“We stress that rate cuts are no panacea, and in the absence of a coordinated health and fiscal response, the situation is likely to get worse before it gets better.” – Oxford economists Lydia Boussour and Gregory Daco quoted in “Barron’s”.
ROLLING FORK – When it comes to the COVID-19 strain coronavirus, I just feel pretty relieved every day that we don’t get the really neat news that the bodies of those who die from it are being somehow reanimated into flesh-eating zombies. Anything short of that, I take to be a positive, pump a little hand sanitizer and go about my business.
On the other hand, however, I have this old friend – he is both old chronologically, which is to say he is older than I, and he is a friend of longstanding – who in his golden years has (a) discovered social media and (b) become a self-appointed media critic.
The combination is most unfortunate.
He is an educated chap and the amount of affection I have for him is born out by the fact that I am leaving him unnamed, but I have to say that some of the stuff he comes out with is just breathtakingly uninformed and predictably partisan. Oh, yeah, I forgot to mention his late in life transformative tendencies have included the adoption of all things Republican.
His latest kick to ridicule what he apparently sees as the (Fox News talking point alert) “mainstream media’s” excessive emphasis of what is very rapidly becoming the novel coronavirus pandemic by cleverly repeating that there are some 325 million people in the United States and that only (a much smaller number) of virus cases have been reported and only (an even smaller number) of those cases have proved fatal.
And while his utilized numbers have been largely accurate (as far as anyone knows), they have nonetheless been absolutely as wrong as the premise he would use them to prove, due to the very salient fact that we actually have no idea how many people in this country are infected with the virus because we don’t have enough kits to properly test enough of them.
And yes: Why the hell not? is indeed, the most salient question summoned to mind, but one which I shall defer until another time.
Because folks really do need to start paying attention to this business, and if the public health angle isn’t capturing it, then maybe something else might. Something like economics. If lots of folks getting sick doesn’t bother them, maybe their own wallets and portfolios starting to suffer might.
The stock market has already lost 3,000 points in a week, but that’s apt to be small potatoes before this plays out – hopefully absent the zombies.
Every economist brave enough to venture any opinion, is saying that the coronavirus and its fallout will weaken 2020 economic growth. What some are calling “virus fear” is disrupting travel and international supply chains. The bond market, in the oh-so-careful economist language, is viewed as “worrisome.” falling below one percent for the first time ever.
But the greatest threat to the American economy can be found in its greatest strength – the American consumer.
As the virus spreads, those consumers will be told to pull back from interacting with others due to fears of transmission and as they do, the things they stop doing will affect industries large and small:
Airlines – the average American takes three flights per year. Flights are already being grounded and companies have ordered their employees to stop business air travel.
Cruise lines – forget that. Vulnerable older adults are already being told to avoid the ships and the thought of being on a floating petri dish has killed a lot of planned trips, to be sure.
Brick-and-mortar stores – the already suffering retail industry could be put out of its misery. Want to go spend the afternoon with a few thousand other folks in the mall?
Festivals and sporting events – events are already being cancelled and there is serious talk about competition at the highest level – NCAA basketball tournament level – being conducted without an audience, sans fans.
As former economic advisor to President Barack Obama Austin Goolsbee wrote in The New York Times last week: “So for all the talk about the global “supply shock” set off by the coronavirus outbreak and its impact on supply lines, we may have more to fear from an old-fashioned “demand shock” when everyone simply stays home…the coronavirus could be a ‘Snowmaggedon-style storm that hits the country and lasts for months. And show some sympathy for the folks quarantined in China and elsewhere. Because if it spreads rapidly in the United States, it could be a heck of a lot worse.”
But, hey, no zombies – yet.