One of the main reasons why I’ve turned more cautious on stocks is due to a growing number of extended lockdowns around the country.
However, investing is all about beating expectations. I had been secretly hoping most of the country would reopen by June 15, after roughly three months of staying at home. Unfortunately, in 2021, there are still country-wide shelter-in-place orders!
The economic destruction so far has been immense. Keeping the economy closed for much longer than three months feels like an extreme overreach by our politicians.
We’ve slowly gone from locking down in order to flatten the curve to locking down indefinitely until there is a vaccine for COVID-19. What happened to locking down until there is enough hospital bed and ventilator capacity? The healthcare system is no longer overwhelmed. Tens of millions of lives are being ruined.
If Congress successfully passes another massive stimulus package with enhanced unemployment benefits extending through the end of the year, we know that lockdowns around the country will be extended. Be mentally prepared for what’s to come.
In an effort to provide different perspectives, I reached out to folks who support indefinite lockdowns to fight the coronavirus. Their stories will also help explain why the stock market has held up so well, in spite of so much economic disaster we hear in the news on a daily basis.
If you’ve been on the fence to support keeping the economy shut for longer than three months, perhaps these stories will persuade you to help minimize the risk to our essential workers. Or, maybe these stories will have an opposite effect and piss you off. Perhaps we’ll find a middle ground.
Survival Of The Richest: Profiles Of People Who Support Indefinite Lockdowns
1) Tech couple making $415,000 combined.
Our company has allowed 100% of our workforce to work from home. Although we went through some job cuts globally, most of the core corporate office remains intact.
We continue to earn our regular salaries and our stock price has rebounded by over 80% from its March lows. I have a base salary of $250,000 + RSUs. I’m busy working on numerous M&A transactions that can help strengthen our position once the economy opens up.
My wife has a $165,000 base salary + RSUs and also gets to work from home. Her company’s stock price is actually up for the year because it is in the digital payments space. The longer the lockdowns last, the stronger her business will grow due to the growth of online payments.
Although we are going a little stir crazy at home, we are doing fine financially. All of our friends are still employed and are able to work from home too. Some of our friends who work at Twitter and Salesforce have been told they can work from home for the rest of the year.
We should probably keep sheltering-in-place past the winter given winter is traditionally the flu season. I’m afraid of a second wave. By Spring 2021, there will hopefully be a vaccine.
2) Hedge fund manager in NYC who makes millions.
As you know, my income depends on my performance. I manage a $1.6 billion risk-arbitrage fund and have a base salary of $500,000. In good times, I’ve earned tens of millions. In bad times, I only earn my base salary. That’s how it should be. Eat what you kill.
We were net short going into the market meltdown in March. As a result, we closed up 2% for the month. But I didn’t cover quickly enough and underperformed in April.
We remain net short in May and will probably increase our shorts the higher stocks rebound. The stock market is so disconnected from the real economy, I think there’s a 35% chance we re-test the lows.
Overall, my goal is to return positive single-digit returns in 2020. If I do, I will be able to earn between $5 – 10 million. More importantly, I’ll be able to significantly raise assets due to my outperformance as investors are seeking security.
I’m currently working from our vacation home in Jupiter Island, Florida. One silver lining is that if we live here for more than six months, we should be able to drastically reduce our NY state tax and claim Florida residency.
New Jersey and New York have been hit hardest by the virus. I’m not returning until the virus is eradicated.
3) Online business owner who makes between $600K – $1 million.
It’s been a wild, wild year. I was on the verge of selling my home workout equipment and nutritional supplement business last year but decided to give it one last go around.
Thank god I did because my site’s traffic and sales have grown by over 300% because everybody is working from home. The only challenge is that it’s been hard to keep up with inventory. The average wait time for delivery has increased by over 100% due to supply chain issues.
Who knows how long my business will be booming. I’m saving 90% of all profits just in case the economy opens up again and my traffic declines. But I’m betting there will be a permanent increase in work from home arrangements that should help my business long term. I’m never selling my business now!
As you may guess, I fully support our politicians for keeping us home for the rest of the year. Not only is staying home saving lives, it’s helping me make more money than I have ever dreamed. Go lockdowns!
4) Actively run mutual fund manager who makes over $25 million.
This lockdown sucks. It sucks for my son who is a high school senior and isn’t able to graduate with his friends. The lockdown is terrible for my daughter, a high school sophomore who was nominated to be the co-captain of her varsity basketball team. It stinks for my wife who was doing so well with her non-profit initiative.
The positive is that I’ve gotten to spend so much quality time with my family at our summer house. Selfishly, I’m kind of hoping my son’s college closes for the Fall so that I can spend even more time with him. If his college moves online, I plan to rent a nice RV and go on a West Coast camping trip with him. It’ll be the greatest father-son bonding moment ever!
To cope with the indefinite lockdown, we’re pretending like summer vacation just came three months early. We’ve been playing lots of basketball and tennis on our vacation property in Healdsburg. We also got some really cool jet skis to ride around on our lake.
