Fear vs no fear is the real question
The best thing I read yesterday was a comparison between places the locked down, versus those who didn't from Bloomberg's Noah Smith.
What's increasingly clear is that the economic differences between places that locked down versus those who didn't was minor.
Here are credit card spending patterns:
A study cited by Smith also showed that job declines also corresponded despite different lockdown policies.
This intersects with another debate about the spread of the virus. Why are hot-weather states and countries being hit so hard right now?
A theory that's getting more and more traction is that indoor contact is the key. There are relatively few examples of outdoor transmission. In the southern US, for instance, it's so hot right now that people who were meeting outside have now moved indoors for social gatherings.
There's an opportunity here to have a series of policies like work-from-home that keeps people from gathering inside (especially in air conditioned places) along with fresh closures of restaurants. Masks obviously help.
That sort of response is going to take some real leadership and it's lacking at the moment. Right now even rising numbers aren't stoking fear so markets can continue to do well but there's a limit, it's just tough to know what it is.
Alabama, Arizona, California, Florida, Nevada, North Carolina, Oklahoma, South Carolina and Texas are all currently the highest seven-day average of new coronavirus cases per day since the crisis began with most hitting records yesterday and today.
The important thing to note here is that the 'reopening' debate or worry about a new lockdown is probably misplaced. What we need is a 'fear' index of the virus itself.
