Panic Time: Finally for Good Reason

It no longer matters how this virus compares to the yearly flu; we've decided to make it immeasurably worse.  It is now time to panic.

We are planning to bet the entire economy on the fight against the coronavirus, apparently without an exit plan.  Humanity is throwing more at this problem in a shorter period of time than it has focused on any crisis in history.  Politicians have a strong incentive to "do all they can"; if it goes well, great.  If not, they did all they could.

Cue madness: our plan is evolving into a national shutdown of all but essential businesses — those directly involved with keeping people alive and the credit markets functioning.

Dr. Fauci has suggested that we won't know if it worked after the first two weeks.  That means it will go on for a minimum of three weeks.  For a large part of those three weeks, we will see ballooning infection and mortality figures worldwide due to expanded testing and the collapsing European health care rationing systems.  It may look grim for some time, risking an extension of any shutdown even if events in the U.S. don't warrant it.

The people who are saying you can just spin the economy back up have never run a business with a lot of moving parts, much less with a heavy dependence on a wide supply chain.  But forget the complex.  Just consider a relatively simple business: a mid-sized restaurant.  For the minimum 3–4 weeks of shutdown, nothing.  Then the better part of a week to prep and stock.  Will the vendors still be there and able to deliver on time?  Many vendors cater to restaurants mainly or exclusively.  Once the doors open, a fragment of the population will be broke, another fragment paranoid, another harrowed and exhausted — the idea that we'll all hit the town to celebrate our freedom is a stretch.  The restaurant then faces spoilage, overpayment of wages, and for how long?  No one knows.  Small and medium-sized business–owners should be worried; if they somehow get some money from the government, it won't solve the problems created by an extended shutdown.

Meanwhile, Congress is ready to spend trillions, and the Federal Reserve Bank has already thrown more money and lending options at this problem than it utilized in the first year of the 2008 financial collapse.  The Fed governors have the same impulse as politicians do: better to do too much than too little.  Because this is a "crisis," they will do whatever they want with our currency, obligating us to tremendous new debts, destroying returns for already brutalized savers, further debasing our purchasing power, and promoting moral hazard.  By the end, the Fed will likely be buying corporate bonds and stocks.  If it throws enough money at American corporations, it will further damage the image of capitalism, though none of these problems was created by capitalism.  It's the Fed's type of debt-fueled crony capitalism that encouraged China to build ghost cities but just a single level 4 containment lab — which may have failed to contain the lab's work.

The radical spending and monetary actions already in the works may be the first of many such steps.  That depends on how quickly the economy can recover from any shutdown.  It's probably not like a television that you can just unplug when you aren't using it, but we are going to test that idea. 

The political stakes couldn't be higher.  Only if the economy really craters will the left ever have the excuse it needs to turn America away from (what is left of) capitalism.  A strong economy with a lot of opportunity is the biggest stack of chips on the political table — and we are pushing it into the pot.  An extended national shutdown is almost certain to fail and to leave the economic system more chaotic and less adaptable — for years.  If liberty and free markets somehow come out ahead in all this, it will likely be due to the efforts of one man.

In the trenches, professionals face a particularly infectious little terminator that offers a binary choice: kill it, or it will keep suffocating people.  There are reports of younger people being afflicted, but the at-risk groups are the very old and the already sick.

We can be sure that an "at risk group" contact system will emerge from this, so that those individuals can be reached quickly in the event that isolation is required again and offered help for their particular needs.  As long as we are going to do that anyway, why not do it now?  We just happen to have millions of idle people, some of whom will volunteer.  Every one of our at-risk people who we can identify and isolate is a life potentially saved and a step closer to normalcy.  If we were serious about it, how many at-risk people could we contact in the next two weeks, to check their status and encourage isolation?  Virtually all of them.

Such an effort would allow the president to announce a conditional end date to the shutdown should we take that risky course.  The conditions would likely be progress toward isolating the at-risk, the status of the health care system in affected areas, and ensuring that the disease isn't hospitalizing a large number of younger, healthier people. 

The president can lead us out of this nightmare.  And an essential part of that leadership is providing as much certainty as possible: tell Americans when we can go back to work and what needs to occur for that to happen, and give us the launch date.

Image: John via Wikimedia Commons (cropped).

