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Pandemic Shutdowns Will Help the Economy, Too (bloombergquint.com) 268

nut (Slashdot reader #19,435) writes: A study by economists Sergio Correia, Stephan Luck and Emil Verner suggests that the best way to save your economy is to save your people. The authors looked at the economic impact of the Spanish influenza pandemic of 1918 on different U.S. cities. They concluded that the earlier, more forcefully and longer cities responded, the better their economic recovery.
A faculty affiliate from the Harvard Department of Economics writes in Bloomberg: [C]ities that implemented aggressive social distancing and shutdowns to contain the virus came out looking better. Implementing these policies eight days earlier, or maintaining them for 46 days longer were associated with 4% and 6% higher post-pandemic manufacturing employment, respectively. The gains for output were similar. Likewise, faster and longer-lasting distancing measures were associated with higher post-pandemic banking activity...

[T]his is at least consistent with the arguments my Bloomberg Opinion colleagues Noah Smith and Michael Strain have already put forward for why easing distancing measures too early would be potentially devastating for the economy... [I]t looks like the things we should be doing to save lives are also what we should be doing to save the economy.

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Pandemic Shutdowns Will Help the Economy, Too

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  • Why not more masks? (Score:5, Informative)

    by quantaman ( 517394 ) on Saturday April 04, 2020 @12:45PM (#59907918)

    Wearing face masks in public has been shown to help decrease the chance of contagious asymptomatic individuals of spreading the virus.

    And wearing a cheap surgical mask or a scarf is effectively an action with zero real cost. The only reason people don't do it is the social stigma because wearing a mask makes you look sick.

    It seems that all it would take is a round of strong messaging from political leaders to reverse the stigma and get everyone wearing masks, and that could help reduce the spread significantly.

    • The only reason people don't do it is the social stigma because wearing a mask makes you look sick.

      I would argue that the social stigma of not wearing masks, actually more comes from Hollywood portraying robbers in masks - from westerns to modern day gangster movies.

    • I'm with you on that [maskssavelives.org].

      It seems like the reason CDC has recommended against wearing masks is because there aren't enough for everybody, and we need to save them for the nurses and doctors. Furthermore there isn't a lot of clear published research that tells us how coronavirus spreads, and the CDC tries to follow evidence based medicine.

      Recently though, the CDC has started recommending facemasks for everyone [cdc.gov].
      • I'm with you on that [maskssavelives.org].

        It seems like the reason CDC has recommended against wearing masks is because there aren't enough for everybody, and we need to save them for the nurses and doctors. Furthermore there isn't a lot of clear published research that tells us how coronavirus spreads, and the CDC tries to follow evidence based medicine.

        There's two different kinds of masks.

        The masks used by the general public are just face coverings to stop them from spreading the illness if they're sick (and don't know it). You can make these with a towel or old shirt if you want. I think the evidence that this reduces spread has been around for a while.

        The masks needed by heathcare providers stop them from catching the illness from sick people. These are the ones in short supply.

        True, but to break the social stigma you need photos of high level officials [yna.co.kr]

        • True, but to break the social stigma you need photos of high level officials wearing masks [yna.co.kr]. You need strong leadership to create that cultural shift.

          Don't know where you live, but around here in America people are already starting to wear masks.

          • by quantaman ( 517394 ) on Saturday April 04, 2020 @04:00PM (#59908454)

            True, but to break the social stigma you need photos of high level officials wearing masks [yna.co.kr].

            You need strong leadership to create that cultural shift.

            Don't know where you live, but around here in America people are already starting to wear masks.

            I'm in Canada, some people have been wearing masks for the past month, but it's not ubiquitous.

            The end goal isn't half the people in the grocery store wearing masks, it's the one person in the grocery store who isn't wearing a mask getting dirty looks until they put one on or leave.

      • by djinn6 ( 1868030 )

        I told people to use masks since the very beginning and a lot of people replied with "it's only effective when worn by healthcare workers", "normal masks don't work, you need N95 masks" and "the chances of getting sick is very low". They were listening to the CDC recommendations. Meanwhile, other countries were using masks to great effect. And we knew masks were effective since a century ago [cnn.com].

