Economic implications of a SARS/Coronavirus outbreak

[Sdajii]

You say that as if the extra income from tourism wouldn't be more than offset by the virus ripping through your population like wildfire, which it would.

The virus almost exclusively kills people who aren't far from death anyway. It doesn't actually have a devastating affect on the population. This isn't Ebola or the plague or smallpox. Literally most people literally don't even notice when they're infected, and most of the others have a mild disease.

Either way, the fact remains that the genie is out of the bottle, it can't be put back in, there almost certainly won't be a vaccine, so the economic devastation is not preventing everyone from getting it, it's just delaying it a bit.

Put it this way, if you knew you were going to lose your house, would you walk away with all your money, allowing yourself to have some resources to set up elsewhere, or would you spend every last penny you had trying to save it then borrow a pile of money, then lose it anyway meaning you move out a few months later but in debt?

What is the endgame here? The virus isn't going to magically disappear. We can't stay isolated forever. Everyone will eventually be exposed. Delaying the inevitable is extremely expensive and will weaken us for decades including causing many deaths, depression etc (poverty is a killer in multiple ways), and we still need to deal with the inevitable. Jobkeeper and double dole run out in September. Things are going to get ugly then.

 

[over9k]

The virus becomes deadlier the older you get. You know who spends on tourism like drunken sailors?

Retirees.

The genie has absolutely been kept in the bottle in many places. To let it out would be the height of stupidity.

 

[Smurf1976]

Everyone will eventually be exposed. Delaying the inevitable is extremely expensive and will weaken us for decades

The missing piece of your argument is how, exactly, is the country losing?

Apart from universities and immigration, which given the duration of stay could be worked around by quarantine, what economic activity of any real benefit to the nation overall is unable to occur at present?

I do agree that ultimately a lockdown is not sustainable. But then constant growth in population or real housing prices is also not sustainable but there's plenty willing to try and kick the can on those two. Same with plenty of other things - they're not sustainable but there aren't too many in a hurry to stop them without first exhausting all possible options for their continuance.

Given that vaccine trials are commencing now, that is trials on humans, it seems a bit premature to say it won't happen. It may not happen, there may come a point where there's no choice other than to deal with that, but the options haven't been exhausted yet.

Of course if a vaccine doesn't eventuate, then that's one almighty spanner in the works of rather a lot of economic argument is it not? The argument that markets fix problems and all that - if the market doesn't come up with a vaccine despite having a truly massive incentive to do so then that's an almighty rug pull from under the entire argument for free market capitalism as being something that's sure to come up with solutions to problems. Such an outcome would likely have far broader implications than just the virus.

That said, well we may not come up with a vaccine that's entirely possible. We're not at that point yet, we've barely even tried, so to say we're going to fail at this point is akin to saying we can't put the fire out when we haven't even dumped any water in it yet. At least give it a go.

 

[Smurf1976]

The genie has absolutely been kept in the bottle in many places. To let it out would be the height of stupidity

If we have come to the point where human health needs to be sacrificed in order to meet the needs of the economy then we're well past stuffed in oh so many ways.

Such a scenario amounts to the master taking orders from the servant.

 

[Chronos-Plutus]

Excellent summation Smurf

I'm likewise young enough and, so far as I'm aware, healthy enough that I'll be paying off the debts.

We will be paying this off for generations to come with all sorts of generational COVID levies and taxes.

The price they'll pay isn't just the deaths right now, but that the best and brightest, or indeed anyone with much sense, will no longer be seeing it as a desirable place to live. The days of US leadership are gone for that reason - the brightest minds are not lured by money alone, such people tend to value their own safety, and many will be looking elsewhere.

Or we could take a look at China. Based on official statistics they've done an order of magnitude better job of dealing with the virus than the US, UK, France or Iran (among many others) have but they've paid a huge economic price for doing so.

That China did what they did is partly my reasoning. Whatever they know about the virus, it scared the absolute crap out of them that's rather clear. Actions speak louder than words and the actions scream that they saw it as a huge concern.

