The Economic Consequences of Opening the Economy Too Soon

[ronburgundy]

So, when will we stop pretending that everything is going back to normal soon?

Who is this "we" that you speak of ?

When will people realize that this isn't like the seasonal flu?

I guess when there is actual evidence.

Said with the identical mentality of a flat-earth creationist who denies the moon landing, equipped with the same tin-foil-hat worldwide conspiracy theories.

 

[laughing dog]

Who is this "we" that you speak of ?



I guess when there is actual evidence.

Said with the identical mentality of a flat-earth creationist who denies the moon landing, equipped with the same tin-foil-hat worldwide conspiracy theories.

Equating covid-19 with the seasonal flu is not difficult for a YECer or a climate change denier since both are unable to comprehend facts or science.

 

[Politesse]

So, when will we stop pretending that everything is going back to normal soon? When will people realize that this isn't like the seasonal flu? The pandemic of 1918 had three peaks before it began to die down. We have no idea how long it will take to conquer this virus. We have no idea how many months or years it will take for the economy to start to expand. For now, the best we can do is continue with the social distancing and accept that this may be the new normal. We were warned about the coming of a world wide pandemic but the world didn't prepare for it.

Well, some people did, and took whatever steps they could to lessen the blow. For years. But those people - the scientists and doctors to whom thousands of lives were owed - were operating on minimal budgets, often no official approval let alone recognition for what they were doing, and are still as a class derided in the press and popular culture of nearly half the country.

 

[Emily Lake]

The people who insist that staying in lockdown for many months so that people don't get sick don't seem to have any sympathy for the people whose livelihoods and security are being jeopardized by the economic fallout of the lockdown.

Who are you describing? I definitely think we should be taking care of those whose livelihoods are threatened by the shutdown, and not just with a $1000 check. But I also think we should attempt to slow the spread of the COVID-19 infection. Ideally, both at once, and the claim that this is "too expensive" to do is absurd; it is the least expensive of many expensive options. And I'm pretty sure most on "the left" would agree with me. What moderate to left politician of any influence whatsoever is advocating not helping struggling businesses and families? Its the good ol' Party of Death that thinks it's okay to let people die for the crime of being poor.

I also want to be able to do both at once. I'm not as certain as you about the affordability though. Not so much from an "Oh my taxes!!!!" kind of a viewpoint, as from a broader economic disruption viewpoint. It's the business collapse aspect that gets hairy. I'm not talking about food production directly, that's clearly essential business. But what about other industry and manufacturing? And what about food production that ends up shut down because of COVID outbreaks? I know at least one meat processing plant has shut down due to an outbreak. I know people whose plumbing business is shutting down. Clothing manufacturers and retailers, etc. We can fill the gap short term, definitely - and we should. I'm just very uncertain how it's going to play out longer term.

 

[Emily Lake]

Depends on how you define long I guess. Research is not conclusive at this point, but there's a fair bit of suggestion that COVID-19 has a surprisingly long "shelf life".

Also, my recollection is that most influenza survives like an hour outside the human body, whereas most coronaviruses last many hours outside the human body. My recollection may be wrong But I'm under the impression that coronas last like 6 times as long as influenzas. I mean, neither is weeks or months, but that's still a pretty big difference when you're talking about contact transmission.

Nah, they are about the same.

That's good to know!

 

[Loren Pechtel]

So vaccine hope needs to be taken off the table as a reason to wait. Then reassess.

There are a few other reasons to wait and some reasons to not wait to get back to work.

But to have what may be vaporware as a reason to wait it would really suck.

We need to get the infected count down, then go with masks, distancing and banning large gatherings until we have a vaccine.

By that time will it have burned itself out like 2003 SARS?

SARS burned out because it didn't have asymptomatic carriers. If you were a threat you had a fever and that could be detected from a distance by a thermal camera. Combine that with contact tracing and it was enough. After SARS we were in China--and all arrivals were funneled through gates that were watched by cameras that would alarm if they saw a fever. (I saw one of the screens--thermal image, complete with temperature.)

