Social Distancing and the Economy

If you ever have worked in disaster services, you become aware of the economic effect of any disaster. Most are well below where most people will notice. A house fire, a car accident, serious disease can devastate a family. Some people end up in the streets for a myriad of personal family disasters. However, the greater society barely notices. At least as far as the wider society is concerned. Social workers know these stories and deal with them often. In your personal life, you have come across these disasters. How many times have you contributed to a Gofundme account for example?

But these are personal disasters that make very small blips in the economy. Then there is the usual sundry of disasters we are used to. On the upper end of these are hurricanes and major fires. In some ways, Wall Street has priced these in. However, earthquakes, fires, and hurricanes do have an economic effect. Most of them are local, and have a depressive phase, with an expansion phase. Why relief agencies prefer you to donate money. This way supplies are bought locally, when possible, priming the economy to rebuild.

A global pandemic is a whole different level of disaster. It’s not just the effects on human health, but a global recession. This is what economists call a black swan. It came out of nowhere, it’s spreading, and it is slowing economic activity around the world. This is one reason the president and his administration have done all they can to deny the seriousness. They know that this will lead to a recession, and whoever has the helm gets the blame.

We know this. An economic crisis is never good for incumbent presidents and Donald Trump has made it tens times as bad. In order to keep the economy humming, they removed information telling those vulnerable to avoid plane rides.

According to The Hill:

The White House this week batted down a recommendation from health officials that elderly people and those who are “physically fragile” not fly on commercial airplanes, an unnamed official with direct knowledge of the situation told The Associated Press.

The AP reported that the Centers for Disease Control and Prevention (CDC) submitted a plan this week with the recommendation as a way to control the spread of the virus. However, administration officials reportedly ordered that particular provision of the plan be removed, according to the federal official.

The Trump administration has since then suggested that those who are most susceptible to the virus not travel but, according the news source, has “stopped short of stronger guidance” laid out by the CDC.

They are also working with the cruise ship industry, and perhaps a bailout package will come. Frankly, since most of those ships are flagged in nations of convenience, perhaps it’s time for Panama and Liberia to bail out their ghost fleets, but I digress. After all, I have told family who are regular cruisers not to until this resolves. The Canadian government is recommending the same. The US government should ask operators to dock their vessels until this is over, and yes, this will lead to losses in the billions for that industry. Sales are also irresponsible.

Now, when the administration closed the borders to China early on, while done for hyper-nationalist reasons, it turns out it was more or less correct. It could have been used to mass-produce testing kits and get the country ready with consistent messaging. Instead, this has been a chaotic response with a very muddled messaging. For starters, President Donald Trump continues to counter any messaging from the experts. Why? He knows this could cost him his job. And as we woke up in the West Coast with markets stopping trading, this comes from lack of trust.

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CDC

Why social distancing? It helps to slow down the growth of the disease. It allows health authorities to get ready. It allows hospitals to implement their disaster plans. Hospitals are going to get patients. There is no way around it. If they get them all at once, it will stress and collapse some systems. If we get them in staggering numbers it will just stress the system.

Social distancing means no movie theaters, staying away from restaurants, staying at home if you can. In fact, if you have underlying conditions or are over sixty years old, you should. Meaning, you like to play bridge, have a game at home. It also means closing schools, and canceling sports events.

But we also need somebody at the helm that is trusted…and as of now we have a president bent on low numbers, and in controlling the message. We have a political party that is following this president down this path. Though two US Senators are now in quarantine. The irony is thick.

There will be an economic cost. But right now Wall Street is reacting to a lack of confidence in Washington and the Trump administration. It does not help that traders on the floor live in a hot spot. How bad of a hot spot, we have no idea.

In order to get some of this to calm down, likely we need two things to happen:

President Donald Trump should resign. He has no trust left, except for his hardcore believers. And once grandma is in the hospital, they will wake up I suspect. However ideological Mike Pence is, he has been repeating what the experts tell him, at times contradicting his boss. This will return some trust.

The political types should step back, and let the professional work. This means enacting social distancing measures. Yes, we will have a recession, that is already baked into the cake. But now it is about avoiding the medical system collapse.

Since our testing kits are still in development, swallow our pride and take the World Health Organization kits. Like South Korea start testing, including drive-through. We need to get a true picture because anecdotally I know of people who had it, got better and we never knew.

This will also tell us just how truly deadly this is.

It is time for experts to do their job without interference. For the moment, the CDC has not updated the page with the numbers of confirmed cases. China tried that, and massaging the data will make things worst.

Written by

Historian by training. Former day to day reporter. Sometimes a geek who enjoys a good miniatures game.

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