Moon of Alabama Brecht quote
May 08, 2020

Early Lockdown Lifting Will Prolong The Greater Depression

Despite the so called lockdown the number of new cases of Covid-19 in the U.S. is barely sinking. It is only because the heavy outbreak in New York is now in decline that the number sinks at all. In most other states the numbers are just stable or still rising. But the White House and many state governors are lifting the restrictions and want everybody to go back to a normal life. This won't work.


Source 91-DIVOC - bigger

Two weeks after the states declare that everything can be reopened the new cases number is likely to again increase.

But people need to believe that it is secure to go back to normal life before they do so. They will not consume more than necessary unless they feel that it is safe to do so. How can they develop that trust while the numbers and headlines continue to show bad news?

The fear is reasonable at least for everyone over the age of 50 and for the many obese U.S. citizens. Covid-19 spreads easily, there is no medication against it and the infection fatality rate in the U.S. is estimated to be 1.3%, much higher than for the flu, even without accounting for New York County.

A good thing is that fear is the only personality-based variable that predicts virus-mitigating behavior. People who fear to get sick will continue their social-distancing and hopefully wear their masks.


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Some 80% of GDP and employment in the U.S. is generated by services. The economy depends on people feeling safe. Who will go to a restaurant, a theater or on a plane as long as the trust that it is safe to do so is not there? The people will learn about the risks in those places and avoid them. That behavior will prolong the crisis.

A better strategy would have been to increase the lockdown measures until the number of new cases goes sharply down. People would then have regained some trust. Lifting the lockdown only when the people feel it is secure to do so would have been much better for the long term economy then the current rush.

The U.S. now has an enormous unemployment problem. To solve that problem as fast as possible the people need security and peace of mind. Only then can the economy spring back.


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It is likely that the real unemployment numbers are some 25% higher than the official numbers. Economist Nouriel Roubini is right in calling this the 'Greater Depression'. It is now already larger than the one 90 years ago.

As the U.S. does not have a reliable social safety net the shock its economy will go through will be much longer lasting than the one in European economies. A lot of jobs will take several years to come back if they do so at all. Many people will lose their housing. General education and health will further decline. Crime will rise and more nutters will go crazy.

One current Amazon bestseller is by an anti-vaxxer who claims this is a 'plandemic', that Anthony Fauci funded the Wuhan lab, and that covering your mouth 'activates' the virus. The author is Judy Mikovits, a disgraced 'scientist' who has been caught faking her research and papers. She was fired from her institution when she was caught stealing its proprietary data.

That such a book sells at all shows the deep mistrust the people have in their government.

The U.S. needs a prolonged unemployment program to keep its people out of misery. It needs an enormous infrastructure program to bring the many millions of people back into work and to reignite the economy.

But neither the Republicans nor the Democrats are calling for those measures. Instead they are busy shuffling trillions of dollars to those who already have too much money.

Posted by b on May 8, 2020 at 18:08 UTC | Permalink

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Re: COVID-19 and vaping, Noirette | May 12 2020 19:02 utc

I think that the profile of victims was very different in the two cases, and since vaping cases were not isolated from anyone, if they were several thousands of COVID-19 cases, a huge epidemic would start then.

It seems that outbreaks of atypical pneumonia happen quite regularly on the global scale, this is why neither China nor WHO could be certain if events in Wuhan are a harbinger of a pandemic or not. You cannot make a pandemic alarm every few months.

Even with COVID-19, majority of people getting in contact with the virus seems not affected, so there can be a period of slow spread when this virus mutation could die out among humans. A bit like with snow avalanches. Snows starts trickling down on a slope in small streams and then -- it can stop or grow.

Posted by: Piotr Berman | May 13 2020 4:01 utc | 201

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