Our fund performance is in line with the market. We get paid mainly by assets under management, and so far our assets are only down about 7%. As long-only fund managers, the main thing we can do to protect shareholders is raise cash and buy defensive positions.
I’m in support of locking down for another couple months to beat the virus. The government and businesses need more time to figure out safety arrangements before millions of people return to work.
5) Friend of a mayor who has a salary of $297,386.
I’m proud of our mayor for quickly enforcing shelter-in-place rules to save lives. History will look back on her kindly. She and the governor are very much in-line with keeping the city and the state under shelter-in-place for as long as it takes to beat the virus. Enhanced unemployment benefits will last at least until July 31, 2020, therefore, she has no problems keeping the shelter-in-place rule until then.
Maybe the rules would be different if she and her fellow politicians weren’t paid so much. But someone has to lead, and I think her salary is well-deserved given her city’s budget is over $12 billion. She has aspirations to do greater things and I think she will.
6) Mother and wife of a tech startup founder who is worth $25 million on paper.
Before the lockdowns occurred, my husband was seldom home. He would leave for the office by 7:30 am and regularly stay until 9 pm. If it wasn’t long hours in the office, it was business trips to see clients.
We have a two-year-old who has barely seen him. It made me so sad.
Now that my husband is forced to work from home, I’m happier because he gets to play with our son more and help out more around the house. It’s still hard to get him to make time given the business is now under stress. However, it’s so much better having him at home than not.
Honestly, I wouldn’t mind if the lockdown lasts for another 3-6 months. Toddlers grow up quick. Being able to share our toddler’s milestones will be priceless.
For people who are in strong support of longer lockdowns, I stand with you. Stay home and save lives!
7) 56-year-old retiree with a ~$8 million net worth.
If the stock market didn’t rebound off its lows, I’d be much more in favor of opening up the economy quickly. But since the stock market is looking to recapture its all-time high thanks to tremendous government stimulus, I support continued lockdowns.
Think about it. If we can save lives by staying at home, not have to work as much while still getting paid, receive government support, spend more time with family, and not see our investments plummet, supporting an extended lockdown makes sense.
I’m using this time to learn about baking sourdough bread. I’m also catching up on all these books I promised to read but haven’t. Let’s continue to shelter in place until there is a cure.
8) Preschool teacher who used to make $65,000 a year.
I’m by far the poorest person here. But thanks to unemployment benefits, I’m able to make about 80% of my full-time salary without having to work. Teaching 2-5 year-olds is stressful. Not only that, I was constantly sick.
Since the lockdowns began in March, I haven’t been sick. My immune system is healing after so many years of strain. If called upon, I will go back to work before the enhanced unemployment benefits runs out. But, I’m happy to keep supporting our essential works and fighting the virus by staying at home.
In the meantime, I finally started my own website. It feels great learning about design and utilizing all these features the internet has to offer for free.
9) Journalist who makes $120,000 while working from home.
Lucky for us, traffic to our website has boomed as people have become addicted to the news. As they say in news industry, “if it bleeds it leads.” The more fear-inducing the headline, the more people want to read it. It’s like luring a moth to a flame. I feel for people losing their lives and livelihoods, but I’m thankful me and my colleagues are doing well.
Don’t Rely On The Government
Hopefully, these examples have provided some perspective on why some people are OK with indefinite lockdowns. Although the livelihoods of lower-income workers and certain minority groups are being decimated by shelter-in-place extensions, a whole other portion of the economy is doing just fine.
I’m assuming that our politicians believe that stimulus checks, enhanced unemployment benefits, and PPP money should be able to support those who are suffering the most until the lockdowns end.
Further, the lockdown situation is ideal for politicians looking to gain more power by having more people depend on politicians for financial support. After all, if you can give over 50 million people enough money to survive comfortably without having to work, there’s a good chance they may vote for you in the upcoming election.
The tricky thing is, what if there are no businesses or jobs to return to once the lockdowns and the elections are over? Politicians are bumping up against their power limits before citizens start revolting. Just like how airline counter staff don’t announce another delay on an already delayed flight until the last minute, politicians are smart for doing the same with the lockdowns.
Be A Rational Citizen
As rational citizens, it is dangerous to rely too much on the government to survive. Governors and mayors unilaterally decided to destroy livelihoods by closing the economy for months. Instead, it’s much better to rely on yourself. If the government so happens to send you some stimulus money or keep their Social Security promises when you’re in your 60s, then great. If not, it won’t matter because you never relied on them in the first place.
The more wealth you can build and the more defensive your income and wealth, the stronger you can support keeping the economy closed. We can do our part to support essential workers who do not have the luxury of staying at home.
After all, as the media, the politicians, and the wealthy like to say, “We’re all in this together! “
I hope we find a middle ground. There is so much hope that we will finally get herd immunity with multiple efficacious vaccines. Therefore, the key is to NOT take too many risks and get sick before you get your vaccine or before herd immunity.
Stay safe, and protect the wealth you’ve recovered!
