In Italy, where I'm in my third week being shut in, experts and doctors are being quoted tiredlessly by the news: the problem is that they're doing their job (which is good!) however they do not realize the impact of their suggested measures. Not their fault by any means, but:
a. They're effectively scaring the population (an WHO advisor here suggested 6-9 months lockdown, which is likely impractical and will have devastating consequences on the social fabric, even without thinking about the economy)
b. The politicians are so scared of the virus that they're completely abdicating their functions (in Italy the Parliament was closed for two weeks, and the judicial system has been completely shut down as well) and doing whatever they're being told.
If this virus was far deadlier and affected young people, I think the tone on this very site would change in a heartbeat.
Similar to what happened after the financial crisis with additional financial regulation.
I have no doubt another pandemic will happen, and we'll likely have forgotten what it's like, so having policies in place becomes even more important.
But that's only temporary.
It's like developers starting over and promising themselves that they won't accrue technical debt this time. And then life happens and you need to push that feature quickly and a few years down the line, you're sitting there saying "we need to start over, this is too much trash held together by hopes and dreams".
Companies will cut corners, because that's their main focus. Politicians will reduce regulations, because that's how they stimulate locale economy, and we're back at square one in no time.
The only lasting shift, aside from potentially more work from home, is people making sure they'll always have an extra package of toilet paper. They won't flee the cities (where viruses can spread much better), even though the rent is killing them, and they won't go into voluntary lock down the next time a thousand people die in China of some lung disease.
In fact, most of the hard problems the world faces will require investments that take longer than 10 years to return on.
The economy is important - but maybe our economy needs to be a little less growth oriented and a little more resilient.
> The economy is important - but maybe our economy needs to be a little less growth oriented and a little more resilient.
I absolutely agree, but I also believe that's not going to happen. And it's not because there's some cabal that won't let it, it's just that everybody wants more and I don't see that changing. Our economic setup with the constant demand for growth is just the result of that. I don't believe you can put the genie back in the bottle, few people are at a point in life where they'd be happy to stay at that level for the rest of their days.
This is pointless, circular logic. It is funded to be a threat to defend its interests, from threats, that may never materialize.
It will change in the right circumstances. We may be closer to them than most think.
That sure might change, and it won't be pretty for US citizens, but it will be great for plenty of countries. Until they get under China's rule, of course.
As soon as the government can detect a 16-times increase in the number of cases, act, and still be soon enough for the next 200-times increase not to be a tragedy, it is a good time to leave the quarantine. Right now Italy can't stand the first increase.
The good news is that each time the disease spreads, those numbers become smaller, the bad news is that we don't know by how much.
It won't be able to hold a long-standing quarantine. Probably a couple of months tops. That's not even mentioning the economy. As I said, endured isolation will have very bad side effects.
Yes, there are economic consequences, but the alternative is quite a lot of avoidable deaths.
As Bill gates said, we can't say- "Hey, keep going to restaurants, go buy new houses, ignore that pile of bodies over in the corner. We want you to keep spending because there’s maybe a politician who thinks GDP growth is all that counts"
The truth is that it seems our choice is relatively simple:
1) Allow the virus to spread rapidly, overload the health system, kill many people, until herd immunity is reached.
2)Do partial shut down measures, some partial efforts at testing and contact tracing, let the virus continue for a long time, and more slowly reach option 1.
3)Do strong shut down measures until the virus is able to be controlled by a strong testing+contact tracing regime.
Iran (seems to have?) chosen option 1.
Italy started with option 2, and will hopefully move into option 3.
Option 3 is the only acceptable option that doesn't destroy the economy and health systems.
Unchecked, 10 cases of this virus will turn into 100s of thousands. That is the same with 10 cases in March, or 10 cases in May or 10 cases in any month.
“That pile of bodies” is mainly the elderly and terminally ill, demographics that society already seems to have little problem ignoring. Even now the worry among most of the population seems to be that those demographics will overwhelm the health system, preventing everyone else from getting medical attention. But this could be solved by triaging, which is rumoured to already be the de facto standard in Italy (i.e. if you are over 60 and show coronavirus symptoms, other patients take priority over you).
The longer the lockdowns in various countries go on, the stronger I think societal pressure for solution 1) – with triaging to avoid overloading the health system – is going to get.
Considering the numbers of infected people confirmed alone and the percentage of asymptomatic cases contact tracing and testing sounds about as realistic as waiting on a cure.
