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Laura Federico

SACRIFICING THE ECONOMY

Updated: Aug 24, 2020

April 11, 2020

I like this pretty, leafy street in my neighborhood.


It’s been a little over a month since I've been at home. And surprisingly, it really hasn’t been so bad.


I have a nice house (I like it, anyway) and someone nice to quarantine with (I like her, anyway!). We have a porch in front and a deck in back, so we can spend time outdoors if the weather's nice, which it mostly has been. We have 3 dogs who need exercise, so we walk every day. We have good meals and a harmonious household (can’t forget to mention the cat, Pirata, whom I call “my little dreamboat”).


Yet, of course, this is a hugely stressful time. I feel weird most days, off-balance, often in a state of low-level anxiety that I'm able to function through, but never really goes away. I few times that anxiety has suddenly shot up, and I've had to stop whatever I was doing and try to breathe. But it's like having smoke in the house — there's really no place you can go where it can't follow you.


Twice now I've felt almost overcome with panic while watching the news. I keep up with news from a lot of different sources, and some definitely present a more high-strung version of events than others. But in this era, there's no channel, no online site, no print publication you can go to that isn't running the story of corona, and nowhere in that story is there much to say that's uplifting.


It doesn't help that none of our usual distractions are available. We can't drive to a friend's house, go catch a movie, drop the mall or local bar. Even the commercials on TV now mention coronavirus.


Much as we're all trying to maintain our equilibrium, we can never forget what's happening out in the world. It almost feels like we’re living inside a snowglobe, except the snow is falling outside instead of in.



My guest room/home office


Today we reached a terrible milestone: more than half a million confirmed corona virus cases in the U.S. and more corona virus deaths than anywhere else in the world. Yet today’s economic news is cautiously optimistic, and I wonder how can possibly be. New York state has more cases than any country in the world, obviously besides the U.S. And we are showing no signs of leveling off yet.


Yesterday 16.6 million people filed for unemployment. That’s a U.S. record. Surely not everyone has even filed yet, right? Only essential workers are supposed to be on the job right now. That means a lot of people are working from home, but some are furloughed, some using vacation time. Some who are still working may be laid off next Friday, who knows? Some are waiting to see what happens before they file. Some, like in Florida, are trying to file but the system is overwhelmed. I just think there will be more than 16.6 before this is over. But God. I hope I’m wrong. It feels like we’re sacrificing the economy for the sake of our lives — an excellent tradeoff since apparently we have to choose.

But why do we?


Interesting that South Korea is not sacrificing their economy for corona. I go back to them again because that nation is our “twin” in this crisis. They discovered their first case the exact same day we did, so we have the same birthday! And we’re still both battling it as hard as we can. But we are doing it in very different ways.


Whereas they’re trying to contain the spread by testing everyone (and I do mean everyone), isolating whoever is positive, then contact tracing and isolating those positives as well, we are still doing almost no testing. As of today we have tested less than 1% of our population. Instead we’ve shut down ... almost everything.


And who knows if that isn’t the right approach? Our numbers are way worse than South Korea’s. But this is a long game, and what we’re doing is working, the scientists say.

The problem is we may spend years trying to fix what’s breaking right now, economically speaking. Already we’re in a recession. It’s official now.

I saw today that we're looking forward to a 25.5% contraction in GDP in the second quarter. That sounds pretty bad. After that experts are anticipating what they call “modest growth,” even if unemployment goes as high as 12%, in the third quarter (the fall). I’m barely conversant in economics but I don’t see how modest growth and 12% unemployment go together, and I wonder why “the experts” are even capping off the numbers that way.


I just keep remembering Dr. Fauci saying “You don’t make the timeline. The virus makes the timeline.” That sounds right to me. We didn’t plan this and we can’t “get in front of it,” as Trump’s people keep saying. This isn’t a sex scandal. We can’t spin this away. We have to humbly sit here in our reactor seat and hope we get through this with as few losses — of every kind — as possible.


At least, that’s how I see it. Plenty of people agree, but President Trump isn’t one of them. Today he's promising to appoint a council that will include “some of the best minds in the country” to see about re-opening the country. Not surprisingly one of the “minds” he’s considering is his daughter Ivanka’s. Well, my thoughts on the nepotism raging in the White House during this administration may be left for another post.


“This country was meant to be open and vibrant,” is the quote that’s circulating on the Internet. Stirring words! If he didn’t base his chances for re-election on a forward-pumping economy, I’d credit him for the phrase, at least. It does sound good, doesn’t it? Open and vibrant. While we sit in our houses and think about how we will never, ever, ever again take for granted going out to restaurants and bars. Hell, I’d settle for paying my PSE&G bill in person! That’s what a month at home has reduced me to!


From the National Association for Business Economics:“[We are] optimistic about a return to economic growth in the latter half of 2020, anticipating an annualized real GDP growth rate of 2.0 in the third quarter ... [T]he median forecast suggests conditions will improve by the end of the year with support from aggressive fiscal and monetary stimulus” including a continued near-zero interest rate by the Feds.


Are economists telling Trump what he wants to hear?

Is he telling us what we want to hear?


Why is anyone considering re-opening when our virus numbers are still going up?

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