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Logical October 28, 2020

Posted by WorldbyStorm in Uncategorized.
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Good point made in the SBP by Dermot Dorgan who is ‘an investment risk analyst, and a member of the Independent Scientific Advocacy Group‘. Writing about the current situation in relation to the pandemic he makes a basic point:

Fear and doubt are a heavy burden for individuals, as they are for society as a whole. When too many of us are too scared to leave our homes, to take public transport, to go into a shop, or to meet friends for coffee, commercial activity stalls and the economy seizes up.

And:

the IMF estimated that about half of the total contraction in economic activity experienced during the lockdown period was due to ‘voluntary social distancing’. The report also suggested that loosening restrictions had a weaker effect on activity than tightening, and that the effect was weaker still when the perceived health risk was higher.

And here’s the crucial point:


In other words, you can lock people down, but you can’t force them out again.

As long as the virus is a threat, many would sooner withdraw from society, rather than run the risk of infection.Their caution is driven by an innate desire for self-preservation, and that primal instinct will prevail over any government policy.Yes, lockdowns are bad for the economy, but they only tell half the story

Because:

I think this point has been lost on those who frame the issue as a trade-off between public health and the economy. They argue that the risk to the public health has been overstated and therefore that more economic activity can be allowed. There is some truth to their argument, but I question whether their policy would be effective in the long run. Looser restrictions might lead to a temporary economic bounce, but what happens as the virus continues to spread, and infections rise?

And;

If the IMF are right, a sudden loosening of restrictions would lead to a sharp increase in voluntary social distancing. If the outbreak was serious enough, huge swathes of the population could be scared into self-isolation. For an already weakened and lop-sided economy, this could be a knock-out blow. Far from liberating our society, this approach might condemn us to an even deeper decline in living standards.

Now if one looks again at the figures from polling in the SBP fully 66% of the population wants current or greater restrictions. Granted there will be individual slippage, but that is a huge bloc of people who are not going to engage in general economic activity to any great degree if restrictions are lifted in a context where the virus is spreading.

And therefore Dorgan is absolutely correct. To pretend that one can ‘live with the virus’ is to ignore the very natural caution of those in the population who will treat any such exhortations with the scepticism they deserve.

For Dorgan the only logical course is obvious… because as he says ‘Irish society is paralysed’ and ‘we cannot solve economic problems until we eliminate the uncertainty in our lives [from the virus]\. By the by nice to hear someone use the word society in these discussions. All too often economy is used as shorthand for society – which is simply incorrect.

His conclusion:

If there is even the slightest possibility that we can eliminate the virus, we must explore the idea in full and without delay. 

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