        If the CDC is too myopic to see the truth, then they shouldn't give any recommendations. Coming out against it, then

    • by shanen ( 462549 ) on Saturday April 04, 2020 @01:49PM (#59908104) Homepage Journal

      Mod parent up? You touched a nerve there.

      Repeating for emphasis (and to correct the quantaman's typo): if everyone wore a mask, then the people who are sick and don't know it would not spread SARS-CoV-2 so much. Testing everyone would be nice, but simple [non-surgical] masks are MUCH cheaper and faster.

      Then we get to the question of leading by example. But Trump can't be bothered? Yeah, I admit that the political leaders speaking through masks look less impressive, but at least they are setting proper examples. Suggestion: If a politician takes off his mask to speechify, then he should be inside a plastic box or shield.

      Actually, I think it's just the narcissism again. Trump really believes he's so beautiful that it would be a greater tragedy to wear a mask. Or maybe it's something with the solipsism or sociopathy? On those grounds why would Trump care about protecting anyone else if he had Covid-19?

    • by ljw1004 ( 764174 )

      The only reason people don't do it is the social stigma because wearing a mask makes you look sick.

      Masks make you look badass!
      https://vignette.wikia.nocooki... [nocookie.net]
      https://cdn.wccftech.com/wp-co... [wccftech.com]

  • by klipclop ( 6724090 ) on Saturday April 04, 2020 @12:45PM (#59907922)
    We have exponentially larger cities and dense populations. The global supply chain and just on time delivery system can't just start back up either. Not to mention that most households don't have savings and still have large debts and bills that still need to be paid. Unless the government plans to pay people to literally stay home for months on end -- I don't think this will end well for the economy as we knew it before Corona virus.
    • Unless the government plans to pay people to literally stay home for months on end -

      Not only have they planned that, congress literally passed a bill to do exactly that.

      • I'm in Canada, and if the American plan is anything like Canada -- they'll make it complicated to apply and slow to disperse funds. :(
        • No, the American plan is simple, money gets deposited into your bank account. If you have weird circumstances (you shut down your bank account in the last year, for example) it might take longer, but for most people, it's simple.
          • by HiThere ( 15173 )

            How weird do you think those circumstances are going to need to be?
            My guess it that most people won't get the check before their second months rent is due. And a lot of people won't get it at all. And that the more you live hand-to-mouth, the less help you'll get. That seems to be normal policy for this administration.

            I don't like or trust the Democrats, but at least they try to pretend that they're doing the thing that will help the most people. It's often a sham, of course.

            • How weird do you think those circumstances are going to need to be? My guess it that most people won't get the check before their second months rent is due. And a lot of people won't get it at all.

              They will start going out in three weeks, so before May rent. Some people probably won't get them by then.

              If you really want to know what kind of problems will show up, and how many people will not get their check, you can go look at what happened when the government sent everyone money in a similar way under the Obama and Bush administrations. I expect this payout to be roughly the same.

      • Too bad that major banks - like Bank of America - are refusing to offer loans except to those who already borrow from them [yahoo.com], effectively protecting their own financial interests first. Hundreds of thousands of small businesses will be locked out from the Payroll Protection plan because of this - and many will fold, permanently. This is a hand-out from Congress to the banks, and it doesn't hurt that Congress also gave itself an additional $93 million slush fund ($173,000 per member of Congress) to play with
        • Too bad that major banks - like Bank of America - are refusing to offer loans except to those who already borrow from them [yahoo.com],

          To be fair, any company already should have had a line of credit available for emergencies. That's established corporate finance.

          Also, this is different than the financial crisis in that it's not a liquidity crunch. We can thus hope to see banks opening their doors again in the next few months.

          • To be fair, any company already should have had a line of credit available for emergencies. That's established corporate finance.

            Good luck getting that line of credit if you're a new company. Heck, most banks won't even give you a credit card for at least 1 year. It's why AMEX still rocks - they'll give (admittedly a small) credit line via cards to any new business. Either way - this is against the regulations released by the Government [treasury.gov] but who cares - banks will get theirs, Congress will keep getting money to play with, and small businesses will get bent over again.

