America’s Choice: Death by Corona or Unemployment

I am an avid reader. Once a month, when my supply dwindles, I will check the New York Times’ bestseller list or see what’s popular in European newspapers for my next buys.

Except for Harari’s outstanding 21 lessons for the 21st century, which tops anything written these last few years, I am a certified fan of US author Michael Lewis.

My personal favorite is Boomerang which explains the European credit crisis of 2013-2014 from the point of view of the Irish, the Germans and the Greeks.

People lose homes, people lose jobs

The author has also seen great success in Hollywood with both Moneyball and The Big Short being turned into blockbusters.

The latter contains a clip which references the choice that the US (and Europe) faces today .

Brad Pitt plays a trader who’s retired and helps two youngsters to make some money during the 2008 credit crisis. As they start celebrating their probable winnings, he turns to them and explains that a downturn is no laughing matter as…. unemployment means death as well.

The quote I refer to is:

If we’re right (about the housing market collapsing), people lose homes. People lose jobs. People lose retirement savings, people lose pensions. You know what I hate about fucking banking? It reduces people to numbers. Here’s a number – every 1% unemployment goes up, 40,000 people die, did you know that?

Hence with this statistic at hand, which originated in the 1970s, keeping the population indoors for weeks and months on end would skyrocket unemployment numbers in your economy, and perhaps cause just as much death as the virus would.

Europe and the US face similar choices

As both continents agree that their populations cannot adhere to the strict regulations that the Chinese government imposed on theirs as they have a democratically elected government rather than one that rules through dictatorship, the choice at hand is to either let your economy fail (the lockdown will not finish by 1 May, let’s be realistic here) or continue as you were to make sure your economy stays afloat but risk many deaths through the virus.

I’m sure someone more grim than me, like the gents over at Goldman Sachs, have already made the calculation as to what is the better choice, death by unemployment or corona.

Time will tell.

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