I tend to agree that the USA will find it difficult to maintain the global brain drain to their nation with the global virus pandemic and widespread civil unrest.

On paper; it looks like China have done an excellent job in suppressing the virus although I am not so sure that the data coming out of China is entirely accurate. Whether true or not, I heard that China were dealing with this virus back in September 2019 but hadn't announced it to the world.

Closer to home a very similar dynamic applies. Where would you rather be right now?

1. In an apartment tower in Melbourne?
2. Anywhere else in Victoria?
3. Anywhere else in Australia?

I think we all know the answer there and the other states, especially the smaller population ones, would be crazy from a purely economic perspective to blow the opportunity that's been handed to them.

Whitsundays or Far North Queensland (FNQ) would be the ideal place to be while this global pandemic rages across the planet. Living there permanently is a different story as there isn't much work for highly skilled people.

Big business needs to likewise face that reality. Working at head office is no longer the prize goal for the best employees. Rather, it's the place where you put the drones meanwhile the stars work from home in a place that's nowhere near the city. Smart businesses will adapt to that quickly. Those not so smart will lose the best employees to those who do adapt. Welcome to free market capitalism.

In saying all that, the dam does not collapse due to the flood. No, it collapses due to inadequate design, construction or maintenance with the flood being merely the trigger.

Same with the pandemic. It's not the first time there's been a pandemic and it won't be the last, indeed the next one may well require far more stringent measures than this one. Hence exposed businesses insure against the pandemic risk, hence the economy needs to be designed to cope with GDP that goes down at times as well as up and so on.

This global pandemic experience will forever change the way big business operates. Some may even claim that this disruption is a good thing. Charles Darwin's theory of "Survival Of The Fittest" is incorrect or incomplete at best; it is survival of the most adaptive to change. This holds true for not only species within ecosystems, but large corporations, small and medium businesses, and individuals.

A primary responsibility of government is ensure that the system (economy) within which corporations, small and medium businesses and individuals operate and live within, is a stable system that doesn't rapidly change. Change is inevitable, constant and the fundamental driver of chaos with systems.

If those things are not in place, if businesses didn't have insurance or governments and central banks haven't allowed for times when GDP goes down, well then that's a failing on their part and the solution is to replace them with better managers who do have the ability to manage risk. Trying to cover up the problem only perpetuates it.

Realistically, what can't occur if Australia or any other country closes its borders?

Holidays and tours by professional sports teams and performing artists basically covers it.

Business meetings etc are doable online.

Manufacturing, mining, agriculture, freight etc carries on business as usual. Only real exception being if someone gambled on long distance FIFO and lost, in which case capitalism takes care of those unable to manage risk by advantaging competitors who can.

Anyone moving permanently could simply be quarantined upon arrival.

That leaves those on a short stay and who need to physically be present. Tourists, live performances of music or other things, professional sports.

Personally well I like going on holidays and I've been to plenty of concerts over the years but I find it unacceptable to knowingly sacrifice the lives of others in order to resume doing so.

We need to be honest with the reality of what we are dealing with. Our international borders will be closed for the foreseeable future and our domestic borders will constantly alternate between opening and closing depending upon virus outbreaks. We need to come to terms with this. Pretending that this is just going to be a V shaped economic recovery and everything will go back to normal soon and that everything will be fine, is foolish and fantastical.

Some people will be able to move permanently and take their job with them, like those that work in IT or perhaps Finance.

I won't be leaving for a holiday for at least a year and if I travel, it will likely be domestically.

 

[qldfrog]

Nah, not a chance of that happening.







The U.S will soon be not just the largest consumer market, but the only one. The only thing the virus will have done at most is delay the inevitable.

Eh i agree with you @over9k
.if we could get permanent residency in the us, be there in a sec as soon as i have sold my ppor here.

Innovators and entrepreneurs dreamland, rewarding efforts, work and brain with investment $ .


