Flattening the Curve

Expectations drive the economy. Economists measure consumer confidence. The futures markets are self-fulfilling prophecies, to a degree.

Politicians know that. You remember.

“If you don’t go shopping, the terrorists win.”

Right now the politicians are managing expectations to preserve the social order. That’s why we’re reopening.

You remember we quarantined to “flatten the curve.” To keep our healthcare facilities from being overwhelmed.

Reopening just means that there’s more room at the hospital. They haven’t beat the Coronavirus. We haven’t discovered a cure. People are still going to get sick and die. But now there are beds in the ICU. Ventilators. We’ve just succeeded in “flattening the curve” so our healthcare system won’t be overwhelmed.

Now we’re reopening to flatten another curve, to keep our social services from being overwhelmed. The pandemic was a double whammy for governments. Quarantine increased the need for public assistance, while simultaneously reducing government’s tax receipts.

Forcing people back to work cuts government’s unemployment insurance liability while simultaneously increasing government revenues.

We’re reopening to flatten the bankruptcy curve, too, to keep those marginal businesses that can’t survive a prolonged shutdown from declaring bankruptcy.

Reopening businesses is just “flattening the curve” so we don’t notice the economic tumult we’re coming into.

Reopening is good for government. And it’s good for businesses that didn’t save any money during the economy’s big expansion.

But for some businesses, reopening is only going to prolong the pain.

For some businesses, the pandemic just accelerated what was going to happen eventually. Some estimates say that one in four restaurants will close as a result of the economic downturn resulting from the Coronavirus and the resulting quarantine.

And all the good news emanating from our governments is just another way to soften the blow of the upcoming economic catastrophe.

But businesses close. Every day. What’s the average lifespan of a business these days? Three years? Five? Any place that’s been open for seven years is an institution. And they’ve survived by salting money away for the lean times.

Yeah, and people die every day, too. but I don’t think the two events are comparable.