Sweden tried something different with its Covid-19 response. It didn’t go well.
I don’t mean to make fun of Sweden. Sweden’s Covid-19 response favored its economy. A lot of smart people still make the claim that more people will die as a result of the Covid-19 economic downturn than die from Covid-19 itself and, so their reasoning goes, it is better to lose a few more souls to Covid-19 now than to risk an economic downturn that takes even more lives later. At the beginning of a pandemic, it’s not always clear how to make that particular cost-benefit trade-off and, to its credit, Sweden was clear about the trade off it chose.
Sweden had two other options known to work, to test, trace, and quarantine, and to lockdown. The former was known to work without major economic disruption, but only when testing and tracing capacity enabled the quarantine of most possible cases. South Korea, Taiwan, and Vietnam were early examples of successful test, trace, and quarantine implementations. In this mode, a country’s economy can operate until a treatment or vaccine comes along. Presumably Sweden, like most European countries, lacked the testing and tracing capacity to elect this option.
Sweden could have locked down like the rest of Europe. Lockdowns were known to reduce infection levels, but also known to wreak havoc on economies. China and Italy were early examples of successful lockdowns. Lockdowns reduce infection levels so that countries then can restart their economies while implementing test, trace, and quarantine. Besides reducing infection levels, lockdowns also limit severe Covid-19 cases that can overwhelm a country’s healthcare system.
Instead of test, trace, and quarantine or a lockdown, Sweden opted for herd immunity. Its public health goal was to keep the economy open and allow a Covid-19 “slow burn” until 60% of Sweden’s population was infected. At that point, enough Swedes would have immunity from Covid-19 that, while there might continue to be new infections, there could be no further disruptive outbreaks.
Unfortunately, the Swedish herd immunity experiment demonstrated that Sweden wasn’t able to save its economy by imposing significantly fewer Covid-19 restrictions than a lockdown. There are many reasons that might be true but, at the very least, we know from Sweden that minimal Covid-19 restrictions meant to keep an economy functioning do not lead necessarily to a better outcome than lockdowns, in terms of either lives or money.
Sweden’s economy dropped about the same as its Scandinavian neighbors, but its Covid-19 mortality rate was significantly worse. There is no herd immunity. The measured infection rate of the general population in Stockholm last month was 7%, nowhere near the 60% infection rate (give or take, depending on your assumptions) needed for herd immunity.
It’s probably worse than that, though. There are many reasons the Swedish policy could have failed. It could be simply that the Sweden’s economy is so intertwined with its neighbors and the world that no matter what Covid-19 policy it enacted, its economy would decline.
However, a study from Harvard indicates that fear of Covid-19 infection caused most of the economic decline in the US. Based on reams of credit card and other economic data, the study found the culprits in the Covid-19 recession were high-income people who, fearful of Covid-19, stopped spending.
“The fundamental reason that people seem to be spending less is not because of state-imposed restrictions. It’s because high-income folks are able to work remotely, are choosing to self-isolate and are being cautious given health concerns. And unless you fundamentally address that concern, I think there’s limited capacity to restart the economy.”Harvard Professor Raj Chetty, NPR, “Why Reopening Isn’t Enough To Save The Economy,” 23 June 2020.
In other words, regardless of Covid-19 policies, economic demand won’t return until high-income people feel safe or until someone invents new ways for them to spend their money during Covid-19 outbreaks.
The US Federal Reserve echos that finding more generally, saying the severity of the US economic downturn is tied to the resolution of Covid-19 outbreaks.
The Fed has repeatedly said the U.S. economic outlook remains highly uncertain and reiterated that a full economic recovery hinges on the battle to control the spread of the novel coronavirus, which has killed more than 127,000 people in the United States.Reuters, “Fed revisits idea of pledging to keep interest rates low,” 1 July 2020.
At the time Sweden chose its Covid-19 policy, it couldn’t have known about the Harvard study, couldn’t have known that economic demand would drop off a cliff as long as Covid-19 was hanging around. Unfortunately, assuming rich Swede’s behave similarly to rich Americans, Sweden’s herd immunity policy choice exacerbated the very economic downturn it was trying to mitigate.