How do we assess contingency levels, other than after-the-fact measure of fatalities? Contingency is highly variable across the country. Rural areas have a lot of personal distancing built in. Urban areas certainly aren't in China-style lockdown, or South Korea-style technology+culture distancing based on prior experience. Nationally, I think the U.S. is at best taking a "moderate contingency" approach.
Each state's governor has control over the contingency, short of the president declaring martial law. e.g. in Mississippi the governor has declared most businesses are "essential" and thus open for business, expressly contradicting local ordinances more strictly defining what is essential. We very likely will see localized variations in infection and fatality rates as a result of these variations. https://www.businessinsider.com/coronavirus-mississippi-gove...
Therefore I don't know whether the progression of the disease is even predictable.
That is what would happen if you just let the thing pass. Those charts of "squashing the sombrero" have the number of beds at a very low place compared to the expected hump of cases. On some of them you can barely even see the gap between the red line and the zero line, due to the scale of the hump.
Death rates would shoot up way above what is normal for the disease, people would die of all sorts of other preventable things too.
Some places' ERs are already at capacity, and there's no way I would go to one right now unless I was almost at death's doorstep. That's not necessarily a good thing if something happens that should normally require an ER visit.
Interestingly enough, questioning the health of that particular institution is much more taboo than most in this crisis. Given the practical importance of patient faith in the healthcare provider that may be reasonable, but for my money I'd like to be able to try and imagine a better healthcare system in a public forum without getting downvoted for criticizing its current incarnation.
You start rapidly building additional capacity to handle the load.
It won't be permanent. It will be like a forest fire and kill a lot of people and be horrible, but will eventually die down due to heard immunity.
You don't want people dying needlessly for half a year.
And while the overload is on, the economy will be affected, whatever the response is.
https://www.cnn.com/2020/03/16/health/doctors-coronavirus-he...
Here's a set of 3 questions that I think leads to a possible answer.
- How much would someone have to pay you to be put to sleep for 8 years, during which period you have no sensory input or output?
- Would you rather be put to sleep for 8 years now or at the end of your life?
- Do you have a preference over being put to sleep for the last 8 years of your life vs just dying straight up?
I think most people would be willing to go to sleep for 8 years for $2 million. And, most would prefer dying 8 years sooner over going to sleep now.
In other words, $2m > sleep for 8 years now > dying 8 years earlier == coronavirus victim
The moral dilemma is that we're asking one person to die 8 years sooner to create an outbalanced improvement in quality of life increase for someone else. That is, you're taking away well-being from one person to give to another. I think government officials implement policies that redistribute human well-being all the time, but it raises alarm bells when we start dealing with life and death.
The impacts of corona measures will lead to the economic slowdown and general reduction of wealth - for you this might mean that you lose your job, can't afford to buy a new apartment, car, furniture, electronics, clothes, etc. but for people that live close to poverty level that just got out of that place because of globalisation and increased economic growth this will result in less access to basic infrastructure, medications, food, development opportunities.
And that's not even touching the reduction in R&D and economic activity that would improve the lives of people. For example - consider risky tech companies like Tesla being wiped out by market conditions - who is going to do R&D in things like battery tech in an economy where people are pulling out of capital investment ? Even the established companies with cash reserves will scale back R&D. And this will happen across the board - which will in turn make future crisis more difficult to deal with.
You don't see people crowding onto fishing boats or hiking treacherous desert to escape Europe ($38k). We can probably afford to fall to that level. It'll be a major lifestyle adjustment, but a doable one.
Looking down the scale to Latin America: Chile, Panama, and Argentina are pretty okay (~$15k). Less so for your typical American middle-class suburbanite, but people have good lives there. Even Brazil is decent (~$10k). But once we start pushing into Mexico, Colombia, Ecuador, etc ($6-7k) the natives start accepting pretty significant risks to get out.
US GDP per capita is about $60k. Although it will be a terrifying shock, we can probably fall to about 10% of that before things are truly desperate. But once we're talking about killing more than 90% of the economy: yes, people might in fact prefer death.
The medical experts do consider economic and market impacts, and there are alignments in governments how to balance everything. However, since this is an unprecedented health crisis with unknown ramifications, that is first priority. Many measures are to create wiggling room to handle what unknown unknowns may come down the road as well.
This shows us systemic vulnerabilities, and societies will be forever changed, probably for the better.
