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An economic catastrophe and an apology

I got hauled up the other day by someone who thought I was very insensitive in blogging about this crisis as an economic one, but not a catastrophic one. What I actually wrote was (I’ve amended it slightly since):

Someone wrote the other day that this pandemic is like a world war. It’s not. A world war was worrying if you would live tomorrow; if your partner might be dead tomorrow; if your children would live; if your house would still be here. I haven’t had any of those worries in this crisis. My only worry in this crisis is whether I could still work. That’s a big difference to a war. This war is purely economic, not catastrophic.

They said I was privileged to be in this position and should think more about what I say in future.

In the cold light of day, reading those words, they are right. I was stupid. People are losing loved ones and worrying if their partner might die tomorrow. I didn’t mean it that way and I could be timid and just let these comments pass by …

… maybe I should …

… I feel I should …

… sorry if I offend anyone …

… but …

I decided not to let this just pass by, as I wanted to put my stupidity in context.

In World War Two, 85 million people died. In World War One, 20 million died. After World War One a third of people on Earth got the Spanish Flu and it is estimated that at least 50 million people died.

So far in this pandemic less than half a million people have been recorded dead, largely thanks to the lockdown. I feel hugely sorry for those who died, their loved ones, their family and friends. I am sorry, and I’m not defending my words. My words were wrong. I am not discounting the hurt, pain, feelings and emotions this crisis faces. But, in a world where my partner, parents or children could die in seconds tomorrow with no notice as a bomb lands, and that event is unstoppable and highly likely, and the likelihood of that event happening is far greater than dying from coronavirus, I think things are different.

The big difference is that, whilst we cannot behave as normal, we isolate and distance and we fear that if we go anywhere we might get the virus and die, we see a huge change in behaviour.

In the UK, for example, thousands of people are dying at home because they fear going to the doctor, to hospital, to get regular treatment, to manage their pre-existing conditions. Thousands more are dying economically. 40 million jobs lost in America, a possilbe six million in the UK, and businesses that were thriving and prosperous being made suddenly destitute and alone. Add to this all of the unseen suffering: couples whose partners beat them and cause trauma; homes that are lost due to being unable to afford the bills; children who are abused and get no home schooling; and more. This is what I meant by an economic war.

The USA has recorded over two million coronavirus cases to date and over 120,000 deaths; but research estimates there will be a further 75,000 “deaths of despair” to add to this. Deaths by drugs, alcohol and suicide.

Researchers estimate that 42% of pandemic-induced layoffs will result in a permanent job loss. That is huge. It is like a war in that sense but, as mentioned, an economic war.

The global economy will shrink massively this year, and we hope it will rebound. We think this will be something we can manage. Yet, as those researchers say:

“If the economic shutdown lingers for many months, or if serious pandemics become a recurring phenomenon, there will be profound, long-term consequences for the reallocation of jobs, workers, and capital across firms and locations.”

Times are not great, but putting the world on a long-term pause makes it worse. Equally, unpausing the world is not great, if it means the disease spreads once more and is rife. The latter makes all of our efforts to stop the spread of the virus come to naught.

It’s a tough choice: stop the economy and cause economic disaster; unstop the economy and let the virus win.

It’s a lose:lose situation.

Either way, I apologise for any offence caused and I have had friends who got this virus. Luckily for me, they survived. Luckily for me, I avoided it. Luckily for me, I’ve been stuck at home for months playing with my kids. Lucky for me. Sorry for those who didn’t have those privileges.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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