Middle Pandemic
2020-03-24
We’re in the middle of a pandemic, and I don’t think the national conversation on the nature of it has really matured.
Right now, the dominant government-mandated conversation is about "social distancing" and "sheltering in place". There are hashtags about "#FlattenTheCurve". It’s all very aspirational, it makes it sound like if we all just sit at home and watch netflix for a few weeks, this’ll all blow over and we can rejoice in that we saved the world.
It won’t work like that. It’s going to get worse. And the reaction to it is going to be the worst part.
Look, for anyone who’s taken an interest, none of this will be news. It’s not some divine prediction from a texas sharpshooter. I don’t want this to happen, but i don’t see another outcome. Check the math, look at how people treat this - tell me the equation doesn’t end in disaster.
The virus
The virus cannot be eradicated. It cannot be contained. Fully a month ago (before the virus had really spread in the US), the CDC declared that it was a matter of when, not if you would get infected. It was too late then, the situation hasn’t improved since.
Let’s do an exercise. Do you think we could eradicate the flu if we tried? It kills ~15k people a year in the USA alone, and we really don’t have to cite how much economic annoyance it causes. People get flu shots every year, but even with a shot you could still come down with a cold at the same time as everyone else.
So knowing that the chinese coronavirus spreads about twice as fast as the flu, and stays quiet without showing symptoms for 3-4x as long as the flu, what possible reason could we have to think it could be eradicated or contained? If we could do something like that, we would have done it to influenza.
This is made worse by how global it is. It doesn’t care about borders - it spreads even in the face of international travel lockdowns (because people aren’t the only thing that travel between borders, and even some people are allowed through borders). Even if we waved a wand and magically removed all cases from the US, the virus is still out there. As soon as travel resumes, or as soon as people go back to their ruined jobs and try to rebuild their lives that the various governments wrecked with all these stay-at-home orders - it’ll come back.
There is no defense, no safe village on the hill. It is here with humanity forever.
Hopeful case
Let’s take the best case scenario. A vaccine, prepared last month, will finish its FDA-mandated testing period in about a year. Let’s make it even and say it comes out on January 1st, 2021. Let’s pretend it will completely immunize a person from all strains of the chinese coronavirus, and that 95% of Americans receive the vaccine and experience no side effects. It is perfect.
We’re still screwed this year, though, aren’t we?
We can’t shelter in place for the next 9 months. Quarantining the country will destroy the economy more than it already has - and we’ve done significant damage to it already; for all of time people can look back on the stock market and see what a mess we’ve made. My state of Washington just ordered all nonessential businesses to close their doors - a week or so after ordering all restaurants to be takeout-only. How many people will lose their jobs because of this, it’s not clear. How many businesses will fold, is unclear. How many property owners (who still have to pay property tax and loan payments on a vacant commercial lot) will fold is unclear. How many loans will go default because the economy is being forcibly stalled, is unclear.
This is just Washington. It would be bad if it were just Washington. But every governor in a state heavily afflicted by the chinese coronavirus is doing the same thing; Illinois, New York, California; it’s happening. It’s not expected there’ll be federal quarantine orders, but it’s not off the table. And when I say that, I mean that nobody is ruling it out, not on the street, not in the press.
Some want the government to hand out money to affected workers; but it’s not clear where they think the money will come from. With a stalled economy, nobody is generating value. The government can’t tax if nobody is making money. If the government can’t tax, all it can do is borrow. But every country is affected by this; foreign funds won’t save us. The best they could do is print money, and boy have they been doing it.
Problem is, printing more money is how most countries slip into true crisis. In fact, we’ve seen and labelled a smaller version of this situation before, we called it stagflation. It’s bad. A stalled economy with governments trying to press on the gas while simultaneously preventing people from working is a recipe for disaster.
And remember, we’re pretending that we can do this for nine months straight. The best case scenario for our current plan involves us being in a depression for nine months straight.
What will happen next?
Otherwise titled; speculation based on past trends.
Martial action
Right now we’re entering a period where businesses in a few states are shutting down for 3-4 weeks. That won’t stem the spread of the virus. After a week with rising numbers, governors in a couple states (probably ones that already have shelter-in-place rules) will start to try to put more teeth into enforcement of the martial law shelter-in-place, leading to more traditional quaratine. This is especially likely as Italy reports fewer new cases - something that’s already barely started to happen. Urban people will demand that the same measures be used against them, and it’ll be put onto the table next week (2020-03-30 onward). Meanwhile, every country will report increased cases, and testing will be spotty.
Of course, a true quarantine is impossible to achieve (and probably unconstitutional to try) in the United States. Each state will consider moblization of the national guard. The justification for that will likely come as some kind of distribution and relief effort; a program to hand out masks or medication for instance. In effect it’ll be theater. The guardsmen aren’t going to be jackbooted thugs kicking down doors (that’s what cops are for), it’ll mostly just be to underscore how serious a given governor is taking this. It’ll probably be followed by increased appeals for federal "action".
Markets
The markets will not recover. Savvy folks will move their wealth into assets that are likely to survive a pandemic - grocery stores, teleconferencing companies, and canned food places are already seeing a big bounce. That won’t go down anytime soon - because investors need a place to park their money. There’ll be big jumps up and big drops down, largely based on whatever the corporate media reports at the time. Unexpected spike in deaths? Drop. Airline bailout? Jump. Federal action to limit something (like international trade)? Drop. You get the idea - the market always acts bipolar. This is not the last time that people will dump money, and not the last time they’ll buy assets.
Small businesses will get wrecked by this whole ordeal. Larger corporations will be able to keep regulators on their side, and might even get bailouts or favorable laws made for them. Small businesses won’t survive - their employees and owners will probably get some form of petty check in the mail (some UBI equivalent from the feds), but it won’t save a business; just cover expenses building up due to having the business taken away by the government.
To Be Continued
(this is a post-factum edit)
This turned into a series of posts, instead of just one big one. I originally had a WIP section at the bottom about the correct way to handle this situation, but it wasn’t finished, and took up too much space with a separate topic.
