Economic Depression Will Destroy More Lives Than Coronavirus
Last night, I managed to align the dots of the corona pandemic in a way that connects them all and allows for verifiable predictions. I would be interested to hear whether others have thought of this.
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The first input datapoint is that the virus can be contained by means of social isolation. We may disagree on the level to which this isolation should take place, but it's official now: staying home works.
There is no clear strategy on what to do next. Even if we manage to hit the "pause" button on the spread for a month, and even with the best of the best medical professionals working day and night, it's unlikely we will have a simple yet effective solution available this soon.
Sure, we may and likely will find ways to "control not treat" the virus. But then, during this month we are buying ourselves, we should be building hospitals like crazy. Which China, by the way, did, and rumors are those temporary hospitals have already been dismantled by today.
Ben Rickert from The Big Short, played by Brad Pitt - Here's a number: Every 1% unemployment goes up, 40,000 people die, did you know that?
Second, everyone understands that the damage done to our economy may already exceed the damage done to our health and well-being. It's not a noble activity to put a price on our lives, but we are already in the territory of comparing lives to lives. The increases in suicide, addiction and incidence of physical illness associated with unemployment costs lives. To quote Ben Rickert from The Big Short, played by Brad Pitt: "Here's a number: Every 1% unemployment goes up, 40,000 people die, did you know that?"
Third, we live in an era where mass media controls the picture of the world that people have in their minds. And the markets are controlled, above everything else, by this picture.
Simply put, a few countries introducing quarantine measures will inevitably cause, and are causing other countries to follow suit. Politicians, as well as most CEOs, must look strong and empathetic in front of their audiences.
By today, we have seen the results of this "infowave" going around the globe penetrating both politics (isolation measures, rent/mortgage suspensions, more privileges to intelligence services, etc.) and big corporations (airlines "voluntarily" refunding tickets), communicating about their commitment to stay available 24/7 with the vast majority of companies supporting work from home.
And fourth is that the US general elections are to take place this coming November.
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The above makes it possible to make these predictions:
• The wave of "let's shut down" will be replaced by the wave of "we are opening up in ways we know are safe".
• The US will be the first country making this move openly, with others following suit.
• The above will take place rather soon, because the US will, correctly, be fearing a different country taking the lead.
I can not really predict when this "rather soon" will be.
Likely at least another 1.5 to 3 weeks, because a) the two-weeks quarantines that were announced must be followed, and b) the public is still terrified.
But also likely fewer than 2 to 3 months from now, because too many other countries would become the "competitors" at claiming this first mover's advantage.
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People are indeed sufficiently frightened now.
We will take significant precautions during The Reopening. Expect even more hand washing, more sanitizers available and larger distances between people as we slowly begin to get back to normal. Also, theaters, big sporting events, and other mass gatherings would most likely continue to be suspended for a while, contributing greatly to our efforts to defeat the virus.
Even without a breakthrough in medical progress, technology will be very helpful. Expect drive-through testing becoming widespread.
Expect office buildings and maybe even train cars that only let people in if they can show an up-to-date "green" test.
Expect signing up for your groceries online, so that you get your own time slot, when the store is half-empty; as long as you commit to stocking up with a large check.
Expect semi-isolation facilities emerging slightly outside big cities, so that if you have symptoms but they are mild, you just drive there — not disturbing the way hospitals operate, yet receiving timely help as needed.
The economy re-starting is a big thing. It drives optimism. It boosts people's energy. Do not forget: it turns the tables, and lets the US politicians claim credit, regardless of whether it's due or not.
And, well, restarting the economy saves lives. Which is a good thing, too.
Written by Dima Korolev & Edited by Alexander Fleiss