Coronavirus: Aids changed us. Will Covid‑19 do the same?

 This virus is to social life what HIV was to sexual life

Social mores change more than you think. If a time machine could take you back to 1981, you would be shocked by how much people smoked, for example, and how much time they spent standing outside telephone boxes that stank of urine, jingling coins in the pockets of their nasty flares or drainpipes, grinding their nasty yellow teeth. If you are a woman, you would be appalled by the overt sexism of male conversation. If you’re not white, you’d be revolted by the casual racism. And if you’re gay . . . well, more about that later. Not that these prejudices have been eradicated, but they were worse then.

So let’s ask ourselves how much social mores are going to change as a result of the Covid-19 pandemic. In the past week, I’ve had several conversations on the topic of “the world after Covid-19”. My immediate response has been: “Why do you use the word ‘after’? Why not ‘with’?”

Yes, there is undoubtedly a benign scenario in which one of the more than 70 teams working on a vaccine against Sars-CoV-2 collects the prize. If all goes well, that vaccine could jump through all the scientific and regulatory hoops, go into mass production and be available some time in the second half of 2021.

In this same happy-ever-after scenario, there are also breakthroughs in Covid-19 therapies. New research confirms that the disease doesn’t do anything much to endanger the lives and health of younger people, and if they do get infected, they get lasting immunity. Summer comes to the northern hemisphere and the contagion recedes. As lockdowns are lifted and people return to their normal gregarious habits, there is no second wave of the pandemic. Far from devastating the southern hemisphere, the disease proves a minor event in Africa.

And — still looking on the bright side — stock markets rally and economies surge to a high-speed V-shaped recovery that makes me, and others who worry about a protracted depression, look silly.

All this is possible, and devoutly to be hoped for. But it is by no means a 100% certainty. Just consider the odds against a successful vaccination. Do we have one for malaria? No. Tuberculosis? No. HIV-Aids? No. (After 40 years of toil, there have been just a handful of phase 3 clinical trials, one of which made the disease worse. The best had a success rate of just 30%.) How about rotavirus, the most common cause of diarrhoea among infants? Yes, they did find a vaccine for that — after 15 years.

Even if a vaccine is found, there will be multiple risks associated with the current rush to devise and deploy one. And even if there are no setbacks, it might turn out to be like influenza: you can get your flu shot each year, but there’s no guarantee you won’t get some other strain than the ones you were vaccinated against.

That’s why we need to give at least some thought to the not-so-nice scenario of living with Covid-19 — at best, the way we live with flu, which delivers its regular seasonal bump in the mortality rate; at worst, the way we have slowly and painfully learnt to live with HIV-Aids.

Which takes us back to being gay in 1981, the year the New York Native newspaper published the first article about gay men being treated in intensive care units for a strange new illness. (The headline was: “Disease rumours largely unfounded.”) It was more than a year later that the term Aids (acquired immune deficiency syndrome) was proposed for the all too real disease.

Here’s a thought experiment. Imagine a world in which Covid-19 — which still has a long way to go before it catches up with Aids as a killer — has the same effect on social life as Aids had on sexual life. That would be quite a different world, and more visibly so (as changes in sexual behaviour largely take place behind closed doors).

Imagine a world in which we routinely wear masks on public transport and in offices; a world in which we greet one another with a wave, not a hug or a handshake; a world in which grandparents see their grandchildren only on FaceTime; a world in which to cough or sneeze in public is as shameful as to fart; a world in which we rarely eat in restaurants or fly; a world without theatres and cinemas (other than a few retro drive-ins); and a world in which football is played in silent, empty stadiums. (Will there be canned cheering, just as there used to be canned laughter in sitcoms?)

I’m not the first person to notice that there are some lessons to be learnt from the last really lethal pandemic caused by a virus, despite the important differences between HIV and Sars-CoV-2, and between Aids and Covid-19. One nurse has recalled the similar ways the authorities responded — at first with complacency and then by stigmatising victims (for “the Chinese virus”, read “the gay plague”). Last month, The New York Times published an article asking “Are facemasks the new condoms?” — destined to become “ubiquitous, sometimes fashionable [and] promoted with public service announcements”.

