Lockdowns, curfews. Troops on the streets. Governments handing out free cash. This utter madness was entirely avoidable
Saturday March 21, 2020
What happens when governments confuse worst-case scenarios with reality? They transform a health crisis into a social crisis and an economic tsunami, with consequences more severe than the virus could produce in the first place.
As I write, hundreds of thousands of people across Europe and the world have already lost their jobs, in the leisure and entertainment sectors in particular. As sector after sector is impacted by global lockdowns, mass unemployment is not a possibility, it is definite. And the social costs are going to be severe. How severe no one really knows. But past experiences show that when people lose jobs, they can also lose homes, their marriages, their health – and our social fabric is pulled apart.
However, we should be careful not to obsess with trying to second-guess what the huge costs to society will be of the panic. Otherwise there is a danger of one form of apocalyptic scaremongering being replaced by another.
There are two related problems. The first is that the global economy was already in the emergency ward before the impact of Covid-19. Whether the economic actions being taken across the world – from unprecedented interest-rate cuts through to eye-watering trillions of dollar state spending – will stem the flow or not remains to be seen. Perversely, it could help to shake out many non- or under-performing sections of the economy, which could be a good thing in the long-term.