And the politicians in charge are too afraid to debate the experts and frankly lack any leadership at all in this situation - (with a few exceptions in other countries). Blindly listening to experts of one domain because you are afraid is not leadership, they are supposed to do balancing decisions - and from what I see in the media they basically delegated the government responsibilities - if they are discussing this they are certainly not making their discussions or reasoning public.
I often hear it framed as: "How much is a person's life worth?" or some general reference to stock values.
But when people say "economy" this is what it really means:
https://www.bbc.com/news/world-asia-india-52002734
Cash flow, supply chains, jobs, bankruptcy, debt, poverty, famine and more than likely families breaking up (financial stress is the #1 cause of divorce) plus a spike in suicides.
That's the economic impact. And when the question of virtually guaranteeing that outcome around the world to a significant portion of the global population vs a risk of a negative outcome for for the percentage of people who are susceptible to serious issues from COVID-19...it gets a heck of a lot murkier.
There's not a heartless bad guy in this situation. Both outcomes are terrible and if you purely look at the number of people negatively impacted, the economic fallout of this approach with its cascading effects look significantly worse.
Not to mention what happens when you take into account the positive effects a recession and drop in production has to: air quality, worker health, general mortality, and climate change?
There is always a tradeoff.
The virus will kill X and reduce the quality of life for Y people. The economic disruption will kill Z people and reduce the quality of life for Z2.
There is a difference between trading my life, or trading a new laptop now instead of saving for it. That is what we are looking at here.
So even if my quality of life goes down, food/health/shelter contributes the majority to that, probably 85%. The rest is all worthless junk.
If the economy is failing to the extent that food is in short supply - that is different. There is no indication that will happen.
Economic conditions have real and immediate health consequences too. For example, in 2010 US unemployment briefly grew about 6% to a total of 10% in the US and there were 40,000 additional deaths from cancer alone[1]. When you consider heart disease, other indications, drug abuse, and suicide, the numbers are much greater. The often cited number of 40k for each percent unemployment may not be far off if these factors are taken together.
This trend also holds true in the OECD where social programs are more common because there are still budgetary constraints on centralized healthcare.
[1]https://www.thelancet.com/journals/lancet/article/PIIS0140-6...
His parents had a house, with a yard. There was air conditioning, cable TV, and each child had his own room. I distinctly remember a nearly-server-class PC much better specced than anything my family owned (a dual-processor desktop in the 1990's!)
Poverty stats don't tell the whole story, especially if they're only based on income levels. A wage that would have you living out of your car in SF might allow a squarely lower-middle-class lifestyle in the rural Rust Belt.
It is a bit of a mystery to me why Congress isn't just providing better funding/financing for all the existing programs. I'm not sure why there should be new types of programs to help individuals. I'm deeply suspicious of efforts to prop up businesses, I'd rather have the focus be on individuals and let businesses figure out the best way forward. For some businesses bankruptcy might be the best solution because the business model has completely changed.
But the urgency and focus on economic measures in the US does have justification. Here in the US, we need things like free testing (already the case in most nations) and to handle the surge in unemployment (we have a system, is is just less robust than most wealthy nations, hence the very urgent need to dramatically expand it).
I made no mention of "which country is or isn't going to come out of this with the least amount of damage", only reiterated the well-known fact that the US has one of the meekest welfare states of any wealthy nation. That had not yet been mentioned in the thread and seemed extremely relevant.
So if you close all non-essential businesses, unemployment rises, which increases the likelihood of people losing health insurance, losing homes, not paying electrical bills, communication (internet / phone) bills, etc. If some people lose all those things and don't have access to them again for 2+ months, and have no other safety net, they might die. Doubly so considering the hospitals may be at capacity with COVID-19 cases.
So, what would be better - keep people at home and unemployed, where people die by lack of resources, or keep people going out where people die by spreading COVID-19?
The third options is to keep people at their residences but either pay them or reduce their bills / mortgages etc to 0 while COVID-19 blows over. But that could take 2-18 months. It was hard enough getting $1200 once for every American household - I doubt it will continue for another 18 months until a vaccine is developed.
The state helping the people to survive this crisis or not is a political choice.
The more difficult political problem is how the financial pain is going to be distributed and how we reboot the economy. How assistance is distributed, taxes are adjusted, or fiscal measures are taken is going to be very complicated with opportunities to create winners and losers based on the policies. So far I'm not particularly impressed by Congress in this area.
