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On Comparisons to CoVid19

Short Thoughts on comparisons to Covid19

People keep on comparing Covid19 to the Spanish flu epidemic. That is fine, ONLY if you want to do a comparison of the virus effects. (Which is not really valid in any case, because most of the Spanish flu deaths were due to pneumonia, which we can now VERY effectively treat using antibiotics.)
If you would like to understand the wider societal impacts, it would be much better to look at the Great Depression.
It was also preceded by a period of excessive materialism. (The Robber Barons and The Roaring Twenties come to mind).
It was also triggered by an environmental disaster, in that case the great drought, the description Dust Bowl comes to mind.
It was also characterised by the wrong policy prescriptions - the Federal Institutions constricted monetary supply. This time they did not make the same mistake, the FED and the government is even bailing out junk bonds. But that's another topic. The wrong policy prescriptions I have in mind here are the weeks long delay in taking action, and when taking action, it was characterised by miscommunications, ignoring institutional knowledge, and cronyism. Among others.
So what did we see in the Great Depression? Many bank failures. This will not happen this time, but unfortunately not many people had money in the bank to start off with.
What we will see this time round is the same VERY long recovery time. First we will need for the virus to be overcome, either (hopefully soon) through a vaccine, or through the painful way of achieving herd immunity the old way.
No matter what anybody tells you, this will NOT be a V-shaped recovery. And talking about recovery, it is EXTREMELY important to distinguish between a recovery of stock market prices, and the real economy. But that's for the next "Short Thoughts".
Suffice to say, hardship is here for a while. The Rich(er) people as always, will be ok. But most of the rest of the people are going to struggle.
Hunker down, and byt vas
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