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An Improbable Summer
Everyone knows that Q1 and Q2 of this year will have been compromised by the shutdown of large segments of the economy. The GDP figures for these quarters will be very poor. This is the part of the movie when we cover our eyes.
But what of Q3?
Although predicting with certainty would be foolish, there is a possibility that Q3 will see a very sharp snapback in activity that could drive up GDP growth close to 10%. This would be caused by pent-up spending on capital goods, on home improvement, on at home technology, and by new spending on health care supplies.
Though excess optimism looks naive in the depth of the crisis, we should remember the speed at which normal activity returned after 9/11, a better analog to the present than the 2008 crisis.
In the immediate aftermath of 9/11, there were an anthrax threat and daily warnings of imminent devastating attacks, including the possibility of WMDs. Yet the economy boomed and the football stadiums were full every weekend. The recovery will occur in a different form this time. The impulse to live in full is at least as potent as the will to merely survive. Improbable as it seems today.
Coronavirus – United States ex-New York
The conventional wisdom in recent months was that the virus wave in New York State was the first of several to spread across the United States. The reality now appears to be different.
Though they are still growing, the per capita numbers of confirmed cases and of deaths in the 49 other states remain far lower than in New York and the tri-state region. More importantly, they are growing at rates that are low enough to suggest that they too are in a fading trend.
If there are to be later cycles this spring, they are likely to be far smaller waves than in New York, and of shorter durations and lower peaks in per capita figures.
Decency vs. Honesty
Albert Camus’ masterpiece novel La Peste (The Plague) is enjoying a resurgence in the current pandemic. Among the many different citations recently lifted from the book, this particular one has appeared in several articles and countless social media posts:
“It may seem a ridiculous idea, but the only way to fight the plague is with decency.”
But in the original French text, Camus had written:
“C’est une idée qui peut faire rire, mais la seule façon de lutter contre la peste, c’est l’honnêteté.”
The English version translated “honnêteté” (literally, honesty) as “decency” but decency is likely a departure from Camus’ intended meaning. This is an important distinction in particular within our culture which is very keen on decency, a commendable virtue but one that is too often promoted at the expense of simple straight honesty. Much of the media and many politicians have sacrificed the latter on the altar of the former.
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