As I sit at home in self-isolation, I ponder the economic health of our country for the next several months and beyond. Seeing people mobilize to fight an invisible coronavirus is certainly inspiring. We all know that managing individual behavior will go a long way toward slowing and ultimately stopping the spread of this terrifying pandemic.
However, why canceling large events, not meeting in large groups, working from home, and maintaining a six-foot separation between people is enough? I am afraid that by closing businesses such as restaurants, bars, shopping centers, gyms. cinemas, travel companies and more, we are headed for unprecedented economic hardship.
Right now, a couple thousand people have died in America, which is sad and painful especially for their families and loved ones. However, if we stay on the path of stopping corporate trade, hundreds of thousands of people will die from the dire economic consequences that lie ahead.
When the unemployment rate rises one percent, there can be almost 40,000 deaths according to Bluestone and all in The causes and consequences of economic dislocation, which is often summarized in inexpensive textbooks and quoted in the popular movie The Big Short. A further breakdown of the figures includes: 20,000 heart attacks, 920 suicides, and 650 homicides.
A three percent increase in unemployment could lead to more than 100,000 deaths, significantly dwarfing the several hundred coronavirus deaths that are directly linked to the pandemic. I think this scenario shows that we need to maintain social distancing practices, but keep our retail businesses open. If certain people, such as the elderly and those with pre-existing health conditions, want to isolate themselves, they can take the necessary steps.
The remaining 80% to 90% of the population needs to learn to accept and live with the risk of this pandemic to maintain our quality of life. We can alter our individual behavior, practice good hygiene, show compassion for those who become ill, mobilize financial and human resources to fight the pandemic, and do so without paralyzing our business, personal and consumer lives.
Compassion should also be extended to the small business owner, who has the working capital to operate for a short period of time without modest sales. Your entire finance allowance can be invested in the business, including the ability to support your employees and family. Also, they could be at an age where there is not enough time to recover from a business or personal bankruptcy. Shouldn’t we accept a reasonable amount of risk to give this entrepreneur the opportunity to keep his business afloat?
Another overlooked aspect of this pandemic is the uneven geographic distribution of the virus. Four states, including New York, New Jersey, Washington, and California, account for 64% of cases. Breaking down further, most of the people with the disease in these states live in New York City, Seattle, and the California Bay Area.
Although the virus has reached all 50 states, why should West Virginia with eight cases and South Dakota with 50 cases and one death suffer negative economic consequences when the number of cases is extremely small? West Virginia is already in a tough spot due to the loss of its state’s coal and manufacturing industry.
In today’s world, there is a risk all around us with crime, car accidents, natural disasters, and more. We do not stop living through tragic circumstances that inevitably find their way into our lives. Instead, we face tragedy head-on and we know deep down that we must always find a way to persevere. The final risk is not taking one and right now we are in extremely risky terrain.