Readers, should we keep the shelter-in-place rules going until there is a cure? Why can’t the rich understand why tens of millions of people want the economy to open sooner? After three months of lockdowns, what’s wrong with a middle-ground where the young and healthy go back to work following new safety precautions and the sick and old stay home?
The New Three-Legged Stool For Retirement: You, You, And You
The Economy Or Maybe Your Life
This is America. They cannot force you to stay in your home! We live in a FREE COUNTRY PEOPLE! I can travel anywhere I want too you know why? Because this is a free country!! Don’t forget the Constitution and what it represents! Forget about money for a minute and remember where you live. In A country where you have rights!
Has anyone realized that as more employees work from home that it is only a matter of time before corporations realize that Americans will not even be necessary? Might Covid be remembered as the driving force behind the offshoring of white collar jobs much like the opening of the Chinese economy was the catalyst in the exodus of blue collar jobs?
Financial Samurai says
For sure. With 40+ million unemployed and employees “working from home,” the stock market is partly marching higher due to the realization this many employees are not needed.
I encourage all employees who still have their jobs to work extra hard during quarantine. Managers are deciding who to cut once quarantine is over.
Yeah lockdown sucks only because I cannot see my family. We’re not allowed to do social visits, so an indefinite lockdown would be a problem. Haven’t seen them in 3 months despite living 20 minutes away. The only way to see them would be to run a risk of being arrested by police or army if you’re doing a non-essential task. Oh and no parks/camping/hotels/restaurants are allowed either, so no way around it other than to commit a crime.
Otherwise, working from home an indefinite lockdown wouldn’t matter.
We have insufficient data points to show if the lockdown was effective. Our response to the covid 19 was the equivalent of ducking your head to avoid getting hit, all the while not understanding what’s being fired.
At this time and for the foreseeable future the success of the lockdown will remain unknown. What we do know are the devastating economic and mental health effects happening now.
As for flattening the curve, I’ll be the contrarian and say that there is not enough evidence to show if the lockdown achieved this. And for those who say there is, show me causation and not correlation. For those who know Kahneman, show me system II thinking.
This will not be the last pandemic in our lifetime and new viruses will appear with more virulence and pathogenicity. If anything we should be learning what works and what doesn’t.
Agreed. The R0 appears to have peaked before the shutdowns, and so far the states that have re-opened have not had a surge in hospitalizations and deaths (in fact, they continue to drop). I also am shocked that people only seem to care about COVID-19 deaths, and ignore all the other ones caused by this or will be caused by this (suicide – one place said they were getting 10x as many attempts, alcoholism, drug overdose/abuse, stress/despair causing heart issues, etc).
Additionally, the CDC’s latest death rates are only about 0.25%, and 0.05% for those under 50. We need to do a better job of protecting the elderly (who make up 85% of the deaths despite only 20% of the population) and less on worrying about 12 year old Johnny.
Lastly, the government doesn’t have the money to cover the freebies. So we’re basically borrowing trillions of dollars from future generations to cover the biggest social experiment in human history. I predict history will not look well on the shutdowns at all, and I say that as someone who has fortunately kept my very well paying job and no immediate family who has lost their job.
Your comment is well thought out except for one crucial fact. No one in India takes Hydroxychloroquine as a malaria prophylactic nor is it used as a cure. The strain of malaria in India has been resistant for many years. Unfortunately the number of cases are on the rise in India and labs in some states have been prohibited from conducting more than 150 tests per day; I’ve been told this is to ensure the official numbers remain low. The outflux of migrant workers during the lockdown has also become a huge problem as these workers return to their villages. As many of them have not been home in a long time they arrive to their villages and meet and greet everyone; the police in these areas are not preventing these contacts.
I didn’t make myself clear. I meant a prophylactic for coronavirus, not malaria. India has in fact approved it for prophylactic use in their country
Common theme I noticed amongst those you asked…ALL of them want the country to stay locked down for their own selfish reasons. I own an executive search firm as a solopreneur. My gross income this year before taxes will end up somewhere between $500 – $600k. My overhead is a phone and a few software subscriptions to run my business. I was doing very well prior to the lockdown but this will be my best year ever and even I don’t want this country on lockdown anymore.
As I drive through my area I see for lease signs and abandoned storefronts (saw 6 in a row the other day) the more this lockdown continues. I get calls everyday from candidates who are begging me to find them a job and the stories are pretty heartbreaking. If things don’t reopen soon, there won’t be enough tax revenue to support all these Democrat freebies – and then what?
We did our job and flattened the curve. The hospitals were not overrun. Cuomo only used about 25% of the beds created in the makeshift hospital at the Javitz Center and the big boat parked out on the Hudson was hardly used. We now have a full stockpile of ventilators and masks. The purpose of the lockdown was never to make sure nobody ever caught the virus. That’s an impossible task with a novel virus like this. But politicians are now drunk on power and making life miserable for the majority of middle class workers.
