Friday, April 17, 2020
Mitigation: the process or result of making something less severe, dangerous, painful, harsh, or damaging
U.S. retail sales suffered a record drop in March as mandatory business closures to control the spread of the novel coronavirus outbreak depressed demand for a range of goods.
The outbreak set up consumer spending for its worst decline in decades.
Retail sales plunged 8.7% in March, the biggest decline since the government started tracking the series in 1992, after falling by a revised 0.4% in February, the Commerce Department said.
We are almost certainly in a Recession.
So what you’re telling me, Captain Obvious, is that when businesses are closed, when people are ordered to shelter-in-place, many of whom are now unemployed or expect to be so very soon; when a global pandemic occurs and we take drastic measures in response…what you’re telling me is that the economy implodes. Who could have imagined such a thing?
We are where we are and second guessing will do no good. We’ll never know how many would have died if we had taken less drastic measures to mitigate the spread of COVID-19. But we do know that more would have died. We are also starting to experience the consequences of those drastic measures. And make no mistake, those consequences will be deadly for many who would likely have survived the virus. We just don’t know how many and never will. The lives saved by shutting down the economy vs. the lives that will be lost from doing so….unknowable.
So we chose to mitigate the spread of the virus. Now we must decide how to mitigate the damage that mitigation has created. Whatever we do, it’s a no win situation. Start opening up the economy in early May and COVID-19 outbreaks are inevitable. Wait until June or July, there is still no guarantee that outbreaks will not occur and the economic damage may become irreversible. Taking half-measures to re-open the economy yet still contain the spread might be the worst of all options…or it might be the best. We don’t know.
What we do know is that we cannot wait months for a vaccine. That is not an option. Without a vaccine, whatever action we take comes with deadly risks. We are reaching a tipping point where we have to consider the long-term consequences of our actions. Just as viral spread is exponential, economic collapse expands exponentially. But there is no flattening curve and no herd immunity when it comes to the economy. Those who lose jobs and life savings do not develop antibodies that protect them and restore them to economic well-being. Many will fall and never get back on their feet.
Whatever we do will be politicized, especially in this election year. Politicians, being who they are, will choose the half-measures option. Open up enough of the economy to say they are “opening the economy”, but maintain enough restrictions to protect “the most vulnerable among us”. With the damage already done and without a vaccine, even those who have jobs will not fully return to normal activities or spending money. We may be able to stop the economic free fall, but recovery depends on that vaccine. Whether COVID-19 is really a monster or we have made it a monster, in today’s world it is a monster and that’s all that matters. Mitigation will only get us so far. Find the cure or learn to live with the monster.