The Swedish Covid-19 experiment is an example of Covid-19 denialism, a way of sweeping Covid-19 under the rug as if something else was the problem, a rationalization to avoid change in the face of Covid-19. For politicians, Covid-19 denialism is an easy way out of asking for personal sacrifice when the payoff for such sacrifice is watching the economy tank while in social isolation. It’s also an easy sell before an outbreak, when an incipient exponential Covid-19 outbreak seems like something that only happens in other places.
Sweden is not alone in its Covid-19 denialism. It has good company in Brazil, Russia, and the US. Brazilian President Bolsonaro insisted hydroxychloroquine would mitigate the Covid-19 outbreaks as he kept Brazil’s economy open. Russian President Putin minimized Covid-19 by classifying deaths as pneumonia, but no one has seen an outbreak of pneumonia cause the depth of economic turmoil Russia now faces. Then there is the US.
The world expected an exceptional Covid-19 response from the US. The US delivered, but not the way the world expected. The US had the CDC, the biotech industry, the money. It had advanced warning about the severity of Covid-19 and time to prepare. What could go wrong?
The US blundered through a Covid-19 plan both vague and poorly executed which, just as it was showing results, Trump cut short to appease his pro-business friends. Now the states that relaxed Covid-19 restriction early are facing a renewed surge in Covid-19 cases and deaths. The US is left with no Covid-19 plan, a sputtering economic recovery, and lots of happy talk from Trump.
“I think we’re going to be very good with the coronavirus. I think that at some point that’s going to sort of just disappear, I hope.”Trump on Fox Business, 2 July 2020, as reported in “Virus will ‘sort of just disappear’: Trump has happy talk, but no plan.”
The cost of Covid-19 denialism is high in terms of lives and money for Sweden, Brazil, Russia, and the US. Denying that Covid-19 takes precedence over the economy misses the point that economic demand won’t grow until fear of Covid-19 diminishes so that high-income people boost demand. Losing a few more souls to Covid-19 now will not bring back the economy and save more people later on. Covid-19 has baked in that future loss of life already.
Last week the EU provided Brazil, Russia, and the US with a mirror to reflect on their respective Covid-19 responses. The mirror is in the form of travel regulations, the Covid-19 criteria a country must meet before it can send travelers to EU countries that have beat back the first wave of Covid-19. Residence of these three countries cannot travel to Europe, even rich ones who arrive on private jets.
This is, of course, a blow to US airlines that want to re-start intercontinental routes. Beyond that, it signals that if a country’s leadership won’t comply with its own public health recommendations, eventually either they comply or they isolate their countries from the world, further hampering their own economic recoveries. Sweeping Covid-19 under the rug starts a death spiral, as it were, in the world economy.
Perhaps more disheartening this week than Trump’s racist Independence Day jeremiad was reading Trump’s new Covid-19 campaign messaging, that the US must “learn to live with it.” This is a picture of what Trump wants the US to live with.
Trump’s denialism enables his supporters to make irrational claims. Individual freedom is more important than forcing citizens to wear masks. Business must stay open to support the economy. Look! The mortality rate of Covid-19 isn’t rising as cases rise, so it’s not as deadly now!
The US now finds itself where it was in March. For the sake of Trump’s re-election, the US must “learn to live with it.”
Yesterday, my friends Will and U.b. took me to their vineyard near Sant Marti for a lavender harvest. It was my first big trip to the countryside outside Barcelona since I arrived six months ago. The valley where cava is produced reminded me of California wine country. I felt at home.
The crowd was a blend of Spaniards, Brits, and Americans. A lot of our conversation during the course of the day was about Covid-19, of course. We’re learning to live with Covid-19 here, but our version of “learning to live with it” is different from the White House version. We’re intent on keeping the case numbers low, not watching them skyrocket.
There was excitement and trepidation about the prospect of travel. Will and U.b. are driving and taking ferries to Greece. Others were traveling to Normandy to see the D-Day memorial. I asked about good day trips around Catalonia. Even as I read reports of a Covid-19 outbreak and lockdown in the Catalan city of Segriá, I felt safe among new friends here. There was no mention of individual rights or a need to prioritize the economy.
After almuerzo, I realized my arms were sunburned, so I mostly stayed in the shade while others cleaned up or continued harvesting. Near the end of the day U.b. was kind enough to cut a bundle of lavender for me with large flowers, something to take home as a memento. As I smelled the lavender this morning, I came to understand that yesterday we harvested more than lavender. We harvested the fruits our our Covid-19 lockdown.