It’s well past time to open up and get the economy going. There will be three camps anyways…the fearfu (that will wear masks 24/7 and not leave the house), the cautiously optimistic (who will try to resume a normal life but follow the CDC guidelines), and the fearless (if I get the virus I’ll live).
This is a virus that most of us have a 99% chance of surviving from. There was never a need to shutdown the world over it. India has 3x the population of the U.S. and only 3,720 deaths to date. They produce over 75% of Hydroxychloroquine worldwide and it is commonly taken in that country for malaria and used as a prophylactic. Could that be why their death numbers are so low? Meanwhile, here in the U.S. the media is trying to do everything they can to discredit the drug because Trump is/was taking it.
At this point, lockdowns are PURELY political and serve no purpose other than to prevent Donald Trump from being re-elected in November.
“At this point, lockdowns are PURELY political and serve no purpose other than to prevent Donald Trump from being re-elected in November.”
Hmmm. Even in states with Republican governors?
And now that all 50 states have begun re-opening?
I find that the discussion of lockdown is really not even relevant in the United States. The first cases in the United States were officially reported in January although many now believe they may have been as early as late November/early December. Lockdowns were not even seriously discussed until March. The disease was allowed to spread for several months with zero control.
Contrast this response with that of Mongolia. Mongolia is one of the most sparsely populated countries in the world but their capital is densely populated and has a population of 1.5 million. Even before their first case, the country listened to China and the WHO and took appropriate action. To date they have had 30 imported cases and zero deaths.
Papa Foxtrot says
I love how actors say we must stay in lockdown. I want to ask them if they want to donate their royalties to struggling actors who do not have a royalty deal with Netflix. My cousin’s acting career is pretty much over right now when he just started.
It is interesting how the wealthy rarely if ever have to deal with the problems that affect the rest of us. They are able to stay at home and watch their wealth rise as the government provides them with a bailout through the subsidy bills. The rest of America receives a crappy check which will not even cover rent in much of the country. Wars overseas are fought by a volunteer military and even when there was a draft, the rich used deferments to avoid it.
Maybe the time has come to instigate a draft (with no deferments, whatsoever) to create a pool of essential workers. The pool could even replace those busloads of Mexicans who are still arriving daily to perform mostly agricultural work.
Of course I’m being sarcastic but if the wealthy were forced to leave their sanctuaries and actually work side by side with those who are truly keeping the economy afloat and continuing to provide a steady supply of food, I honestly believe we would not be in the situation we are now.
I’ve noticed an anti-wealthy vibe from the country lately. What is your definition of wealthy in terms of income or net worth. Trying to decide if I am wealthy and evil, or still a man of the people.
There are 3 types of national response to COVID
1 – Government treating their citizens like adults – open and honest communication. All citizens understand and accept the risks and consequences.
Taiwan, Korea, Japan, Sweden
2 – Government treating their citizen like children – Many countries including US. Stay home Johnny! It’s dangerous out there.
Subset – Bad parent trying to discipline unruly toddler throwing tantrums – United States.
Our government feed us misinformation to cover their miss-steps. We did not have enough masks for healthcare workers. Instead of just saying that, they had to lie, tell us masks are not needed, even dangerous. I still remember the Sanjay Gupta CNN video 6 weeks ago. Also exaggerating the COVID danger posed to the young in order to scare the young adults into staying home and not infect the elderly.
Los Angeles lockdown….
– One woman I know is throwing a party of 30 guest because her son is sad because he won’t have a high school graduation.
– Multiple people I know goto “underground” barber shops or hired in home hair, manicure and eyelashes services.
– My friend kept visiting her mom in Orange county every weekend. Another 80 year old lady goes to supermarket 5 times a week. My buddy goes to Home Depot everyday.
– A girl who was single before the lock down is somehow pregnant now.
– Real estate investor cruising around with their business partner in the same car visiting their construction site where all the workers hammering away without mask when they were suppose to stop non essential work.
– Lockdown protests at Huntington beach
Literally only 1 out 20 people I know adhere to the home sheltering according to recommendation.
3 – Government treating their citizens like animals – China, India, Jordan…etc. Lock them up, board up their doors, military police on the streets.
I would have been ok with very strict lockdown for 3 weeks where you cut the chain of transmission then opening up gradually with social distancing as long as the government is honest about it. Most of my friends thought it was just a 2 week shut down. I told them this is not gonna be two weeks, it’s gonna be much longer. Then the state kept extending the lockdown and people get disillusioned and mistrustful of the government like the boy who cried wolf. Now we have a dog and pony show with everyone swimming is a cesspool of spit and saliva and disease along with record unemployment. Yes, it not a super deadly disease, but it sure is not pleasant to know this thing is circulating in your community.
Sam: As a reader of several blogs in the FIRE movement, I’ve appreciated many of your posts, featuring great financial analysis and helpful, empowering examples of how you’ve made financial decisions based on that analysis. This post is a glaring exception. Before venturing outside of your area of expertise – finances – and into politics, public health, and science, consider applying the same level of thoughtful analysis you put into your financial posts. When you don’t, as I believe happened here, sure, you may excite a few of your readers in inflammatory comment threads, but you will more likely lose credibility with the vast majority of your loyal readers – most of whom have reasonable common sense, compassion, and believe in the greater good – who now question your judgement, and will view all of your work with that lens. Hope you can get things back on track for the rest of us.
