Coronavirus: Why the Economy Won’t Bounce Back

Central banks and economists are predicting that economies damaged by the coronavirus `crisis’ will bounce back quickly.

I don’t think they will.

The bankers and the economists are not thinking straight because they see everything in hard, fiscal terms. They think that if governments throw huge amounts of money at the problem they have manufactured, then large businesses will recover and soon begin operating as they did before. (They don’t give a damn about small businesses. Indeed, part of the plan is to destroy small businesses which are difficult to regulate and inefficient in taxation terms.)

This confidence is embarrassingly naïve.

Even if governments cancelled lockdowns and social distancing straight away the damage done by a series of deliberately terrifying and oppressive regulations will last for decades and probably for generations.

And that, of course, is the aim.

The politicians and Bilderbergers know what is going on.

But most economists and many bankers are not at the top of the food chain.

The fact is that the fear and anxiety which has been created is not going to disappear overnight.

There is much anger among those of us who see exactly what governments are doing: the thinkers, the sceptics and so on.

But a large part of the population is too overwhelmed by fear to see the truth.

Millennials and children, in particular, have been devastated by the way their lives have been disrupted. They see very little future.

Those in their late teens and early twenties who are usually the backbone of any protest movement are now too terrified to do or say anything. They want to be told what to do and when to do it. They have lost their drive, their ambition and their sense of identity. Younger children, equally terrified, have seen their world turned upside down and inside out. They no longer have any certainties other than fear and foreboding. Education skills, now fractured, will probably never develop. Ambitions have been smashed. Many will see no further than a government paycheque and a life lived in quiet obedience.

It has been noticeable that most of the protests about lockdowns and social distancing have come from the over 40s. It is older folk who see what is happening and who are feisty enough to stand up for themselves and their country. And it is mainly those in the older age groups who find it difficult to understand why nations have been shut down for a virus which has so far killed less than half the number of people likely to be killed by a nasty winter flu. (As I write, the coronavirus is alleged to be responsible for 300,000 deaths worldwide. The flu can kill 650,000 people in a season.) And it is those people who realise that without people and businesses back at work and paying taxes there won’t be any money for health care, education, roads or unemployment benefits.

The economists and the central bankers don’t realise that most people’s habits will now be changed permanently.

People have become distrusting and suspicious. They don’t trust anyone or anything outside their immediate circle. Many relationships have been fractured permanently. The effect of the stress they have been under will produce permanent damage. When (or if) GPs surgeries eventually reopen there will be queues and long waiting lists as people report their depressions and anxieties and ask for help. With no suitable training, and no time, GPs will hand out vast quantities of anxiolytics and anti-depressants – most of which are addictive. Tens of millions will be turned into prescription drug zombies.

In the future, shopping is going to be largely done online. People will want to hoard essentials because they know that there are likely to be more lockdowns ahead. Vast numbers of small businesses will move online since their bricks and mortar businesses are no longer viable.

People won’t travel as much as they used to do. If holidays are taken they will be relatively low key and most people will probably not travel outside their home country. Millions are going to lose their jobs and become reliant on government pay cheques. Millions more will work at home. Most people will get their entertainment entirely from the television set.

The consequence will be that many large businesses will fail as it becomes clear that their business models are no longer valid.

In my view, the economists and the bankers have got it all wrong.

There is not going to be a rapid recovery from the coming recession.

But, then, I don’t think that the politicians and global leaders ever expected that there would be.

They arrested the wonderful bloke who used to wander up and down carrying a sign saying `The End is Nigh’.

I fear his time has come.

We are heading for a global depression like nothing there has ever been before. We are being manipulated and we’re going back to the days before the Industrial Revolution. And I’m afraid I don’t think it’s happening by accident.

Copyright Vernon Coleman May 17th 2020