Real Damage

One of the aftershocks of shutting down the economy is the real damage it’s doing economically to people. Suicides are up.  People out of work lose hope.  The rampant uncertainty is causing real anxiety.

Wealthy people will be okay. People who are knowledge workers will mostly be okay.  That’s not the largest part of our population.  I have asked before and will ask again; Why do we have the same policy for urban areas as rural areas?

Policymakers might be self creating a Depression with crappy policy.

At the same time I have heard anecdotal stories of urban dwellers fleeing to the rural areas.  If they don’t have homes, they are using VRBO or AirBnb. In some cases, sheriffs are knocking on doors and telling them to go home.  In other cases, they are ridiculed at local stores when they go out for supplies or refused service.

Coronavirus has become an ideology for a lot of people in the US.  Politicians are using it to grab power.  Jeffrey Tucker writes,

This is not just a virus. It’s a template. People paint on it with their own philosophical presumptions, their visions, their deep perceptions about the path of history, and pour onto this template every grievance against the world, every perceived slight and every hope for how the world should be organized. Their heavens and their hells are reflected in the goings on all around them. For them, this is not a health malady; it’s a chance to affirm their worldview and impose it on others.

Yes and if you can shut the economy down until April 30, you can shut it down permanently.

Last night I listened to Professor Nick Epley from Chicago Booth talk about social distancing.  One stat that came up was that humans are hardwired to be with each other physically.  When you go without that physical connection, it is physically damaging to your health.  As damaging as a lot of other maladies that you might imagine.

I think Americans are getting the wrong impression.  Quarantining in our homes is not going to prevent anyone from getting sick.  It is going to slow the spread of the virus so we don’t overwhelm our hospital system.  Clearly, statistics show that some people are more vulnerable, and it’s going to be up to them to assume individual responsibility to stay healthy.  Just like in normal times.

I don’t mean to demean the seriousness of COVID 19.  Here are some stats on deaths of every sort of thing you might imagine.    These are worldwide numbers and we have to take the Chinese data for what it is.  I assume they fake their data.  Thereare 7.8B in the world:

Coronavirus, 21,000 deaths.

Seasonal flu, 113,000.
Malaria, 228,000.
Suicide, 249,000.
Traffic fatalities, 313, almost 314,000.
HIV/AIDS, 391,000.
Alcohol-related deaths, 581,000.
Smoking-related deaths, 1,162,000.
Cancer deaths, 1,909,000.
Deaths attributed to starvation, 2,382,000.
And death by abortion, 9,900,000.

There will be resistance to opening up the economy.  Those people are wrong just like a lot of the models that over estimate the fatalities from COVID19.

In my home state, government budgets will be pushed to the brink.  They already were technically bankrupt. For sure they are now.  The only thing that will save them is a willing municipal bond market or a government bailout.  If the latter happens, we are in deeper trouble economically in the US than I previously thought.