While it's been fun/politically expedient for some like the current President and many of his party's Senator to blame the Greater Recession of 2020's slow recovery on Governors and local officials who used their health and safety emergency powers to restrict sectors of their economies following federal CDC public health guidelines and while that intuitively seems to make sense, increasing anecdotal evidence suggests strongly that individual consumers' well-grounded fear of contracting and spreading Covid-19 may be the dominant factor driving the recession and its Reverse Square Root recovery. A very useful piece by Ben Casselman and Jim Tankersley in today's NYTimes, presents Iowa's situation as Exhibit A, because its economy was never heavily restricted but Iowans restricted their own economic activity out an appropriately strong abundance of caution. In the following graph depicting every state's decline and slow recovery in employment, see Iowa in blue and all the other states in gray:
Change in nonagricultural employment since January, by state
2020 Feb. March April May June July Aug Sept.
The principal reason Iowa never hit the lows of the majority of other states appears to be that its economy is less dependent than many other states on sectors like tourism and restaurants/bars, etc. that were especially hard-hit by Covid. Also, Iowa has a relatively low population density (ranking number 36 in density the US) making social distancing easier for Covid-wary people to practice than in densely populated place like New Jersey which ranks number 1 in density.
So what gets individuals over their fear of contracting Covid and gets them as consumers back into restaurants, bars, retail shops, etc. and what gets teachers, students and staffs fully back into classrooms, dorm rooms, lecture halls, etc.? Maybe nothing except being part of a local/regional population that visibly follows the CDC's public health personal practice guidelines with or without mandates from Governors, combined with the widespread rapid testing and effective vaccination that is likely to be to be possible in most places basis only in Q3 of next year.
Until that comes about the jobless, small and medium-sized businesses, and revenue-short states and localities are all going to continue needing the fiscal support that the Senate in particular seems unwilling to provide at this crucial juncture in economic recovery process.
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