Sharing different people’s stories is bad judgement? Get outta here. Staying in an echo chamber and not seeing different perspectives is why people are so clueless in America.
100% agree with this, Science. Sam has shown very unique insight in the past but I personally feel like his political lean has injected itself too much in his posts in the last year/year and half. I see this website now as more of a niche blog for the wealthy right on the west coast, which is totally fine, but the focus of which is too narrow for me personally.
In this post, these “profiles” (anecdotes which could be made up or embellished for all we know) are pushed as evidence to drive home the inflammatory narrative he wants. Sam, you realize that lower-income workers and “certain minority groups” you claim to care about are being kept afloat by PUA too, right? Their livelihoods were being systematically decimated long before shelter-in-place extensions. The anecdotes I have in the midwest, which include many middle/lower-middle class individuals, respect the public health and scientific reasoning behind stay-at-home orders. It’s not just the rich who want to keep the shelter-in-place rules and to imply so is grossly misinformed.
Financial Samurai says
Hi Elliot – Can you share what is my political lean? I encourage folks to not depend on the government to achieve financial freedom. If there is gov’t support, great. If not, it doesn’t matter b/c you didn’t depend on it in the first place.
I understand it’s tough to accept and see different points of views. It’s one of the reasons why many Americans born and raised only speak one language and most don’t have passports. As a result, there’s a lack of appreciation for the world and how great our country is.
But I encourage you to keep an open mind and see the other side of the equation. We already know there is massive devastation with unemployment and businesses closed. To keep highlighting the devastation is beating a dead horse b/c the mass media does this everyday for months now.
Folks want to know why the stock market is booming again, despite all the devastation. This article may explain why.
I’d love to profile your viewpoint. Also, I’m working to profile different points of view from those who want to open up the shelter-in-place ASAP to save lives and livelihoods.
Hey Sam thanks for your response. The lean I’ve noticed is more conservative/libertarian. I don’t want to make assumptions or reduce you to a political identity but it’s just something I’m seeing creep in to more of your posts. You do you though, I just find that it reduces the credibility in some of your posts. I acknowledge and understand the differing points of view on a basic level that reopening the economy = increase in economic prosperity. This flawed and oversimplified logic appeals to certain groups of people who are financially struggling but it’s unfortunately more complex. I reject the view that prematurely reopening the economy during the spread of a highly contagious virus will result in an economic rebound that so many assume will occur.
The lack of a national plan and preparation due to amateur leadership gives way to almost total reliance on local governments which complicate everything. Inconsistent plans to safely re-open will slow public confidence no matter how bad they want to return to work. The economy won’t magically transform until people feel safe. No level of denying or discrediting public health and scientific experts in the name of freedom or liberty will change that fundamental reality. People won’t feel safe if/when a second wave hits and further decimates communities, necessitating another lockdown and even greater economic hardship than before. But that seems to be the way some states are heading.
The virus doesn’t discriminate between those who appreciate the exceptionalism of America and those who don’t. As the recovery and infection data changes I will always keep an open mind about the viability of safely re-opening. My wife and I run a small short term rental business and would LOVE for the travel economy to rebound but not at the cost of exposing more people to the virus.
I agree we shouldn’t rely on government to achieve financial freedom; I don’t think many do. I do believe that first world governments should provide some degree of a safety net for its citizens and this pandemic has made it clear how critically important the existing aid has been for millions of people. Prematurely reopening the economy may increase livelihood for some, including myself, but to imply that it will “save lives” is devastatingly untrue, at least as of right now.
Financial Samurai says
What type of short term rental? Property? If so, how’s that going?
What type of political leaning would you like me to be and write about? Also, feel free to share me more about yourself.
The good thing about financial freedom is the freedom to do as I please. Not sure if that makes me a libertarian, but it feels great.
Boy did this turn into a hot mess, Sam.
The government shuts things down and begins implementing restrictions and everyone goes bonkers. Same thing happened after 9/11–the government restriction part, that is. Anyone see any planes in the air on September 12? The difference? The Government understood the cause of 9/11, developed a cohesive, nation-wide response and loosened/tightened restrictions in a much more swift and meaningful way.
With COVID-19? The Government was/is clueless.
Researches are still debating if masks are effective or not–months later.
The efficacy of of potentially life-saving or life-ending drugs are being debated and touted on open television.
States, Counties, and Cities are adhering and ignoring various parts of each others conflicting orders.
Federal and State governments are openly competing for life-saving PPE equipment.
Its a total mess. That is the reason why we are all in this state of chaos debating what we should do right now because no one is taking the lead, controlling the response, putting together a cohesive, nation-wide plan (even if that includes letting states develop their own protocols to some extent), and implementing that plan.
