Published at 10:54 on 13 May 2020
Insufficient amounts of testing and tracing infrastructure are in place, but it doesn’t matter: reopening is happening.
It also doesn’t matter that some areas are being more cautious than others. Well, it does matter, but not so much as one might wish it did. All a plague needs to keep spreading is for some areas to fester, mostly untreated, so that it can continue to spread and affect all areas.
Here Comes the Second Wave
It’s going to be a doozy. If you look at the curves, overall, they’ve barely flattened. The “low” point from which the resurgence is going to start really isn’t all that low, in other words. Things will reach crisis levels surprisingly soon.
At that point, there will be attempts to slam on the brakes, but it will be largely too late. Momentum will dictate the process.
The key fallacy of our time is the dichotomy of saving the economy versus saving more lives, because letting the disease rage mostly out of control will destroy the economy. Smarter capitalists like Bill Gates realize this. Even most economists do. Even nominally right-wing economists like those in the employ of the American Enterprise Institute have been making this argument.
One would think such an amazing (and unusual) amount of consensus might attract attention. Apparently not, at least on the political right. This is not a surprise; humans have an amazing ability to rationalize away inconvenient information.
Keep in mind that even if the pandemic stopped getting worse, the economy would probably continue to get worse for some time. Many businesses that are still alive on paper have been fatally wounded economically. As the inevitable happened to them, the economy would almost certainly sink further in the coming months.
Now there is going to be a second, more severe wave of infections added to that whole process. The conclusion seems inescapable.
Hello, Second Great Depression
It is theoretically possible for a massive stimulus program to address this. It was also theoretically possible for better testing and contact-tracing to be in place before the reopenings started. Just like the latter failed to happen, the former will not happen, either.
In order for such measures to be taken (basically, a second New Deal), there must be both the will and the ability. Neither exists. A large and vocal minority, given disproportionate political power by an antiquated system, won’t allow the measures to be put into place.
What measures (too little, too late) can be put into place will be doomed by corruption. Just like Trump cronies soaked up most of the aid in previous packages, they will in any coming packages. Money spent on relief will thus mostly go to waste. The show in Congress over relief measures is therefore mostly a show; the US government is incapable of preventing a depression.
The economy is even more global today than it was in 1929, and in 1929 it was already global enough that Germany was able to drag the rest of the world down for the ride when it entered an economic depression. Moreover, the United States is far more economically prominent today than Germany was then.
It therefore seems inevitable that the severe downturn will be global, a Second Great Depression.