            We can thus hope to see banks opening their doors again in the next few months.

            And lots of small businesses will be permanently shuttered by the

      • WTF? It takes a crisis like that for congress to finally get off its ass and do something sensible?

        Well, at least we can say that when the shit hits the fan they act like decent human beings.

        • by HiThere ( 15173 )

          Well, spending bills are supposed to originate in the House, but the House passing it doesn't mean that the Senate will even consider it.

          A lot of the government was designed under the principle that all worthy families were basically self-supporting WRT their needs. Given a biased reading of worthy, this was probably usually true up through the 1930's. (But it's also worth remembering that the folk of that period accepted a much higher background level of deaths.)

  • by yassa2020 ( 6703044 ) on Saturday April 04, 2020 @12:46PM (#59907924)
    It's crazy how they always turn it into a false choice where individuals have to be mistreated for the good of everyone. Especially when it comes to greed and money, where the truth is things aren't zero-sum, and everyone does better when everyone does better. What is it with the "only me can be god" mentality? Must come from having control over billions of lives that makes you go insane/stupid? Or do we just have inbreds from 100 generations ago that never gave up their god powers and so they have no perception of reality?
    • You call it a "false choice". What do you think are the other choices that aren't being considered? Most that have been considered end up with worse outcomes.

  • Arrange that all employees keep their jobs. The government can support that.

    It is VERY difficult if you have lost your job, and don't know when and where you will work again.
    • by shanen ( 462549 )

      Basically agreeing, but in my longer comment I was wording this idea in terms of freezing the lower priority parts of the economy.

    • by HiThere ( 15173 )

      That ties life even more tightly to the employer. Bad idea. And there are lots and lots of special cases that say why it will cause problems. Also there are lots of people who don't have jobs. Are you OK with saying "Let them die in the street"?

      There are only a couple of alternatives, though. One is for the government to supply free housing, free basic food, and free health care at a level sufficiently above basic that those receiving it aren't weakened to the point where they are easy targets for cont

  • by Dunbal ( 464142 ) * on Saturday April 04, 2020 @12:50PM (#59907938)
    Not possible to compare COVID-19 to the Spanish 'Flu - it's apples and oranges. We don't happen to be living in 1918 anymore. Medical science has progressed. Technology has progressed. Communication has progressed. That makes for a lot of fairly important variables that are totally different. But sure from an ivory tower I'm guessing all pandemics look the same...
    • by spun ( 1352 ) <loverevolutionary@@@yahoo...com> on Saturday April 04, 2020 @01:04PM (#59907972) Journal

      What pointless hand waving. At least try. At least say how you think the differences will change the conclusions of the paper. Not saying you did not read the paper, but someone who had not read the paper could have easily written what you wrote. Your vague assertions that "important variables are totally different" is basically just your dumb ass flexing like "look at me! I'm smarter than a Harvard grad and,in the five fucking seconds I thought about this, I have found all sorts of important considerations they (in my fantasy) did not think of! Aren't I a fucking genius?"

      No bud, you are not. You've just wasted your own time and ours with this vague pile of crap you wrote, that makes no point other than "change makes things different! Dur hur..."

      Fuck your anti intellectual attitude, and your smug, smarter-than-you bragging.

      • What pointless hand waving. At least try. At least say how you think the differences will change the conclusions of the paper. Not saying you did not read the paper, but someone who had not read the paper could have easily written what you wrote. Your vague assertions that "important variables are totally different" is basically just your dumb ass flexing like "look at me! I'm smarter than a Harvard grad and,in the five fucking seconds I thought about this, I have found all sorts of important considerations they (in my fantasy) did not think of! Aren't I a fucking genius?"

        No bud, you are not. You've just wasted your own time and ours with this vague pile of crap you wrote, that makes no point other than "change makes things different! Dur hur..."

        Fuck your anti intellectual attitude, and your smug, smarter-than-you bragging.

