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Friday, May 15, 2020

WHAT'S HAPPENING TO THE ECONOMY ISN'T A DOWN TURN.

There is a lot of talk and concern about a depression or recession associated with the COVID-19 Pandemic. This is not the reality of the current situation.  As I said in a tweet, calling this a down turn is like calling Hurricane Katrina a housing shortage. This disaster is blowing the economy over, but that is not the primary issue. The primary issue is 10s of thousands, to hundreds of thousands of Americans dying. While the hurricane is still blowing is no time to send out some kid to start the coffee and put out the donuts for the morning rush.

There should be a simple common sense path forward. First you deal with the disaster, then you worry about the financial impact. Note, the word simple does not mean the same as easy. The game of Golf is simple, get the little ball into the hole in as few shots as possible. The simple goal is not easy.
This pandemic is a hurricane of a disease causing virus. As long as they are circulating there is going to be infections, illness and death. There are other illnesses out there causing sickness and death, but the Coronavirus causing COVID-19, according to qualified experts, is unique in its ability to spread and its wide range of targets then it attacks the human body.  It comes from a family of viruses that include most if not all strains of the common cold. The family also contains the SARS virus, which this one, by my reading at least, is most directly related to.

By my non-expert understanding, one of the differences between this and the SARS outbreak of earlier this century was the severity of illness. SARS didn't have a range of illnesses, to say, if you caught SARS you became very sick, period. (There were a very few exceptions) So it was relatively easy to contain. If you had it, you were in the hospital, likely ICU, you weren't in the grocery store sneezing on a shopping cart. That is not the case today. People have a wide range of illnesses from deadly, to zero symptoms at all. The zero group is what makes this one so hard to control. People with zero symptoms are able to infect large numbers of people around them and not know its happening.  Many of those people will get ill, some will die, others will without symptoms be new spreaders. THAT is the howling pandemic wind blowing down the economy.

As in a hurricane we should not, cannot, ask people to risk the howling wind for non essential purposes to keep money moving. No one needs to go bowling in a howling hurricane and no one needs to go bowling in howling pandemic. First things first, deal with the disaster we have little control over, THEN we can deal with the new economic reality without turning the pandemic into a much deeper crisis than it already is. 

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