The intolerable shut-down must end

Chart #1

Chart #1 shows what I estimate the total loss of private sector jobs has been since most of the country went into lockdown. It's just about the worst economic catastrophe imaginable: over 26 million people have been sent home and forced to apply for unemployment insurance. To date I am unaware of how many public sector employees have been affected, but I'd bet it's very few. Eric Garcetti (Mayor of Los Angeles) announced last Sunday that thousands of city workers will be "furloughed" beginning this July, but that only translates into a 10% drop in their incomes, not their jobs. 

The disparity between the massive suffering imposed on private sector workers and the extremely limited impact on public sector workers can only exacerbate the feelings of frustration that are building across the country. I think people are beginning to realize that we consented to the shut-down strategy in the belief that doing otherwise would result in millions of deaths. A shut-down was necessary to "flatten the curve," and that has been achieved throughout most of the US. It is pointless to continue the shut-down, since the virus can only be contained by immunity, which in turn is achieved by infection or by vaccination, and the latter is still far in the future.

So why not begin the reopening? Hospitals throughout the country are so empty (having forbidden elective surgeries and having received far fewer covid-19 patients than originally projected) that many are teetering on the verge of bankruptcy. The 14-day moving average of daily new cases (an official criterion for reopening) is now falling significantly in at least 20 states (most impressively in New York), and it has flattened in at least 14 other states. New studies reveal that many millions have already been infected, yet only a few have been sick enough to seek treatment or a test. It's becoming crystal clear that the vast majority of deaths occur only among people who were already suffering from a co-morbidity; for healthy people under the age of 65, the risk of dying from covid-19 is negligible, according to Stanford Professor Ioaniddis.

Yet we are still under the thumb of bureaucrats and politicians who were quick to impose draconian shutdown measures but are now very slow to embrace any reopening. Tens of millions are going stir-crazy, millions fear the loss of their business and/or their livelihoods, millions are standing in breadlines and virtually all students are studying at home while staring at computer screens (yet these are the ones with almost no chance of suffering serious consequences from a Covid-19 infection). But the ones calling the shots are still getting paid (and many handsomely) and still fully-employed. There is a precedent for this, and it portends more social unrest in the days and weeks to come. A good friend of mine, H. Cademartori, penned this cartoon with these thoughts in mind:

If there's a silver lining to this massive unemployment cloud, it's that Congress decided—in a paroxysm of generosity—to add $600/week to each unemployment check through the end of July. Unfortunately, the Law of Unintended Consequences promptly kicked in, as many workers suddenly discovered they would be earning far more while unemployed than they were previously making while working. This will make it much more difficult for employers to restart their businesses, especially in the restaurant industry. "Call me August 1st" will be the answer that many employers receive when asking their workforce to come back.

Recovery from this shutdown will likely be painfully slow for awhile, but it will happen, and at some point—probably on or about August 1st—it should begin in earnest. I'm still planning to take the family to Maui in August.

UPDATE (April 24): I highly recommend this article by Scott Atlas. It is a succinct and compelling summary of what we know so far about the coronavirus and why it is time to end the shutdown: "Strictly protect the known vulnerable, self-isolate the mildly sick and open most workplaces and small businesses with some prudent large-group precautions."

UPDATE (April 25): I also highly recommend this article by George Gilder. “... since the virus has already spread widely in the general population, efforts to stop further spread are both futile and destructive. So let’s stop pretending that our policies have been rational and need to be phased out, as if they once had a purpose. They should be reversed summarily and acknowledged to be a mistake, perpetrated by statisticians with erroneous computer models.” HT W. Smith