I am curious to know who will be going to work when the pandemic is announced. I have approval to work from home, but a friend who is an O.R. nurse has plans to retire rather than risk exposure. What about the rest of you? Will you still go to work? If so, how will you protect yourself?
Dr. Dave
I’m a long retired paramedic, a bit too long in the tooth to go back to lifting stretchers, but unwilling to sit back during a pandemic and do nothing. I’ve arranged with a local M.D. to help out if Avian Flu hits. I’ll do house calls for him, evaluate patients, and train family members on how to treat them at home. Neither of us believe the hospitals will be receiving flu patients for very long.
I also expect to provide these same services to my nieghborhood. If there are other community needs, I will do what I can to assist. That includes everything from the removal of the dead, to delivering meds, food, and water to people.
As far as how I will protect myself, I’ve bought a supply of masks and gloves, but doubt they will last more than a month or two. Hopefully I can get resupplied along the way. If not . . .well, I expect to be exposed anyway. Hard for me to see how we can avoid that.
My greatest fear is not of this virus. It is of what becomes of our communities, and our humanity, if we hole up and abandon them. I know that is a minority opinion, but it’s the only one I can live with.
No, I won’t be going to work. I’m a single parent and my first priority will be my children. I just hope I don’t get stuck in a lock down situation when BF hits.
FLA_MEDIC – at 06:13
Your sentiments are admirable. I hope you can stay healthy.
Although I have been instructed to work from home, about 15 of my colleagues have been told that will be reassigned from our corporate headquarters to our nearest distribution center. The intention is for these people to fill in for others who must remain home to care for their children. I know that there are literally thousands of government accounts, corporations, and hospitals who depend upon my employer for essential equipment and supplies, so keeping our distribution centers operational will be mission critical. However, I still have not heard how they plan to prevent people from making each other sick.
FLA_MEDIC – at 06:13
I always believed that the people that are on the everyday frontlines are truly unselfish heroes. Your post is a testament to that. Thank you.
We are a self-employed household. I’m job is property management. “Working from home” is not necessarily an option. However, we will put all tenants on notice that house calls will not be made for anything but the biggest emergencies in the event of an active pandemic in our area.
We are still working on other areas of business continuity. We have to collect rent … and need to figure out all the PPE that goes along with that. A lot of our tenants are either immigrants and/or low income.
We have certain legal and moral obligations that are unavoidable. How far we will take this will be dependent on the actions of the virus itself so we are trying to stay flexible.
Will you still go to work?
No.
The present project I’m working on wouldn’t be necessary. There won’t be any demand for nickel and cobalt should the SHTF.
No- we’ll be shut down fairly quickly, just behind the schools and churches. DH on the other hand is a mental health practioner and his agency has done NO planning. Our family tenative plan is for him to SIP with me and kids during the worst of it then after go out and help pick up the pieces.
My DH plans on working. He works in MSM. >;) Of course, he still thinks the pandemic is a “non-issue”, so his “plans” may very well change if things are severe. We are lucky in that we have a separate guest house on our property, where I will “make” him stay in, if I get my kids home from college and we are in a SIP situation.
I’ll probably help as long as the PPE lasts, and I figure we’ll close when they’re gone. My dept. is non-essential, so our workers will be reassigned to other depts. Patients and workers still have to be fed, cleaned up after etc. Then help my neighbors ( a couple of ‘em). But semi-SIP when I can - no unnecessary running around. Son will be working - probably locked down for the duration or until he’s the last one standing so … But if he’s home when they lock down, I’ll SIP with him. (but I’m betting if he “can’t” go to work at work, he’ll go in with me to help at my place, Lord knows they’ll need all the warm bodies they can get to do whatever. Now if DD and family can make it here, all bets are off. I’ll SIP so hard and fast with those grands, if you blink you’ll miss it. But really, till it hits, who knows. I’ve changed my mind a few times as I’ve learned more about this beast.
I applaud FLA_MEDIC, I’ve been a critical care nurse since 1989, and have seen & done just about everything out there, hemorragic strep, menegitis, MRSA (weekly now), so most things don’t scare me, but I work in a hospital who for the last 2 years has completely ignored my warnings & information. We have done nothing in regards to pandemic. Last weekend I had a very critical patient who was bleeding out everywhere. I could not find our usual stockpile of goggles or mask/face shields…out. We were up to our elbows in blood in there, finally someone found me a pair of goggles on another floor, as of yesterday I checked our stock room and still no face shields or goggles. I have 2 children who will need me at home, I think about these two issues constantly and this has left me very conflicted. I have read numerous papers on “duty of care”, ethics and so forth, my hospital also has a duty of care to its employees. We have 7 ventilators in our hospital (pretty standard for a 10 bed ICU mid - to small hospital)The bottom line is there will be very little we will be able to do with a massive influx of critically ill patients, hospitals will be the first to succumb after the first 2 weeks and HCW will probably die in large numbers. I take my job very seriously, but have become very disallusioned (sp) with my hospital and their complete disregard for their employees, so I will be at home, as I believe so will a good deal of my co-workers. I have been very proactive in my town with articles, handouts, meetings etc….again to very little avail. But I will help in my neighboorhood when needed. There will be nieces & nephews who will also sip with us, all in the critical age group of 20′s. I actually think I can be a big help here. I know people may be critical about my attitude…but believe me I have more than put in my time over the years.
TXNurse at 11:19
I admire your courage and dedication but when it comes down to the bottom line it is family first. At the end of your life it is family that surround your death bed not co-workers and your supervisor.
Good luck and God bless you and your family.
Scooba…thank you…so true
TXNurse – at 11:19
Consider this, you may actually be more effective at the base level of care than you could be in the hospital setting.
