November 29, 2020

‘I’m going to shut down the virus’ without shutting down the economy



Apparently there is a magic solution to the coronavirus crisis that every nation in the world has missed. Luckily for us, Joe Biden is going to make it happen:

From the very beginning of the stay-at-home orders back in April, the idea was that in order to enforce social distancing and limit the spread of the virus so that it didn’t overwhelm the health system, we needed to clamp down on people going out. That meant things like bars, restaurants, gyms, movie theaters, etc. would need to close at least until things were under control. As it turned out, things have never really been under control. We’ve had various surges around the country and are in the midst of one now with 90,000 new cases in a single day.

And something similar is happening in Europe. Belgium is one of he hardest hit countries in Europe at the moment and they just announced a new lockdown.

Belgian authorities on Friday announced a six-week closure of nonessential businesses and tight limits on social contacts as the country tries to stave off caseloads that could fill hospitals to capacity within a week.

The lockdown capped a week that began with most European countries still trying to resist a return to springtime closures that devastated economies but helped avert an even worse health crisis. This time, Belgium and others are keeping schools open, though the new plan lengthens a holiday break that starts Monday.

“Our country finds itself in a situation of a health emergency,” Belgian Prime Minister Alexander De Croo said Friday. “This reinforced lockdown has a sole objective: to avoid the failure of our health-care system.”

France is also seeing a steep rise in cases and is starting a new lockdown today which is set to last for the entire month of November. This lockdown closes all non-essential businesses. President Macron acknowledged this was going to be a hit to the economy:

In a televised speech on Wednesday evening, Macron called for a “collective effort” to combat Covid-19, admitting recent efforts to contain the virus were “useful, but not enough”.

“Difficult measures have to be taken,” the president said…

He recognised that another lockdown – following the strict two-month confinement in March and April – would hit the French economy, adding: “The health system won’t hold unless there is an economy to support it, but nothing is more important than human life.

Even in Germany which has been widely praised for its response, Chancellor Merkel has announced a new shutdown:

Chancellor Angela Merkel says German officials have agreed to a four-week shutdown of restaurants, bars, cinemas, theaters and other leisure facilities in a bid to curb a sharp rise in coronavirus infections…

Shops and schools are to remain open, unlike during Germany’s shutdown during the first phase of the pandemic in March and April. Restaurants will be able to provide take-out food.

Merkel appealed to people not to make unnecessary journeys and said hotels won’t be able to accommodate people on tourist trips.

The decision came hours after Germany’s disease control agency said a record 14,964 new confirmed cases were recorded across the country in the past day, taking the national total in the pandemic to 449,275.

It’s a big trade off but it’s really unavoidable. You can of course take the other choice. You can choose not to shut down quite as much to preserve your economy. That’s what Sweden did but there are consequences there too.

Like other countries, Sweden has been hit hard economically. During the first six months of 2020, the gross domestic product fell by 8.5 percent. Unemployment is projected to rise to almost 10 percent in the beginning of next year.

The drop in GDP is considerably smaller than in southern European countries and the United Kingdom, and one to three percentage points smaller than in Denmark, Germany and the United States. The GDP fall, however, is larger than in Finland and Norway. It’s difficult to meaningfully evaluate the impact of different coronavirus strategies using this metric, because of the differences between the countries’ economic structures. For example, Sweden depends less on tourism, an industry hit particularly hard by the pandemic, than do Italy and Spain. Still, the lenient Swedish approach to the pandemic, involving fewer formal restrictions, likely did dampen the economic impact of the pandemic.

But the death toll here has been much higher than in our Nordic neighbors. As of Tuesday, the cumulative number of deaths from coronavirus infections per million people was 52 in Norway, 64 in Finland, and 118 in Denmark, according to Johns Hopkins University. In Sweden it was 581 — not that far below the United States with 673.

Again, the point is not that we have no choices in how we respond. I think Germany is right not to close schools. Reopening schools here would be a good idea. But whatever choice a country makes, something has to give. Shut down too much and you might control the spread of the virus but your economy will be a disaster. Don’t shut down as much and your economy won’t be hit as hard but your death toll will be higher. It’s a terrible choice to make and it’s why it was so absurd to hear Joe Biden attacking President Trump in the first debate both for the coronavirus death toll and for the economic toll, as if he, Biden, could have avoided both.

That’s what Joe Biden is doing in that tweet above, i.e. claiming he can shut down the virus without shutting down the economy. Even in China, where the economy is booming compared to most of the world, that’s not true. China’s initial shutdown in Wuhan was more severe than anything done in the U.S. or Europe so far. And given the situation we’re facing now, there’s no way to stop the spread without limiting social contact. Whether that comes in the form of a government mandate or simply people exercising common sense and following good advice, the economy is going to take a hit to get things under control again. There’s no magic solution to this crisis like the one Joe Biden is promising.





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