economy europe

The Not-So-Great Coronavirus Debate Rages On: Kill The Global Economy To Save Lives?

"...but the faster the virus stops, the quicker and stronger the recovery will be."

Just as COVID-19 deaths looked poised to begin gradually falling in Italy, fatalities in Spain rose the most in a single day since the outbreak began.

The country said 514 people died from the virus in one day despite draconian lockdown measures aimed at stopping the spread.

On Monday, Italy reported 601 deaths, marking a second consecutive day of declines and stoking optimism that perhaps – just perhaps – the worst is over for the country, which became the global epicenter this month when fatalities surpassed those seen in China.

In Iran, the situation continued to deteriorate. The death toll climbed to 1,934 after 122 people died in the past 24 hours. Nearly 1,800 Iranians have tested positive since Monday.

Australia’s infection total topped 2,000 and in the US, at least 100 people died Monday, bringing the total to 500+. Donald Trump appears poised to encourage Americans to go back to their normal routine (or something that closely approximates their normal routine) within days, even as medical experts generally advise against it and state and local officials continue to institute what amount to shelter-in-place orders. GE, Ford and 3M are collaborating on a large-scale effort to make desperately needed ventilators.

Japan is set to delay the 2020 Tokyo Olympics by one year, an outcome that was unavoidable. Tokyo saw its largest one-day rise in patients on Tuesday, Fuji News Network reported.

WTO Deputy Director-General Karl Brauner is infected, a spokesperson said.

The UK is, of course, on almost total lockdown after Boris Johnson delivered a stern message on Monday evening, barring any and all unnecessary movement of people for the next three weeks. “Stay home”, he implored.

Europe’s economy looks poised to fall into a deep, dark recession, a self-evident contention that began manifesting in record-low PMI prints on Tuesday. The country-level data reflects the malaise evident in the broader gauge.

“The latest PMI data revealed dismal results for the French private sector, with coronavirus-driven shutdowns leading to widespread economic disruption”, IHS Markit said, noting the record plunge on the services gauge. “These declines suggest GDP is collapsing at an annualized rate approaching double digits”, economist Eliot Kerr remarked.

“March data highlight that the COVID-19 outbreak has already dealt the UK economy a more severe blow than at any time since comparable figures were first available over 20 years ago”, Markit and CIPS lamented. “The combined monthly decline in output across manufacturing and services exceeded that seen even at the height of the global financial crisis”.

On Monday, following the first of what will, apparently, be several calls between G20 officials, IMF Managing Director Kristalina Georgieva said 2020 is going to be worse than the GFC for the global economy.

“The outlook for global growth for 2020 is negative—a recession at least as bad as during the global financial crisis or worse”, she said. That means global growth, as a whole, will contract this year, and although we don’t yet have an official projection from the IMF (i.e., an update to their January projection), you can pencil in a contraction as far as Georgieva is concerned.

“We expect recovery in 2021”, she went on to say, noting that in order to get there, “it is paramount to prioritize containment and strengthen health systems—everywhere”.

“The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be”, Georgieva reasoned.

At least one person doesn’t agree.


 

12 comments on “The Not-So-Great Coronavirus Debate Rages On: Kill The Global Economy To Save Lives?

  1. RStantz says:

    It’s not an either/ or : coming out quarantine too early will do both.

    • calh0025 says:

      Indeed. I recall my E. Coli 157 infection. The antibiotics I needed could shut down my kidneys permanently if I was not lucky but the infection would kill me if I didn’t take them. Making my system endure the short term risk of damage was the only way to avert short term system failure.

  2. Bob says:

    “WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO” –

    In 15 days Trump might contract coronavirus, and so the question will answer itself.

  3. calh0025 says:

    The folly in Trump’s “logic” is that there are really only a handful of possible scenarios to play out. One is miracle resolution where heat, malaria pills, prayer defeats this thing permanently very soon, which lets say the odds are negligible.

    The second is we bite the bullet and idle the global economy keeping only essential items running until we have a vaccine and monetizing the pain then ride the rocket ship once we are out from under this nightmare and hopefully start taking seriously the idea of building resilience into our economic systems with early warning systems like universal healthcare and proactive pandemic detection and anti viral research.