Yet the lesson of HIV-Aids is not quite that it “changed everything”. The really striking feature of the history of the Aids pandemic is that behaviour only partly changed after the recognition of a new and deadly disease spread by sex, needle-sharing and blood transfusions. An early American report noted “rapid, profound but . . . incomplete alterations in the behaviour of both homosexual/bisexual males and intravenous drug users”, as well as “considerable instability or recidivism”. By 1998, just 19% of American adults reported some change in their sexual conduct in response to the threat of Aids.

The advent of antiretroviral drugs that stop HIV carriers succumbing to Aids has somewhat diminished the fear factor. Even so, one might have expected a bit more fear to persist. A 2017 paper showed that fewer than half of at-risk men had used a condom last time they had sex. According to a recent British study, sustained campaigns of public and individual education are necessary to discourage gay men from having sex without condoms. In Africa, the “ABC” — abstain, be faithful and “condomise” — approach has had limited success.

Yes, there have been changes in sexual behaviour. According to the psychologist Jean Twenge, millennials have fewer sexual partners on average than earlier generations. Another American study concluded: “Promiscuity hit its modern peak for men born in the 1950s.” And let’s not forget the invaluable UK National Survey of Sexual Attitudes and Lifestyles, the most recent version of which revealed a marked decline in the frequency of sex in Britain.

Yet few if any of these changes can be attributed to HIV-Aids. The return of “No sex, please, we’re British” mainly affects married and cohabiting couples, and, according to the definitive analysis in the BMJ, is most likely due to “the introduction of the iPhone in 2007 and the global recession of 2008”.

Social mores change more than you think. In the face of a deadly disease, however, they also change less than you might expect.

Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford, and managing director of Greenmantle

No medicine will cure Covid‑19’s injustices

 Unlike the Black Death, this pandemic is not reducing inequality

One of my favourite cartoon characters from the 1970s was the little Japanese-Italian chick Calimero, whose constant, plaintive refrain was: “It’s an injustice, it is!” I have been hearing modern versions of Calimero’s lament a lot recently.

“It’s true that more men are dying than women from Covid-19 around the world,” wrote Ryan Heath and Renuka Rayasam in Politico, “but that’s not exactly cause for celebration.” Not exactly? Then there was the Atlantic journalist Annie Lowrey, who wanted to persuade us that the economic burdens of the pandemic were disproportionately falling on millennials.

Growing up in Glasgow, my friends and I liked to quote Calimero sarcastically at anyone who complained about their lot. “It’s an injustice, it is!”

Let’s get one thing straight: the principal losers in a pandemic are the people the contagious disease kills before their time. They are disproportionately old and (to a lesser extent) male.

The latest provisional figures for deaths registered in England and Wales show significant excess mortality, relative to five-year averages, in the first three weeks of last month. In the week ending April 17, for example, there were nearly 12,000 excess deaths, more than double the five-year average. Deaths attributed to Covid-19 were equivalent to three-quarters (74%) of the excess; 88% of Covid-19 deaths were of people older than 65; and 58% of Covid-19 victims were men.

As we learn more about the excess deaths not attributed to Covid-19, we shall see that most were directly or indirectly attributable to the pandemic — people in care homes who probably did have the virus, or people dying of heart attacks because they were afraid to go to hospitals — so the basic story will not change: this is no virus for old men.

But what about the economic injustices of the pandemic? Hans Holbein’s Dance of Death series makes it clear that death in the era of plague was no respecter of rank. By contrast, cholera pandemics in the 19th century waged class war against an urban proletariat living cheek by jowl in filthy slums.

