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The Human Toll of an Economic Pandemic

We are keeping a journal of the weird stuff that is happening or things we talk about during quarantine. Conklin Coronavirus Convos as it were.

Son: “If a $100k house has one floor, and a $200k house has two floors, why doesn’t a $500k house have five floors?”

Me: “………..”

We also found ourselves knee deep in a conversation with our two girls in college that I suspect might be happening around the country.

Our freshman asked me if there’s any chance they won’t go back to school in the fall.  I said, “It’s probably 50/50.”

Our sophomore nearly lost it.  “WHAT?!”  I reminded her about how the next wave will begin once we lift the quarantine, how scared the country is right now, how we each need to do our part to prevent the hospitals from being overwhelmed, how online classes sound good to a university when the alternative is a potential lawsuit, etc.

“I can’t…I HAVE to go back.  I hate quarantine!  I quit!”  She was serious.  She was officially done with the stay at home order.  I said two weeks ago it would take up to a month before the natives grew restless, but I guess she is ahead of the curve.  “When will things go back to normal?!” she demanded.

We’re two weeks in, and I suspect many of us are having the same thoughts.  To preserve our sanity, my wife and I take walks most days.  During these walks, we sometimes encounter neighbors.  Everyone is very friendly and polite, but no one stops to talk anymore.  We keep our distance without having to make it awkward.  We are all thinking the same thing.

On one particularly narrow part of a pathway through some woods, we passed by a neighbor.  He sort of stepped into the grass on his side, we did the same on our side.  We nodded and waved.  But I also realized I was holding my breath.  I’m not sure if he was six feet away or not, but we weren’t that close.  And I was holding my breath.  I didn’t exhale until we were well on our way.

“When will things go back to the way they used to be?” she demanded again.

“When we stop holding our breath around other people,” I answered.


Last Week This Morning

  • 10 Year Treasury drifted lower and closed at 0.595%
    • German bund inched higher again to -0.44%
    • Japan 10yr hovering around -0.01%
  • 2 Year Treasury is down a touch to 0.229%
  • LIBOR got above 1.00% and then closed at 0.99%
  • SOFR is .01%, driven to zero by daily, massive Fed repo intervention
  • 3 month T-bills went negative
  • More than 6mm Americans lost their jobs last week
  • You down with PPP, yeah you pay me…someone out there got that reference faster than the SBA got the loan program up and running


Human Toll of Economic Pandemic

The newsletter from two weeks apparently broke our little corner of the internet.  At last check, we had over a million reads and counting.  More than 90% of that has come in the last week.  A newsletter intended for commercial real estate professionals was being read by anyone and everyone from all around the world.

The sharpest critics normally accused me of being misinformed (probably true), unqualified (definitely true), and insensitive to the human toll CV19 was taking (I hope not, but I understand why they feel that way).

But I would argue that it was Dr. Fauci that was insensitive last week.  “This is inconvenient from an economic and a personal standpoint, but we just have to do it,” Fauci said.

Inconvenient.  I wonder if the 10mm Americans that lost their job last week would agree?  I wonder if the millions more that lose their job this week would agree?  We’ve lost more jobs in two weeks than we lost during the entire financial crisis.  Isn’t it possible that medical professionals making recommendations are being insensitive to the economic realities of a recession?  I’m not talking about those on the front line who are performing a herculean task, but the administrators setting policy.

Dr. Fauci then suggested an upcoming extension of the federal stay-at-home order until there is a vaccine, which could take well over a year or potentially years.

The shutdown “is our major weapon against this virus right now,” he said. “We don’t have a vaccine that’s deployable. This is the only thing we have.”

And there you have it.  Finally.

A public admission of what I have been saying to the flatten-the-curve-at-all-costs crowd over the last two weeks.  Flattening the curve isn’t a two week thing.  It’s not a four week thing.  It’s not even a four month thing.

We are committing to flattening the curve until there’s a vaccine.  Period.

And by now you have read, that’s 12-18 months away.  Left to his own devices, Dr. Fauci would like for us to stay at home until there’s a vaccine.  He might want to start working on a Plan B because there’s a 0% chance Americans stand for that.

Two weeks ago I said flattening the curve was overrated because it’s economically unrealistic to ask the country to shut down for that long.  That decision could be based in fear rather than real data.  Those suggesting we stay at home for the next year assume there is no human toll from an economic recession.

