Instead of putting up my usual Saturday snippet of an excerpt from a book, today, in the light of the coronavirus situation, I'd like to post snippets from three articles that summarize where we are today, and show a trend that's certain to continue for at least a few months, if not considerably longer.
The reason I'm doing so is that, almost unbelievably, there are still those who maintain that the coronavirus pandemic is "all in the mind", that COVID-19 is no worse than the flu, and that this whole affair is overblown fear-mongering by those seeking to manufacture a non-existent "crisis" in order to overturn our civil liberties and make a grab for power. In the light of the cold, hard evidence available to us, I simply can't understand that mentality, and I make sure I stay away from it. I don't need that kind of crazy in my life.
Last night I put up a couple of video clips from Italy, where that country's health care crisis over COVID-19 was portrayed in graphic reality. If you haven't already watched them, please click over to that post and do so. That's the reality we're facing here in just a few short weeks from now, unless some miraculous cure is discovered. (I'm hopeful about chloroquine, which is much in the news at present, but nobody yet knows for sure whether it will work. Please God, it will!)
With that in mind, here are three articles concerning the economic impact of the coronavirus pandemic. They show very clearly how we're in this for the long haul, and can expect things to get worse before they get better. We can make it through this, but it's going to take a concerted effort from all of us. Please click through to each of these three articles to get a clearer picture of what we're facing. Unlike many scare-mongering propaganda puff pieces, of which we've seen far too many over the past few weeks, these are solidly factual.
1. U.S. economy deteriorating faster than anticipated as 80 million Americans forced to stay at home. "Estimates of the pandemic's overall cost are staggering. Bridgewater Associates, a prominent hedge fund manager, says the economy will shrink over the next three months at an annual rate of 30 percent. Goldman Sachs pegs the drop at 24 percent. JPMorgan Chase says 14 percent ... U.S. officials are deliberately engineering a sharp recession to blunt the spread of a fatal disease for which there is no cure, definitive treatment or vaccine ... The only way to interrupt the viral blitzkrieg is to implement "social distancing." But keeping friends and co-workers apart is a recipe for crippling the consumer spending that drives 70 percent of the $21 trillion economy."
2. The Beacons Are Lit. "Here in the US there’s every reason to think our experience could be far worse than China’s without immediate action. It is not confined to just one city; we have large outbreaks on both coasts and more popping up everywhere. All 50 states now have cases. Worse, we are reacting much later than China did. I am convinced that a rigorous national lockdown and social distancing is the only way to stop this from reaching epically tragic proportions. Yes, it will have a huge economic cost. We just have to collectively pay it. The alternatives are worse ... A stunning 39% drop in the number of hourly employees going to work in the US just in the last 10 days. Is there anybody who thinks that’s not going to increase? ... Let me be clear. The US is facing a deflationary depression. One cannot have the economic impacts we are seeing and think they will magically go away when the virus does. That’s not how economics and business work."
3. 9% of the US Has Been Laid Off Due to the Coronavirus. "41 million Americans ... this week will take home less money than last ... 9% of working Americans, or 14 million of your friends and neighbors, will take home no paycheck this week, because they were laid off ... Wow, that's not a recession. A depression is the only word ... Depression is a very fitting word if those numbers are even close to what's going to happen."
Even if chloroquine proves to be a "miracle drug" against COVID-19 (something we don't yet know, and won't know for another week or two), and even if it reverses the current health care crisis and makes it far more manageable, those economic impacts have already occurred, and will take months to work their way out of our business and commercial and industrial systems. That's just the way it is. One can't inflict this much damage on an economy, almost overnight, and expect it to bounce back as if nothing had happened. We're already in this for the long haul.
There are things we can do. Congress and the President are working on measures to alleviate the economic pain - not take it away altogether (that's flatly impossible), but help people survive through it. (I'm worried that political points-scoring on both sides may hamper that. I'd love to see our politicians consistently behave like adults, but that's not going to happen.) As individuals, there's also a lot we can do to help ourselves and each other. I wrote about them a few days ago. Please click over to that article, and see whether there's something you can contribute to make our common lot a little easier.
Finally, I'd like to suggest that we need to take a good, hard look at our personal risk profiles. Some of us - including yours truly - are more at risk from this disease than others. For all of us, but particularly for those at higher risk, it's more important than ever to make sure our affairs are as close to organized as possible. Let's update our last wills and testaments, make lists of bank accounts, debts, computer passwords (including login ID's for our banks and other creditors), and so on. Let's make sure we communicate those things to our significant others and/or a trusted friend, so that in the event we can no longer manage our own affairs, someone else can do so on our behalf. (That may also mean signing powers of attorney - check with your lawyer.) It'll be hard enough for our loved ones to see us struggling against this disease. There's no reason to make it harder for them by leaving bills unpaid, and their having utilities cut off or being evicted for non-payment of rent.
Let's not panic, but rather take a long, sober look at reality, and prepare (and conduct) ourselves accordingly.