We’re Watching an Economy Die

How America’s Stunning Lack of a Coronavirus Response is Producing Economic Disaster Unseen in Modern History

umair haque
Eudaimonia and Co
Published in
13 min readApr 16, 2020

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See that chart above?

It says that another 5 million or so people filed for unemployment last week. That’s 22 million in one month. How much is that, in real terms? The US labour force is 165 million people or so. That’s 13.3% of the labour force unemployed in one month. That’s more than a rate of about 3% a week, as I predicted at the beginning of all this. At that rate, by the end of next month, more than a quarter of the US economy will be unemployed.

We are watching an economy die. There’s simply no other way to put it. As I and most other good economists cautioned, Coronavirus is a shock like we’ve never seen before — ever. Not even a war produces a massive shockwave like this, which is one reason war metaphors are inadequate. But it’s a shock like we’ll again and again in the near future, as climate change and mass extinction and ecological collapse bite — so this is a chance to get our house in order, to make preparations for an age of such shocks.

The first thing you need to understand about watching the economy die like America’s is is that it’s needless: it never needed to happen. The second thing you need to understand about this particular event — a gigantic shockwave of unemployment — is that it’s like the plume of a volcano, or the crest of a tsunami: just a front, which carries a massive wave of destruction right behind it. That damage is yet to come, but it is now on the way, inevitable. So: this massive shock front of unemployment is just the beginning. The nightmarish consequences it will have — depression and what that produces, which I’ll get into shortly — never needed to happen at all, and yet those effects, now that the shockfront is exploding before our very eyes, are going to last, and have dramatic, ruinous consequences of their own. A cascade, a chain reaction of ruin has now been set off.

How and why?

As I pointed out a few weeks ago, the stimulus was woefully inadequate. It provided businesses and households the equivalent of just one week of support…amidst an historic crisis that was going to last months. If the ante wasn’t upped, and…

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