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Risk and Economics in a Pandemic

The nature of recession, and the relationship between economics and the pandemic response.

There are a lot of different ways to think about recessions. One is a traffic model. A bustling economy is moving a lot of cars with little trouble. A hurting economy is moving fewer cars slower. Depression is outright gridlock. The need to get cars moving is the recovery mechanism. (The slow cars are slowing each other down, which is akin to cascading financial problems.)

Another metaphor is a tree, battered by disease or wind, having lost some of its leaves. It has to slow its growth to repair itself instead. In some cases, government provides artificial sunlight, artificial rain, etc. to nurture the tree along.

The main thing about economic downturns is that they are a signal that, in some way, our collective resources were misallocated. Either we didn’t regulate enough, or didn’t spend enough on the right things. Sometimes we took a calculated risk and are just unlucky. Other times, we did not calculate risk correctly.

One of those risk calculations is the healthcare and insurance system. It doesn’t fully cover the nation, and it’s largely subject to the same kinds of economic problems as the rest of the system. Under a true universal system, whether Medicare-for-All or not, that wouldn’t be. It would dramatically reduce the suffering, but it would also help to prop up the larger economy. To divorce vital industry from the economic winds is a great ballast. The tradeoff of ballast is that growth in (at least parts of) healthcare would be more limited. Slower to accelerate, but slower to halt.

Another risk calculation, made (or failed to be made) by Donald John Trump, was to underfund, reduce, and dismantle parts of our shield against pandemics. Even now, he keeps pushing for quick fixes, corner cuts, and premature reopening, all which threaten to undermine public health efforts that economic recovery depends upon.

Governors and mayors weighed the risk of stay-home orders. Ministers did, too. The risk, plus some luck either way, results in a signal of whether the decisions were apt. Sometimes the signal is in lives lost.

The Republican party in the state of Wisconsin decided the risk of having people vote the normal way at the normal time during decidedly abnormal public health conditions was worth the risk of more suffering and death.


The economic fallout will take some time to really become apparent in all of this. It depends on the length of the shutdown, which depends on the ability of government to manage test coverage in a way that ensures we can reopen and stay open. So far, that’s not materialized.

Which makes no sense! The economic output lost from having to keep protections higher, or the economic output lost from having more waves of virus or worse waves, are both in excess of the societal cost of ramping up testing to the level needed to avoid them! For all the monies appropriated by the Congress, for all the nonsense dispensed by the president (including his fantasy over an anti-malaria drug), they haven’t done the one thing! Testing! Even if a quinine-based drug were a magic bullet, testing would still be king!

The decision between minimizing risks and maximizing economy is false. Those who see what should be very welcomed reductions in projected deaths and say, “We should open up,” are inviting much larger outbreaks and tolls. Failure to expand testing is bad for the economy. Risk is what’s hurting the economy, so taking on more of the same risk is to invite ruin.

Happy and/or Merry Easter!

Not a War–a Fire.

A fire is a better metaphor for pandemics than a war.

Lots of metaphors around these days. Fire is one of the better ones. Fire spreads; disease spreads. Fire is dangerous; disease is dangerous.

War doesn’t spread the same way, though its devastation does. It’s more targeted. It is man-made.

Nobody says, “Let’s let the fire burn, we can’t shut the economy down because of a little fire.” Good people don’t offer up grandparents in immolation.


The administration’s response to the fire, to the disease, has not been good. It has gotten marginally better, but threatens to get worse again. The response, and the disease. Which is the big problem with letting a big-time loser direct the fire department. Not good.

Places that do not heed the basic rule of fire safety—deprive it of fuel—will be scorched worse than those places that do. For a disease, human contact is spreading the embers to new fuel.

With developed diseases, like influenza, we have vaccines. That’s a controlled burn or a fire break. Sets some distance. People still get flu, but we try to make it harder for that particular fire to spread. With this new fire, it will take time to develop a vaccine. So we have to spread the fuel apart—social distancing.


As with fire, this disease will spread to any fuel it can reach. Different houses will burn differently. Some will be spared, others will collapse. These are human lives we’re talking about.

You don’t reopen until the fire has abated, until it’s under control. You don’t mess around with fire. Places that do will, with high probability, get burned. Already, due to Donald John Trump’s errors of judgment, more are sick than should be. And some probably getting sick because of his unfounded optimism. All these Republicans who have downplayed the threat, and their counter-culture media drones, they’re fanning the fucking flames. Morons.


Anyway, stay safe out there. Be thankful for the mail carriers, the doctors, the grocery workers, and, yes, the firefighters. Right now they’re all firefighters.

Donald John Trump is a firebug. Don’t listen to his lies. His job is to make sure all those firefighters are equipped, and that we’re doing all we can to stop the spread, but he’s not. That’s a failure.


As a side note, the term shelter-in-place refers to an immediate stoppage of nonessential movement during an acute emergency. Basically, during a shelter-in-place situation, unless the danger to you is greater where you are than the risk of moving, you shouldn’t. It applies to wherever you happen to be at the time of the order.

The orders being issued aren’t correctly described as shelter-in-place. They are stay-at-home. Nobody expects someone to start living out of their local gas station if that’s where they are right now. During a real shelter-in-place, one would be expected to stay at the gas station until the immediate danger had abated and the order lifted.