Should there ever be a trade-off between the economic health of a country and the health and well-being of its citizens?
It is the kind of stuff that you would expect to hear debated in an ethics class at school rather than under the glare of a spotlight on the world stage.
But that appears to be the gist of the ongoing battle between the people in The White House and respected epidemiologists. Politicians want the country to get back to work immediately. Epidemiologists say the economy cannot possibly open safely until the COVID-19 infection rate starts to flatten or come down.
So, who is right?
Politicians warn that there won’t even be an economy left to go back to if we continue to keep a country in lockdown. They say that businesses will be so badly scarred, and some so terribly decimated, that they will never be able recover. Healthcare workers argue that we can always bring an economy back to life, but we haven’t yet figured out how to raise the dead….
…. By the way, injecting chlorine – as promoted by the US president doesn’t count. Nor does taking a drug used for malaria – also touted by the US president and also by the president of Brazil – does not count either. They are as crazy as each other.
So, the debate between epidemiologists and economists will not be resolved overnight because there is no right or wrong answer to the balance of risks between the health of an individual and the economics of a country. There are only our views of what we believe is right and what is wrong. After all, how do we put a value on human life?
Thing is the economy will recover. Economists who say otherwise are just being sensationalist. But what is not in dispute is that it will take time – a very long time to revive economies to pre-pandemic levels. It could also take a lot of money – money that some countries just do not have or simply can’t afford borrow.
Given the difficult outlook, investors need to remain calm, sit tight and focus on the long term. That is because whether you side with epidemiologists or with economists, it will take a long time to recover from the damage wreaked by the pathogen regardless of whether we open up economies slowly or quickly.
But just make sure that the shares you own are in superior companies because time is the friend of the wonderful business, it is the enemy of the mediocre.
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Disclosure: David Kuo does not own any of the shares mentioned.
