Most of us had never heard of a cytokine storm before a few weeks ago.
For those unfamiliar, many patients with coronavirus suffer a “double whammy” when their immune system reacts to the virus too slowly at first, and then far too aggressively. Potentially causing more damage than the virus itself inflicts.
I can’t help wondering if our economy might be in danger of a similar “double whammy”. The economic impact of this pandemic is huge but will vary by industry, company, individuals, etc. Our national response needs to be well calibrated. Mistakes made now by politicians overseeing the economy could have negative effects for years to come.
The government is throwing its weight around in unprecedented ways. Mandated business closures, stay-at-home orders, and war time controls invoked over some industry, all would have been hard to imagine a few months ago. We’ve seen $2 trillion in federal spending with likely even more coming too.
Where is this money going? Is it being deployed in a way that’ll address the illness in our economy? Or to the most convenient or politically connected places? No amount of money will ever be enough, if it’s used poorly.
An example that has me raising my eyebrow is the deployment of small business loans. The government decided that our nation’s banks should be responsible for distributing funds. For some banks this may be a low profit – high headache endeavor… there are many stories about banks moving very slowly on loan applications even as needy businesses struggle to pay their bills.
Poorly designed or badly executed stimulus programs could make our economy worse, not better. Much like a cytokine storm, we might be reacting too slowly in some ways, and too forcefully in others.