Covid-19 Infection or Losing Your Job: Which Would You Prefer?

Covid-19 Infection or Losing Your Job: Which Would You Prefer?
Kenny Kemp/Charleston Gazette-Mail via AP
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On March 18th FedEx founder & CEO Fred Smith was interviewed by Fox’s Bret Baier about the new coronavirus. Smith’s entrepreneurial brilliance makes him an insightful interview at any time, but the one referenced on the 18th was particularly important.

That’s the case because FedEx has 907 employees based in Wuhan. Wuhan is an increasingly prominent city when it comes to production, and as FedEx moves production and packages around the world, it was only logical that Smith’s company would have a big presence there.

What Smith relayed to Baier was very eye opening, which is why it’s surprising the interview didn’t achieve more play than it did. Smith indicated to Baier that all 907 of his employees in Wuhan had been tested for the virus, and four were initially diagnosed as having contracted it. Smith went on to report that two of the four positive diagnoses were later revealed as false, but the main thing was that those who contracted the virus were fully recovered.

From there it’s worth considering the Smith interview on March 18th relative to when the virus first became news in the United States. It was in early January that readers started to read about it, which means it likely had been working its way through Wuhan and other Chinese cities for quite some time.

The point of this introduction is that FedEx’s complex in Wuhan is hardly some kind of micro warehouse employing very few. One imagines that at 907 employees it’s fairly large relative to other employers in Wuhan, not to mention that Smith’s employees were actively handling packages presumably touched by residents of the city that’s known as the epicenter of the virus’s breakout. Translated, Smith and FedEx's experience with the virus as of March 18th was much more than anecdotal. That his employees were largely spared its spread, and that none had died, reads as a reasonable market signal going back over two months (and realistically much longer than that) that the lethality of Covid-19 was thankfully less than substantial.

Thinking about China more broadly, much noise has been made by left and right about how China’s death rates from the virus require an asterisk next to them, that Beijing’s Communist Party leadership can’t be trusted, that the economic figures are fudged, etc. For the purposes of this piece, let’s agree that all that’s assumed is true.

If so, it doesn’t alter the reality that assuming massive amounts of deaths in Wuhan and elsewhere from the coronavirus, this truth would have quickly reached the media. In a world in which information travels at the tap of a smartphone, there’s no way to hide what’s happening. Or for that matter, what happened. Along these lines, it’s no doubt true that Chinese history books are scrubbed of information about the bloody, 1989 Tiananmen Square protests. At the same time, it’s also well known in China that anyone with passable computer skills can pull up the truth about what happened on the internet with ease.

In short, if the coronavirus had been a major killer in a country with hospitals that don’t hold a candle to U.S. hospitals, and in a country where smoking is at least visibly quite a bit more common, we would have known about it months ago. Smith’s nearly 2 ½ month old interview, along with the speed at which news travels, tells us there was fairly reliable information going back quite a while that this wasn’t the Bubonic Plague.

It’s something to think about in consideration of the economic impact of the lockdowns. Patricia Cohen reported in yesterday's New York Times that “More than 40 million people – the equivalent of one out of every four workers – have filed for unemployment benefits since the coronavirus pandemic grabbed hold in mid-March.” In Cohen’s case, let’s first excuse her reportorial habit of blaming the virus for the onset of all this job loss, while also correcting it. What happened is that by mid-March, much of the U.S. was locked down or on the way to being locked down. With streets and businesses empty, and with other businesses increasingly shut down by decree, unemployment soared.

This is important simply because we knew by mid-March that the virus wasn’t very lethal. Sorry, but we did. Just as the old Soviet Union couldn’t keep the Chernobyl nuclear incident off of the front pages of U.S. newspapers at a time when communications technology was more than primitive by comparison, there’s no way that the Chinese could have hidden mass death in Wuhan or elsewhere if in fact mass death had been the result of the virus’s spread.

Which means that it was also well known by mid-March that some who contracted the virus experienced a lot of discomfort, some very little, and some seemingly not at all. But the main thing is that if it had been a major killer, the previous truth would have been a known quantity.

All of which brings up a question: who among us would trade job loss for the possibility of delaying exposure to a virus? As Holman Jenkins at the Wall Street Journal has long made plain, flattening the curve at best means rescheduling virus exposure as opposed to avoiding it altogether.

As someone who has been laid off before, and who has also been demoted, the embarrassment and agony that comes with job loss would make feeling sick to awful for one or several weeks the ultimate bargain. Worse is that job loss and/or demotion stay with those let go and publicly shrunken long after both scenarios happen. For one, there’s the terror related to how bills will be paid, rent will be made, and whether a move will be a necessity. For two, while it’s so often the case that job loss is a consequence of forces beyond one’s control (think dopey politicians prone to hysterics), it’s frequently true amid layoffs that not everyone is let go. No matter the circumstances of job loss, they attack the self-worth of those made redundant. And then there’s the terror of getting back on the job market, all the while wondering how to explain your unemployment.

All of the above ignores how much it pains those who must deliver the news about firings. Media members who should know better paint CEOs and executives as heartless on the matter, but readers can rest assured they’ll never find anyone who enjoys delivering news this crushing. Job loss is awful for everyone,

Which brings us back to mid-March when the lockdowns began and when layoffs took off at a rate no American has realistically ever seen. Politicians will claim they had no choice, that the virus was an unknown, that “China” wasn’t forthcoming with the truth about it such that stateside politicians had to fly a little bit blind.

Let’s please not them get away with such nonsense. The very technology that enables rapid fire communication among readers, the very technology that has enabled long lost and geographically distant friends to reconnect (think Zoom parties) amid these lockdowns is the same technology that would have alerted us to a killer, as opposed to that which generally makes us ill.

Politicians panicked. Plain and simple. And in doing so their panic led to exponentially more unemployment and long-term agony than would have been the case had they simply told us adults to be careful. In short, let’s not let the political class hide behind a lack of knowledge and “China.” They need to pay at the ballot box.  

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). His new book is titled They're Both Wrong: A Policy Guide for America's Frustrated Independent Thinkers. Other books by Tamny include The End of Work, about the exciting growth of jobs more and more of us love, Who Needs the Fed? and Popular Economics. He can be reached at jtamny@realclearmarkets.com.  


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