The cost of COVID

In terms of the economy (and school and work) 2020 could be described as the year that COVID-19 ate.

By Morf Morford

Tacoma Daily Index

In terms of the economy (and school, and work and entertainment) 2020 could be described as the year that COVID-19 ate.

Around the world, we will be assessing the damage and assigning blame for years, if not decades.

Obviously we are very much still in the middle of the COVID mess, and the situation could easily get worse before it gets better, but let’s take a look at where we are, where we’ve been, and just maybe, where we are going.

First of all, we are going into winter. Winter makes its own demands on fuel, transportation and other related costs.

Fewer of us are commuting and more of us are spending far more time at home than usual, so the costs (and benefits) will be substantially different from a “normal” year. (I keep getting the feeling that “normal” is becoming so distant to most of us, that the word itself might drop out of our standard vocabulary).

The Bill & Melinda Gates Foundation 2020 Goalkeepers report highlights some of the dynamics at work – and how many of them have a multiplier effect on other, seemingly unrelated areas.

In summary though, many thousands of lives have been lost here in the USA, many more overseas. Millions have lost jobs. Others have lost trust in their fellow citizens. Entire sectors of private industry have been upended – if not erased forever.

Many of those who have been infected and recovered may yet deal with medical repercussions for the rest of their lives.

Here are two key take-aways; first, the pandemic has hit everyone, but it has hit us all in different ways, and second, none of the social or economic consequences occur in a vacuum.

The term ‘mutually cascading catastrophes’ begins to define our economic and social landscape.

Just as individuals have been impacted differently, regions and nations have been impacted unequally. The Bill & Melinda Gates Foundation reports that developed nations have devoted about 20% of their GDP towards Covid-19 disaster relief while developing nations have been able to dedicate about 3% of their smaller GDP pools towards the same goal.

For nations like ours, it has been a massive cost, but for developing nations, without our infrastructure of research, education and healthcare, recovery will take years, if not decades longer.

Unlike our president, researchers have run out of superlatives and metaphors; are we in a tsunami? An avalanche? An economic earthquake? A social revolution? Or all of these?

Where were we before we were so rudely interrupted?

The Bill & Melinda Gates Foundation monitors economic development on 18 indicators included in the United Nations’ Sustainable Development Goals. In past several years, the world has improved on every single one. This year, 2020, on the vast majority, we’ve regressed. Suddenly and abruptly – and for some, semi-permanently.

Progress is fairly easy to measure. Tsunamis, avalanches and economic earthquakes, not so much. The daily, if not hourly, struggle against hunger, thirst, disease, weather and human cruelty and exploitation is nearly impossible to measure.

And as the Gates Foundation emphasizes, more than ever before, we need a global, collaborative response; “There is no such thing as a national solution to a global crisis. All countries must work together to end the pandemic and begin rebuilding economies. The longer it takes us to realize that, the longer it will take (and the more it will cost) to get back on our feet.”

If you’ve ever ridden a bicycle, you know that the first few seconds can be a bit wobbly. The same dynamic is at work in an economy; momentum is our friend, starting and stopping is disastrous.

Supply chains, education, home ownership and much more are all threatened or thrown into chaos by global disruptions.

Consider housing and homelessness in the COVID era; according to the U.S. Census Bureau, 23 percent of white Americans (that’s just about one in four) said they were not confident they could make rent in August. Among Black and Latinx Americans the number was double that: 46 percent (almost half) didn’t think they could pay for that most basic of necessities, shelter.

When it comes to education, many in poorer countries, particularly girls, will more than likely NEVER return to school.

More and more will depend on a social “safety net”. But how effective those “safety nets” are, who has access to them, and who pays for them will be the burning questions for a generation or more.

The sheer financial loss around the world is inconceivable – the International Monetary Fund projects that, even with the US$18 trillion that has already been spent to stimulate economies around the world, the global economy will lose US$12 trillion, or more, by the end of 2021.

That’s way too many zeroes for my mind to comprehend. Here’s how the Gates Foundation frames it:

“ ….in terms of global gross domestic product (GDP) loss, this is the worst recession since the end of World War II, when war production stopped in an instant, one entire continent and parts of another were destroyed, and 3 percent of the world’s pre-war population was dead. In those same terms, the COVID-19 financial loss is twice as great as the “Great Recession” of 2008. The last time this many countries were in recession at once was in 1870…”

There’s an ancient Chinese curse; May you live in interesting times.

Times that are interesting are by definition not boring or predictable; they demand more of us, often more than we knew we had to give. These are the times that are challenging, difficult, and usually remarkably productive.

In our times the stakes are higher than most of us could ever have imagined. We cannot afford the familiar “business as usual” responses.

Here’s how the Gates Foundation closes their message;

“But before the world can really begin to address the damage this set of mutually exacerbating catastrophes has caused, we need to stop the inciting one: the pandemic that is currently getting worse, not better, in many countries. We cannot rebuild health systems, economic systems, educational systems, and food systems—to say nothing of making them better than they were when this year began—until the virus that is tearing them all down is under control.”

You can read the full report here:

It is a sobering yet encouraging report on the challenges and possibilities ahead of us.

As with every challenge humanity has faced, we can prevail if we work together. Our success has far more to do with our will than our resources.

As in every crisis, it is our character that is put to the test.