New column for on the way a lack of demand, not shutdowns, is what's now holding the economy back.
As lockdowns have been lifted in most of the country and businesses have been able to reopen, supply shock has waned, only for a new problem to emerge: weak demand.
"Economy v Health" is such a foolish & false dichotomy: if govts allow a virus to spread unmitigated, without safety measures, people will self-regulate as much as possible. If they don't, they're more likely to get sick. Either way, demand collapses.
Consumer anxiety over the continued spread of the pandemic—as opposed to state-mandated limits on business operations—is holding back the recovery by making it impossible to get back to business as usual.
Let's talk business. Many governments still struggle to understand that not controlling #COVID19 harms the #economy more. Because: Consumers remain anxious. Also without lockdowns. (EN translation of today's Dutch thread) /1
This is a good article that pins current economic apathy on people being afraid of a global pandemic rather than efforts to contain it. Control the virus and the economy will recover.
"The point is that lifting stay-at-home orders and opening restaurants isn’t enough: Until consumers feel safe, they’re going to stay away." - J. Surowiecki. #dealwiththehealthcrisis
China's economic recovery reinforces the argument I made in this column: it's our failure to get the virus under control that's keeping the service economy in the US from getting back on its feet.
Forget Shutdowns. It’s ‘Demand Shock’ That’s Killing Our Economy: Gyms, restaurants, and movie theaters are all reeling for the very same reason via
Labels like "supply/demand" shock not very helpful. Point is that some sectors hurting b/c people don't want to get sick. This is either temp or perm. If former, need income maintenance. If latter, need to facilitate transition.
The experience of restaurants and gyms and theme parks is telling us is that the #pandemicrecovery problem now isn’t lockdowns. It’s something more basic: justifiable fear.