How have the last two weeks felt?  Imagine that for another 50-76 weeks from now.  Imagine another entire school year living under house arrest stay at home orders.  Now imagine 80mm Americans without jobs.  GDP contracting 30%.  How much worse will we feel in a month?  In a year?

My question to those that that believe we should be flattening the curve for the next year is – at what cost?

This isn’t just an economic cost.  I’m not just talking about job losses.  Lost wages.  Consumer spending.

I’m talking about the very real human toll severe economic contraction takes on society.  While the headlines tonight will no doubt remind me of exactly how many new cases and deaths we had, they won’t be able to tell me what the long-term human toll will be.  It’s natural to make decisions based on the terrible news that comes in today, but can we at least please consider the human toll that will eventually be felt?

Suicides.  Domestic violence.  Educational impact.  Crime.  Psychological trauma.  There is a very real human toll, this isn’t just a question of economics. While we do everything we can to mitigate the damage to our sick today, let’s at least consider the potential long-term damages that will arise from those decisions.



During much of the 20th century, suicide rates were on the decline. The CDC reports that since 1999, however, suicide rates have increased 24%.   There were over 48,000 suicides in 2018.

Following the financial crisis, there were numerous studies conducted on suicide rates.  “There has been a substantial rise in suicides during the recession, greater than we would have anticipated based on previous trends,” lead author Dr. Aaron Reeves, of Oxford University said in 2014.  He also concluded that suicide rates rise about 1% for every 1% increase in unemployment rate.

“Sadly, I think there is a good chance we could see twice as many suicides over the next 24 months than we saw during the early part of the last recession,” Reeves recently told Reuters.

A 2019 study by the National Bureau of Economic Research found a direct link between workers wages and suicide rates.1

Another study of suicide rates in Europe during the financial crisis found an additional 5,000 suicides per country study, linked directly to unemployment increases.  US male suicide rates increased by 8.9% during the same time frame.2

Impact of Business Cycles on US Suicide Rates3 found that suicide rates increased during periods of economic contraction.

Most notably, suicide rates during the Great Depression peaked at an all-time high of 22 per 100,000.   Today, the suicide rate sits at approximately 11 per 100,000.  A return to the levels experienced during the Great Depression would result in an additional 48,000 suicides per year.


The list goes on and on.   Just a few more for those that really want to dig in:

“We find a strong positive association between unemployment rates and total suicide rates over time within states.”4

“The research evidence linking recession, unemployment and suicide is substantial.”5

The World Economic Forum (we know them as the people that host the economic elite in Davos each year) concluded that sentiment plays a much bigger role in suicide rates than previously believed.

“Our findings suggest that consumer sentiment plays a significantly greater role in explaining variations in the suicide rate compared to traditional indicators such as income and employment figures.

So it would make sense that constant negative announcements – such as high unemployment, rapidly rising prices, and increasing business failures – can have an impact on mental well-being. Ultimately, these relentless messages depress consumer sentiment and raises suicide rates.” (emphasis mine).

Anyone notice relentless negative headlines recently?

There are almost 9,000 US deaths from covid-19 as of this writing.  It will undoubtedly move higher.  But isn’t at least a little possible that some of the lives we are saving today will come at the expense of another as a result of the economic fallout?  Maybe the net benefit isn’t as clear as we think it is.


Domestic Violence

This wasn’t on my radar until my wife mentioned a social media post that highlighted how a quarantine must be affecting those stuck in an abusive household.  Largely women and children.

A 2016 study led by Princeton Professor Dr. McLanahan concluded women experienced increased partner violence during the financial crisis.6

“Most surprising, rapid increases in unemployment rates – 50 percent or more in the past year – led to increases in men’s controlling behavior, but not physical violence, among couples who did not directly experience unemployment or material hardship themselves, suggesting the fear of hard times was important for these couples,” McLanahan said. “This pattern exemplifies the psychological dynamic that a loss of control in one domain, like the economy, leads men to assert greater control in another domain, in this case their intimate relationships.”

Even without actual physical violence, a sharp increase in unemployment rates (even among those not directly impacted by job loss) resulted in increased controlling behavior.



A Stanford study in 2017 concluded, “we find that the onset of the Great Recession significantly reduced student math and ELA achievement.”7

That same study also concluded that, “Moreover, the recessionary effect on student achievement was concentrated among school districts serving more economically disadvantaged and minority students, indicating that the adverse effects of the recession were not distributed equally among the population of U.S. students.”

