Home > Critical Thinking, Current Affairs, Dystopia, Musings, Philosophy sans Sophistry, Reason, Secular Religions, Skepticism > Some Predictions about Downstream Effects of COVID-19 Shutdown: 1

Some Predictions about Downstream Effects of COVID-19 Shutdown: 1

Since I have been recently writing a lot of posts about the COVID-19 shutdown (link 1, link 2, link 3, link 4, link 5, link 6), I thought it might be a good idea to write down some more and specific predictions about the downstream effects of COVID-19 shutdown. So here are some of them, in no particular order of importance or significance. Just so you know, most are pretty depressing.

1] As I have mentioned many times in the past, jobs in the service sector dominate the economic landscape of post-industrial western countries. Just think about how many people you know who work in a place which makes a real physical product or processes some raw material vs all those who work at some shop, mall, hotel, restaurant or something similar. But this goes even further, as the largest employers in most towns and cities in this country are either hospitals, universities or school districts. While these more “credentialed” jobs might seem to be something other than service sector jobs- they are just that and you will see why that matters later in this post.

While jobs in the service sector might seem too heterogeneous to be hit by the shutdown and its aftermath, they share some common features that make them especially vulnerable to economic disruption. Firstly, majority of business in the service sector operate on much low margin of profit compared to some other sectors. For example, there is no service sector equivalent of Apple or Microsoft with a few hundred billion dollars stashed into overseas accounts and obscure financial instruments. In other words, consumer sector businesses and employers lack the very deep pockets of corporations in other sectors.

Secondly, as a partial consequence of the first, they are heavily dependent on highly predictable levels of businesses activity and are usually (especially in west) financially over-optimized to the point that they cease to be profitable or even viable when capacity utilization levels are not close to maximum. This is a fancy way of saying that restaurants, bars, hotels, airlines, most shops in malls etc become money pits if they are not operating at close to their maximum capacity for a good part of the year. FYI- this is less of an issue in some Asian countries where the proprietors often own the premises and are not so heavily financially leveraged.

But why does this matter? Well.. because even if they can survive a couple of months of being closed down due to helicopter money from the government, they are just not viable if forced to operate at 25% or 50% capacity for even couple of months. Sure.. restaurants which do mostly takeout (pizza joints, chinese) might survive, but the vast majority will simply close it down because there is no way a sane person would operate, for more than a couple of months, under poorly thought and uncertain regulations made up by bozos without any skin in the game.

And it gets worse.. the service sector is far less monopolized than other sectors of the economy, and the majority of business in it are either small or medium sized. Given that government largess seems to preferentially benefit the large and politically connected in every sector, it is likely.. almost certain.. that many small to medium sized businesses will go bankrupt or close forever. What makes this outcome especially problematic is that those business account for the majority of jobs in that sector. In other words, we will a large rise in long-term unemployment in the very societies which have decided (about four decades ago) to abandon their economies to the “free market” aka financialism and monopolization by choice.

To add insult to injury, the vast majority of people in this sector are under 60 years of age and therefore the least likely to die (less than 1 in 1,000 chance) from COVID-19. And here is what will happen next.. tens of millions will be unable to pay their rents, mortgages, student loans, car loans etc for a prolonged time. Of course, trying to throw so many people on the street and out of their cars will have some very nasty political repercussions- more so because the majority are young. Some of you might say.. but what about unemployment insurance? Well.. that amount paid by most western countries (but especially USA) is not adequate for covering majority of their bills- more so if you live in a medium to large city.

And it gets worse…

2] The whole “social-distancing” and “quarantine” bullshit along with dubious measures such as requiring everybody to wear mask in public perpetuates the atmosphere of a perpetual crisis. I liken these measures to the security theater we saw in USA after 9/11- but with the potential to cause infinitely more economic problems. Think about it.. would you eat out at restaurants with same frequency as before if you server was wearing a face mask and every alternate table was closed off with big stupid stickers? Would you go to a pub as often? What about a movie theater? What about shops in malls pestering you to disinfect your hands every time you walked into them? Would you buy as many clothes as before if you couldn’t try them out in fitting rooms?