In which other dimension would they come here?because of the virus?
And not even be able to ever get out if i listen to some..sorry not never..until a vaccine LoL
It is not a difference of opinion here, it is a cultural and reality Grand Canyon
Australia is still a great place for tourism..oops sorry closed, retirement..but without ever seeing your O/S family and to have fun as a backpacker or student...sorry closed too.
The new Amish country

 

[qldfrog]

I actually expect to see a brain drain and very quickly.
An area not discussed much but of critical importance for the young and brightest is promotion.if you scratch being the surface, you will notice that WFH is a great killer of ambitious but not ambition.
How do you prove that you are better than John to your manager on the zoom screen
Your job is perfect ..so is his, but you have not had the talk at the water cooler with Jane about this new project that could be a great fit with your skills etc
WFH does not fit with corporate ambitions: these younger brightest will need to leave and this will happen very quickly while you will not see them moving back here to raise a young family ..that was the previously existing scenario repeated again and again, and this is dead
If you have a North Korea situation but do not shot the escaping, who will be left behind.?
Brain drain will start within months

 

[over9k]

Yeah, australia's only competitive edge is in mining. That's it, it's all it has.

But it's a lot, so aus will be fine. Just not somewhere the best & brightest will migrate to.

 

[Chronos-Plutus]

Yeah, australia's only competitive edge is in mining. That's it, it's all it has.

But it's a lot, so aus will be fine. Just not somewhere the best & brightest will migrate to.

Mining and Agriculture.

 

[over9k]

Well yes, but 50% of the world's iron ore supply vs an order of magnitude less of its food. Sorry, should have been more specific.

"Rocks and crops", as we say.

 

[Chronos-Plutus]

Well yes, but 50% of the world's iron ore supply vs an order of magnitude less of its food. Sorry, should have been more specific.

"Rocks and crops", as we say.

Australia has great potential to leverage of these existing industries. For example, Australia's space industry can provide critical support to our mining and agriculture sectors.


https://www.industry.gov.au/strategies-for-the-future/australian-space-agency

 

[qldfrog]

Australia has great potential to leverage of these existing industries. For example, Australia's space industry can provide critical support to our mining and agriculture sectors.

View attachment 105672
https://www.industry.gov.au/strategies-for-the-future/australian-space-agency

You do not build a space agency without importing skills
Also remember the link between defence and space:
NASA is where it is/was thanks to high tech defence contractors..and reverse..a beneficial loop
Airbus/Ariane rockets are the fruit of military cartel experience and skills.
We have zip.
I had to move skills from air defence to mining when moving in OZ .
Can list the high tech relevant areas in oz: Boeing and Eurocopter in qld, submarine in SA.
Over...
And a lot of expats who will be on the way out soon
NOT A CHANCE

 

[Chronos-Plutus]

You do not build a space agency without importing skills
Also remember the link between defence and space:
NASA is where it is/was thanks to high tech defence contractors..and reverse..a beneficial loop
Airbus/Ariane rockets are the fruit of military cartel experience and skills.
We have zip.
I had to move skills from air defence to mining when moving in OZ .
Can list the high tech relevant areas in oz: Boeing and Eurocopter in qld, submarine in SA.
Over...
And a lot of expats who will be on the way out soon
NOT A CHANCE

Considering Australia's enormous geographical land mass, we should have established a space agency/industry decades ago.

 

[Smurf1976]

An area not discussed much but of critical importance for the young and brightest is promotion.if you scratch being the surface, you will notice that WFH is a great killer of ambitious but not ambition.

If someone’s age 20 then you’re probably right. Health risks are minimal and they’ll chase promotion and so on.

Once they’re 30-something with kids though, well if they choose the US then either they haven’t made it, they didn’t get those promotions and they have no real choice in what they do now, or they’re not one of the brightest. Safety tends to be a priority at that point and the US isn’t really in the race these days.

Young people chase money and success. Oldies tend to favour certainty and safety. Having children is usually the tipping point for most.

