Article: Rethinking the Coronavirus Shutdown

[TravelTime]

Rethinking the Coronavirus Shutdown
No society can safeguard public health for long at the cost of its economic health.
By The Editorial Board
Updated March 19, 2020 7:40 pm ET

Financial markets paused their slide Thursday, but no one should think this rolling economic calamity is over. If this government-ordered shutdown continues for much more than another week or two, the human cost of job losses and bankruptcies will exceed what most Americans imagine. This won’t be popular to read in some quarters, but federal and state officials need to start adjusting their anti-virus strategy now to avoid an economic recession that will dwarf the harm from 2008-2009.

The vast social-distancing project of the last 10 days or so has been necessary and has done much good. Warnings about large gatherings of more than 10 people and limiting access to nursing homes will save lives. The public has received a crucial education in hygiene and disease prevention, and even young people may get the message. With any luck, this behavior change will reduce the coronavirus spread enough that our hospitals won’t be overwhelmed with patients. Anthony Fauci, Scott Gottlieb and other disease experts are buying crucial time for government and private industry to marshal resources against the virus.

Yet the costs of this national shutdown are growing by the hour, and we don’t mean federal spending. We mean a tsunami of economic destruction that will cause tens of millions to lose their jobs as commerce and production simply cease. Many large companies can withstand a few weeks without revenue but that isn’t true of millions of small and mid-sized firms.

Even cash-rich businesses operate on a thin margin and can bleed through reserves in a month. First they will lay off employees and then out of necessity they will shut down. Another month like this week and the layoffs will be measured in millions of people...

If GDP seems abstract, consider the human cost. Think about the entrepreneur who has invested his life in his Memphis ribs joint only to see his customers vanish in a week. Or the retail chain of 30 stores that employs hundreds but sees no sales and must shut its doors.

Or the recent graduate with $20,000 in student-loan debt—taken on with the encouragement of politicians—who finds herself laid off from her first job. Perhaps she can return home and live with her parents, but what if they’re laid off too? How do you measure the human cost of these crushed dreams, lives upended, or mental-health damage that result from the orders of federal and state governments?...

Read more here:

Opinion | Rethinking the Coronavirus Shutdown

No society can safeguard public health for long at the cost of its economic health.

www.wsj.com

 

[bluehende]

The article is behind a paywall. I would like to read it as it is not of my viewpoint. The WSJ editorial board is well thought of. This is that decision that has no good answers. How do you balance modeled deaths vs modeled financial loss and it's accompanying health consequences. You have to err on the human life side as financial loss can be mitigated. This is a decision I do not want to be in the room making it. An absolute free market system says the chips fall where they may and demand will spur a lot of new business' that arise from the ashes. There should certainly be a cost benefit done for these decisions and I will assume which way that scale tips is very specific to ones own situation. I will say that CNBC did an interview with a former airline CEO that was demanding a bailout for the airlines in the name of national security. I remember this exact same person railing against the TARP bailout. How do you do nothing when the modeled deaths are in the millions under that scenario. Especially when Italy showed us how real this is. We also have to remember that Italy did shut down so the higher deaths only delayed the same draconian economic results. Waiting until we are sure the models are correct is the same as doing nothing. I do not believe the entirety of federal, state, and local officials with better info than we have made the same decision without good reason.

 

[CalGalTraveler]

Placed in wrong thread.

 

[TravelTime]

This is written by the Editorial Board. It is not an opinion piece by one author. This is different.

 

[TravelTime]

The article is behind a paywall. I would like to read it as it is not of my viewpoint. The WSJ editorial board is well thought of. This is that decision that has no good answers. How do you balance modeled deaths vs modeled financial loss and it's accompanying health consequences. You have to err on the human life side as financial loss can be mitigated. This is a decision I do not want to be in the room making it. An absolute free market system says the chips fall where they may and demand will spur a lot of new business' that arise from the ashes. There should certainly be a cost benefit done for these decisions and I will assume which way that scale tips is very specific to ones own situation. I will say that CNBC did an interview with a former airline CEO that was demanding a bailout for the airlines in the name of national security. I remember this exact same person railing against the TARP bailout. How do you do nothing when the modeled deaths are in the millions under that scenario. Especially when Italy showed us how real this is. We also have to remember that Italy did shut down so the higher deaths only delayed the same draconian economic results. Waiting until we are sure the models are correct is the same as doing nothing. I do not believe the entirety of federal, state, and local officials with better info than we have made the same decision without good reason.

I can send you the full article through a private message. They are not saying to do nothing. They are just saying that the shutdown needs to be more balanced. The article concludes by saying: America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lockdown.

 

[x3 skier]

I read the article earlier and agree wholeheartedly with the approach. Sooner or later there will be a recognition of the costs of keeping someone like me who is approaching 80 alive needs to be weighed against the use of those resources for the larger part of society. I have a DNR and a living will that if it came to it would allow a ventilator or other valuable resources to be used for someone younger or more likely to have a longer and fuller life than I would have if treated.