Covid-19 can't be tested en-mass like that, people don't know they are infected.

 

[Elixir]

By that time will it have burned itself out like 2003 SARS?

SARS burned out because it didn't have asymptomatic carriers. If you were a threat you had a fever and that could be detected from a distance by a thermal camera. Combine that with contact tracing and it was enough. After SARS we were in China--and all arrivals were funneled through gates that were watched by cameras that would alarm if they saw a fever. (I saw one of the screens--thermal image, complete with temperature.)

Covid-19 can't be tested en-mass like that, people don't know they are infected.

The Trump virus will be with us forever. As long as everyone on the planet isn't repeatedly tested, it isn't going to go away.
Pity to think that it is probably not the worst part of Trump's legacy.

 

[Loren Pechtel]

I really don't think opening back up will have too great of an impact on the overall economy - or preventing small businesses from going bankrupt. These businesses were built on sustaining expenses based on a projected revenue stream pre-pandemic. The only way to open up and pay all employees and afford to stay in business is to somehow generate the same income. That could take years, and in the meantime everyone is placed at greater risk.

Exactly. A hard shutdown is actually better for the economy than a long period of living in fear.

Another (terrifying - for me at least) remedy besides UBI could be allowing business owners to file Business Interruption claims on their commercial policies. Most forms have a strict virus exclusion or will tie any business interruption claim to actual physical damage to the property, but state OIRs could issue a bulletin stating that it no longer applies.

aa

And then any company offering business insurance would cease to exist.

 

[Alcoholic Actuary]

I really don't think opening back up will have too great of an impact on the overall economy - or preventing small businesses from going bankrupt. These businesses were built on sustaining expenses based on a projected revenue stream pre-pandemic. The only way to open up and pay all employees and afford to stay in business is to somehow generate the same income. That could take years, and in the meantime everyone is placed at greater risk.

Exactly. A hard shutdown is actually better for the economy than a long period of living in fear.

Another (terrifying - for me at least) remedy besides UBI could be allowing business owners to file Business Interruption claims on their commercial policies. Most forms have a strict virus exclusion or will tie any business interruption claim to actual physical damage to the property, but state OIRs could issue a bulletin stating that it no longer applies.

aa

And then any company offering business insurance would cease to exist.

The smaller ones would for sure. Depending on the number of states and number of claims - the big guys might be able to weather it. The real issue would be the dramatic increase in commercial policy rates as this 'previously excluded peril' starts to work its way into the pricing.

Fun fact: There is a similar cause of loss in a standard HO peril called "Loss of Use" which basically reimbursed a homeowner or renter for expenses like hotel, meals, and other incidentals whenever their displacement was caused by damage to the property. In all 50 states it was mandated that the coverage be tied to actual property damage and excluded things like riot, war, civil authority, and government action. Then a few years back the state of California's insurance regulator decided 'Mandatory Evacuation' through any civil authority was reimbursable on a standard HO or Renters policy through the Loss of Use coverage (no deductible). It was challenged in court, but became law here. All of the evacuees in the fires in 2017, 2018, and 2019 were fully reimbursed for displacement even if the fire wasn't anywhere near their home and did no damage. To wit, no insurer went out of business because of the bulletin change but rates in CA did increase.

So maybe anecdotal, but insurers, regulators, and legislators are taking a hard look at business interruption exposure and exclusions right now.

aa

 

[SimpleDon]

For those who apparently can't comprehend any argument not expressed in the form of a cartoon:

View attachment 27220

The real reason behind the stay at home orders has been to flatten the curve, to prevent the hospitals from running out of supplies, ventilators, and beds. However, it's not going to stop the disease. I hate to say it, but we are all going to get it. Even when we come up with a vaccine, you won't be 100% protected. This nasty bug is really the souped-up flu. It changes and evolves. The best thing that you can do is to boost up your immune system: exercise, sleep well, eat well, veggies, fruit, protein, exercise, don't stress, don't smoke, don't drink to extreme, and exercise! Overweight people are being ravaged by COVID.