 

[Chronos-Plutus]

You do not build a space agency without importing skills
Also remember the link between defence and space:
NASA is where it is/was thanks to high tech defence contractors..and reverse..a beneficial loop
Airbus/Ariane rockets are the fruit of military cartel experience and skills.
We have zip.
I had to move skills from air defence to mining when moving in OZ .
Can list the high tech relevant areas in oz: Boeing and Eurocopter in qld, submarine in SA.
Over...
And a lot of expats who will be on the way out soon
NOT A CHANCE

What I meant by leverage was more in relation to existing and new industry growth, operations and function.

Sure there may be an opportunity for a few mechanical and electrical engineers from the mining sector to cross over, however a great deal of talent and skill will need to be imported, as you say.

 

[rederob]

As most people already know, Hong Kong, Singapore and Tokyo all wore masks from day one, here are the links for Vitamin D already posted on ASF

https://www.aussiestockforums.com/t...tbreak-discussion.35174/page-198#post-1080556

I don't use social media for science.

 

[qldfrog]

If someone’s age 20 then you’re probably right. Health risks are minimal and they’ll chase promotion and so on.

Once they’re 30-something with kids though, well if they choose the US then either they haven’t made it, they didn’t get those promotions and they have no real choice in what they do now, or they’re not one of the brightest. Safety tends to be a priority at that point and the US isn’t really in the race these days.

Young people chase money and success. Oldies tend to favour certainty and safety. Having children is usually the tipping point for most.

If someone’s age 20 then you’re probably right. Health risks are minimal and they’ll chase promotion and so on.

Once they’re 30-something with kids though, well if they choose the US then either they haven’t made it, they didn’t get those promotions and they have no real choice in what they do now, or they’re not one of the brightest. Safety tends to be a priority at that point and the US isn’t really in the race these days.

Young people chase money and success. Oldies tend to favour certainty and safety. Having children is usually the tipping point for most.

fair and agree, my son birth was what made me decline a job in the silicon valley but that was a mistake my son will not do.
But in term of safety if you are 30 or 40, the virus counts for zip for you or your kids..and please not the example of a guy dying from covid at 41, I lost 41y old colleagues to blood cancer and others to cardiac arrests strokes once the 40y old is reached, you start dying more than we are comfortable with.
I am sure you have noticed

People will not move/move back to Australia scared by the virus and looking forward to leaving in a bubble they can not escape.They might come here escaping crime or Islam fanaticism (Europe) but we are a giant aged care/retirement home island and this will not improve with this
Anyway, each to his own, we could also soon get put frozen in a fridge and live forever...very safely...except for the grid problem ;-)

 

[Sdajii]

The virus becomes deadlier the older you get. You know who spends on tourism like drunken sailors?

Retirees.

The genie has absolutely been kept in the bottle in many places. To let it out would be the height of stupidity.

The genie is out of the bottle. The genie doesn't need to be everywhere at all times to not be out of the bottle! That's never what the term has meant! The genie is not contained in the bottle, it will eventually get everywhere. The SARS genie was contained. The Chinavirus genie is out, it is all over the world, it is in most countries, that means you can't put it back into the bottle, that means there will forever be there to reinfect any place which does not maintain ongoing restrictions. That's what the genie being out of the bottle means.

You're thinking very short term, allowing grey nomads to travel in places which have been kept isolated. Eventually the virus needs to run its course, you can't keep everywhere isolated forever. You're pretending that it can be kept out forever, it can't. It only just popped up a few months ago.

 

[Sdajii]

The missing piece of your argument is how, exactly, is the country losing?

Apart from universities and immigration, which given the duration of stay could be worked around by quarantine, what economic activity of any real benefit to the nation overall is unable to occur at present?

I do agree that ultimately a lockdown is not sustainable. But then constant growth in population or real housing prices is also not sustainable but there's plenty willing to try and kick the can on those two. Same with plenty of other things - they're not sustainable but there aren't too many in a hurry to stop them without first exhausting all possible options for their continuance.

Given that vaccine trials are commencing now, that is trials on humans, it seems a bit premature to say it won't happen. It may not happen, there may come a point where there's no choice other than to deal with that, but the options haven't been exhausted yet.

