{"id":1166,"date":"2020-03-28T15:22:45","date_gmt":"2020-03-28T14:22:45","guid":{"rendered":"https:\/\/www.sajo-innovation.de\/blog\/?p=1166"},"modified":"2022-09-03T15:16:36","modified_gmt":"2022-09-03T13:16:36","slug":"pandemics-and-economics-an-explosive-mixture","status":"publish","type":"post","link":"https:\/\/www.sajo-innovation.de\/blog\/pandemics-and-economics-an-explosive-mixture\/","title":{"rendered":"pandemics and economics \u2013 an explosive mixture"},"content":{"rendered":"\n

March 28, 2020<\/strong><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

Globally, governments show two extreme ways to deal with the\npandemic:<\/p>\n\n\n\n

On the one hand, there are those who fight the spread of the\nvirus using massive restrictions. Among them are totalitarian regimes like\nChina, but also some democracies such as South Korea, Taiwan and India.<\/p>\n\n\n\n

On the other hand, there are governments who follow\nprinciples of laissez-faire. Among them are Brasil, Sweden and up until last\nweek the United Kingdom.<\/p>\n\n\n\n

The German government aimed for a way in between. Still,\nmeasures are felt individually and economically. However, these measures cannot\nshow any effect at the moment. Note: The viral spread follows a logarithmic\ncourse while at the same time the incubation time of up to 14 days is relatively\nlong. Should the measures lead to a drop in new infections, it will take weeks\nto show an effect. Nevertheless, many economists are already now pushing for a\nrelaxation of the restrictions. Quite frankly: We do not understand! Economy is\nbased upon numbers. We would expect economists to have a basic understanding of\nmathematics.<\/p>\n\n\n\n

Currently, there are two possible scenarios:<\/p>\n\n\n\n

  1. The restrictions will be in place until a significant decline of new infections can be observed. This is the moment when a step by step relaxation of measures may be envisioned. This scenario will lead to strong and painful consequences, in society as well as economy. Small enterprises and self-employed people will be hit hard. Government help is absolutely necessary, but needs to be relieved from bureaucratic hurdles. This needs to be improved. Thus, this scenario will lead to economic losses.<\/li>
  2. The economists\u2019 call for relaxation of the restrictions will be heeded. The societal and economic life will go on as usual, the virus will spread logarithmically (in all age groups!), millions of people will fall ill, numerous people won\u2019t be able to work, and tens of thousands of people will flood ICUs in no time. Doctors and medical personnel, nurses and numerous relevant institutions (police, fire department and so on) will be confronted with a significant lack of personnel. Should hospitals be overburdened with coronavirus patients while medical personnel fall ill, the hospitals, which are already strained, will no longer be able to care for patients with other diseases and conditions. This will have a snowball effect, once millions of workers are unable to attend work.<\/li><\/ol>\n\n\n\n

    –> Now our question to the economists would be: Which of the two scenarios will lead to a bigger economic loss?<\/p>\n\n\n\n

    A small hint:<\/p>\n\n\n\n

    Scenario 1: The economy will run on a reduced level. <\/p>\n\n\n\n

    Scenario 2: The economy will run at full speed against a concrete wall.<\/p>\n\n\n\n

    \"\"<\/figure>\n\n\n\n

    One word regarding age discrimination and the judgement on\nindividual groups:<\/p>\n\n\n\n

    In a democracy each life is valued the same. In economy a\nretired person is considered an economic burden. Previous achievements are not\npart of their calculation. To us, this is cynical and undemocratic.<\/p>\n\n\n\n

    Even this pandemic will end. This is the good news. The bad news would be, that there is already a pandemic waiting in the animal kingdom. It is a matter of time. Thus, now would be the time to prepare on a global scale for future catastrophes.<\/p>\n\n\n\n

    One natural disaster wiped the dinosaurs from this planet. Animals with great flexibility and abilities to adapt were the survivors. The current pandemic is giving us some lessons on how to change our behavior (as a global economy, as a society and as individuals), to be able to confront future challenges. <\/p>\n\n\n\n

    \"\"<\/figure><\/div>\n\n\n\n

    Stay tuned, <\/p>\n\n\n\n

    Sabine and Joerg<\/p>\n\n\n\n

    <\/p>\n","protected":false},"excerpt":{"rendered":"

    March 28, 2020 Globally, governments show two extreme ways to deal with the pandemic: On the one hand, there are those who fight the spread of the virus using massive restrictions. Among them are totalitarian regimes like China, but also some democracies such as South Korea, Taiwan and India. On the other hand, there are […]<\/p>\n","protected":false},"author":3,"featured_media":1151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[162,12,159,11,163,17,158,161,136,15,16,157,19,18],"acf":[],"_links":{"self":[{"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/posts\/1166"}],"collection":[{"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/comments?post=1166"}],"version-history":[{"count":7,"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/posts\/1166\/revisions"}],"predecessor-version":[{"id":8589,"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/posts\/1166\/revisions\/8589"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/media\/1151"}],"wp:attachment":[{"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/media?parent=1166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/categories?post=1166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sajo-innovation.de\/blog\/wp-json\/wp\/v2\/tags?post=1166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}