What about airlines? would you take a flight as often if you had to deal with all that bullshit? What about vacations? Would you stay at hotels as often even if you still had a job? And all of this security theater for what end? To maybe slow spread of a highly infectious disease with an gross population IFR of less than 0.5% and mostly problematic in people over 70 and 80? A disease that does not cause symptoms bad enough to seek any medical attention in over 90% of those infected. A disease that is functionally asymptomatic in most people it infects? A disease that the vast majority recover from without any therapeutic intervention or long-term sequelae.

The vast majority of disease control measures deployed to stop this pandemic are closer to ritualistic virtue display than good science. Consider for example, face masks. Do they benefit people under 70 to the same extent as those over 70? And given the highly infectious nature of this disease along with very low mortality in most age cohorts, isn’t it a good idea to let non-vulnerable people get the illness and recover from it. thus conferring them immunity than wait for an effective and safe vaccine- which will likely take at least a few months. Now let me ask you another question- do you think I am the only one thinking along these lines?

It is becoming increasingly harder to maintain lock-down in many parts of the world and while those regions might suffer more death at first- it will become increasingly obvious that letting people under a certain age get infected while protecting the more vulnerable minority is the least bad option. Notice I said ‘least bad option’ because there is no realistic good option in the near future. You are really choosing between options that front-load death or those which spread far wider economic misery over a much longer time-scale. Personally, I choose the first and you can be sure that the majority will eventually choose it because the second one sucks far more.

Noe let me ask you a related question- what happens to the credibility of the people and institutions who pushed the second option. As many of you know, it is my opinion that Trump’s rise of power had a lot to the non-recovery of most people from the GFC of 2008 and continued neoliberal policies under Obummer. Imagine what such a crisis and much bigger repudiation of “credentialed” people and institutions would do for the political scene in this country. You might remember that in a previous post I made the case that rise of fascist and strong-men type leaders in continental Europe during 1920s and 1930s had everything to do with high rates of unemployment among men combined with a repudiation of the elites who led them into WW1.

You think Trump is bad? Just imagine the type of right-wing ‘populists’ that will arise in response to these stupid and ruinous lock-down policies. In future posts of this series, I intend to write about the impact of these stupid policies on schools, universities, future of “left”, effects on certain parts of manufacturing sector, municipal bonds, velocity of money, effect on rates of drug use and much more. But before I finish this post, let me say something else. If you think that a crisis of this extraordinary magnitude will make corporate-owned western governments question their faith in neoliberalism- think again.

And another thing.. this crisis will destroy whatever residual faith people in many countries still have in the WHO- but that is the topic of another post.

What do you think? Comments?

  1. This blog has gone down in quality as of late...
    May 20, 2020 at 6:34 pm

    I took a walk through the dicier area of my ‘hood yesterday. All the shops were shut down, an already dilapidated area looked far more dilapidated than even two months ago. You could see glass on the street where cars had been broken into. Those getting unemployment will be okay in the short term but employers getting fat off their PPP bailouts will offer 30 hour, no benefit, minimum wage gigs thereafter. Those who worked as servers won’t get the fat checks they got from tips with these jobs once the unemployment runs out…

    Bargain Basement Bezos will still call people “heroes” with 200 cents in hazard paying ending before the “mask” requirement ends. All the “liberal” politicians won’t question his monopoly because they want their easy peasy deliveries. The divide between so-called blue collar and white collar workers will be deeper than ever before with the elitist democrats and the racist republicans both spitting on “essential” workers and demanding more with little to no increase in pay and still no health insurance…

    Basically lots of people will be hurting for years after this while assholes like Mike CaCa will still proclaim “I got mine, now pull yourself up by the bootstraps and vote democrat you fucking wussian troll, you…”

    • P Ray
      May 22, 2020 at 5:04 am

      The CONservatives always get exposed when you look at people who fail to understand society has changed,
      and LIEberals always get exposed when you look at people who think everything should be free
      both sides are very good at ensuring their movement leaders benefit the most, while essentially acting as safety valves for real social change.

