Thursday, October 29, 2020

Western Leaders Losing to the Virus

As we speak, the coronavirus is wreaking havoc in Western Europe. It is also wreaking havoc across vast swaths of America. It is good politics for Democrats to blame it on President Trump, but political leaders who have been lauded for their totally scientific approach to the virus are not faring very much better, for now.

The Wall Street Journal editorialized this morning:

Keep in mind that continental Europe was supposed to have done everything right to prevent another infection surge. The first lockdowns were extensive and prolonged. Governments mandated masks and social distancing. The new surges are due to the insidious nature of the virus, not to policy mistakes. That’s a lesson for Democrats who blame every new American infection on Donald Trump.

The reality became clear months ago that the virus can’t be banished on government orders, especially as citizens suffer and chafe under the pain of lockdowns. Targeted closures that protect the vulnerable are better policy responses until better treatments and a vaccine arrive or some broader immunity is reached. U.S. policy makers should do their best to avoid following Europe into another tragic shutdown.

To be more specific, everyone has insisted that German Chancellor Angela Merkel got it right. Apparently, not so much:

Germany, which was supposed to be Europe’s anti-Covid model, ordered a one-month shutdown of restaurants, bars, fitness studies and theaters. Hotels won’t be able to host tourists, and public gatherings can’t be larger than 10 people from two households.

As for super-enlightened France:

France will begin another national lockdown on Friday requiring people to remain in their homes. At least factories will be able to continue operating, but restaurants, bars and supposedly nonessential shops will have to close by government edict.

French and German leaders say they have no choice lest the country’s hospitals be overrun. Chancellor Angela Merkel said German hospitalizations have doubled in 10 days. “Within weeks, we will reach the limits of our health system,” she said. “It is completely clear that we must act, and act now, to prevent a national health crisis.”

Stamping out the virus without destroying the economy has always been the greatest challenge. Apparently, it has not been a rousing success in the Western world:

All of this will cause enormous economic damage after historic losses in the spring. Europe’s nascent recovery will go into reverse, and growth in the fourth quarter could be negative. The impact will ripple throughout the global economy, which accounts for the rout in equities. Investors have been betting on recovery, and at worst targeted lockdowns amid the inevitable fall and winter Covid spikes.

I would add that the Journal also believes that the current stock market rout is a function of the virus. It might also be a reflection that the market was seriously overvalued. It might be showing the hand of the Federal Reserve, working its magic to support the Biden campaign. (And no, that is not paranoid thinking. Banker William Dudley said that the Fed is perfectly capable of doing so.) Or else, the markets might just be preparing for the oncoming Kamala Harris presidency.

1 comment:

Sam L. said...

The virus has a gun in their backs?? Coullllllllllllllllllllld be. (Dark humor, for dark days.)