        No, the way it works is that the researchers and those who believes that their findings is applicable to the current covid situation have the burden of proof. OP puts the finger on the relevant point, even if the proponents can show a correlation between non-pharmaceutical interventions and increased economic output over time (for the record I believe they can do this), the mechanism that accomplishes this would have be able to work the same way today. What mechanism does the paper suggest? (end of page 4):

        • If nothing else, "more is better" is not a super-useful conclusion because it provides a lower bound but no upper bound; at some point more must also be worse.
        • by HiThere ( 15173 )

          Correlation may not be causation, but it's a damn sight better than nothing. And better than a wild guess.

          There are clearly major differences, of course. There was no promise of a vaccine against the Spanish flu, whereas there are lots of promises of a vaccine against COVID-19. But promises aren't reality, and serious projections say that *IF* a good vaccine is not available for testing, then the time to availability is well over a year. 18 months is a typical projection. So there are three or four vac

    • Some things have changed and other things have stayed the same. And not all of the things which have changed are for the better when it comes to management of contagion. Notably, people travel farther and faster than they did even a hundred years ago.

  • by packrat0x ( 798359 ) on Saturday April 04, 2020 @12:58PM (#59907958)

    It's as if the Harvard Department of Economics has never heard of the Broken Windows Fallacy [wikipedia.org].

  • Taking the 'speedy' approach would be like trying to work through a class-4 hurricane. Sure - you'd be 'productive', right until everyone exposed was thrown to the winds.

    Instead, we're hunkering down - there's still going to be damage, but as can be seen from most wealthy nations other than the USA, the precautions work - minimizing spread, and rationally optimizing the availability of hospital services to get through the progression of the disease is MORE than worth any costs - since the alternative is mu

  • by Joe_Dragon ( 2206452 ) on Saturday April 04, 2020 @01:03PM (#59907966)

    KIll US broken healthcare tied to jobs!

    • KIll US broken healthcare tied to jobs!

      What?

    • That is the number one thing Congress could do to "fix" the healthcare system. Allow equality in tax deductions for healthcare expenses, between companies and individuals. If you're self-employed, you don't get the same benefits as a corporation when it comes to taxation. Allow full deduction for individuals, and you'll see a LOT more individual consumers in the market, and that will spurn a price war - like it always does - bringing costs down for everyone. Keeping it locked up to employers-only allow
  • If you want to take an example from the flu pandemic of 1918, easing social distancing and opening businesses just creates another wave of infection until natural herd immunity is reached, or in modern times, a vaccine to boost it. The chance of effective medication to prevent or treat covid-19 effectively enough is looking unlikely at this point. Even ideas like giving an “immune” pass to people who have successfully fended it off and have antibodies will incentivize people to get sick so the
    • "The chance of effective medication to prevent or treat covid-19 effectively enough is looking unlikely at this point." - Not unlikely enough to prevent Bill Gates from funding seven large scale factories to produce as yet unproven vaccines in parallel with the testing process. He figures one or two of those will actually work.
      • by Kokuyo ( 549451 )

        And just imagine the ka-ching in his wallet when they do...

        I saw a tweet or something today where someone called Bill Gates one of the few decent rich people and Jeff Bezos a prick... well, they were half right.

        • And just imagine the ka-ching in his wallet when they do...

          Bill Gates' foundations are working to eradicate illnesses around the globe. This falls right in line with his overall philanthropic efforts. His approach is literally wasting billions of dollars, because they're only going to pick one winner. Whatever you can accuse Gates of, it takes a special cynicism to believe he's trying to profit from this pandemic.

          Besides, the chance of a single company being able to monopolize a successful vaccine is essentially zero. Literally every uninfected person on earth w

    • by Kokuyo ( 549451 ) on Saturday April 04, 2020 @02:53PM (#59908290) Journal

      Exactly. Easing the lockdown WILL trigger the wave. The problem is, the lockdown is flattening the curve, meaning that herd immunity will be pushed further out, meaning the lockdown does not have to be in place for the two months the virus would have taken to race across the populace, but two YEARS.

      Do tell me who is going to pay for billions of people staing at home for a year or two.

