The National Bureau of Economic Research defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months.” So, are we in a coronavirus recession?
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If we’re not, then we surely will be by next month. It will most likely be labeled the Coronavirus Recession, or perhaps the CONVIR-19 Recession.
In just the last couple of days we seen the cancelation of major sporting events, the closure of museums and large theaters and other major gathering places, the shutdown of college campuses, a travel ban on most European tourists, and the rapid decline of air travel.
Soon, elementary school closures across the nation will not just put hundreds of thousands of teachers and other school employees out of work, but create a childcare crisis for millions of parents. Many will be forced to stay home to care for their children.
As the virus spreads, increasing numbers of Americans will be quarantined, and unless able to work from home, they will join the growing army of the unemployed. Business sales will decline leading to still more layoffs, as the coronavirus recession snowballs.
China vs The U.S.
If we look to China, where the coronavirus originated, there is hope that we too can quickly bring it under control. Surely, with greatly superior resources and a population just one quarter the size of China’s, we should be able to easily duplicate their efforts.
But China is an authoritarian state, tightly controlled by the Communist Party. Its government can much more easily impose its will on the population. We, on the other hand, are a deeply divided nation led by a delusional ignoramus who spent the last two crucial months denying that there was anything to worry about, since the virus would disappear by the end of April.
So now we must hope that the Congressional Democrats and Republicans – who have long been at each other’s throats for years – can put aside their animosities for the greater good of the nation. Will they? Maybe they will. But don’t bet on it.
