By Karl Arnold Belser
15 May 2020
I am taking a snapshot of the world situation every two weeks without knowing in advance what will turn out to be true. I want to be as thoughtful as possible so that I can examine and criticize my thinking process in the future. This chronicle serves this purpose.
Six million more people became unemployed in the US in the last two weeks for an overall total of thirty six million. Further there are at least ten million more that are unemployed either because they gave up or could not get unemployment insurance. The employment participation rate is now below sixty percent, the lowest after the great depression of the 1930s. See the Bureau of Labor Statistics Charts as of May 8.
The chart below shows the US unemployment rate versus time after WWII. Note the quick and deep fall in employment. Further all past recovery rates have been about 0.14% per month. If this rate were to hold true for the current 14% level it would take 100 months or 8.3 years to recover from the current unemployment level.
I doubt that recovery will happen like it did in the past because the Fed kept many zombie businesses alive for the last ten years using quantitative easing.. The jobs with zombie companies will not come back.
There is a general denial that pretty much everyone that might die will die if exposed to the Coronavirus until there is a vaccine or herd immunity. Herd immunity would occur if about 85% or more of the US population is immune by either vaccine or recovery.
The United States recovery as a whole is uncoordinated. Each state is doing its own recovery plan without herd immunity. The reason is economic. The collateral damage of the shelter in place directive will be many times worse than the Coronavirus disease. In fact it looks like about half of the people that die are older or compromised people that are not a significant part of the labor force. So it is a moral issue.
Today about 90 thousand people have died at the expense of 36 million job losses. This mean that 400 people lost their jobs per death. this is a tragedy because all of these people would probably have died anyway even if shut down had not occurred. All that has happened is that the economy of the United States has been severely damaged.
The latest attempt to cope with the Coronavirus is that of contact tracing.. The Chinese do this with GPS location and face recognition. It has worked. China has recovered but unfortunately the rest of the world is so destroyed that there is little money to buy Chinese products. What good is production with no customers?
The US is not going to use face recognition or GPS tracking for privacy reasons. Instead some parts of the US are deploying thousands of people to manually talk to and track down people that an infected person might have come close to. Of course the US cannot force anyone to quarantine like the Chinese can. This is another wasted effort that allows the news media to talk without understanding the big picture. The result is that the TV viewers are terrified.
The fear that has been instilled into the American public by the government and the media will probably have a negative effect on the recovery. So I expect that I will have to live in a masked, sheltered-in-place environment for the rest of my life.
Last updated May 15, 2020
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