Covid-19 is different. It began with the relatively well-off jet set — the kind of people who fly to conferences in Singapore and then to ski chalets in the Alps. As soon as it got out of the airports, however, the virus went downmarket, spreading rapidly wherever people are tightly packed indoors — subways in big cities, for example. The mortality rate in poor areas of England is double that in rich areas, according to the Office for National Statistics. In Britain and America, the non-white population is being harder hit. Yet it has been the responses of government that have principally determined how the costs of the pandemic have been distributed.

Wherever you look, the economic data is the worst of our lifetimes. In America, about 30 million jobs have been lost in the space of just six weeks. Donald Trump’s economic adviser Kevin Hassett warned last week that the unemployment rate could reach between 16% and 20% next month, the highest since the early 1930s.

And yet the US stock market has rallied so much since its low on March 23 that it ended last month just 14% below its pre-pandemic peak. In other words, investors think it’s as bad as . . . early October 2019, when the S&P 500 index was last at Thursday’s level. The market has actually rallied 30% since the nadir of March 23.

We are simultaneously a) suffering a public health disaster, with a second wave of infections and illness likely at some point when we go back to work and school; b) inflicting a deep and probably long recession on ourselves, with lockdowns that are the bluntest possible instrument for controlling contagion; and c) breaking the record for an equity market rally. How can we resolve this huge paradox?

The answer is that unconventional monetary policy is being used on an unprecedented scale with the principal aim of shoring up the prices of financial assets. For that is the principal effect of near-zero interest rates and quantitative easing, which has led to a 60% expansion of the Federal Reserve’s balance sheet.

Backstopping Wall Street is not in the Fed’s statutory mandate, admittedly, but it has been the Fed’s practice since the days of Alan Greenspan’s “put” option, which established an implicit floor — but not a ceiling — for stocks. Since Ben Bernanke, the Fed has also done the job of shoring up the rest of the world’s financial assets, via international swap lines.

Under Jerome Powell, all restraint has been cast aside. If the market blinked, even at full employment, he cut rates. Now he is conducting repo operations as well as swaps with foreign central banks. The amount of swaps outstanding is now $446bn (£357bn). I can’t find data on the repos.

It doesn’t hurt that about 20% of the S&P is made up of big tech companies that may ultimately make more money as a result of the pandemic, because we’re all now strongly incentivised to do more in their virtual world than in the real one (Amazon is up 24% year-to-date).

It also helps that we’re getting good news about therapies (remdesivir, for example) and vaccines (Moderna’s, for example), though I can’t help noticing that Wall Street screens out bad news about Covid-19, such as the story about people in their thirties and forties suffering strokes after contracting the disease. And, of course, we’ve flattened those curves of confirmed cases. So the stock market’s rally is not wholly illusory.

Really smart guys tell me that the second wave that I wrote about here last week is already “priced in”. Maybe. But what’s not priced in is the enduring effect the pandemic will have on demand as older consumers steer clear of shopping malls and anything else involving crowds even after lockdowns end. What’s not priced in is the political backlash as people see big companies getting bailed out — the airlines, notably — and the loans intended for small businesses also going to the big boys. What’s not priced in is the psychological depression that will follow when people in America and Britain go back to work without enough reliable testing or contact-tracing capacity to limit the size of the second wave.

At a mid-March press briefing, Trump was asked: “How are non-symptomatic professional athletes getting tests while others are waiting in line and can’t get them? Do the well-connected go to the front of the line?” The president replied: “No, I wouldn’t say so, but perhaps that’s been the story of life.”

Inequality is just “the story of life” — especially when it comes to US healthcare. Well, maybe so: as my father liked to tell his children, nobody said life was going to be fair. But that doesn’t sound like an election-winning slogan to me. Sometimes it’s possible to echo Calimero without being sarcastic: “It’s an injustice, it is!”

Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford, and managing director of Greenmantle

Coronavirus: the economic legacy of lockdown

 The fallout from our disastrous Covid-19 policy could tip us into the worst depression since the 1930s

I learnt a new American military abbreviation this week: SOL, to add to Snafu and Fubar. Snafu, for those who haven’t watched enough war movies, stands for situation normal, all f***** up. Fubar means f***** up beyond all recognition. And SOL? That means shit out of luck. At a time when the world economy seems more Fubar than merely Snafu, it’s worth considering that it’s probably also SOL.

I learnt the term SOL from a man you’ve never heard of: Robert Kadlec. Since August 2017, Kadlec — a career medic with the US Air Force — has been assistant secretary for preparedness and response at the US Department of Health and Human Services. On October 10, 2018, Kadlec gave a lecture at the Robert Strauss Centre on biodefence policy, in which he made a lucid argument for the equivalent of an insurance policy against the risk of a pandemic.

“If we don’t build this,” Kadlec concluded, “we’re gonna be SOL should we ever be confronted with it.”

What makes Kadlec’s remark so striking is that, only the previous month, the government he works for — the administration of President Donald J Trump — had published a 36-page National Biodefence Strategy. In June 2019, Congress passed a Pandemic and All Hazards Preparedness and Advanced Innovations Act. On paper, the United States was ready for a pandemic — better prepared and better resourced than any country in the world. On paper.

Almost as well prepared — on paper — was the British government. The Cabinet Office correctly rated pandemics as the No 1 threat to the country, ahead of terrorism and financial crashes. Ministers could count on the epidemiological expertise of the New and Emerging Respiratory Virus Threats Advisory Group (Nervtag) and the Scientific Advisory Group for Emergencies (Sage).

And yet when, in January, reports from China made it clear that the new coronavirus now known as Sars-CoV-2 was both contagious and lethal, there was a disastrous failure to act on both sides of the Atlantic. The American epidemiologist Larry Brilliant, a key figure in the campaign to eradicate smallpox, has said for many years that the formula for dealing with an infectious disease is “Early detection, early response”.

Other countries — such as Taiwan and South Korea — did both. However, without adequate testing capacity, the US and the UK could not do the first; and, rather than responding early, they chose instead to dither.

Only on March 16, with the publication of terrifying projections by the team at Imperial College London led by Neil Ferguson, did policy lurch from insouciance to panic. Without both mitigation (social distancing) and suppression (economic lockdowns), Ferguson argued, “81% of the GB and US populations would be infected over the course of the epidemic”, with “approximately 510,000 deaths in GB and 2.2 million in the US”. Allowing for population increases, that would have made the 2020 Covid-19 pandemic more deadly than the 1918-19 influenza pandemic.

We shall never be sure if those projections were correct, because Ferguson’s warning was hastily heeded in both London and Washington. Beginning a month ago, the British and American economies have followed the majority of developed economies into an economic lockdown without precedent in history. Satisfied that his advice had been heeded, Ferguson revised down his projection of total UK deaths due to Covid-19 from more than half a million to “20,000 or less, two-thirds of which would have died this year from other causes” (in other words, a net 6,700).

Epidemiologists and economists appear to have much in common: both like models and maths. But it has become apparent this year that epidemiologists don’t much care about economics. Another Imperial College paper published in March predicted that social distancing and lockdowns could save between 30 and 40 million lives around the world this year. “We do not consider the wider social and economic costs of suppression,” the authors noted, almost as an aside, “which will be high.”

That may be the understatement of the year. Last week the chief economist of the International Monetary Fund, Gita Gopinath, published an assessment of the economic costs of what she named “the Great Lockdown”. This will be, she said, “the worst recession since the Great Depression, and far worse than the global financial crisis”. The global economy will shrink by 3%. And if the pandemic fails to recede in the second half of this year, it could shrink by another 3% in 2021.

In the US, there has never been such an upward leap in unemployment: 22 million people have filed for unemployment benefits in the past four weeks — one in eight American workers. For the UK economy, the Office for Budgetary Responsibility (OBR) is predicting the worst year since 1900 — a contraction of 13%. While the perennial bulls of Wall Street make their usual predictions of a V-shaped recovery, academic economists grow more pessimistic by the day.