Another study out of the University of Pennsylvania found that math and reading test scores were adversely impacted for each year they were in school during the recession, particularly for low-income districts.8   “The adverse effects of the recession were concentrated among school districts serving higher concentrations of low-income and minority students,” according to researchers Matthew Steinberg and Kenneth Shores. “The Great Recession exacerbated the inequality of student achievement outcomes.”

According to a study by Kirabo Jackson of Northwestern University and his colleagues, recession-era budget cuts did lead to lower maths and reading scores.9  “A 10% reduction in spending per-pupil in all four years of high school reduced the likelihood of a student graduating by 2.7 percentage points.”

Another study found that the state of the economy at birth can have long lasting effects on children.10

“The results demonstrate a strong correlation between the unemployment rate during infancy and subsequent behavioral problems. This finding suggests that unfavorable economic conditions during infancy may create circumstances that can affect the psychological development of the infant and lead to the development of behavioral problems in adolescence,” the authors wrote.

And finally, a study by Oxford’s Brian Bell found that entering the workforce during a recession results in a higher proportion of criminal activity.11

“Our research shows that recessions have a more disturbing and substantial impact in that they initiate and form a higher proportion of criminal careers: young people who leave school during recessions are significantly more likely to become involved in crime than those who leave school while labour markets are more buoyant.

For the United States, we use data on arrest rates from the FBI Uniform Crime Reports and the Current Population Survey. We find that the average arrest rate for a cohort entering the labour market during a recession is 10.2% higher than for an otherwise similar cohort entering a more buoyant labour market.”


Psychological/Emotional Trauma

I don’t know how our medical professionals on the front lines do it.  When I served in the Army, I knew I might get dropped in behind enemy lines and I might not come home.  But I also knew I wouldn’t be bringing the enemy back with me to potentially put my own family at risk.

Our medical professionals are not only putting themselves at risk, they are putting their own families at risk.  Is there a higher calling than being willing to treat a sick stranger at the potential expense of your own loved ones?   If it were up to me, medical professionals would start receiving hazard pay and stop paying taxes.

Furthermore, they are strapped for resources.  How helpless they must feel.  And angry.  And then they have to deal with a knucklehead like me saying flattening the curve is overrated.  How convenient from my recliner.

How do they triage?  How do they tell a family member they can’t say goodbye in person?  What if they have to make a decision about who receives treatment and who doesn’t?

This has to be taking a toll on their mental health, right?  It’s too early to have any real studies, but leading psychologists are very worried.12

“The scale of this outbreak as a traumatic event is almost beyond comprehension,” said Yuval Neria, the director of trauma and post-traumatic stress disorder at the New York State Psychiatric Institute and a professor of psychology at Columbia University Medical Center.

In fact, one early publication out of China suggests the psychological toll for health care workers could “exceed the consequences” of the virus itself.13

A study conducted on Chinese medical professionals following SARS concluded, “About 10% of the respondents had experienced high levels of posttraumatic stress (PTS) symptoms since the SARS outbreak. Respondents who had been quarantined, or worked in high-risk locations such as SARS wards, or had friends or close relatives who contracted SARS, were 2 to 3 times more likely to have high PTS symptom levels, than those without these exposures.”14

And it won’t be limited to medical professionals.  All of us are inundated with relentless, negative headlines.  This can’t be good for our psyche.  I’m a glutton for news, but even I have turned it off because it’s just overwhelming at times.  I doubt I’m alone.


Better to be Safe Than Sorry?

Researching all that was very sobering.  And I’m not suggesting we do nothing today.  But I would like for us to at least consider the long-term effects of the decisions we are making today.

I was pretty clear two weeks ago that I thought the covid-19 mortality rate was dramatically overstated.  Experts seem to agree that we likely have 10x more cases than have been tested positive.  That means the true mortality rate has to be a fraction of the current mortality rate.  Yet all I heard was covid-19 was as deadly as the 1918 Spanish flu because we were seeing a 2%-4% mortality rate.  Heck, Italy was at 12% and we were on the same path, right?  I felt like I was screaming into the void.

My concern was/is that we could be basing sweeping policy decisions on insufficient data.  If so, isn’t there at least some chance that we will eventually, with the benefit of hindsight, look back and say, “We probably would have done it differently knowing what we know now.”

