The current coronavirus strategy of most governments is a recipe for a worldwide economic disaster. In many countries, the strategy of confinement and forcing shops to close is a surefire path to large-scale business failures. The cascade of economic and financial repercussions to come is likely to lead to another Great Depression. Italy, for example, already had a 135 percent debt-to-GDP ratio before the crisis.
To limit the spread of COVID-19 in Canada, “The federal government has advised Canadians to stay at home and limit their contact with others if they have been diagnosed with the virus, exposed to someone who has or if they traveled outside the country within the past 14 days.”
Murray Newton Rothbard died on the January 7, 1995. What would “Mr. Libertarian” say today about the government measures against the corona epidemic?
The Federal Reserve’s zero interest rate policy and industry bailouts threaten more than just the fragile economy. The very foundation of the social order risks permanent fracturing under this system of moral hazard.
With fear of the coronavirus continuing to wreak havoc on every country in the West, almost all governments have taken radical measures for containment of the virus: mandatory quarantines for many, the closing of businesses, and the prohibition of many economic and social activities. I am not going to pretend that I am a medical expert and share my thoughts about how serious the virus really is. I will, however, focus on its economic consequences.
Young people today are delaying starting “adult” life until later and later. The median age of first marriage has climbed to nearly 30, up from the mid-20s a generation ago.
When one imagines working on Wall Street, he envisions stock traders scrambling to place buy or sell orders, perhaps even some puts or options. Today’s powerful artificial intelligence tools allow traders to game stock market trading. In some ways, this computer-driven high-frequency trading resembles actual gaming in that it may seem as if one is simulating various trading scenarios.
Governments all over the world are using the alleged threat of a COVID-19 pandemic to shut down the world’s economy. Daniel Lacalle, an authority on energy economics, writes: “The decision to shut down air travel and close all nonessential businesses is now a reality in major global economies. The United States has banned all European flights as Italy enters a complete lockdown, Spain declares a state of emergency, and France closes all nonessential public places and businesses.”
In this time of crisis, many exclaim how impressed they are by the “swift and decisive” actions by the Chinese regime. Instead of recognizing the abhorrent disrespect for human life, the Chinese response is put forth as an exemplar for combatting a pandemic.
