As America enters a month and a half since the World Health Organization considered the coronavirus outbreak a global pandemic, we need to discuss the societal and economic effects the disease has had. As devastating job loss continues and plummeting of the stock market, long term effects of this pandemic lead researchers to believe the world is in for far worse consequences as a result of the virus in its aftermath.
Three Primary Political Narratives
There are three primary political narratives that have been built around the coronavirus pandemic which have affected our economy and the rest of society. One point titled, “What about the flu?” outlines a narrative that dominated discussion of the virus in its early days. Its goal was to minimize the threat of the disease, specifically with regard to a similar occasional virus such as the seasonal flu. Denying biology behind the virus, suppressing the inevitable consequences of a novel coronavirus, and characterizing the dangers of the disease as minimal were all ways the media portrayed the false realities that surrounded the pandemic. In essence, those who distributed information to the public falsely reassured citizens that everything will be alright and purposely ignored the truths of what horrors such an epidemic may cause, with the intent to further a political agenda.
The second example describes the media and government officials who have bent the truths of our reality through the concept of Herd Immunity. This is an idea where larger populations get over the pandemic in time. While in theory this may seem like a great idea, unfortunately as a result of the pandemic, over 100,000 Americans and over 356,000 citizens around the globe have died due to COVID-19 complications. In addition, many more low-income earners in the United States have been bearing the majority of the suffering versus much wealthier citizens. The idea that while we seek herd immunity, society can also protect against the old and sick. This is not true and only one of these goals could be achieved if society utilized herd immunity. This political narrative is based on the government’s goal of preserving the economic status quo. Most of the data media outlets use to illustrate the effects of the virus are made up of models that do not reflect accurate figures of cases and deaths. These models are created to convince the public that it is perfectly fine to live life as if there wasn’t a global pandemic, ignorant of the risks and ramifications involved.
Lastly, the third political narrative examines the idea of Flattening the Curve. The curve, in this case, means preserving medical care utilization and avoiding overwhelming the healthcare system as a whole. As legitimate data has shown, lockdowns have been extremely useful in preventing a surge in cases that could overwhelm the healthcare system. Quaranteeing and isolation is a way to prevent disease on a wide scale, yet where the government can get carried away with these recommendations is their ability to take advantage of these suggestions. These practices may help to eliminate the disease entirely if everyone cooperates. Yet, if the media can scare citizens into not leaving their homes in fear of contracting the deadly virus, the government would have a larger control over the everyday lives of Americans than ever before. All in all, it is remarkable how far society has come, from initially seeking valid information about the virus to the government and media taking advantage of the uncertainty of our situation for their own ends. Our society has become a polarized partisan battlefield for institutions and political structures to promote these ideas for their own benefit. After all of this discussion, we have seemed to forget about the first responders on the frontlines of this war against disease who are battling with their own safety.
How the Government has Initially Reacted to the Pandemic
As much as the healthcare sector has been most affected by COVID-19, the world of finance may be next in line to suffer horrific inconvenient consequences. The government has decided to assign bailouts for airline companies, cruise ships, private jet businesses because they have unfairly lost millions of dollars due to the pandemic. Senators and other officials are watching money being spent they didn’t know existed, partly because pretty soon the government will be distributing money they won’t even have. The government, as it has in the past is supremely concerned with the attitudes of the ultra-rich and making sure they are taken care of before anyone else.
As low-income earners in the United States bear the brunt of the pandemic, the most that eligible citizens have gotten as aid from the federal government is a $1,200 stimulus check. Most qualified citizens won’t receive that payment for weeks after it had been promised, and some citizens may not collect it at all. As the largest corporations are receiving trillions of dollars weekly (which soon may turn into monopoly money), the most heavily affected citizens are left to fend for themselves without any help from “big brother.” This is a tremendous problem that may lead our country into a long and dark depression. Citizens cannot continue to pick sides and march on the left or right of a fake constructed competition for power but can work for our local communities from the bottom-up; that way, we can recognize the biology of the disease, understand the rights and responsibilities that we have as obligations to each other as citizens, and move forward to solve the issues that press us most together. However, there are ways that citizens can work together to lessen the lasting ramifications of this crisis. After all, Americans accomplish remarkable things aside from any other country in the world during times of despair.
How Investors Will Effect and be Affected by the Changing Economy
One of the most important questions that investors need to get right, is determining whether the economic climate as a result of the pandemic is inflationary or deflationary. We are experiencing a vast loss in jobs and human life, real restrictions, and behavioral changes in international trade, as well as everything that makes the modern economy run, which all lead towards a deflationary environment. Known as the “4 horsemen of the apocalypse” or when applied to the financial sector, the “4 horsemen of the investment apocalypse,” these symbolize wrongdoings that will lead to the end of the world. The first 3 horsemen represent a deflationary economic environment since some of the challenges we face today have been issues that have lasted for decades. Monetary and fiscal policy, in particular, have been met with a deflationary environment, especially after the great financial crisis. COVID-19 will bear a similar deflationary crisis. The 4th horsemen of the apocalypse is death, and for the investment apocalypse, inflation.
In response to the pandemic, the federal government has seen an effective merger with the Federal Reserve and the US Treasury. This type of behavior was common during the lives of Alexander Hamilton and throughout President Jackson’s administration. The modern “bank of the United States” consists of the Federal Reserve issuing money and buying commodities such as debt securities that the Treasury produces. This merger has been at the heart of what proponents of modern monetary theory have called for years; these proponents see the government working as a unitary actor, a bank that essentially invests and spends in the real world, but wouldn’t match the institutional appearance we usually see. What may usher in the 4th horseman of the investment apocalypse is this merge of monetary and fiscal policy as we see with the response to the coronavirus.
The November Presidential election may very well be a tipping point in this conundrum. Political scientists and economists believe there is another 2 trillion dollar spending plan on the horizon, which may possibly be titled “Infrastructure bonds” or if Trump is reelected, maybe the “Make America Great Bonds.” The Fed may continue to expand the use of its exigency clause, especially since they won’t be met with any opposition in court. There aren’t any political parties or a government institution that would attempt to put a stop to how the Federal Reserve is conducting itself. This unchecked behavior will allow the Fed to continue on without any resistance. It seems the government isn’t doing anything productive for themselves, or the citizens they supposedly represent.