The most recent study on covid-19 mortality rate was released last week by a team out of the Imperial College London.15

This study concludes the true current mortality rate, including those who don’t have symptoms, is 0.66%.

Let me be clear – that is terrible.  The average flu is 0.1%.  Covid-19 is very deadly.  But it’s not 2.5% deadly.  That’s uncomfortable to say when Americans are dying every day.  I’m not trying to be callous.

But assuming every single American contracted covid-19, that difference amounts to 6mm lives.  Are we making decisions based off a death toll that might be overstated by 6mm?  If we make a more reasonable assumption that a third of the country contracts it, that difference in mortality rate is the difference between 2.7mm and 718k deaths.  Obviously, both terrible outcomes.  But dramatically different ones.

Maybe we would make the exact same decisions today with a 0.66% mortality rate as we would with a 2.5% mortality rate.  But at least make those decisions with truthful data, not the overstated numbers being reported in the media.

“Better to be safe than sorry,” many would respond.

But after reading some of the long-term consequences, I hope we can acknowledge that may not be true.  There is some cost to overreacting.  Suicides.  Domestic violence.  Education.  Criminal behavior.  Psychological trauma.  Maybe it won’t show up in a scary black and red box on tonight’s news, but there is a cost to be paid eventually.

Just as importantly, we don’t have unlimited resources.  New York Governor Cuomo has been vocal about needing 30,000 ventilators.  I dug in one day and his math checks out, but…that’s based on a worst-case scenario that may or may not come to pass.  Again, that’s very uncomfortable when New York is the epicenter and the news just keeps getting worse every day.

But what if some ventilators destined for Michigan get diverted to New York?  Isn’t there some chance that a dying patient in Michigan would have survived?  If Cuomo’s projection for 30,000 ventilators ultimately ends up being too high, isn’t it possible there’s a human toll arising from “better to be safe than sorry”?

The fight to save every human life does not take place in a vacuum.


Wildly Speculative Predictions


Prediction #1

Dr. Fauci will change his tune about the economic consequences being simply inconvenient, or he will be forced out/minimized.

I don’t think Dr. Fauci should spend one second worrying about the economic consequences.  That’s not his job.  I want him laser focused on providing recommendations that will save every American life.

But that also means he doesn’t get to dismiss the economic consequences, particularly those he may never personally feel.  Dr. Fauci should opine only on medical topics and then our leaders can incorporate his advice with the advice of economic and psychological experts.


Prediction #2

By month end, stay at home orders will extend into the first two weeks of May.  We will hear a lot about not stopping now when we are so close.  Rising death tolls will give temporary political cover fire for this decision.  But there will be far more rumblings than we heard two weeks ago.


Prediction #3

By month end, when another 10mm+ have lost their jobs, this will happen for most Americans:

Fear of economic consequences > Fear of health consequences

This, in turn, will drive the political response.


Prediction #4

By month end, the government will have a more targeted plan to un-quarantine, even if it won’t begin until June.  Americans may comply with an extension into May, but only if it comes with a light at the end of the tunnel.

Masks are the first example of what’s to come as we un-quarantine.  There will be more and more announcements similar to this that will help us feel like we can get back to work.

Here’s the most important stats from that Imperial College London study.  Look how differently the mortality rate is by age group.



80+         13.40%

70’s         8.60%

60’s         3.99%

50’s         1.25%

40’s         0.30%

30’s         0.15%

20’s         0.06%

10’s          0.02%

0’s           0.00%


Doesn’t it seem like we should be able to figure out a way to go back to work by simply telling everyone 60 and older to stay at home?  Many of these people already have exited the economy.   My parents retired a few years ago.  I asked my mom how her life has changed.  “Not that much.  We don’t see our friends in person and I didn’t get to hug my grandchildren on my birthday, but other than that it doesn’t feel that much different.”

The people most at risk are the same people who weren’t going to work anyway.

I can’t visit my grandparents right now.  I get it.  Even if the quarantine was lifted today, there is no way I would go see them.  What if I have it and don’t know it?  Until I can take a test right before I see them, I’m voluntarily staying away.  But does that mean I can’t go to work?

The Spanish Flu of 1918 was so devastating, in large part, because it killed everyone of all ages.

Covid-19 doesn’t.

So why are we making decisions like it does?