If any of the 40+ trials going on for drugs is successful and makes COVID-19 clinically manageable, it would improve the situation earlier than just waiting out a vaccine (which, like the drugs, may not work at all).
None of this is true because non-essential bills have also been shut down.
If you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the spirit of this site when posting here, we'd be grateful. Examples:
"Comments should get more thoughtful and substantive, not less, as a topic gets more divisive."
"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
This is an unfair way to characterize this difficult issue.
In what way is the fact that there will be two different levels of economic costs in two scenarios a 'false dichotomy'?
Edit: I think this is worth clarifying. I may misunderstand you, but it looks like there are two errors in your post. The first is treating differing scenarios with differing outcomes as if they were the same, simply because they have some facet in common.
The second is a mis-use of the term 'false dichotomy'. If you believe that a choice between two options will have the same outcome, that is not a false dichotomy. A false dichotomy is a logical fallacy, a special case of the fallacy of exhaustive hypothesis. Here, one wrongly assumes that there are only two possible choices and uses this assumption to arrive at some seemingly logically derived conclusion.
My apologies if I've misunderstood your intended meaning from your short post.
It is indeed a false dichotomy. If anything, just irresponsibly letting nature run its course will be worse. Besides, recessions have been consistently associated with decreases of death rates. There is no evidence, and plenty of counter-evidence, that recessions cause increased death. Of course, we are getting a recession either way.
What do you think 'false dichotomy' means? How does it apply, here?
But nah, the "market" apparently entirely consists of assholes on Wall Street playing Capitalism II and lobbying governments for payouts. No way it has any real impact!
Paying rent and mortgage, on the other hand, isn't material. If you don't pay it nothing material changes - it's not an iron law of the world in the way that hunger is, evictions are a choice. Admittedly it transfers the problem to someone else, but if the solution to maintaining everyone fed includes them then they're not going to go hungry.
Financial conditions also have a time tradeoff. Reducing retirement funds affects material conditions in the future. Or the date at which people are able to retire.
If you had a button you could press which let you retire immediately, but (with probability P) took the life of some random person in the world, would you press it? With what value of P?
For example, in 2010 US unemployment briefly grew about 6% to a total of 10% in the US and there were 40,000 additional deaths from cancer alone[1]. When you consider heart disease, other indications, drug abuse, and suicide, the numbers are much greater. The often cited number of 40k for each percent unemployment may not be far off if these factors are taken together.
This trend also holds true in the OECD where social programs are more common because there are still budgetary constraints on centralized healthcare.
[1] https://www.thelancet.com/journals/lancet/article/PIIS0140-6...
Edit: Here is a Meta-analysis showing that the risk of death was 63% higher among those who experienced unemployment in the US AND Europe
You are delusional to think it is possible to suspend payments without printing massive amounts of money that will certainly lead to more death.
Currency inflation kills. Look at venezuela. You cannot shrug this off. At least consider the effects.
> By March 2009, it held $1.75 trillion of bank debt, mortgage-backed securities, and Treasury notes; this amount reached a peak of $2.1 trillion in June 2010.
That feels like a lot of liquidity to me.
Liquidity expansion through loans and purchase of credit and equity instruments simply isn't very inflationary. It can only cause real price inflation if the money starts chasing a shortage of real goods and services - which are currently being dramatically underproduced. If it does start causing inflation, the Fed can and will simply raise interest rates from their current near-zero level. Or fiscal policy can be used.
Venezuela is under sanctions which are intended to exacerbate the situation. https://en.wikipedia.org/wiki/International_sanctions_during...
What the fed is doing is printing money now that will be destroyed later, or held in reserve. Either way, it is backed by actual financial instruments (whatever equity or bonds or notes they're buying).
We've done a middling job at making sure people have air and water, less good with food and even worse with shelter and medicine. But liquidity? That should be last on the list of things to worry about. It should always be last.
We should believe that some economic curses last multiple lifetimes.
Death is not a problem, everyone dies, nobody knows when they will. Could be someone pressing a button, could be a bus, could be old age. You can die tomorrow. But suffering, that really matters. I wouldn't make someone suffer, but if it's quick painless death... way harder question.
I just really dislike the focus on living rather than focusing on the value of life. I mean this in a pre-pandemic sense. Hearing people talk about fear of death, and yet accept a lifetime of meaninglessness.. just irks me.
