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COVID-19: There Is No Crying Over Spilled Milk, Even If It Isn't Spilled Quite Yet...

Robert Brusca profile picture
Robert Brusca


  • The coronavirus is here, there is no cure and there is no plan to deal with it.
  • The Fed seems to have decided that it will fight the virus and try to sustain growth using rate cuts - a dubious strategy.
  • China’s economy slowed sharply as the country used draconian measures to reduce contact among people to quarantine, isolate and defeat the virus.
  • Many investors in the US seem to think China’s results are a model for the US, but there is no evidence for that.
  • We should have no confidence that the way to sustain growth is by using traditional macroeconomic policies. COVID-19 and the way it must be attacked to contain it is a game changer, as it changes how the US economy works.

The expression “There is no crying over spilled milk even if it isn’t spilled quite yet" begins to capture the dilemma of what to do in the wake of the coronavirus.

The coronavirus wave may still be on its way, we are not yet fully in its "wake." It may not have fully washed over us yet. Whatever the consequences, they are more or less in train, and we are in whatever state of preparedness that we are in. It is too late to get "more prepared."

Learn from China

Economists have reacted to this with their usual knee-jerk response and have used their favorite tool, one of their precious rate cuts (my precious...) - in this case, a cut of 50bp. But there is no patented response for policy to a coronavirus type of event. And it is important to look at China and to learn from it and from what it has done that is both good and bad, effective and ineffective, applicable and inapplicable. It is important think through what China has done step by step and not to generalize to grasp what will translate to the US and what won’t.

Why the virus goes viral

The virus is not an EMP shock that knocks out capital equipment, rendering it useless and requiring instant investment. It is a disease with a high death rate for a flu. It is particularly lethal for older people and especially for people in ill health (see death rate/also here/for age profile and other here). No young people also have died - as of this writing, no one under the age of 30 has died. The disease is highly communicable and apparently can be transmitted asymptomatically, which makes it hard to stop (see Virus Transmission). And for some

This article was written by

Robert Brusca profile picture
ROBERT A. BRUSCA is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has taught in a graduate program at the Zicklin School of Business at Baruch College in Manhattan, and he has taught at Columbia University and at Michigan State University. . Mr Brusca has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial Markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International (for 16 years). Mr Brusca currently is a consultant. He was the first guest on the first day of CNBC and continues to make numerous TV and radio appearances. Mr. Brusca holds an MA and PhD in economics from Michigan State University and a BA in Economics from the University of Michigan. His wife is a financial expert on Bloomberg radio and TV. He has a daughter in college

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Comments (7)

Kmasse profile picture
Excellent article, thank you!
Author please check your assertion that "no one under the age of 30 has died" from Covid19.
It is being reported that the death rate for those 10-39 year old is 0.2% and that for each 10 years added that rate approximately doubles such that at 80+ years it reaches 15%. The only group with no deaths is 0-9 year olds, https://bit.ly/2ILMa1f
If you are referring to USA, given the smaller numbers and lack of testing, one should consider its statistical significance.
Robert Brusca profile picture
sources are linked. It was true when I wrote it.
Robert Brusca profile picture
Also this is about HEALTHY people. If you are below 30 in age have diabetes or some other disease you are part of a 'special population' not the general population and you will be subject to different morbidity rates. But thank you for the observation.
nailed it. the virus is bad, but the desperation in the response is driving a lot of the fear too. we all know the virus is bad, just look at Italy now, Spain next week, and the US soon. But having a president, with obvious fear in his eyes, telling us he has a natural ability for science and all the fuss is for nothing, like the US has a shield of growth around us that will keep the virus out, is equally bad (for the market).

the Church of Growth has been predatory and sick for too long, it's time to rethink what the purpose of an economy should be.
Well written but unlikely to pierce the wall of reality-denying smugness that prevails around here.
Thank You!
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