It no longer matters how this virus compares to the yearly flu; we've decided to make it immeasurably worse.  It is now time to panic.

We are planning to bet the entire economy on the fight against the coronavirus, apparently without an exit plan.  Humanity is throwing more at this problem in a shorter period of time than it has focused on any crisis in history.  Politicians have a strong incentive to "do all they can"; if it goes well, great.  If not, they did all they could.

Cue madness: our plan is evolving into a national shutdown of all but essential businesses — those directly involved with keeping people alive and the credit markets functioning.

Dr. Fauci has suggested that we won't know if it worked after the first two weeks.  That means it will go on for a minimum of three weeks.  For a large part of those three weeks, we will see ballooning infection and mortality figures worldwide due to expanded testing and the collapsing European health care rationing systems.  It may look grim for some time, risking an extension of any shutdown even if events in the U.S. don't warrant it.

The people who are saying you can just spin the economy back up have never run a business with a lot of moving parts, much less with a heavy dependence on a wide supply chain.  But forget the complex.  Just consider a relatively simple business: a mid-sized restaurant.  For the minimum 3–4 weeks of shutdown, nothing.  Then the better part of a week to prep and stock.  Will the vendors still be there and able to deliver on time?  Many vendors cater to restaurants mainly or exclusively.  Once the doors open, a fragment of the population will be broke, another fragment paranoid, another harrowed and exhausted — the idea that we'll all hit the town to celebrate our freedom is a stretch.  The restaurant then faces spoilage, overpayment of wages, and for how long?  No one knows.  Small and medium-sized business–owners should be worried; if they somehow get some money from the government, it won't solve the problems created by an extended shutdown.

Meanwhile, Congress is ready to spend trillions, and the Federal Reserve Bank has already thrown more money and lending options at this problem than it utilized in the first year of the 2008 financial collapse.  The Fed governors have the same impulse as politicians do: better to do too much than too little.  Because this is a "crisis," they will do whatever they want with our currency, obligating us to tremendous new debts, destroying returns for already brutalized savers, further debasing our purchasing power, and promoting moral hazard.  By the end, the Fed will likely be buying corporate bonds and stocks.  If it throws enough money at American corporations, it will further damage the image of capitalism, though none of these problems was created by capitalism.  It's the Fed's type of debt-fueled crony capitalism that encouraged China to build ghost cities but just a single level 4 containment lab — which may have failed to contain the lab's work.

The radical spending and monetary actions already in the works may be the first of many such steps.  That depends on how quickly the economy can recover from any shutdown.  It's probably not like a television that you can just unplug when you aren't using it, but we are going to test that idea. 

The political stakes couldn't be higher.  Only if the economy really craters will the left ever have the excuse it needs to turn America away from (what is left of) capitalism.  A strong economy with a lot of opportunity is the biggest stack of chips on the political table — and we are pushing it into the pot.  An extended national shutdown is almost certain to fail and to leave the economic system more chaotic and less adaptable — for years.  If liberty and free markets somehow come out ahead in all this, it will likely be due to the efforts of one man.

In the trenches, professionals face a particularly infectious little terminator that offers a binary choice: kill it, or it will keep suffocating people.  There are reports of younger people being afflicted, but the at-risk groups are the very old and the already sick.

We can be sure that an "at risk group" contact system will emerge from this, so that those individuals can be reached quickly in the event that isolation is required again and offered help for their particular needs.  As long as we are going to do that anyway, why not do it now?  We just happen to have millions of idle people, some of whom will volunteer.  Every one of our at-risk people who we can identify and isolate is a life potentially saved and a step closer to normalcy.  If we were serious about it, how many at-risk people could we contact in the next two weeks, to check their status and encourage isolation?  Virtually all of them.

Such an effort would allow the president to announce a conditional end date to the shutdown should we take that risky course.  The conditions would likely be progress toward isolating the at-risk, the status of the health care system in affected areas, and ensuring that the disease isn't hospitalizing a large number of younger, healthier people. 

The president can lead us out of this nightmare.  And an essential part of that leadership is providing as much certainty as possible: tell Americans when we can go back to work and what needs to occur for that to happen, and give us the launch date.

Image: John via Wikimedia Commons (cropped).