True, finance ministries and central banks all over the world have done their utmost to compensate for the economic shock inflicted by the great lockdown by reviving the tools they deployed against the financial crisis in 2009-10. Quantitative easing — purchases of all kinds of assets by the central banks — is back, and this time the quantities being eased make me feel, well, uneasy. Since February 26, the Federal Reserve’s balance sheet has exploded from $4.1 trillion to $6.1 trillion. Among its recent purchases are junk bonds.

Deficit finance is also the order of the day: the US Coronavirus Aid, Relief and Economic Security (Cares) Act, a general-purpose bailout bill that combines cheques for everyone with soft loans to businesses, has a $2 trillion price tag. The federal deficit for 2020 was expected to be under 5% of GDP; now it could be above 15%. The Fed is buying all of the new government debt, though by creating excess reserves for banks, not printing dollar bills.

The OBR estimates that the UK’s public sector net borrowing will be £273bn this year — 14% of GDP — taking total public debt above 100% of GDP. The Bank of England is directly financing some of that borrowing by expanding the government’s “ways and means facility”, the government’s overdraft at the bank.

Worldwide, the IMF’s fiscal monitor puts the costs of additional health and relief measures due to the pandemic at $3.3 trillion. On top of that come public sector loans and equity injections to corporations ($1.8 trillion) and guarantees and other contingent liabilities ($2.7 trillion). All over the world, public debt is soaring, even as poor countries come cap in hand to the IMF to have their old debts forgiven.

We know that at least one policy goal has been achieved. Thanks to government action, the great lockdown has — thus far — been significantly less costly to investors in nearly every asset class than the global financial crisis, even as the real economy has suffered more. But no one should pretend that what governments are doing is “stimulus”. You cannot stimulate a locked-down economy, any more than you can accelerate in a car with two missing wheels. All you can do is stealthily employ policies that were once dismissed as too radical — universal basic income and modern monetary theory — and hope that people and businesses will stay afloat long enough to resume normal service when the public health emergency is over, whenever that may be.

Even in the best-case scenario, there will be an almighty fiscal and monetary hangover. In the IMF’s nightmare scenario of a multiyear depression, there will come a point when the discrepancy between economic realities and asset prices will no longer be sustainable.

So have we made a ghastly mistake? Will we one day look back and say that policymakers overreacted — that Trump and others were right all along to worry that the cure would be more costly than the disease? From the outset, with the evidence accumulating from China and Italy that the victims of Covid-19 were disproportionately over 65, a few right-leaning politicos and pundits made the mistake of talking as if there were a crude trade-off: the economy or the elderly.

Last month, Dan Patrick, the lieutenant-governor of Texas, who is 70, was roundly condemned when he posed the question: “As a senior citizen, are you willing to take a chance on your survival in exchange for keeping the America that all America loves for your children and grandchildren? . . . If that’s the exchange, I’m all in.” In response, Andrew Cuomo, the governor of New York, tweeted: “My mother is not expendable. Your mother is not expendable. We will not put a dollar figure on human life.”

This was an asinine argument — on both sides. Economists routinely “put a dollar figure on human life” when assessing the costs and benefits of public policy. The key concept is known as a Qaly — a quality-adjusted life year — and the going rate these days in the United States is between $50,000 and $150,000. But crude utilitarian calculations — how many units of economic output should we be willing to sacrifice per Qaly? — are impossible in the case of Covid-19 because we still know too little about it. We have only guesstimates of such crucial variables as how many people have the virus without symptoms; what the true infection fatality rate is; how long an infected person who survives has immunity; whether or not the virus will recede as spring turns to summer in the northern hemisphere; and what lasting neurological or cardiovascular damage the virus may do.