I fully support any cohesive plan that results in the least amount of damage, both socially and economically. And I won’t pretend I am capable of developing that plan on my own. But if that plan includes closures for another month? fine. two months? fine. a year? so be it. We will get through it–humans are amazingly resilient and adaptable.
Wow, you hit it on the head. I have houses in Illinois and Wisconsin and travel between them. Remarkably different attitudes – Illinois is locked down, masks required, non-essential business closed, … Wisconsin as of last week is going back to “normal” – no masks, big groups at bars and restaurants, water-parks opening up …
I think the US is in the worlds largest social experiment. Not to be too political, but a total amateur leading the nation through one of the most difficult crisis.
I’m in WI too, and the differences even in between counties have to be seen to be believed. It’s a testament to how fractured we are both as a state and as a nation.
So much we don’t know about this virus. I was sick with it for 5 weeks, yes 5 weeks. After two weeks of feeling almost normal the last two days I feel sick again. It feels just like when I had it. I’m in my mid-40’s and what I thought was good health. So it not just the elderly. You can either have no symptoms, “mild” symptoms (which is severe for something else) or be in the hospital. So you are rolling the dice.
Testing is not reliable. I had 3 negative tests, two swabs and a blood test. I had the symptoms to a T. So how can you have people go back to work based on a test that you’re not sure is accurate?
On the financial side I had my hours cut 20%, so that doesn’t qualify me for unemployment. So its not just people out of work, which I am fortunate to not be, but also reduced incomes. So I’m not spending on anything other than food or essentials.
From the little I’ve spent outside social distancing seems to go out the window once you open things up. There has to be a balance in opening things up, but know that if you don’t do it responsibility you’re rolling the dice with you’re health.
Financial Samurai says
Jim, did you get a 4th test which turned out positive? It is unclear from your comment how you know you had the coronavirus.
It feels that if one doesn’t feel well, then one shouldn’t go to work, regardless of the test results. Of course, some jobs are more flexible than others. I assume employers will absolutely not pressure employees to ever come to work when feeling ill, ever again.
I felt that pressure a lot during my finance days from 1999 – 2012.
I had all the virus symptoms while I was sick. After 7 days I went to the ER, because of my breathing, but they wouldn’t test me. I needed to have severe shortness of breath. I finally got a nasal swab at the 2 1/2 week mark which was negative. I continued to have symptoms so I went back a the 4 week mark and again another negative swab test. At the 5 week mark, which I was on the tail end, I got the blood test. Which came back negative.
Now I know with the 3 negative tests, you’d think that I never had the virus. However, I can assure you I’ve never been sick like this and all the symptoms are exactly as how they describe. There have also been many reports recently on the new with false negative results and bad tests.
So my point is that you can’t rely on a test that will tell you if you had the virus for certain especially if you never had symptoms. Because in my case I did have them and still a negative test, which isn’t reassuring if people are using that as a metric to go back to work.
Financial Samurai says
Got it. Congrats for being negative!
I’m assuming with your symptoms you would self quarantine anyway, regardless of the test result right?
The social pressure of coughing or sneezing in public would be immense?
The negative test doesn’t actually mean I’m negative, which is what I was trying to convey. The tests aren’t accurate. You can be positive regardless of what the test says. Doctors don’t know much about immunity either even if you have antibodies. They HOPE you have some immunity, but no one know for sure and for how long.
Yes, I went by the assumption that I have it based on the symptoms. Luckily I’ve had someone shop for me and the few times I ventured out I used a masks, etc.
Financial Samurai says
Gotcha. So perhaps tests are a total waste of time given people will still believe they have COVID-19 even after 3 negative tests and vice versa.
It would be nice if I also got COVID-19 between Dec 2019 – Feb 2020 so I hopefully have a greater chance of being immune. I was sick during that time. I wonder if people should just say they had COVID-19 despite the negative tests to improve their chances of getting a job, their mental state, etc.
Maybe you had the flu? People seems to take the flu lightly as they often confused the common cold for it.
@hansen – The flu doesn’t last 5 weeks. I’ve had the flu and its nothing like it. When you typically get a cold or flu, you start feeling sick, then its full blown and you start to get better. This is different… you’ll feel normal for like 2 days and then it comes right back at you. This happened like 6 times, when I thought I was getting better. That’s how I know
One thing for sure, a voter who is mad about the restrictions will make a more motivated voter than otherwise. The longer this goes on, their numbers will probably grow. My guess is they will take out their frustrations the most on state and local politicians.
Same goes for those voters who are angry at their politicians for recklessly putting the public health of their community in danger. My guess is they will vote too.
Do you mean the progressive bloc that was mad at Trump for putting restrictions on travel to/from China?
I’m beginning to come to the conclusion that “lockdowns” were misguided and what we really needed to do was focus our energy on providing the most resources possible for the very vulnerable members of our society. What good is a lockdown if it still means that an 80-year-old grandma still needs to go to the store to buy toilet paper because she doesn’t have anyone nearby to take care of her needs?
I think we should reopen with caution and focus our resources on protecting the most vulnerable until we get a vaccine.
