To Flatten Or Not to Flatten

One of my daughters texts that if she hears “flatten the curve” one more time she will lose it, but the phrase is useful. It is shorthand for the idea that around half of us will eventually get coronavirus, the only question is when. So the idea of social distancing and self-quarantining is to spread the epidemic out over a longer time, so that our health care system isn’t ever overwhelmed. This graphic illustrates the point; click to enlarge:

From a public health standpoint, this makes sense. But what about the economy? With our population self-quarantining and social distancing, many businesses are suffering badly. Ohio has, rather shockingly, ordered all restaurants and bars to close. Similar if less draconian measures are in place elsewhere, and they are likely to expand. The airlines are suffering, and bankruptcies seem possible if this continues. Countless restaurants and bars will go out of business. And don’t even mention the cruise industry.

My question about hunkering down is, when does it end? For how long are we expected to defer travel, avoid public events, and hole up in our homes? Will conditions be any different a month from now? I don’t think so; why should they be? Two months? Three? Curve-flattening, by its nature, will go on for months, at a minimum. Maybe warm weather will bring a temporary respite, but a conscious strategy of minimizing many forms of economic activity, for months if not years, will inevitably magnify the virus’s impact on our economy.

Today President Trump and Vice President Pence held a press conference at which Trump announced that the Fed is reducing its interest rates to 0.0 to 0.25%. That will give the economy a temporary shot in the arm, and it should goose the stock market tomorrow. Great. But I hope someone in the administration is thinking about how we transition out of the “flattening” phase and get our economy back to normal.

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