Most of Spain starts Phase 1 of the relaxation of its Covid-19 restrictions on Monday. Catalonia decided to hold off, so we probably start Phase 1 in ten days. That’s a little frustrating. After 60 days, though, I’d rather get this right than have to go back to lockdown. Until Spain has adequate resources to test, track, and quarantine, a return to lockdown may be the best option if the Covid-19 infection rate R pops up above one again.
It’s much better now that we can go outside for exercise. I can meet people for a walk, so there’s socialization in my life again. My friend Ruben, who lives about 15km up the coast, was wondering what Barcelona looks like during our evening communal exercise time, so I took a snap.
It’s clear that not everyone wears a mask. On Carrer del Verdi, which was Gracia’s version of Restaurant Row in Manhattan all those days ago when restaurants were allowed to operate, I counted about half the people with and half without masks. On the quieter side streets, most people weren’t wearing masks.
I don’t know why the streets that were crowded before Covid-19 are crowded now. Old habits, I guess. People congregate now where they were used to congregating before. They want life to be normal, even if all the stores are closed and we can go out only during certain hours. It seems much safer to walk on the quiet side streets. Fewer opportunities to cough and sneeze on each other.
Spain has some of the same crazy political dynamics as the US. I feel safer here, though, in spite of the similarities. With the exception of a few wingnut politicians, Spanish intentions seem less economic and more healthy than the US. As in the US, though, the conservatives are pushing to open sooner. Madrid, the worst hit city in Spain, has a conservative government. It will start its Phase 1 on Monday. I wish I understood better why conservatives are pushing to open so fast, to risk the progress containing Covid-19.
To me, the claimed economic benefits from relaxing Covid-19 restrictions seem like a convenient rationalization for ending restrictions sooner than later. I’m watching the meatpacking debacle in the US with some alarm. The meatpacking industry is the canary in the coal mine for supply chains operating during the Covid-19 pandemic, the supply chains the economy needs if it is to work the way it worked before.
People want meatpacking plants to operate at any price. They are, after all, part of the food supply chain. At least, that’s the rationalization.
For instance, Nebraska’s Governor Ricketts overruled local officials in Grand Island who asked JBS to close its meatpacking plant because of Covid-19 infections. Grand Island officials wanted to stop the Covid-19 outbreak before it overwhelmed the local healthcare system. Governor Ricketts, on the other hand, was concerned about food riots if meat production stopped.
“Can you imagine what would happen if people could not go to the store and get food? Think about how mad people were when they couldn’t get paper products…. Trust me, this would cause civil unrest.”
Nebraska Gov. Ricketts in a press conference explaining his decision not to close a JBS meatpacking plant in Grand Island.
I’m not going to second guess Gov. Ricketts’ intentions, but his rationalization to overrule local officials lacks the very imagination he asked the press to conjure. Can you imagine what would happen, for instance, if people cooked without meat for a few weeks? Can you imagine what would happen if people shut down the plant just long enough to figure out how to protect the workers?
A successful response to the novel problems the novel Coronavirus presents takes a large dose of imagination. It helps to imagine ways to contain Covid-19 rather than spread it.
After all, Covid-19 has an imagination, too. Maybe not in the way that you or I think of imagination, but look what Covid-19 figured out how to do all on its own at other meatpacking plants that turned into Covid-19 hotspots.
Why, look! Following anonymized tracking data from the mobile devices that visited five other meatpacking plants with Covid-19 outbreaks, it’s clear that the owners of these mobile devices could have transmitted Covid-19 to all 48 continental states and into Canada. Free trips for Covid-19 all over the country. That’s imagination!
Not to make light of this, but when we say we want to open up for business again, we can’t just open up for business again. We have to re-imagine supply chains, re-think the way we use enclosed space, re-organize our activities to fit Covid-19’s requirements. If we fail to apply our imaginations, Covid-19 will use its own imagination to shut down business for us. It’s quaint to think we just go back to business, to imagine that when people start dying around us at work, we’ll just keep slogging it out through the ensuing chaos.
There’s a larger problem, though, with the argument to forget Covid-19 and get back to work. It’s too late. It’s like waking up in Hiroshima in August 1945, pouring a cup of tea, looking over the irradiated landscape outside, and saying something like, oh, don’t worry about that, all we need to do is make it like before.
The economic damage from Covid-19 has been done. It’s massive. This is not particularly controversial. The May 2020 report from the Bank of England is indicative of what other central banks are saying.
As billionaire and hedge fund manager Ray Dalio says in his recent TED talk, the Covid-19 economic is on the order of the 1929 market crash, the kind of destructive meltdown that occurs every 80 years or so.
This is a long, but useful listen as much for the history as for the economics. Based on past economic disruptions, Dalio expects significant shifts in income and wealth distribution. The tools in a government’s toolbox to manage through these massive disruptions are:
- Cutting spending (austerity)
- Debt restructuring (forgiveness)
- Redistribution of wealth (taxes)
- Printing money
In Dalio’s estimation, the world is likely to see not only a shift towards Chinese power, but also a new Bretton Woods type of agreement. Bretton Woods made significant changes to the way central banks coordinated policy after WWII, turning the US dollar into the world’s peg currency. One risk with Trump’s ineptness is that the world could peg to a different currency and put the US economy at enormous peril.
Dalio points out that creativity and productivity have been key to transforming economies in past crises. In a related vein, Kim Stanley Robinson writes in the The New Yorker about the way Covid-19 demonstrates our ability to change. She sees hope that if we deal with Covid-19 effectively, we may figure out how to deal with other cataclysmic problems like climate change.
Economics is a system for optimizing resources, and, if it were trying to calculate ways to optimize a sustainable civilization in balance with the biosphere, it could be a helpful tool. When it’s used to optimize profit, however, it encourages us to live within a system of destructive falsehoods. We need a new political economy by which to make our calculations. Now, acutely, we feel that need.
Kim Stanley Robinson, The New Yorker, “The Coronavirus Rewrites Our Imaginations,” 1 May 2020
When my friends say the best thing is to open up the economy, my biggest fear isn’t that they’re probably wrong. My biggest fear is that they may have forgot to apply their imaginations to the crisis at hand. The safest thing for our health and for the economy is unlikely to be opening up things as quickly as we can. We know that from the meatpacking plants.
The safest thing is to play our advantage against the virus, to use our imaginations to outwit Covid-19. Just as I find safety in Barcelona’s less traveled side streets, I expect the same less traveled streets to present me with unexpected answers to my questions.
COVID Diary BCN 