We have to face the fact that by flattening the curve we have also extended its duration. I don't think that anyone has told Trump this fact for fear that he would abandon the quartine all together to restore his now threadbare chances of being re-elected by restoring the economy.

You are correct that without a vaccine the disease has to run its course. But not everyone has to get it. CVID apparently has an R(0) of 3, which means that it's probably sufficient if 70% of the population is immune to the disease for the disease to stop being transmitted. You can then accept that we are doing all of this social distancing and self-quarantining to make sure that the most vulnerable among us are in the 30% who don't have to get the disease.

This is not the libertarian "herd immunity" argument. They want everybody to get the disease to reach the "herd immunity" and are willing to accept the large number of deaths that will occur among our most vulnerable. Libertarians are an arrogant lot.

I understand that no true® Libertarian is promoting this, in the vein of never claiming any concrete position as a libertarian position without ever stating what a libertarian believes in, as in "I have told that so many times in the past you should remember what it is." Libertarians are an arrogant lot.

There are two mealy-mouthed words in the statement above, "apparently" and "probably." So very much is not known about this disease that the public health people are hedging their bets.

 

[Elixir]

We have to face the fact that by flattening the curve we have also extended its duration.

We should also refrain from making any claims about immunity until we know a few things about it.
Like:
* Is it real?
* If it's real how long does it last?
* If it wears off, is a re-infection more, or less severe?

I don't think that anyone has told Trump this fact for fear that he would abandon the quarantine all together to restore his now threadbare chances of being re-elected by restoring the economy.

Perhaps someone whispered in his ear that his most ardent Nazi followers are the ones defying quarantine guidelines, and thereby making themselves the most likely group to show up dead by November.

 

[Cheerful Charlie]

Here in Houston, it is now illegal to leave home without a face mask. Cops may cite people who don't have one. Lots of Tea Party Libertarian morons calling up our local Faux radio station to rant and rave about their precious freedom to run around without a mask, and threatening to shoot city officials. A stupidity feeding frenzy.

 

[bilby]

Here in Houston, it is now illegal to leave home without a face mask. Cops may cite people who don't have one. Lots of Tea Party Libertarian morons calling up our local Faux radio station to rant and rave about their precious freedom to run around without a mask, and threatening to shoot city officials. A stupidity feeding frenzy.

Of course, if they are going to flaunt their lawlessness by refusing to wear masks, they risk identification and later arrest. So they will need to wear something over their faces to avoid being identified...

 

[TSwizzle]

Here in Houston, it is now illegal to leave home without a face mask. Cops may cite people who don't have one. Lots of Tea Party Libertarian morons calling up our local Faux radio station to rant and rave about their precious freedom to run around without a mask, and threatening to shoot city officials. A stupidity feeding frenzy.

Considering most face masks provide next to no protection, it is a pretty dumb law.

 

[Jimmy Higgins]

Perhaps someone whispered in his ear that his most ardent Nazi followers are the ones defying quarantine guidelines, and thereby making themselves the most likely group to show up dead by November.

Except they are more likely to spread the disease than to die from it.

 

[ronburgundy]

Today is on track for over 2500 deaths, making this the deadliest 3 day stretch so far (7600), and about 5-10 times more deaths than the 3 deadliest days of flu deaths in ever. And that's with quarantines. So, yeah, seems like a great time for all the raving idiots to run around without regard for others and taking no safety precautions since they think the whole things a hoax.

 

[repoman]

Today is on track for over 2500 deaths, making this the deadliest 3 day stretch so far (7600), and about 5-10 times more deaths than the 3 deadliest days of flu deaths in ever. And that's with quarantines. So, yeah, seems like a great time for all the raving idiots to run around without regard for others and taking no safety precautions since they think the whole things a hoax.

Compared to 1958 flu adjusted to population?