The wrong way to think about this problem — and I already see people doing it on social media — is to say: “They’ve cratered the economy and yet only 29,000 Americans have died. That’s less than in some regular flu seasons!” First, this ain’t over. Historically, most pandemics have come in more than one wave, and a second Covid-19 wave later in the year seems all too likely. Second, this is the toll after social distancing and lockdowns. You really have no clue what it might have been if we’d done nothing.

The choice was never between a deadly dash for “herd immunity” and the great lockdown. The choice was, and remains, between excessively costly and affordable containment of the contagion until we understand it well enough to control it with vaccination and effective therapy. The east Asian democracies, along with Israel and the smarter north European countries, are showing that there is a way to avoid economic lockdowns by mass testing and tech-enabled contact-tracing. The problem is that neither Britain nor America seems anywhere close to either, even as the political pressure mounts, especially in Republican states, for a return to work.

What that means, I fear, is that we may end up with the worst of both worlds: enough lockdowns to condemn us to economic depression, but not enough to avert a much higher level of mortality than we are ready for.

People die every day, of course. But there were 6,082 excess deaths in England and Wales in the week to April 3, 59% above the average for the corresponding week in the preceding five years. The number of Covid-19 deaths amounted to more than half of that excess (3,801). And it is almost certain that the week to April 10 will look worse, as there were 5,353 Covid-19-related deaths in NHS hospitals that week, 88% higher than the previous week.

Contrasting these numbers and similar data for the US with the far lower death rates in countries that practised early detection and early response, you begin to understand what American soldiers mean by SOL. Except that luck really shouldn’t play a part in the way a well-run country handles a pandemic.

Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford, managing director of Greenmantle and the author of The Square and the Tower: Networks, Hierarchies and the Struggle for Global Power (Penguin)

Don’t bet on a quick global resurrection

 The speed of the economic recovery will be more tortoise than hare

Easter never felt more Eastery. The world economy looks dead. Can it be resurrected? Just over a century ago, amid the worst flu pandemic in history, the greatest economist of his generation fell ill. John Maynard Keynes was in Paris, attending the peace conference that would in time produce the Treaty of Versailles. Having collapsed on May 30, 1919, he wrote to his mother: “Partly out of misery and rage for all that’s happening and partly from prolonged overwork, I gave way last Friday and took to my bed from sheer nervous exhaustion, where I have remained ever since.”

He remained prostrate for close to a week, getting up only for meetings with the prime minister, David Lloyd George, and “a daily stroll in the Bois [de Boulogne]”. Did Keynes have the dreaded Spanish flu, as Lloyd George did? His biographer, Lord Skidelsky, says we cannot be sure. If so, he was lucky to survive it. According to the latest estimate, that pandemic killed 39 million people — 2% of the world’s population — dwarfing the battlefield fatalities of the First World War.

Among the victims of the pandemic were the South African prime minister Louis Botha, the Bolshevik leader Yakov Sverdlov, the German sociologist Max Weber and the grandfather of the current US president Frederick Trump.

It was shortly after his recovery and return to Britain that Keynes wrote the inflammatory tract that made him famous, The Economic Consequences of the Peace. In it he deplored the punitive terms of the Versailles treaty — which imposed on Germany an unspecified but potentially vast war reparations debt — and prophesied an inflationary economic disaster, followed by a political backlash.

Who among today’s great economists will write The Economic Consequences of the Plague? Large parts of the world’s economy have been brought to an abrupt standstill by the Covid-19 pandemic. To contain the contagion, countless businesses have been told to cease trading and millions of workers have been told to stay at home. To offset this “supply shock”, and to prevent a catastrophic downward spiral of shrinking demand and debt deflation, the world’s central banks and finance ministries are injecting even more “liquidity” — that’s money, to you and me — than they did in the wake of the 2008-9 financial crisis.

The effects of these measures can be seen in the remarkable performance of corporate stocks and bonds. As I write, the S&P 500 is just 18% below its peak on February 19. At its low point — March 23 — it was down 34%. Those who expected carnage in the low-grade, or “junk”, bond market are amazed. Who could have foreseen that the Federal Reserve would buy even junk?

