Why the pandemic isn't like a hurricane
White House economic adviser Larry Kudlow likes to compare the coronavirus pandemic to a hurricane, arguing it's a devastating but finite event that doesn't leave a lasting economic mark.
Why it matters: It's a flawed analogy being used to inform America's economic policy.
Here's what Kudlow told Axios' Jonathan Swan, for an "Axios on HBO" interview that aired Monday night:
"It's like a big bad hurricane or a bad snowstorm. It's a natural disaster. And we've seen in the past with natural disasters, they come and they inflict enormous pain. And this virus has inflicted horrible pain. But the disaster passes and therefore has very little damage to what I call the structural aspects of the economy."
Yes, the disaster will eventually pass. But, unlike with a hurricane, we have no reliable forecast for when the skies will clear. Maybe we get a working therapeutic or vaccine by year-end. Maybe by the middle of 2021. Maybe later.
- Businesses physically destroyed by natural disasters can usually rely on insurance to rebuild. That's not generally true during this pandemic, with interruption-of-business claims being denied.
- Businesses don't reopen while the winds are still whipping, unlike what we're doing right now. Imagine a New Orleans restaurant during Hurricane Katrina saying: "Yeah, the roads are flooded and our ceiling might collapse, but come get dinner anyway."
Natural disasters also don't play geographical whack-a-mole like we're seeing now with the coronavirus pandemic. Kudlow says we won't shut down the economy again. That's akin to saying Houston wouldn't shut again were it to get hit with another hurricane like Harvey.
- Nor is there ever politicization of public safety measures like wearing masks.
The bottom line: We're facing something novel to our lifetimes. Comparing it to natural disasters, even horrific ones, doesn't do it justice. It also doesn't help us set adequate, sober-minded policy.
Go deeper ... Kudlow: "There is no second wave coming"