I’m fearful that we are instead heading for a reality of massive civil disobedience which will likely lead to even fewer resources and energy to protect the most vulnerable as governmental attention is instead focused on asserting power and control to keep the least vulnerable in line.
I can’t stand these debates about the shutdowns because there’s only ever two narratives:
1) “We NEED to stay shut down as long as possible! The economic sacrifices are worth it because you can always just MAKE MORE MONEY! We can always just #cancelrent. But let’s stay locked down as long as possible because we ain’t gonna #DieForTheDow! F*** CAPITALISM!”
2) “REOPEN THE ECONOMY NOW! The coronavirus is a Democratic HOAX designed to destroy the economy to take down President Trump! Our freedoms are being violated and we ain’t gonna stand for it no more! We ain’t gonna sacrifices our liberties for your pwecious widdle FEELINGS!”
This is more or less both sides of the shutdown debate, which is ridiculous because both those who want to reopen the economy and those like me who think the shutdown should continue see legitimate large scale issues with taking either route.
Keeping the economy shut down is essentially a death sentence for so many people. Not just low income, but even middle class people living paycheck to paycheck. I think something like 40% of the American people are $400 away from financial ruin? As far as I’m concerned, that’s the statistic that defines America. Millions of people die from poverty every year. We don’t recognize it because “poverty” doesn’t show up on a coroner’s report, but I’d wager the vast majority of deaths in this country are poverty-related in some way, from exposure to the elements due to homelessness or malnutrition-related health issues all the way up to death from poor conditions at a job that someone couldn’t leave or being trapped in a household with domestic abuse. The next Walmart employee to get trampled to death by a Black Friday crowd? That’s death by poverty, whether you like it or not. Shuttering businesses and denying an income primarily to low income and middle class workers won’t just lead to less consumer spending, but an increase in full on poverty and even death.
Yet reopening the economy is probably even worse. We like to pretend that the coronavirus isn’t out there still and hasn’t killed 85,000+ people in about 3 months, but it is and it has. We’re about to hit 90,000 deaths. That’s THIRTY 9/11s! That’s if 9/11 wasn’t a day, but a whole friggin’ month! The people protesting in front of capital buildings with guns and no masks, let’s be honest, don’t care and don’t take this seriously. It’s an infectious disease that spreads in secret because you may not even be exhibiting symptoms yet. Reopening the economy in a nation full of people who don’t take this threat and honestly couldn’t care less how many people died so that they can sit in a crowded Red Lobster will just lead to tens of thousands of more deaths. NEEDLESS deaths. And let’s not pretend that if we do open the economy, it won’t be a decision made by the wealthy political elite at the behest of the wealthy corporate elite, all of whom will not be the ones out there risking infection. It will be young, low income workers most at risk.
What irritating is that there’s an easy fix that satisfies both solutions. If the fact that people don’t have incomes and can’t pay their rent is the problem with shutting down the economy, then the government should just provide everyone an income. More and more people are calling for an Emergency Universal Basic Income. Imagine if everyone got enough to pay their food and housing costs and the like, no means-testing or anything like the stimulus checks. Monthly payments until the pandemic was over (or at least controlled enough where we can safely go back to work). Then you can shut down the economy without most of the negative effects of shutting down the economy. Since the issue with shutdowns is that people lose their incomes, that takes care of the income issue and you can shut down the economy safely. Plus, people will have money to spend when the economy finally reopens, which is not the case right now since everyone’s incomes have taken a hit. It’s also better than cancelling rent, since then you’ll have to bail out the landlords.
It’s a way better idea than all the crap these “stimulus” packages have had. All juggling things around as if this were 2008 (you can’t approach a recession caused by the physical inability of workers to work the same way you do prior ones where the capital wasn’t in the right place to provide work to those otherwise ready workers), none of these recent packages do anything. I just posted an article on my blog today about all the blunders of the Paycheck Protection Program. You could have done an Emergency UBI for so much cheaper than any of these other half measures. Even if you had to inflate the money supply to do it (ugh), it’s still better than just cutting off everyone’s incomes and hoping people suddenly come up with the money to pay their rent via demonic sacrifice or something (that never earns more than $200).
But the government either isn’t smart enough to do that or simply doesn’t care if you go poor. So let’s just get back to accusing each other of wanting tens of thousands of people to die in the streets.
ARB–Angry Retail Banker
So much of what you have said makes a lot of sense to me.
Yes! These are my thoughts as well.
Also, lay-off freezes so that we don’t have hordes of people losing their health insurance. Other countries are doing that too, not because of health insurance since their government provides it, but because it’s easier to restart the economy when the time comes.
Yep- I agree the current discussion is very dysfunctional and not fact-based. Also agree that the current federal approach to economic support is very inefficient and patchwork. Other countries are simply reimbursing companies for some or all of their payroll costs; it’s cheaper, more efficient and less disruptive than all of our various loan/unemployment packages. And now they are talking about payroll tax cuts as a solution again– as if that will help anyone who needs it.
