When did Americans become such children? Posted by: Garbage in... | May 8 2020 18:50 utc | 8 I understand that dissenting views are not tolerated here - but I'll try providing one anyway and see how long it takes to get deleted. We now know far more about Covid19 – the Lockdown should end https://off-guardian.org/2020/05/08/we-now-know-far-more-about-covid19-the-lockdown-should-end/ Posted by: DM | May 8 2020 18:52 utc | 9 It's hard to know what the numbers are saying when you don't know the percentage or numbers of people being tested to get the confirmed cases. Like most statistics, the person putting together the numbers can bend them any way they want. Posted by: Tobi | May 8 2020 19:08 utc | 10 Literally every human concern - every social, psychological, spiritual concern; every political, constitutional, rule-of-law concern; every concern of human and civil rights, civil liberties, human freedom; every concern of children's healthy development; and literally every health concern except for this flu - have been eradicated from the propaganda and evidently from the minds of the police-statists. Their minds have been scoured clean of literally every thought except for a threadbare fanatical obsession with quantity of life (an obsession they pursue in defiance of all the evidence; their lockdowns don't work even according to their own terms, let alone according to the terms of ecology, biodiversity, sound epidemiology; even their arch-ideologue and high priest Neil Ferguson was caught admitting that he regards his entire agenda as nothing but a Big Lie), and a grossly reductive notion of "opening the economy", which they deploy in order to slander the rapidly increasing number of people who are questioning, criticizing, and rejecting the lockdowns for a vast diversity of reasons I only briefly surveyed above. The fact that the police-statists are utterly unwilling to meet any of these concerns except for the economic, and are willing to meet that one only in the most reductive, fraudulent, slanderous way which expresses total contempt for the vast numbers of people being economically destroyed beyond any hope of recovery (which is a major purpose and goal of the terror campaign and lockdowns), says it all about the total bankruptcy of their position. As in every other case, police-state authoritarianism has nothing but brute thug force, including in its ideas. |
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"b" is Moon of Alabama's founding (and chief) editor. This site's purpose is to discuss politics, economics, philosophy and blogger Billmon's Whiskey Bar writings. Moon Of Alabama was opened as an independent, open forum for members of the Whiskey Bar community. Bernhard )"b") started and still runs the site. Once in a while you will also find posts and art from regular commentators. You can reach the current administrator of this site by emailing Bernhard at MoonofA@aol.com.
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Yup, b. You nailed it. Opening up before we get a 'handle' on this disease will be a complete disaster.
Posted by: blues | May 8 2020 18:21 utc | 1