Cheers

 

[Karen G]

I can send you the full article through a private message. They are not saying to do nothing. They are just saying that the shutdown needs to be more balanced. The article concludes by saying: America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lockdown.

And what did they say that strategy should be? It's very easy to criticize a plan but a lot harder to come up with something better.

 

[TravelTime]

And what did they say that strategy should be? It's very easy to criticize a plan but a lot harder to come up with something better.

Yes, I agree. They did not offer a solution other than saying: "America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lockdown."

In their defense, I do not think the article was overly critical. I think it was more pragmatic and they tried to display compassion for small businesses and people who will be laid off. I think this was a needed article because it is not popular right now to think about how the economic costs could be as great, if not greater, than the actual costs of the virus.

 

[Brett]

Yes, I agree. They did not offer a solution other than saying: "America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lockdown."

In their defense, I do not think the article was overly critical. I think it was more pragmatic and they tried to display compassion for small businesses and people who will be laid off. I think this was a needed article because it is not popular right now to think about how the economic costs could be as great, if not greater, than the actual costs of the virus.

yes, written with a business viewpoint like most WSJ opinions.
Maybe after this virus pandemic crisis is over the national response will be different, perhaps more of a "Darwinian" approach similar to what Mexico is doing - no lockdowns or extraordinary precautions taken.

 

[TravelTime]

yes, written with a business viewpoint like most WSJ opinions.
Maybe after this virus pandemic crisis is over the national response will be different, perhaps more of a "Darwinian" approach similar to what Mexico is doing - no lockdowns or extraordinary precautions taken.

I doubt our country will take such a Darwinian approach. However, there must be a better way to handle a pandemic than shut down all businesses. Work at home makes sense for some companies but it destroys many businesses who can't offer this.

 

[bbodb1]

yes, written with a business viewpoint like most WSJ opinions.
Maybe after this virus pandemic crisis is over the national response will be different, perhaps more of a "Darwinian" approach similar to what Mexico is doing - no lockdowns or extraordinary precautions taken.

I can't believe Mexico's approach is going to end well.....
But, it will serve as a useful comparison.
I do agree there is much to be learned from this and I hope we take an unbiased approach to achieving that learning.

..from TravelTime:
I doubt our country will take such a Darwinian approach. However, there must be a better way to handle a pandemic than shut down all businesses. Work at home makes sense for some companies but it destroys many businesses who can't offer this.

Your point makes me wonder if you believe there is a country that has the correct (best) approach at this time. Do you see a country with this approach?

 

[Panina]

Many lessons will be learned. Right now we are in the center of the moving virus. Easy to say what is right or wrong. History, looking back will make it clearer what was done right and wrong.

All I know is most of my family are in the locations that are hardest hit and I rather lose everything I own then lose them. My financials will hurt lots as will theirs after this passes. If anyone dies that will hurt so much more.

 

[TravelTime]

I can't believe Mexico's approach is going to end well.....
But, it will serve as a useful comparison.
I do agree there is much to be learned from this and I hope we take an unbiased approach to achieving that learning.



Your point makes me wonder if you believe there is a country that has the correct (best) approach at this time. Do you see a country with this approach?

Germany has a low death rate. I am not sure why but it might be worth looking into what they are doing. In general, I think this is unprecedented and no one knows what to do so they are just throwing darts at the dart board. After this is over, I hope an evidence-based approach will be examined for the future.

 

[bluehende]

I can't believe Mexico's approach is going to end well.....
But, it will serve as a useful comparison.
I do agree there is much to be learned from this and I hope we take an unbiased approach to achieving that learning.



Your point makes me wonder if you believe there is a country that has the correct (best) approach at this time. Do you see a country with this approach?

I would guess Korea and Singapore. Both relied on early detection and isolation of those infected and it worked quite well. Alas not preparing ahead of time precluded us from that tract.

 

[Ralph Sir Edward]

In the great economic contraction that is here and getting worse, remember.
The factories are still there.
The planes are still there.
The farms are still there.

The real question is will the people to run them still be there?

What will happen under the economic disaster is that the old owner class will get eliminated as owners (but not as people).

 

[pedro47]

Today is Friday evening and I just looked at the Fort Lauderdale webcam and for first time in the past thirty (30) years there is not one cruise ship with a passengers on board. All the cruise ships are just sitting in port. A very Strange site. IMO.

Even after 9/11 cruise ships were cruising to the Carribean, in Europe, Asia and the Mediterranean.

How much is this Coronavirus costing the cruise industry, the Cities of Fort Lauderdale, Miami, Tampa, the airline industry, taxis companies, auto rental agencies, the hotels industry and restaurants just in these three (3) cities and now included the loss revenue all around world.

 

[Brett]

I would guess Korea and Singapore. Both relied on early detection and isolation of those infected and it worked quite well. Alas not preparing ahead of time precluded us from that tract.

yes, early detection is important. It will interesting to compare country responses to this pandemic after it's "over"

 

[WinniWoman]

Can you copy and paste this article here?

