Newsletter, May 2020
Webinar II -- Pandemic as an Exercise in Economics
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The Lost Time — the Good Life Lost
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Economic facets of the American Epidemic/ International Pandemic, the bitter and painful scourge of our society and that as well of every continent, save Antarctica — these are the many parts of the immensely tangled structure of contagion and fear, with no place to flee to. Yet prudent self-discipline and carefully reasoned public policy will bring nearly all safely to the other side of the chasm, most with little harm done or scars remaining. Facing the menacing prospects in the short run, in any event, is confusing and not a little scary. If we walk, with gingerly steps, through the months ahead with no sickness, we nevertheless will face harms to our comfort, wealth, income, and pride — we hope that at least our domestic tranquility, in the proximity of spouses and kids, will survive. We reflect on these nodes of hardship, with the hope that reasoned public policy will abate many of the harms, and that our own Mother-Wit will save us from others. First of these fancied sources of security, not so secure in fact, is our occupational performances, and our income, all perhaps blown away with the first adverse breezes. Our savings go next, and the future is left bleak. The amenities of the life, the evenings at theaters and class eateries, for example, largely gone. If we are proprietors of shops or pizza and taco purveyors, or dentists or aestheticians, good bye to the clientele, and the revenue.
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When
Should
Becomes
Must
— The Growing Social Consensus
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But we and our fellow workers, imposed on by a string of misfortunes, are not to blame. While those who are not touched by the losses continue to live the life of Riley, if a bit confined. The forward impetus of the world economy is slowed and made to swerve but is still capable of motion. The governments that so often are cursed for their blockhead performance, may come to the rescue. The CARES statute (of the $2tr price tag), and, as is sought, several stages of successor legislation (present estimate $3tr) — all are fit to place in our hands, against the season’s harms, ready cash to buy what is there to be had, and to pile up the rest against harms to come — or for the happy day when our cumulation will be the feature of a brighter time. Are we not, as a mass of vulnerable beings, obliged out of some inner fire of empathy and a bent toward preservation of each other, to provide for ourselves and, as strength remains, all the rest of the earth’s people ? The mix of charity and confusion, and the wishes for preservation join in saying yes — this despite the burthen of grousing among elderly senators : Extend unemployment compensation ? . . . over our dead bodies! And Food Stamps ? Horrors! The essence of the moral life in our time.
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The Economic Imperatives — True and False El Dorados
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Finally, how could the Government, or all the makers of fine economic weather, provide the aid, tirelessly extracting, from the still functioning economic apparatus, the deserved sustenance , and even a modicum of comforts? States cannot help very much, their hands tied by intendedly beneficent anti-deficit rules, but the Federal Government, not so constrained, can obtain cash at will from the cooperative Federal Reserve System, the Central Bank, put down as the essence of evil by the conservative mindset, but also the savior in a depression. The “Fed.” can make favorable entries in the U.S. bank account as fast as the U.S. can print bonds in any colors favored by the Fed. The neat and salvific trick celebrated by the new breed of Economists.
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Debt, that represented by the bonds held, in effect, in the gov’t’s own pocket, should save the day. The fiscal orthodoxy championed by right-thinking persons up to the last decade is, happily, much compromised in the era – an era of the Fading of Orthodoxies — in which debt, this kind of debt, at any rate, is not guilt, and is not sin, but the lubricant loosing the innate energies of a still vital people.
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