      Funny how little security people have now, one could almost say it is a return to peasantry and serfdom.

      • ...this blog has gone down in quality as of late...
        May 22, 2020 at 9:45 pm

        …ironically, the black plaque was one of the things that ended serfdom…

        …many business owners got their PPP welfare bailouts. They have to bring back workers or pay back the loan in full, many laid off are making more on unemployment than they did at their pitiful jobs…

        …maybe business owners will finally have to pay living wages of $20-25 per hour and get that entitled “you should be glad to have a job” mentality shoved up their asses. Hopefully there is a labor movement and a realization that the Pelozi’s and the Trump’s haven’t done shit for low status men…

        …it will be nice seeing lots of businesses go BK…

        “what have you done for me lately?”

        Feminazi’s, tradCons and libtards will start shitting themselves when a guy like me finally gets to ask that question…

    May 21, 2020 at 4:55 am

    A few brave GAY NIGGERS standing up against the W.H.O.:

  3. bonzo
    May 21, 2020 at 5:16 am

    You mentioned .5% fatality rate and also front-loading of deaths, but didn’t connect the two, so I’ll do it. Yes, about .5% of the population will die from Covid-19. However, about .9% of the USA population (over 1% in Spain and Italy, because older populations) would have died anyway in 2020 based on trend line. Some of those deaths would be non natural causes: auto and industrial accidents, poisoning, drowning, suicide, murder, etc. But most would be the end result of illness, especially illnesses of old age. What covid does is similar to bad flu: it’s the final straw that kills off sick people who were going to die anyway later this year or next. So letting covid rip through the population probably results in the same .9% death rate as we would have gotten without covid, except about .5% of this .9% is front loaded into March/April.

    Instead of these stupid counts of people infected with or dying of covid, which are subject to debate because of testing issues, truly useful measure is excess loss of years of life. For example, if 100 people aged 30 normally die of natural causes in the USA each year, but this year 120 die, then that’s 20 excess deaths. Assuming average life expectancy for 30 year olds is 85, then there is excess loss of 20 * (85 – 30) = 1100 years of life. Whereas if normally 9000 people aged 84 die each year, and such people also have life expectancy of 85, and this year 10000 die, then there is only excess loss of 1000 years of life: 1000*(85-84)=1000. If the excess of people dying in March/April is mostly people who would have died anyway later this year, then there is zero loss of whole years of life. Rather, you have to use excess loss of months of life, which drives home the point that we’re destroying the economy to allow near dead people to eke out a few extra months of low quality life in a nursing home, which is idiotic.

    • doldrom
      May 21, 2020 at 11:29 am

      Agree strongly. And that’s not even trying to quantify the loss of quality of life for the tens of millions that willl be destitute and homeless. Or the hundreds of millions that will starve around the globe.

      What is almost completely unmentioned is how few are actually saved by ICU/Ventilators. About 50% death in the ICU (not surprising seeing that nursing home patients have a life expectancy of 6 months), but among the ventilated much higher. Most of the supportive care in the ICU (oxygen, anti-biotics, etc) can be applied outside of ICU as well, so collapse of healthcare is only an issue for ventilation support.

      The whole thing has mostly served to stagger the use of ventilators which objectively seen are an expensive ritual of last rites for the doomed.

  4. bonzo
    May 21, 2020 at 10:07 am

    Followup. Maybe the lockdowns aren’t that crazy. Uou only can be sure something is a mistake if you try and it fails. Thankfully, we have Sweden versus Finland as test cases for different approaches, though of course we won’t know results of the test until sometime next year, after second, third and subsequent waves.

    Ut’s pretty clear (was clear in March actually) that covid19 is not that dangerous. But the next such respiratory illness might be more on the lines of smallpox. Experts have been warning about an eventual deadly pandemic for decades. Now they have everyone’s attention. Hopefully, we will start preparing now for the future pandemic that will be serious. It’s going to require a total redesign of our society and economy to be able to withstand such deadly pandemics, so we need to start preparing now.

