To date, I’ve seen far too much amateur epidemiology and surprisingly little economic analysis around Coronavirus. Even the econ blogs I follow have fallen victim to this disease (armchair virology, not Coronavirus). In doing so, they have also fallen strangely silent on the economic outlook.
I’ve experienced the same dynamic in conversation – even with professional investors. If you bring up the economic and financial outlook, conversation limps along for a few sentences of vague foreboding. Then it slides back to discussing the latest hopes for a miracle cure!!!! After repeated tries (I’m not the most clueful guy), I’ve figured out that people just don’t want to go there (yet).
Why? Stages of Grief. Denial, Anger, Bargaining, Depression, and Acceptance.
We are going through two distinct grief cycles. One track on the virus. One track on the economy. We are at different stages of grief on each…
Virus => Denial, anger, Bargaining (new drugs!, vaccine coming! LL Bean is making masks!), depression, acceptance.
Economic recession to come => Denial (NO NO NO Lets get back to talking about the virus!!!), anger, bargaining, depression, acceptance.
We are also doing what humans do – hyper focusing on an (admittedly serious) immediate threat to the exclusion of an (arguably natier) secondary threat.
At some point, however, the economic news is going to get hard to ignore. Because something like 20-30 million newly unemployed folks (out of ~156m total employed) are going to be walking among us by the end of April. Having mostly lost health insurance (stupidly and inexcusably tied to employment ONLY in the US). During a nationwide pandemic.
As a society, we’ll move on to the next stage – Anger. That is not gonna be fun.
A possible silver lining is that anger will probably be directed at the fools who led us into this so ill-prepared. But we’d be foolish to expect that anger to be wholly reasonable in choosing its focus and target(s). Especially with the fool(s) at the top desperately working to channel that anger away towards someone, anyone else. We can only hope they fail in that effort too.
We live in interesting times.