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How are pandemics not “intrinsic factors in the economy”? We’ve lived through a dozen documented pandemics and can find records of ports and seaside trading hub

How are pandemics not “intrinsic factors in the economy”? We’ve lived through a dozen documented pandemics and can find records of ports and seaside trading hubs dealing with them. The etymology of the word quarantine is related to the amount of time a foreign vessel was isolated at a port before it was allowed to enter the city. Implying that such spikes in unemployment or any other economic metrics aren’t representative of business as usual is a grave underestimate of how usual the business of pandemics and natural disasters is.

devoutsalsa 6y ago
I kind of think of it as the economy gets kicked in the crotch every ~10 +/- a few years by something, but it’s usually a different something every time.
roughly 6y ago
I should have said "endogenous." The difference between 2020, 2008, and 2001 is that in 2001 there was a substantial overinvestment in an unproven field, in 2008 there was a widespread underpricing of risk, and in 2020 a virus hit. 2020 doesn't say anything* about the broader economy - there's nothing "wrong" in the 2019 economy to inform 2020 or 2021 or beyond. The difference is worth noting because an awful lot of the punditry's model for recessions is to assume there needs to be a structural adjustment that involves some amount of turmoil and there's nothing that should be done to prevent that. In this case, there's no reason to assume that, and no reason to assume that economic turmoil is either necessary or beneficial. A disaster happened, and we should view it like a structure fire, not a bankruptcy. *except of course that a huge portion of the country has a precarious living situation, our health care system is a disaster, and our political system was wholly unprepared for any actual challenge. There's all kinds of deep foundational ills in the economy, but none of those would have caused a sudden severe spike in unemployment absent the pandemic.
- riffic 6y ago
  the concept of antifragility would like to have a word with your thesis.
throwawayboise 6y ago
We haven't had a pandemic remotely approaching 2020/21 in at least 100 years. It's clearly a black swan event, not an intrinsic factor in the economy.

devoutsalsa 6y ago

I kind of think of it as the economy gets kicked in the crotch every ~10 +/- a few years by something, but it’s usually a different something every time.

roughly 6y ago

I should have said "endogenous." The difference between 2020, 2008, and 2001 is that in 2001 there was a substantial overinvestment in an unproven field, in 2008 there was a widespread underpricing of risk, and in 2020 a virus hit. 2020 doesn't say anything* about the broader economy - there's nothing "wrong" in the 2019 economy to inform 2020 or 2021 or beyond. The difference is worth noting because an awful lot of the punditry's model for recessions is to assume there needs to be a structural adjustment that involves some amount of turmoil and there's nothing that should be done to prevent that. In this case, there's no reason to assume that, and no reason to assume that economic turmoil is either necessary or beneficial. A disaster happened, and we should view it like a structure fire, not a bankruptcy. *except of course that a huge portion of the country has a precarious living situation, our health care system is a disaster, and our political system was wholly unprepared for any actual challenge. There's all kinds of deep foundational ills in the economy, but none of those would have caused a sudden severe spike in unemployment absent the pandemic.

riffic 6y ago
the concept of antifragility would like to have a word with your thesis.

throwawayboise 6y ago

We haven't had a pandemic remotely approaching 2020/21 in at least 100 years. It's clearly a black swan event, not an intrinsic factor in the economy.