      Being immune for half a year or up to a few years is in itself an enourmous victory. Because even if we do lose immunity eventually, we will lose it at individual rates. Should it come back afterward, the virus will not meet a populace completely open to it. The spread factor will be way below what it is currently, because half the people you "infect" will still be immune. Once their immunity runs out, other's will already have gone through the disease and have reestablished immunity.

      Also correct me if I'm wrong but while a new strain of influenza, for example, can pass by the immunity your body acquired to the last strain, isn't the existing immunity like a stepping stone giving your body an edge in developing antibodies against the current strain?

      tl;dr: Unless a miracle happens, our economies will not survive a lockdown that holds long enough for the whole pandemic to pass. The wave WILL crash! The question remains, how much damage do we allow the economies to take before the inevitable?

      • A lockdown isn’t even necessary. If America had testing capabilities that were on par with first world countries, like South Korea, we could simply test everyone and only quarantine those who have it. That takes a molecular test capable of direct detection. Antibody tests don’t show positive until after infection and transmissibility is well underway. Then we can trace the contacts and test again and isolate. Imagine If even trace amounts of the virus glowed brilliant green, like in a video
      • The six months to a few years is for the exact same strain, no mutations at all. It was a problem with SARS-1 which is why it can’t so easily be ruled out for SARS-2.
      • The government will pay. Currently, the cost for the government to borrow is negative, and keeping people alive and fed and housed is going to be less costly in the long run.

        But pretend the government goes bankrupt (in the case of the USA, I honestly donâ(TM)t know what that means), a mass debt-forgiveness would probably work out just fine. Some companies will need to be compensated, but work will still need to get done, crops will need to be grown, products shipped.

        Economies are all convenient fictio

  • by C.D. Reimer ( 6283198 ) on Saturday April 04, 2020 @01:14PM (#59908004) Homepage
    Everyday is like Christmas morning. Everything is quiet. Few cars and people on the streets. And somewhere in all this manure is a unicorn that will save investors.
  • [C]ities that implemented aggressive social distancing and shutdowns to contain the virus came out looking better. Implementing these policies eight days earlier, or maintaining them for 46 days longer were associated with 4% and 6% higher post-pandemic manufacturing employment, respectively.

    Does that mean that the Red states in the U.S. are fvcked?

    Peter Hegseth "This is one of those cases where the more I learn about coronavirus, the less concerned I am. There's a lot of hyperbole."

    https://www.youtube.com/watch?v=NAh4uS4f78o [youtube.com]

    • Does that mean that the Red states in the U.S. are fvcked?

      Nah, it's one of those things that isn't scary until it comes to your town and the hospitals get overloaded. Then your governor institutes an emergency quarantine. Even Louisiana has a stay-at-home order now.

    • Yes, it means Red States are fucked. It also means the US is fucked in general because the country as a whole has behaved like the red states. Everybody else in the developed world is going to recover from this pandemic faster than us and suffer less damage from it to begin with. We may well lose our status as a leading superpower as a result. Will it be like the fading away of the British Empire, or like the Soviet Union's collapse made worse by the oligarchs looting its remains, or merely a multi-decade s

  • by Vadim Makarov ( 529622 ) <makarov@vad1.com> on Saturday April 04, 2020 @01:24PM (#59908024) Homepage

    It is known that preserving the human capital is the most important factor for recovery. Having said that, the age distribution of the victims of these two pandemics is different. Wuflu mostly removes people of post-retirement age who do not contribute much to the economy, while the Spanish flu killed younger people [wikipedia.org] in their prime years as contributors to the economy.

    • by swillden ( 191260 ) <shawn-ds@willden.org> on Saturday April 04, 2020 @02:53PM (#59908286) Journal

      It is known that preserving the human capital is the most important factor for recovery. Having said that, the age distribution of the victims of these two pandemics is different. COVID-19 mostly removes people of post-retirement age who do not contribute much to the economy, while the Spanish flu killed younger people [wikipedia.org] in their prime years as contributors to the economy.

      Keep in mind that this becomes much less true if the healthcare system is overwhelmed. 40% of the people who need hospitalization for COVID-19 are under 50. With good care very close to all of these younger people will survive (though some will suffer permanent lung damage), leaving nealy all of the fatalities from the other 60%. If, however, medical treatment isn't available, nearly all of those who need hospitalization will die, young and old alike.