    The last one is to go back to normal then watch as the pandemic grows exponentially unchecked overrunning the hospitals and causing millions of deaths all while the economy burns to ash as businesses encounter a lack of supply from vendors, missing critical employees and a workforce scared to death to go to work. Nobody goes to sporting events or bars because everyone has lost a friend or a loved one and the virus is out there perpetually. Cities encounter massive civil unrest. The recovery is slow and painful.

  4. Ria says:

    The unusual part of this economic downdraft is that it is emmanating out of the service and trade sector of the economy. The problem with Trump is not his “solutions”. There is a some chance he could be right. It would be based on luck rather than some sort of at least semi rigorous process. Most Americans I would bet would not be willing to rely on luck. But here we sit. The most unbelievable thing to me is that this fool’s popularity is actually rising. Hard to underestimate the stupidity of the American electorate.

    • Viss says:

      I think a Huge part if Trump’s exploding problem is in the way he frames his on the fly messages and thinking. This is basically world war 3, and the concept of needing output from people to provide critical services and products is essential and even patriotic but the GOP and Trump seem to be focused on ways to enrich themselves and friends. Obviously, other wars have allowed for theft and abuse by Captain’s of industry, whose Fidelity is always focused on selfserving piracy.

  5. Omegaman13 says:

    For the man who delights in giving others disparaging nicknames, I give you: President Donald “Typhoid” Trump!

  6. jyl says:

    The idea “trade lives for economic activity” probably plays well in more rural areas and small towns, where there are few if any Covid-19 cases and the large cities feel remote, and with the 0.5% who derive most of their wealth from securities or owned companies, while being easily able to sequester themselves (at the Hamptons, etc). That happens to coincide with GOP electoral strength.

    Prematurely lifting the shutdown as an electoral strategy seems odd, because the case curves will continue to climb, more medical systems will be overwhelmed, and the virus will start making an impact in those small towns and rural areas (watch Midwest). At that point the Fed govt will be forced to choose between reversing course and belatedly reimposing the shutdown – snuffing out whatever market rally has occurred and throwing things back into chaos – that much closer to the election.

    Unless you believe that a magic bullet (hydroxychloroquine, warmer weather, etc) will arrive in the very near future.

    Seems to me the better strategy would be to continue the shutdown, use the time to beef up our medical system with temporary hospitals and emergency production, then carefully ease the shutdown, all while Trump plays Santa Claus and sends voters $2,000 checks (while quietly bailing out large companies). The Treasury could probably include a personal note from your Benevolent President with each check. Trump has the opportunity to spend $2-4 TR to buy the election while granting tens of millions a sort of paid staycation – can’t believe he’s not grabbing it by the p***y.

  7. Anomalous2 says:

    Maybe he could wait until the daily death count has peaked and was on the way down for a couple weeks or so. Of course if it took off again…

  8. Viss says:

    Maybe, we just have to allow our leadership to give the ok to go back to work and ignore cases reports and deaths. Sending people back to work, just as the contagion is accelerating is a perfect step for Trump zeolites to put their money where their mouth is. Adversely, the other 200 million+ people that more cautious, can examine evidence as it plays out. The outcome for all this is highly uncertain, but in general most people around the globe are being cautious for good reasons. In the possible event, that the pandemic intensifies during the period of Trump’s heightened denial, all the possible deaths are on him, but as usual, he won’t accept any blame and perhaps Pat himself on the back for helping. However, at some point, if the American pandemic echos the impacts of what has happened during the stages of contagion, why Americans look at Trump any differently than a terrorist, and why would anyone allow him to not be punished? This is the man who claimed he could kill someone and not be accountable, and now, as possible mas murderer, how so we process that?

  9. RStantz says:

    Seems like the fundy Christian, anti-vaxxer, “I wasn’t sick until I went to the doctor” crowd has DJT’s frighteningly limited attention. No accident that he is proclaiming Easter as “Back to Work Day.” We will just let God sort ’em out.

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