economy

It’s Not Going Away. And There’s No Going Back

The US and Europe have now seemingly lost control of the virus -- again. Although a vaccine does appear to be just around the corner, it will be months before a shot is widely distributed, according to most expert accounts. Last week, European equities were rattled by a series of new containment protocols, including new restrictions on household "mixing" in London and curfews in some of France's largest cities, which went into effect over the weekend. Ireland is considering a full lockdown. In Italy, Giuseppe Conte is poised to ban some sporting events and will reportedly order restaurants and bars to close their doors promptly at 10 PM. The country reported a record 11,705 new cases on Sunday. Although no one seems particularly keen on taking the political risk associated with instituting the kind of harsh, nationwide lockdowns that plunged the world into a brief depression earlier this year, leaders are essentially encouraging citizens not to be around each other. "How winter and Christmas work out will be decided in the coming days and weeks through the sum of individual actions," Angela Merkel told Germans, who should avoid unnecessary trips and parties, according to the
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7 comments on “It’s Not Going Away. And There’s No Going Back

  1. John says:

    I don’t think it’s as bleak as all that. Maybe I’m wrong, time will tell.

    For anyone who hasn’t seen it, I’ve found this to be a great resource on how this will/is playing out-

    http://chm.med.umich.edu/research/1918-influenza-digital-archive/

    History rhymes.

    • calh0025 says:

      The unfortunate thing about rhyming is that the content of any two rhyming verses can be very different and lower lethality diseases like Covid tend not to burn out as fast. You can look at ebola and it is so lethal that a sustained spread is hard. The randomness of covid also gives it legs. I see nothing barring a complete global vaccination that could arrest the perpetual spread of covid. What’s more the more animal populations it jumps back into the more likely a new mutant will reenter human circulation. Imagine for example that ALL monkey populations were now Ebola reservoirs.

  2. runamok says:

    It’s going to be a horrible winter and spring. We know what’s coming. We saw this only months ago. By the time Europe talks about locking down, it’s two weeks too late to curb the spread. The same will happen here, all over America, in regional waves. Snowbirds will be flocking soon to Phoenix…many come from South Dakota, North Dakota…add cheap gin and sunshine together…you get the picture.

    i’m in the this will change everything camp.

    When that Applebees closes, it’s the payroll for 50 people, sales tax paid to city and state, SS and Medicare taxes, sewer and water tax, less driving and less gasoline taxes paid to use to repair roads and bridges. And, the guy who paints stripes on the parking each year on the third Sunday of April at 6AM, one less job for him each year. Less revenue to cover the debt obligations for the hospital bond the town approved last year.

    All the while, the town’s fire, police, and teacher, pension obligations remain fixed, unchanged, eating up a larger share of a shrinking pie.

    This is a reset. (And not the big one, that’s still to come, maybe later this decade.) We’re not going back to Jan 2019 levels for years yet. The town that loses the Applebees gets back to 85 to 90% Gross Town Product (GTP) and tries to start a new trendline up and to the right. The gap between Jan 2019 and the new trend line is disappeared economic product.

    If there were a chance the town would be able to get to a post-COVID, 4% real growth rate for five years from 2022 to 2026, I’d feel better about the prospects. Fact is, for those reading The H Report, the town might not ever see 4% real growth ever again (barring war and recovery, which no one should want). A 2.2% real growth rate like the mid-2010s seems like a dream. Maybe time for the town to look at insolvency and reorganization. The mayor is going to wish he could spend the winter in Scottsdale.

  3. DoubleB says:

    Fascinating article. As someone who has lived in area where the golden era was roughly 100 years ago, these towns/counties never really seem to die. The private economy that disappears gets usurped by a public one. The local college might expand, prisons and clinics get built as “solutions” to the resulting poverty and its repercussions. Jobs to help more disadvantaged students get added to the local school district. These areas that are already rural tend to have outsized representation in their state legislatures, either due to districting or tenure, helping to ensure the money is there to keep supporting the area.

  4. I think we are heading for a modified lockdown in the US in the next two months. This article did remind me that in the beginning of the crisis you promised to support in some way two women of establishments that you went to on a regular basis. I wonder how that worked out.

    • One of them refuses to take charity anymore and works making sandwiches now. The other is back in Manhattan, where she has help from a generous family (not hers). Neither is doing what I would call “well,” though.

    • John3D says:

      I believe I saw the insight here on this site that the first telltale of an empire’s fall is a decline in education. That certainly is happening in the US. A significant percentage of the population can no longer gather information from multiple sources and use critical thinking to unearth the facts. This is always in play to some degree, but there comes a tipping point when a significant percentage can’t think critically and are numerous enough to create a feedback loop among themselves that amplifies their misguided opinions.

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