I spent the past two weeks worrying aloud that I thought literally slamming the door on the US economic engine was nearsighted, silly and an idiotic move. Sadly, the economic news over the last 72 hours exceeded even my worst projections – along with those of almost every economist. Most figured the US economy would teeter at around 6 or 6.5% unemployment through April, with growth shrinking by about 10% for Q2 after zero growth in Q1. Instead, we now know that we’ve already bled almost 10 million jobs and the unemployment rate has already zoomed to 9.5 or 10%. We also know the economy contracted by about 0.8% in Q1. Along with those (now rosy) projections about how the economy was doing in March, we can also expect the similarly anticipated “V-shaped” recession is about as unattainable as the Ark of the Covenant.
I could sit here and angrily type my frustration that the government decided to shut everything down in the middle of the best economy I had experienced since I was in my mid-20s. (Trust me, I’m tempted!) But as my grandmother loved to say, “There’s no sense crying about the spilled milk. Better to get a mop and clean it up.” So how do we clean up the mess we created?
When I first started writing this yesterday, I planned on including lots of charts and tables, relying on data to drive my points home. But nothing seemed to grab my attention. Then I remembered something when I first started in sales all those decades ago. People rarely make decisions based on data. Oh, we all love to pretend we do. We convince ourselves that we are supremely rational beings. Reality is different: we are emotional creatures first and foremost. When confronted with a decision, even the most clear and concise arguments will get overwhelmed by our strongest emotions: love, hate and fear.
Last week, I wrote “How many people will end up dying from COVID-19 vs. how many people will die from starvation and other diseases of poverty if the economy slips into another massive depression?” That is still the question we should be focused on. People are afraid. They’re afraid of dying. They’re afraid of their parents dying, they’re afraid of their children dying, they’re afraid of their spouses dying. But the narrative spun by both the media and the punditry is that because of COVID-19, the deaths we fear are more immediate. They’ve taken everyone’s fear of death and added the element of immediacy, and then told us the only way to eliminate the immediacy is to wall ourselves off in our homes.
This is as much a political crisis as it is a medical and economic one. As much as the media is distrusted these days (and for good reason), it’s important to note that they are getting their cues from the political class. When the governor of New York is on television daily, declaring he needs tens of thousands of non-existent ventilators or else people are going to start dying in the streets, we sit up and take notice. When the governor of Pennsylvania takes to the airwaves to declare that this is the gravest crisis we have ever faced, people heed his words. When the President of the United States begins a daily briefing by reciting the litany of the dead, we are left with the impression that our lives are about to be snuffed out.
Now, imagine if our political leaders were to go back to the original premise of “which is worse: the deaths that will result from an economic depression plus COVID-19, or just the deaths from COVID-19?” Well, then we still understand the immediate effects of COVID-19, but we’re also asked to consider the long-term effects. Why? Because unless we’re completely irrational our psyche is now forced to realize this is a life-and-death decision no matter which way we decide. People, maybe even people we love, maybe even ourselves, will die. The only question then becomes how to balance the equation so that as few people die as possible.
It’s rare that a moral question can be summed up with an equation, but this one can:
Cnm ⸫ Cm+D
Where C stands for deaths from COVID-19, D for deaths from an economic depression, and m for mediation. What is the relation between those three factors? How do we mitigate the number of deaths in each scenario, and at what point does Cm+D cross to become less than Cnm?
(Sorry. The old data guy couldn’t resist throwing mathematics into the pot.)
We know our current approach is definitely going to result in D, and we also know the human toll of D – in famine, malnutrition, abuse, and exposure – will be dreadful. Here’s what else we’re finding out: countries that shut down even further than the US and then tried to “return to normal” – like China, South Korea and Singapore – have had recurrences of COVID-19 that are even worse than their initial outbreaks. So does that combination mean we’re just screwed? We can’t restart and try to to return to normal without killing more people, and we can’t stay in our current stance without killing more people?
No. Not at all.
The key is we can reopen our businesses, pray they return to solvency and that replacements for those that disappeared come alive quickly, but with a couple of caveats.
- First, we need to understand that normal has changed. Medical science has shown that coronaviruses are, in general, highly mutable: that is, they make up for the fact they are not difficult to destroy by mutating, often quickly, meaning most treatments are not terribly effective. It’s why the “flu shot” is rarely more than 50% effective, and why nobody has yet come up with a cure for the common cold. The mediation efforts we put in place now are likely to remain with us for a long, long time.
- Second, those most at risk from COVID-19 should be isolated from the rest of the population as much as practicable. If you have bad lungs or a compromised immune system, you should stay at home as much as possible. When they fall ill and require hospitalization, they should be moved to separate wards from the remainder of the population.
- Third, the nature of white-collar work should change. I understand many jobs require you to be onsite in order to perform your tasks. Most white-collar work does not. I never understood the resistance to telecommuting; I was doing it 15 years ago and hardly ever “went to the office” for the last 6 years of my career. I think most companies are now realizing that the phobias they had about telecommuting were not well founded and having already put in place the systems that allow remote work, will stick with the model going forward.
- Fourth, the nature of school should change. Just as white-collar workers don’t need to be in a cubicle to do their job, students needn’t be tied to a desk in a building to successfully learn. Yes, there are details that would need to be worked out so far as socialization goes. Yes, it might impose a secondary hardship on families that think both parents need to work. But in an era when school districts across the country are spending billions on trying to maintain crumbling school buildings, buildings often inadequate to meet current needs, continuing with teleschool only makes sense.
Finally, our society needs to accept that some portion of the population will contract the COVID-19 disease each year. It is the nature of the virus. Every time I hear a politician, doctor or commentator talk about “defeating coronavirus,” I cringe. It’s not that eradicating the virus isn’t a worthy goal. It is, however, ridiculous to set that condition as a benchmark for returning to living.
This will probably be the hardest adaptation for our society to make. After all the hype, the shutdowns, and the panic, the idea that this is a new reality – one with yet another dangerous disease – in our midst will be difficult for many to accept. We like to think man is invincible and master of his environment. The idea that nature sometimes refuses to be tamed is a concept that we haven’t truly dealt with for nearly a century.
But if we don’t, we will have destroyed the economy that powers modern civilization. And we will have forgotten that most important of American traits: liberty. A free people do not willingly chain themselves and they are not willingly chained. It’s time we remembered that which makes us strongest and unique, and put those principles into action.