Seeing that doing nothing will likely lead to lead to millions of deaths, how would the lockdown possibly kill more than that? Are you under the impression people will just willingly starve to death, or that fighting over food will get so bad that millions of people will die?
The lockdown is wasting months to years of billions of people's lives. That has to be equivalent to some number of deaths, hard to quantify how many, but it's greater than zero.
Also, a bad economy literally kills people by starvation albeit in foreign, poor countries that don't have food surpluses or the ability to print USD.
And if we locked down the global economy for a year or two until a vaccine is developed, yes it's not out of the realm of possibility that millions worldwide would die a result of the 2nd, 3rd, 4th and 5th order consequences of that decision. Look how many stress fractures are occurring after just a few weeks. You think they'll get better with time and continued stress?
Honestly I think the UK had the best original strategy of locking down the people most at risk, make sure they're taken care of as much as possible, and letting everyone else get herd immunity as quick as possible. But people weren't/aren't willing to accept that, and likely still won't for at least the next few weeks.
Finally, the UK changed their strategy away from sequestering the 70+ population because Imperial College told them that would only halve their death toll, and it would still remain solidly in the millions (for a country of 66 million).
But if we're just talking about the US: The range from the CDC models last I checked is anywhere from 163,000 - 1.7 million for a country of ~330 million.
By comparison the opioid epidemic alone has already killed somewhere between 100,000 - 200,000+ over the last 5 years. And that was largely the result of a kinder, gentler, less dramatic economic shock known as the 2008 recession and decades of preceding industrial decline.
We've already compressed shocks that took months in 2008 to weeks, not the least of which is the record unemployment filings in the posted article. Hence the largest stimulus package in world history being passed in days.
"The economy" is not some vague abstract number on the evening news, and economic shocks do kill people, it's just less tangible than a virus. If this continues for more than a month or two I expect people returning to work out of desperation and then receiving death threats for doing so, and things will get uglier from there if the lockdowns continue.
The problem in the UK is that they seemed to have no substance to the plan. Yes, hard lock down the people at risk, but where is the government response to make that possible?
If they had a well developed plan to carry out those words it might be worth doing, but they didn't and then caved when it was clear it was just rhetoric.
Please show us your calculations.
Or just a shortage in distribution mechanisms for it, because we are unwilling to consider emergency measures during an emergency?
Also: even that conversation seems like a huge false choice. Why not just give up on market capitalism for a few quarters and make sure everyone is fed/clothed/sheltered? It's not like houses disappear overnight if rent/mortgages aren't paid. And it's not like we've never suspended capitalism in the past -- the federal government put in price controls, effectively nationalized industries/supply chains, etc. during WWWII. And then we returned to capitalism afterward.
> But nah, the "market" apparently entirely consists of assholes on Wall Street playing Capitalism II and lobbying governments for payouts. No way it has any real impact!
TBF, those are the folks getting most of the economic relief so far. And not just from recent Congressional action. Somehow when it comes to ensuring liquidity in certain financial markets, the federal government can move mountains in minutes. But when it comes to people having a safe place to sleep and food to eat we're the mercy of the invisible hand.
Why can't e.g. HUD, unilaterally and without congressional action, create "liquidity in the housing market" by making enormous zero-interest loans to everyday folk whenever they feel like that's necessary?
People who trade in equities and bonds have enormously powerful economic backstops, which people who merely pay rents and mortgages and buy food do not have.
Society already does this with the automobile. 36,000 people die every year for the convenience of driving, which I feel is a completely reasonable tradeoff, and this is not a controversy, at least in the united states.
Unrelated but curious, why do you feel it's a completely reasonable tradeoff? In my mind, automobiles have led to a class (and historically race) divide which further segregates and polarizes sects of society.
As for whether I think it's a "reasonable tradeoff". I don't know, but maybe because it's not brought up as controversial by society. This is not a good reason, I suppose, but I haven't really thought about it. I guess I'm mindlessly mimicing the ethics of people around me.
While I think the US response to Corona was slower than the response in my country I feel the US is the only country that's seriously discussing economic repercussions and debating the medical experts.
In EU (at least in my country) it's doctors running things and we are in "stop the pandemic at all cost". Everyone is in panic due to Italy situation. But doctors are only trained to see the medical side of the picture - and there is a point at which this approach to fighting the virus is going to have worse consequences than a full blown pandemic itself - I don't see anyone publicly discussing this point around here.