Now more and more, on radio and on TV (I listen to the BBC) reports of mounting hardships and tragedies as a result of lock-downs. Almost 40 million unemployed in the US.
Comparisons to the Great Depression are now not at all far fetched. I raised the spectre of such a comparison early in the crisis but I am not sure I really even believed it myself - I was worst case scenario-ing. And now!!
Much of this is subsidised unemployment, suggesting that the massive cash infusion policies imply obstacles to recovery by the perverse incentives they create.
One report on the BBC suggested that 250 million people across the world have been brought close to starvation!! Millions in India are not getting necessary health care (for example for the treatment of TB), and the developing world in general has been devastated. A microcosm of this is emerging in the US in food bank lines, suicide numbers, and in other ways.
So was the lock-down worth it? Was it necessary? So many were so sure it absolutely was.
We simply do not know to what degree the lock-down helped overall. Some places without a high degree of lock-down have had a low death rates. And even now we do not know whether deaths have been avoided or simply delayed. I have not heard any logical explanation as to how it is that lock-downs have permanently reduced the death rate. We have no vaccine, so the virus is just as threatening now as it was when we crashed the world economy.
So what did we achieve? If we are safer it may be because for some unknown reason the virus plays itself out. I hope so. And if so, we did not need the drastic sacrifice of economic value that will be with us for years.
Millions of Indians needing TB treatment have not been able to make it to the hospital, only one example of the massive hardships, some fatal, that lock-downs have caused across the world and even in N. America - poor people without work in desperate straits. This is fact.
As for macroeconomics, I do not have much faith in the ability or willingness of the monetary authorities to act appropriately. QE is a transformative move, introduced after the 2008 crisis, now being taken to new levels from which it will be all but impossible to retreat. National debt has climbed to dangerous levels. Most dangerous of all is the precedent that has been set and the expansion of the scope of government. The Democrats are frothing at the bit to use this crisis to in their worlds "transform our society".