 

[TravelTime]

Can you copy and paste this article here?

TUG rules say we can't copy and past an entire article on TUG. I can PM it to you.

 

[Talent312]

The medicine may be worse than the illness and merely the source of pain + suffering.
But sometimes, the medicine just tastes awful, but contains the cure.
I'll leave to those who are more knowledgeable than I to call this one.
.

 

[HitchHiker71]

Early detection coupled with tracking, communication and swift reaction is important:

Singapore Was Ready for Covid-19—Other Countries, Take Note

After SARS and H1N1, Singapore built a robust system for tracking and containing epidemics. South Korea, Taiwan, and others did too—here's what they learned.

www.wired.com

That’s a decent article that explains why Singapore, Taiwan and a few other countries were able to flatten their curve quickly.

We are WAY past that now unfortunately, and the pain we will experience is going to be much worse as a result, both in human and in economic loss.

That said, it’s possible we are overreacting because the predictive models we are using cannot account for a novel virus. We are seeing some scary modeling that says upwards of 60-70% of the population could be infected - but here’s the thing - the current numbers available don’t come anywhere remotely close to supporting this. I’ve seen some articles that argue that the decisions we are making are based upon modeling that is very immature and chock full of unproven assumptions. Many of the decisions we are seeing for shutting entire states down are based upon these models.

That said, we do know that social distancing is really the only tool we have to flatten the curve. There’s a part of me that wonders aloud if we should actually adopt a much more draconian 30 day ‘shelter in place’ quarantine. Deploy the national guard, lock down the entire country - snuff this out now.

We can tolerate a 30 day pause. Give everyone payment holidays for the time period - no mortgage payments or utility payments or rent or loan payments of any kind - then send out the checks to every American adult and grant loans to businesses that are eventually forgiven if they keep paying their employees - to help tide everyone over.

Practicing moderation as this article basically argues - may actually work out much worse over the long term - as doing so may result in repeated outbreaks and repeated shutdowns over time - which will quickly become intolerable especially from an economic perspective.

Of course this is just me thinking out loud. There are no easy answers - that much is certain.


Sent from my iPhone using Tapatalk

 

[WinniWoman]

Excellent and true article. This is so scary.

 

[TravelTime]

The New York Times also has an article on the impact of the economic crisis. Their solution is for the government to pay companies to pay employees until this subsides. Not sure how realistic this solution is. I would be interested in hearing other Tuggers' opinions.

-----

Put the Economy on Life Support
To limit mass unemployment, the government needs to provide companies with the money they are temporarily unable to earn.
By The Editorial Board

The federal government has a chance to save millions of Americans from unemployment as the coronavirus spreads, but policymakers must act decisively.

Employers, facing a revenue drought, are firing workers at a record pace. Preliminary data indicates that more people filed for unemployment benefits last week than in any previous week in the nation’s history, shattering a record set back in 1982.

The mass layoffs are depriving families of income and, what is perhaps more important in the middle of a pandemic, leaving many without health insurance, too.

The necessary solution is a grand bargain: The federal government provides the money that companies are unable to earn, and companies use the money to keep workers on the payroll...

Read more here:

Opinion | How to Avoid Complete Economic Destruction (Published 2020)

To limit mass unemployment, the government needs to provide companies with the money they are temporarily unable to earn.

www.nytimes.com

 

[x3 skier]

The New York Times also has an article on the impact of the economic crisis. Their solution is for the government to pay companies to pay employees until this subsides. Not sure how realistic this solution is. I would be interested in hearing other Tuggers' opinions.

-----

Put the Economy on Life Support
To limit mass unemployment, the government needs to provide companies with the money they are temporarily unable to earn.
By The Editorial Board

The federal government has a chance to save millions of Americans from unemployment as the coronavirus spreads, but policymakers must act decisively.

Employers, facing a revenue drought, are firing workers at a record pace. Preliminary data indicates that more people filed for unemployment benefits last week than in any previous week in the nation’s history, shattering a record set back in 1982.

The mass layoffs are depriving families of income and, what is perhaps more important in the middle of a pandemic, leaving many without health insurance, too.

The necessary solution is a grand bargain: The federal government provides the money that companies are unable to earn, and companies use the money to keep workers on the payroll...

Read more here:

Opinion | How to Avoid Complete Economic Destruction (Published 2020)

To limit mass unemployment, the government needs to provide companies with the money they are temporarily unable to earn.

www.nytimes.com

Bernie Sanders for the win!

I didn’t read the actual ariticle, just the intro.

Actually, that seems sort of contrary to the guidance. Most layoffs seems to be a result of closings because of the need to observe Social Distancing. Is the NYT suggesting to keep people working as if there was no need to do that and fill up factories and restaurants and stores so everyone gets infected? Unless it is intended to be unemployment insurance by another name where the payments go thru the company instead of the states which seems like a needless complication.

Cheers

 

[TravelTime]

Bernie Sanders for the win!

Cheers

I do not get it.