Yet I feel a bit like Keynes did in 1919. Of course, I see the need to get money to those workers who will be unemployed for as long as it takes the scientists and pharmaceutical companies to find and distribute a Covid-19 vaccine. But the Fed’s current policy would appear to be a generalised bailout of investors, even those whose positions were known to be risky.

And the US Congress has, in great haste and amid frantic horse-trading, passed legislation that commits taxpayers to writing down hundreds of billions of dollars of “loans” to businesses large and small. Moreover, the legislation would appear to make more than half of American workers better off being unemployed than they would have been working.

Turning to some of today’s leading economists, I became more despondent. For the arch-liberal Paul Krugman, this is “the economic equivalent of a medically induced coma”, but the Keynesian remedy of government borrowing can provide the necessary relief and stimulus. “There may be a slight hangover from this borrowing,” he wrote on April 1, “but it shouldn’t pose any major problems.” (Was the date of this blog post significant?)

By contrast, Kenneth Rogoff — one of Harvard’s few conservative professors — wrote last week of an “economic catastrophe . . . likely to rival or exceed that of any recession in the last 150 years”, with lingering effects, potentially leading to a “global depression”. The pandemic, Rogoff argued, was akin to an “alien invasion”.

Larry Summers, who lies somewhere between those two ideologically, chose a more grisly metaphor. “Physical isolation is chemotherapy,” he said, “and the goal is remission. The problem is that chemo is . . . increasingly toxic over time.” He foresees an “accordion-like dynamic” until a vaccine is generally available in 12 to 18 months.

I am with Rogoff and Summers. This is a disaster, the economic consequences of which cannot be offset by even the biggest monetary and fiscal splurge. Over the past three weeks 16.8 million Americans — slightly over 10% of the workforce — have filed for unemployment benefits. According to our best estimates at my macroeconomic and geopolitical advisory firm Greenmantle, GDP has declined by even more and is currently running at 75%-82% of its level in the last quarter of last year.

Our estimates, based on state-by-state assessments that allow for the share of the population who can work from home, suggest a slight drop in GDP for the year’s first quarter (-1.45% quarter on quarter), followed by a lockdown-driven collapse (-10.8%) in the second quarter. We expect a partial rebound of 6.5% in the third quarter, as lockdowns are partially relaxed but social distancing measures remain in place — as they must, until a vaccine is available.

There has been loose talk from some of the banks about a “V-shaped” recovery. That prediction was wrong after 2009 and it will be even more wrong in 2020. The shape we have in mind is something like an inverted square root or a tortoise’s back. Certainly, the speed of recovery will be more like a tortoise’s than a hare’s.

The key is that in the protracted “post-lockdown, pre-vaccine” period, there will inevitably be a reduction of capacity in all sectors of the economy that depend on some level of social proximity, such as retail, air travel, education, live entertainment, hotels and restaurants.

An economy without crowds is not a “new normal”. It may be more like the new anomie, to borrow Emile Durkheim’s term for the sense of disconnectedness. For most people, the word “fun” is almost synonymous with “crowd”. The coming year will be a time of depression in the psychological as well as the economic sense.

Note that our calculations above omit the effects of lockdowns and social distancing on the demand side, including domestic consumption and investment, and the pandemic’s effect on global trade. While Krugman seems confident deficit-funded relief measures will prop up demand, I am not so sure. Panicking people are going to save as much of those benefits as they can. Broke businesses will pocket the government cash and still downsize. And don’t get me started on the enduring hit to trade.

In short, I can’t honestly wish my readers a happy Easter. In the Bible, Christ’s resurrection happens in just three days. The resurrection of the world economy will take far longer. I only wish Keynes could rise from his eternal rest to tell us exactly how long.

Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford, and managing director of Greenmantle

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Trump exemplifies the Ugly American. Davos will accept him anyway.