The Long Suffering Has Just Begun

Switch on the news, talk to anyone, read anything, run for your life but Coronavirus stories will follow you right along, you can not escape them. Social Distancing, Isolation, Quarantine are the catch phrases of the Spring of 2020. It is the Spring of Panic, but soon it will be the Summer of Anger and Blood.

As governments panic, as politicians choose the “hard” decisions of forced lock downs, they give only secondary thoughts to the facts that they have jammed a klinok, a dagger, into the very hearts of their economies and even less to what that means on the longer scale.

Italy was the first, who nation wide shut it all down, except for pharmacies and grocers. However they gave little thought that the average modern family has only 2-3 days worth of food in their pantry or that the average city has only 5-7 days in stock city wide. Sure distributors are still working and distribution centers have another 15-20 days worth of non-perishables or frozen goods. Forget about the fresh fruits and vegetables to be imported, with docks shut down, workers are home, who will unload, who will stamp the authorizations, who will move the goods. They will rot, which means citizens do not have access at their grocer and shippers and purchasers will lose their shirts. Same goes for imported drugs and drug sub-components.

Further, if these disruptions continue past 2-3 weeks, the distribution centers will run out and with upstream manufacturing, processing and farming effectively shut down, where exactly will the next wave of food come from? Government warehouses of dry store emergency rations? That will stoke anger in a public used to choice and freshness. It is one thing when that public is surrounded by the devastation of war or a natural catastrophe and  has acknowledged psychologically the predicament. It is quite another when their neat lives are disrupted by a flu-like virus they can not see and may not see the patients of. Then their quiet and busy lives have turned to first boredom and then hunger and then anger.

In parallel, most people will now be devoid of their base incomes as well. Most people do not work in such jobs that they can work remotely. Most of the average humanity works either in manufacturing or in services that requires both a server and a customer to be at there locations. Countries such as Italy, Spain, Greece, Portugal, Georgia are tourist intensive, that is from a quarter to half their income is based on tourism and this panic and government quarantines have put a big fat x on all of it.

Sure governments are making half measured steps, such as the US government plans (and only plans at this point) to send out $1000 per worker for 1 month. In the US this will at best pay rent on an apartment and if the family lives in a really cheap, run down ghetto, it may have some left over for utilities. Groceries? Seriously? Insurance? Medicine? Europe is making equally half step measures with Italy banning the charging of rent during the lock down and France stopping the payment of utilities.

But these are half measures and with most workers in the “prosperous” West now surviving paycheck to paycheck, the minus of that one paycheck will mean they will have nothing to buy those groceries with within a couple of weeks to a month at most. Worst, with all other businesses closed down, they will not even be able to sell off their goods for quick cash. This means either the government will have to step in in a large way or starvation, anger, rage and rioting, looting will become the order of the day.

The cycle starts to feed upon itself, demanding from bankrupt governments, already drowning in debt, to print or raise more monies, from economies they murdered, to pay for the bailout of millions of their citizens who will otherwise riot and burn down the city and country.

And even if they are able to pay these sums and sustain their people and feed them and pull up these quarantines in a month and try to get things back without burned out neighborhoods and riot police, what then? Millions of businesses, small and medium and tens of millions of workers, will be out of work, mass unemployment, demanding yet more money and economies left in taters as unemployed citizens buy less and less and feed the downward cycle. Sure, the big connected corporations will get big connected bailouts, but everyone else? Not quite so lucky. Least we forget, in an advanced economy, small and medium businesses make up to half the employment. In a post industrial economy this could be as high as 75-80%. What then?

Unfortunately, few in most governments understand or bother to think through economic impacts. They fail to understand what long term implication or even medium term implications their actions will have. They are reactionary, virtue signaling popularity queens who were elected because they promised more, talked sweeter, looked better then their competition. This is the reality of behind the façade of democracy and its only one global catastrophe away from crushing its own society, and that Come to Jesus moment is upon us all now.