Ego, you and Augustus have both been posting quite a bit about the economic harm of the lockdown. Our suppressed freedums, etc.
And I don't disagree with you about either. Rather, I disagree about extent and importance.
I was surprised by the lockdown. I didn't think we would get here before the "bodies in the streets" level of pandemic.
Myself, I expected a pandemic, of some sort, at some point, and this one has been pretty mild, all things considered. Hopefully, it will continue to be.
But you keep posting these silly stories, to these silly studies, and the horror stories about the harsh effects of this lockdown. And I find myself in the weird position of pointing out the flaws in the studies, and the sad version of journalism we have, when in reality, I think the situation is far worse than the headlines are saying, economically.
The studies showing "antibodies are common, so fatality rates are exaggerated" all have the same systemic problem in their data collection. The Stanford study was so bad the PIs wife sent out an email appealing to friends and family who thought they could have already contracted the virus that if they participated in the study, they would get a free FDA approved test for the antibodies, that would clear them to get back out there. Obviously, this isn't a representative sample of the public. One can't fix sampling like this. The NYC study took a sample of people who were at a grocery store and we're willing to be tested, in NYC, during all of this.
I shouldn't be so disappointed, maybe sampling is normally this bad, but peer review catches the worst of it.
These studies are being pulled off of "preprint servers". This means that they are being pulled before peer review can point out the flaws. That there are so many of these studies, with such consistent errors speaks more to educational faults than the general accuracy of the studies, I think. That editors keep publishing them just shows how little trust we should have for journalism. This isn't very complex, or difficult to understand. Yet it keeps getting repeated. Draw your own conclusions.
Right now, we are helicoptering money, so there are competing interests trying to show how damaged they are, in an effort to get the helicopter to fly over them. Like dramatic teenagers showing how they cut themselves. And like with those teens, it speaks to a problem, though often not the one they are highlighting.
I find myself pointing out the silliness of their claims, when I really do think we are in an economic mess. Yet I never get to talking about that mess. So let me try to get what I am thinking down in one post.
Prior to the virus, we had the longest period between recessions in US history. The everything bubble, it was called. Think back to the investment threads, and how conservative people were getting. We were due for a recession. Overdue.
And we dicided to kick this one off with a booming kick. Lockdown. I'm not arguing that the lockdown isn't causing economic havoc. I'm arguing that it is currently suppressing the havoc.
When we lift the lockdown, all hell is going to break loose. A lot of jobs and businesses are going to be gone. And it really doesn't much matter how much longer this lockdown goes on. Does it really matter if GDP is down 33% or 35% right after the lockdown? What if we drop significantly more after? It's ugly either way. While some will be quick to point out that the difference is pretty big to those responsible for the 34th percentile, I am more concerned with how long this recession goes on, and what the recovery looks like.
The way I see it, even among the asymptomatic, there is about 50% GGOs (ground glass opacities) in the scans. But the CFR seems to be acceptable, so long as hospitals are not overwhelmed. Less so afterwards. Managing the dance well means fewer deaths, but also far less damage to the economy. Fewer long term health consequences among the survivors.
I don't think we have to lockdown forever, merely until masks are common and cheap. Maybe not even that long, but probably until about then would be best.
So, long term, the way young people of today will remember 2020 could be: "The year we had that lockdown, schools closed, and I couldn't get a job, and Mary wouldn't go out with me because of "social distancing"..."
Or 2020 could be "the year we had a lockdown, we closed schools, then when the hospitals were overrun, we started C19 clinics in the closed schools, and everyone got real sick. I remember after I got over it, I got a job volunteering at the clinic, changing bedpans and sheets. By the time Dad got over it, the plant closed. The next year my folks lost the house, and mom never got her health back. When I was a kid, I remember my parents worried about me being a boomerang son, coming back to live with them after college. Nobody was worried that they would be sharing my basement apartment in my thirties..."
There is lots of room for this to get much worse.
Much of our economy is based on inessentials, as is being made really clear, right now. How much are people going to demand those inessentials, after this lockdown? Sure, people miss their luxuries. But will they spend like they did before the lockdown? Maybe. What about all those closed businesses, and lost jobs? Do you see anyone thinking now is the time to take that risk they have wanted to take? Expand the business? Change careers?
What about the government fixing the economy? What more could the Fed do? What more can we load up on the Federal budget? With C19, and local economic problems, who wants to buy treasuries? China? What's that going to look like?
We have a highly leveraged economy. And leverage requires confidence. How low the GDP goes, isn't depending on how long the lockdown goes on, that damage is done. It's dependent on how "the dance" goes, and what that dance does to our confidence in our futures. If we feel secure, we will spend, invest, and expand. If we don't feel secure, we won't. Look to survivors of the great depression, for what that looks like. Before the great depression, people were better prepared for hard times than we are currently. What do you think people who used to have inessential jobs are going to be doing, when people close their wallets from necessity, rather than frugality?
The lockdown ain't great, or well done, or well timed. But it's not the problem. It's just one of many, and certainly not the worst. Just the most obvious, right now.
. I talked to my friend who owns a local coffee shop chain (3 stores), a coffee roaster and a clothing/ jewelry store. She says she is just hanging on by a thread (they are doing coffee delivery). New Orleans is almost all small businesses, so it will be interesting to see how this plays out here.