    Maybe a month of shutdown each year would be advisable as a sort of fire drill. Mandatory vacation, with 100% of businesses are shutdown, other than hospitals, police, utilities, etc. But no food stores, no gas stations, etc. People would thus have to prepare for the shutdown by stockpiling in advance. There would be no lockdown, so people could hang out in the park or visit friends. But they would be constantly reminded that the shutdown was a drill, and that during a real pandemic they would have to avoid other people. Such an annual shutdown would train businesses to build in slack.

    As far as loss of GDP from this proposed annual shutdown, much of GDP is bullshit makework anyway so no real loss. The real problem in the economy is that money is being hoarded by the wealthy rather than circulating. Fix that problem and then people will be able to accommodate a month of shutdown in addition to 6 weeks vacation during times when businesses are open. Fewer weeks work per year would not a problem if average workers were paid better for weeks they do work, as they could be.

    • doldrom
      May 21, 2020 at 11:33 am

      Nobody is talking about cumulative cases, let alone costs. An exit from this panic reaction was missing from the beginning. The more you stomp on the transmission succesfully, the further you are from finding out what the ultimate results will be. Everybody is now acting that countries that were most successful with initial measures to slow transmission have achieved the lowest cumulative mortality. There’s very few theoretical reasons to thinks that’s true.

  5. MikeCA
    May 22, 2020 at 2:59 pm

    So this is the new Russian/crazy alt-right/crazy Republican conspiracy theory. I mean you all saw what happened in Italy, Spain and New York City when people hesitated to shut things down. Now the line is Covid-19 is no big deal for anyone except old people, so man up and go out and get yourself sick.

    To believe that you have to ignore what has happened in China, Italy, Spain, New York city and even Russia. As P. T. Barnum said, “There’s a sucker born every minute.”

    • ...this blog has gone down in quality as of late...
      May 22, 2020 at 8:33 pm


      And somehow a pice of shit like MikeCaCa would be happy to keep on ordering on amazon and have a low status guy such as myself deliver to him with no benefits. But if I get Coronavirus it is my fault because I didn’t pull myself up by the bootstraps…

      Fuck You Mike CA….

    • bonzo
      May 22, 2020 at 10:07 pm

      Euromomo updated again for week 21: https://www.euromomo.eu/graphs-and-maps
      Compare Spain, Sweden, Switzerland. Basically, same trajectory, even though Spain had strong lockdown, Sweden had no lockdown, Switzerland somewhere in between. These euromomo graphs of excess deaths are what matter, not those stupid counts of deaths due to covid19, which can easily be inflated by attributing every death to covid19.

      Now it’s true that euromomo graphs are different for Norway, Finland, Greece, etc. But that doesn’t prove anything yet. What is really needed is the percentage increase in excess deaths for the year for each country and we won’t know that until Dec. Even more accurate would be percentage increase for combined 2020-2021. It is quite possible Norway, etc will simply spread there increased excess deaths out over 2 years, so no spike like for Spain, etc, but still same percentage increase for 2 year period for all countries, regardless of lockdown.

  6. doldrom
    May 23, 2020 at 8:35 am

    Do you know that?
    The best measure of transmission is positive tests, because we can assume that if the testing is working with the same gating protocol, it will be proportionately similar over time, even if it is inaccurate. Infection, incubation, and presentation (sick enough to get tested) takes about 12 days, with little variation.
    Look at the curves, linear or logarithmic, and check out when the first tiny inflection takes place of less steep. In virtually every jurisdiction, this inflection takes place before lock-down measures + 12 days.
    I do not know what is causing that, but it the rate of infections cannot be affected by something subsequent. More evidence is supplied by the fact that the shape of the infection curves is far more similar (regardless of relative incidence) than are the measures and enforcement. That’s why you have scientists remarking that it seems to take the same 70 day wave everywhere.
    About epidemiology, it remains one of the unanswered puzzles why infections seem to burn out. No, the answer is not something simple such as blanket exposure and herd immunity. Epidemics almost never progress along some path resolvable by a few variables.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: