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Guestwords: The Corona Economy

Wed, 04/08/2020 - 17:30

Unfortunately, the rule of thumb for navigating this coronavirus pandemic is if someone tells you they know something for sure, they are either ignorant or lying. Nobody truly knows what is going to happen, which industries are going to change, or how daily life is going to be affected, possibly forever.

I am not one to induce panic when it could be argued that panic is appropriate, but many of my friends and classmates became as concerned as I was when I sounded the alarm that this virus has the potential to do a lot more damage to the country than we realize.

Imagine, for a minute, that you have built a business from the ground up that survived even the financial crisis of 2008. Let’s say, for example, that it is a restaurant. Even during the financial crisis, the problem of people fearing to leave their homes, those who still had homes, that is, did not exist. Today, however, we are facing a problem we have never seen before.

A clear indication of this is the stock market itself, which not only dropped precipitously before we knew how much damage the coronavirus had done to the economy, but also has made a slight recovery while we are still in the dark. I would not be surprised to see it reverse course toward the bottom when the final unemployment numbers are out and the earnings season takes a hit, which is inevitable for many companies.

Most small companies that rely on brick-and-mortar in-store purchases have cash reserves meant to last only a few weeks at the most. It seems that we will go well past a few weeks in our quarantine, meaning that many of these companies, companies that are the backbone of our economy, have no choice but to file for bankruptcy and lay off all of their employees. The ripple effects of this could be so widespread that it is impossible to predict with any accuracy the consequences of shutting down the U.S. economy for not just weeks but months at a time, with no end in sight.

Of course economic gain should never be valued over human life, and quarantining is the best way to stop Covid-19 from spreading. It is vital that we employ methods similar to those of South Korea and not Italy so that we not only reduce the spread of infection, but also send people back into employment as quickly as possible.

However, to simply say that we ought to remain quarantined until this virus is gone for good because “we can’t choose money over people” is an obtuse analysis of the potential problems. Many people don’t understand what experts mean when they say “economic recession” or the much worse “economic depression.” For some context, Forbes wrote the following on death rates linked to economic downturn: “Researchers from the University of Oxford compared suicide data from before 2007 with the years of the crisis and found more than 10,000 ‘economic suicides’ associated with the recession across the U.S., Canada and Europe.”

Now, the cost-benefit analysis of destroying the economy in order to save a certain number of lives from the coronavirus is a discussion worth having and is one that is clearly being had at the federal level. But to pretend that it is as black and white as “money vs. lives” is intellectually dishonest and divisive at a time when we all need to be on the same side. Clearly there are wide-ranging effects on people’s lives, not just their wallets, if the economy is shut down for months at a time.

A couple of weeks ago, the Knox County mayor in Tennessee said his area had already seen nine suicides in a matter of two days, and Portland, Ore., police reported a 23-percent increase in suicide-related calls in the first week of lockdowns. Mental health deterioration, economic-related deaths, and increased drug use are all effects of shutting down the economy. The federal government and private industry need to carefully weigh the solutions to come to the correct one.

Matt Walsh, a political pundit, commented last week on Twitter that “people actually think the government can magically freeze the economy like a pound of beef and then thaw it again in a few months and all we’ll lose is a bit of flavor. No. That’s not how this works. The government is not magical. It can destroy the economy. It can’t resurrect it.”

I agree. It is time we stopped being myopic about the dangers of shutting down the economy entirely. Dr. Anthony Fauci, the immunologist who has served in every president’s administration since Reagan, has made it clear that there is a very real possibility of a second wave of coronavirus in the fall. With this in mind, and knowing how devastating just a few weeks of a lockdown can and will be to small, medium, and even large businesses, it is difficult to imagine what the effects of back-to-back economic shutdowns would be on a country with an already inflated level of debt.

I am not advocating decreasing social distancing, that goes without saying. But we need to carefully consider the costs of an economic shutdown for a prolonged period of time because, in some cases, the solution can be worse than the problem. Keeping an open mind to any and all solutions to both problems, Covid-19 and the potential recession, is how we have to move forward as a country. This will ensure that as many lives as possible are saved, regardless of whether they are being saved from the problem or the solution.


Jordan Foster is a student at Cornell University’s College of Arts and Sciences and a graduate of East Hampton High School.


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