That V-Shaped Recovery Isn’t Happening

That V-Shaped Recovery Isn’t Happening

  • Bouncing back from coronavirus was never going to be easy, and now it’s even harder.

No Health, No Recovery

For almost as long as Covid-19 has been terrorizing the planet, people have
expected a quick, V-shaped end to it. This newsletter first discussed the
concept in February, back when Elves still held dominion over Middle Earth.
We suspected it wouldn’t be so simple. Now we know for sure.

Even in the best of circumstances, with everybody in America doing all the
right things to stop the spread of coronavirus, economic recovery might have
been halting. These are not, it may shock you to learn, the best of
circumstances. The U.S. didn’t lock down enough, then it reopened too
quickly, and now the virus is surging again. Maybe it’s not as bad as it was in
March in New York, writes Justin Fox. We’re testing more and missing fewer
cases than we were then. People are somewhat smarter about the virus.

But then “March in New York” is a bar for success so low it might as well be
buried in concrete. The simple fact is that the virus has roared back, and many
people are scared and avoiding whatever businesses have reopened. Mohamed El-Erian, who has been V-skeptical throughout this crisis, reminds us the idea of a trade-off between growth and safety has always been false. Until we get the virus under control, the economy will continue to need lots of help.

Although peopled by V-shape enthusiasts, Wall Street seems to get this. Stocks briefly jumped today on some promising vaccine news. You can’t spell
“V-shaped economic recovery” without “vaccine.” But the FDA yesterday made clear it won’t foist any vaccine on the public until it’s sure it’s safe and
effective, writes Max Nisen. This means anybody hoping for a V to materialize
in 2020 will be disappointed.