I also think there’s confusion as to the purpose of the “lockdowns”. It was to give the healthcare system time to ramp up and prepare. I give credit to my county for putting together a dashboard showing the various metrics they need to achieve before re-opening (PPE, contract tracers, etc). That makes a lot of sense- but something like this should’ve been done at the national level and clearly communicated. I dont think anyone is *seriously* advocating keeping the economy closed until the virus is erradicated.
A side effect of all the uneven and confusing response is that people are pretty spooked. That doesn’t bode well for the economic recovery when things do re-open across the country; many people won’t just got out and resume “normal” life immediately.
Are you ready to increase taxes to 60% of income to pay for universal income? Most middle class workers don’t make much extra with the current tax structure. Second, you’re promoting a culture of laziness. Now no one has to hustle to make a living…they can just sit at home. Note, we have a social net, it’s called Welfare.
I used to think the same thing when I first heard about UBI. Then I read about it. And doing so, I learned that what I thought about it–and, coincidentally, everything you just said–is wildly untrue.
Regarding increasing taxes to 60%, that’s not a thing. Permanent UBI proposals by modern proponents have funding mechanisms which rely primarily on consolidating means-tested welfare into the program, a Value Added Tax, relying on the additional tax revenue on new business generated from the additional consumer spending, and the cost savings on poverty-related spending, as well as ancillary funding mechanisms such as carbon taxes and financial transaction taxes (side note: A “carbon fee and rebate” is one proposal to fight climate change and alleviate poverty, and I believe it was a conservative think tank that proposed it initially). While I did read one proposal that would eliminate the standard deduction, even in that plan, the UBI received would be 4x as much as the new taxes paid for a middle class worker.
The issue with funding comes on Emergency UBI plans that are designed specifically as temporary measures to tackle the coronavirus. To my knowledge, they primarily involve expanding the money supply, a measure that I do NOT like. However, the economic consequences of an economy that remains shut down with no universal income support is far more disastrous than the consequences of money printing at this point. So I oppose printing money for Emergency UBI less than I oppose shrugging our shoulders and doing complicated bailouts that always backfire.
As for your point about a culture of laziness, this is wildly untrue and quickly becomes apparent the moment a base level of common sense is applied (which, I will admit, I didn’t apply myself when I first heard of UBI as I too thought we’d all become lazy if we got it). For permanent UBI proposals, the amounts of $1,000 and $1,200 per month have been the most mainstream and common numbers thrown out there. No one is living off that amount. Even a pair of roommates or a married couple making that much each will find it difficult to live a comfortable life without the shame of being so far behind their peers, assuming they can even live on that amount. My own housing costs alone are just over $1,250/month, so relying solely on UBI for me would be literal homelessness. So the idea that we can all just sit at home just doesn’t work in the face of the economic (and social) realities of living in this country.
You mentioned welfare. THAT promotes not working, primarily because of the means-testing. If you disincentivize people to work, people will not work. In many cases, underemployed recipients can’t take promotions or extra hours because the amount that they’d lose in benefits is greater than the amount they’d earn in extra pay. It’s a safety net, and a terrible one at that because so many people fall through it. I read something like less than 20% of the people who have been identified as in need of housing benefits actually receive them. UBI is better because it doesn’t disincentivize work by punishing people who do so, and no one (particularly those in need) is excluded. It’s less of a net and more of a higher floor. It’s also cheaper to administer.
Emergency UBI is a little bit different because you WANT to provide enough to give people the incentive to NOT work when there’s a virus that’s killed almost 90,000 people in three months and likely no vaccine in sight. That’s why you see amounts like $2,000/month get thrown out by UBI proponents. Generally speaking, that amount is not being proposed for permanent UBI proposals. Remember that the circumstances and resulting dynamics of an Emergency UBI are far different than those of a permanent one.
As far as “hustling” to make a living, I mean I just came off a job where I worked 50-55 hours per week every week for almost a year. I could have stayed on unemployment, but I took a job recently with a lower take home pay because I want to work (and work remotely. YAY!). So it’s not about not wanting to “hustle” or work; it’s about wanting an improved capitalist system that works for everyone.
And one final thing regarding work and UBI, there’s been a ton of studies and experiments done on the subject. Even the “failed” Finland experiment had its full results come out a couple weeks ago. Guess what? No decrease in employment. Though these studies in aggregate do show various results such as decreases in things like financial stress, strained personal benefits, likelihood of drug abuse, domestic violence, and crime. But more importantly to the context of what we’re saying, no decrease in employment.
So we were both wrong (you now, and me about a year and a half ago). The idea that UBI promotes a “culture of laziness”? Debunked by actual data. And again, by common sense once you really sit down and think about it.
ARB–Angry Retail Banker
Excellent post! Hope you hang around here to bring some common sense (and data driven) points of view into the conversation. I’d like to believe the US could implement something as rational as UBI instead of our crazy ineffective patchwork of safety net programs hat currently exist. Sadly, I’m skeptical that politics will allow it to happen.