  • Complexity at work (Score:3, Interesting)

    by helga the viking ( 4796617 ) on Saturday April 04, 2020 @01:31PM (#59908044)

    It seems people are delving into how its like/unlike the Spanish flu in behaviour. Just do best practice as per the medical experts to beat this thing because we're [mostly] not medical experts here.

    If they say 'isolate for 6 weeks' then society has to do that.

    Needless to say this is showing up the inflexibility and inefficiencies of the free market economy. Trying to rebuild that house of cards will not be possible there will be revolutions before that happens because in Europe at least people are seeing the political bulls**t unfold. The fewer people killed the better for the economic output. Anyone who has had to deal with co-workers who have lost partners or parents due to sudden accidents knows what that does to productivity now multiply that by hundreds of thousands random walk through industries. If its bad enough the virus will kill enough specialists or leaders in industries to affect the output/progress perhaps not but dont want to go near the domain of possibilities there.

  • by Rei ( 128717 ) on Saturday April 04, 2020 @01:35PM (#59908060) Homepage

    The 1918 pandemic was abnormal for how deadly it was to healthy young adults. COVID-19 is unusually deadly to the elderly and those with preexisting conditions. Obviously, if you have a disease that hits your workforce unusually hard, that's going to affect your economy differently than one that hits the elderly and sick.

    A much more apt comparison would be with the 1956-1958 pandemic. 110k US deaths - which adjusted for population growth comes out to 206k today. The worst season of it had ~70k, equating to about 130k today. These numbers compare to the US's official forecast for COVID-19, 100-250k. The elderly/sick bias with the 1956-1958 pandemic was pretty similar to that of COVID-19, and unlike that of the 1958-1958 pandemic.

    • by Rei ( 128717 )

      ** Unlike that of the 1918 pandemic

    • if you have a disease that hits your workforce unusually hard, that's going to affect your economy differently than one that hits the elderly and sick.

      The elderly and sick are a larger part of the workforce than you realize. So many either can't afford to retire or don't want to.

  • by LynnwoodRooster ( 966895 ) on Saturday April 04, 2020 @02:14PM (#59908168) Journal
    Approximately 1 male per 4200 laid off [nih.gov] due to being unemployed. We hit the projected 32% unemployment, that's about 33 million people unemployed men - which would mean another 7,800 suicides alone. Women are about 1 per 7100 laid off, meaning the other 27 million unemployed women would result in 3,800 suicides. So doing the shutdown nationally could easily result in more dead from suicide than from the coronavirus. And we're not talking even about those suffering from poor healthcare, or homelessness, or other side-effects of being unemployed.
    • by omnichad ( 1198475 ) on Saturday April 04, 2020 @02:41PM (#59908262) Homepage

      You think 10,000 suicides is going to outweigh the end numbers by even a little? Current projections are 100K-200K dead because of our delayed measures. New York alone already has more than 1/3 of your suicide numbers, and they're way ahead on infections than most of the rest of the country. Nationwide, we're over 8,000 dead. And most states are just getting started.

      Now tell me again, how could the shutdown result in more dead from suicide than the coronavirus?

    • Approximately 1 male per 4200 laid off [nih.gov] due to being unemployed. We hit the projected 32% unemployment, that's about 33 million people unemployed men - which would mean another 7,800 suicides alone. Women are about 1 per 7100 laid off, meaning the other 27 million unemployed women would result in 3,800 suicides. So doing the shutdown nationally could easily result in more dead from suicide than from the coronavirus. And we're not talking even about those suffering from poor healthcare, or homelessness, or other side-effects of being unemployed.

      We also don't know how the lock down affects affects suicide rates.

      A lot of the depression associated with unemployment and loneliness comes from the fact that people feel aimless and are left out of social activities.

      But with the lock down people doing nothing at home are doing exactly what they're supposed to do, and it doesn't matter if you're alone since there's no one is going to fun parties.

      More importantly, it gives people a sort of common purpose. For instance, the World Wars caused years of hardshi

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