Of course if a vaccine doesn't eventuate, then that's one almighty spanner in the works of rather a lot of economic argument is it not? The argument that markets fix problems and all that - if the market doesn't come up with a vaccine despite having a truly massive incentive to do so then that's an almighty rug pull from under the entire argument for free market capitalism as being something that's sure to come up with solutions to problems. Such an outcome would likely have far broader implications than just the virus.

That said, well we may not come up with a vaccine that's entirely possible. We're not at that point yet, we've barely even tried, so to say we're going to fail at this point is akin to saying we can't put the fire out when we haven't even dumped any water in it yet. At least give it a go.

I'm not sure if you're joking or stupid when you ask how the country is losing. Have you checked how much money the government is chewing through every day to maintain the current insanity? Are you aware of how many people have lost their jobs and businesses? Are you aware that everyone unemployed, of which there are more than ever before, and being paid double the normal dole? Are you aware of how many people have sold out their superannuation? Are you remotely aware of the future implications of people selling out their superannuation now? I mean, if you get 10 credit cards and max them all out everything might seem fine for a few months, and perhaps someone like you may not see it as a problem until later...

Vaccines being tested was inevitable, just like vaccines have been tested for other coronaviruses since before I was born, vaccines for HIV have been tested on humans for decades. That doesn't make it possible. No matter how futile, people are going to have a go at things, and so they should, and hey, just maybe we'll have a medical miracle, and people are going to chase it because if they do come up with a vaccine that works, even if it doesn't really work effectively, it'll be worth incredible money so people are going to try, just like they're still trying for HIV etc. The probability of a vaccine which actually works being created for this virus is close to zero. It's barely higher than for HIV (which is probably literally zero). Even if it is theoretically possible for it to exist, the probability of a vaccine for this virus which works being created within 5-10 years is negligible.

If a cheap, effective vaccine within 6-12 months was likely, it still wouldn't be worth all the harm we've caused. The economic damage we've already done is going to cause problems for literally decades. The government spending so much money and financially crippling itself, not on major infrastructure developments or any sort of investment, but on Jobkeeper, double dole payments, all the activity for which there is no ongoing benefit. People selling off their super just to get through (or in many cases they're stupid enough to take the excuse and use that money to buy silly nonsense, for example, I sell high end snakes and I've literally been seeing people use their super money to buy tens of thousands of dollars on a literal handful of pet snakes, which has been brilliant for snake sellers but highlights the insanity of the situation), and people having lost their businesses and jobs, the reality of this is really going to hit in September when Jobkeeper and double dole expire. This is already the reality we have, even if a magic vaccine was produced this afternoon, and it will already cause more harm than the virus ever would have, but there's almost certainty that we won't have a vaccine anyway, meaning all this damage is ultimately for nothing.

No vaccine has ever been produced in anywhere near the timeframe you seem to be thinking. No vaccine, ever, for any type of virus, even the easy ones. This is literally a category of virus which no effective vaccine has ever been produced for, ever, even after decades of trying. I'm not saying it's 100% impossible, but if it did happen it would make the Apollo program and the Manhatten Project look like primary school science projects, and it's almost certain not to happen.

 

[Sdajii]

If we have come to the point where human health needs to be sacrificed in order to meet the needs of the economy then we're well past stuffed in oh so many ways.

Such a scenario amounts to the master taking orders from the servant.

Human health is literally dependent on the economy! Poverty is literally a killer. Whether you're talking about poverty on an individual level (individuals being more poor than their neighbours) or a national level (life expectancy in poor countries regardless of individual wealth) there are countless studies demonstrating clear, tangible links between life expectancy and quality of life and economics. It's not coincidence that poor people get sick more and die sooner than rich people. It's not coincidence that people in poorer countries get sick more and die sooner. It's not coincidence that this effect is dramatic when a country suffers economic damage, that is, if a country was previously wealthy and then collapses, it often doesn't cope as well as a country which wasn't previously wealthy; there's a difficulty in adjusting.

In terms of years of human life, we are killing a great many to save a few.