China Virus Madness?
The situation has not changed. Therefore, it seems to me that the analysis should not change, either.
However, it seems to me that, in Italy at least, the emergency is now morphing into madness. I have little doubt that other Countries like Spain and France will very soon follow, then they tend to react in the same way. I can only hope that the United Kingdom and the United States will keep a cooler head, following a tradition of “stiff upper lip” in times of crisis.
Listen, people: factories do not close even in war times, with the enemy bombers flying over them. The decision of the Italian Prime Minister, Conte, to shut down the country’s factories starting tomorrow is exactly an example of what should not, never (not if we had enemy bombers on our heads!) be done.
The very cold shiver that went down my spine when I read the news was mitigated by the detailed information: post, transports, banks, insurances stay open. Fishery and Agriculture also go on. This is a big chunk of activity in a Country like Italy, particularly when you consider that working from home will obviously continue. But the damage of the most recent measures for the Italian economy is now estimated at at least 7-8% of the GDP if this does not stop soon; and really, one wonders how can a Prime Minister who ordered half the Country to stay home suddenly say to his people “today is the fourth of April, this means you all can go back to work in your factories”.
One cannot avoid but noticing this: that people like Conte have no downside in paralysing the Country, but they will face a huge wall of hysteria and possible political annihilation if they don’t. They all go with the flow, because the tide is too strong to be stemmed. Like every politician, they know that the art will be in letting people suffer first until the circumstances allow to change the course, and not be seen as the responsible for the suffering later.
There was, in Italy, a luxury tax on yachts some time ago. Everybody – and I say everybody – in the corridors of power knew that this would have resulted in a very fast, and very easy, exodus of yachts to nearby countries, like Croatia. They knew, and they did not care. It was more important to offer the country some sacrificial lambs (the hated “rich”) and let the economy living around around the rich (the tourism, the services, the caterers, the maintenance industry etc) suffer as the business moved abroad in a matter of hours. It was a move of such cold-blooded, calculated cynicism, that it provided a very raw example of what a politician will do to survive in a democracy.
I think that something like this is happening now. As the hysteria grows (which I am afraid it will), Conte and the other politicians will not have any interest in trying to plant their feet, draw a line in the sand and say that there must be a limit to the measures taken to prevent the diffusion of the China Virus. On the contrary, the temptation will be big to put themselves “at the head of the movement” and look “caring”, even as they carelessly destroy the lives of millions and cause untold suffering for years to come.
Social distancing is all fine. Work from home whenever possible is all fine. The enforcement of the end of mass gathering is something which has always been done for public order reasons. But when you begin to shut down factories and condemn to closure every shop that is not “essential”, you are playing with the very fabric of the country and making of Italy the next Venezuela.
This massive spending (authorised by Brussels, but nevertheless to be repaid by the Italians; without even the ability of printing the money and take the inflationary hit, because Italy is not even in control of its currency anymore!) will cause massive tax hikes, which will cause huge discontent and will castrate the Country’s growth for many years to come. Three, four, six weeks of madness will have consequences for years to come, and will likely change the trajectory of the Country. If we are lucky, they will be at least the end of the Euro, but we shall see about that.
The numbers I keep seeing, and the situation I keep observing, is still exactly the same that I have described here . The figures have grown, as expected; but the fundamental nature of what is happening (that is: who is dying, what ethical challenges this poses, and how we should react to them) hasn’t.
The coming weeks will cause a huge ripple effect on the economies of half of Continental Europe. The Left will rise, as it is always the case when misery and poverty do. This may result in an entirely home-made World War I, with the citizen shooting themselves out of sheer panic rather than being shot at by the enemy.
Also, consider this: when you get bombed, you see immediately that things are going badly, and can decide to work towards a peace agreement relatively fast. But this madness might only end when the pain has become unbearable on the moment, which means that it will become much worse still in the 4-8 months to come.
As the German poet Schiller said (about marriage, but you get my drift) “der Wahn ist kurz, die Reu’ ist lang” (the madness is short, the regret is long).
Caution, yes. Prudence, yes.
But panic decisions that shut down the Country are not prudent, they are criminal.