Your expertise will be welcome. You will probably be able to help triage those that will respond to care and those whose only need left to fill is end of life comfort.
While the hospitals are wonderful … in all honesty it sometimes seems that a “free clinic” in an area of town actually helps more. Hospitals are for emergencies, triage and clinic set ups will be able to offer advice and training on how to care for those critically ill that cannot be transported or cannot be accepted (for whatever reason including staff shortage and equipment shortage) to a hospital.
I’m thinking of the example of small towns around airports that have yearly emergency response drills. People aren’t just sent to the hospital after a mock crash; they are triaged by community volunteers and emergency personnel so that those most in need, and those most able to benefit, receive care first.
Your career experience will be more valuable in the field where it will get to more people.
Everyone on the Flu Wiki and my dog knows that businesses and institutions should exercise some common sense regarding the workplace during a pandemic, but who knows if they will. I was thinking of some priorities that could be utilized when TSHTF and hope that others will comment, criticize, or add to this list:
1. ALL non-essential personnel should SIP if for no other reason than to stay out of the way. My husband works in the health field, but he’s in administration. He plans to SIP, and I feel that everyone else in administration should do the same rather than walking around spreading deadly germs. No one is that important, and they will need office space for many reasons.
2. HCWS and First Responders - Single parents should be given first priority to SIP. I know this puts a burden on two-parent families, but children have to be kept home and cared for. This will of course significantly reduce the number of workers, but it would also enable institutions to more carefully allocate PPE supplies and take more precautions to protect these critical workers while they are saving lives.
3. Schools - A lot of threads have addressed this issue, and it’s really very simple. As soon as we hear any news that a pandemic has begun (anywhere in the world), schools should have a matter of a few days to implement in-home schooling, and all schools should be closed. It’s only a matter of weeks until the virus will consume every area so what is the benefit of keeping these germ centers open? I’ve always said that my son can catch a virus all the way from California (we’re in Texas).
4. Businesses - Dr. Dave’s company seems to have the best policy, and this should especially apply to critical infrastructure businesses (utilities, etc.) and distribution/transportation companies. As with health institutions and first responders, we need to protect these critical workers as much as possible.
5. Volunteers - Utilize volunteers such as FLA MEDIC as much as possible. But be prepared to give them the same protection and care that salaried professionals receive. People will be our greatest resource during this coming crisis, not antivirals and vaccines. (Personally I also think you should be canonized.)
TXNurse - You know how much I admire you and all the work you do. I am constantly sending your list and essay on to others, and I do believe it is making a difference. You have already made a tremendous contribution and should you decide to stay with your children, it will be the right decision.
Some interesting discussion threads on this topic over the last year:
Drafting healthcare workers: http://www.curevents.com/vb/showthread.php?t=28826&highlight=healthcare+worker+draft
Canada will forcibly draft healthcare workers: http://www.curevents.com/vb/showthread.php?t=41109&highlight=healthcare+worker+draft
Duty of Care: http://www.curevents.com/vb/showthread.php?t=56049&highlight=pandemic+health+care+workers
There was also an anonymous survey of HCW’s with regard to Bird Flu, inadequate PPE and reporting to work.
Something like 60% said they would not show up.
Just remember we will also need HCW’s AFTER a pandemic, so don’t everybody go out and martyr themselves in the first wave.
I think most business will just close!! People wont be able to get to work even if they wanted to! We will run out of gas for vehicles and the grid will go down - so what will you do when you get there, if you cd get there? Without electricity the computers wont work, financial sector will collapse because the volume cant be done manually anymore, nobody will be travelling, neither will goods or services. Bosses wont want to pay people if they cant ‘sell’ their products, so you may be laid off anyway! I think it is admirable but crazy to think of trying to go to work!
Bird Guano – at 12:50
At least in Ontario, they have watered down the bill. It no longer forces HCW to work, but gives the Ontario Premier powers to issue licenses to qualified individuals from out of province (but why would there be any from other provinces). In the latest version of the Ontario Pandemic Health Plan, there are discussions about ‘competency based’ deployment. Of course they can’t pass the bill as originally drafted. We are not in a pandemic yet, and passing the bill will simply ensure HCW’s resigning now.
What I think might happen is when the pandemic starts, the Ontario Legislature will convene, and change the laws very quickly to force essential workers to go to work, based on ‘competency’. There won’t be a political outcry, not from the public. Yes, if you volunteer for the Red Cross, you may be deemed competent. The only problem is, a lot of enslaved workers will work to rule, and not too many lives will be saved.
If people are smart they will stay away from hospitals and care centres - ground zero in my opinion - re HCW - who is going to prosecute them - the police and courts will be down as well!! The jails will be unserviced - I dont think there will be much appetite for litigation in the circumstances!!
I am not suggesting forcing at gun point. I am saying that there will be a lot of coercion. They will have to try it, even though it won’t work. The threat of punishment is more effective than the actual punishment. At the start of a pandemic, they will set an example of a few, hoping the rest won’t revolt. It depends on the CFR, and no one knows about the CFR until its too late, when everything breaks down.
Of course I will “go to work”…. however, I teach on line classes for a univ. so I don’t I don’t have to leave the house. I am expecting a large increase in students and course offerings in on-line college courses when TSHTF. The only real question for me is if the net will stay up. I can handle no utilities, but I need net connections to “work”. I am fiber linked so I don’t think there will be much of a problem, but WHO knows.
If HCW’s start walking now, society will pay attention. There will be a public debate, and serious money allocated to prepare, by both government and individuals. This is clearly an ethical issue, and some greater minds should say some thing.
Earlier in this thread, it was stated that fountains are deemed more important than ventilators. TPTB have no ethics, and have no moral authority to tell HCW not to walk now.
If TPTB keep dragging their feet, HCW walking may be the only way to tell the world about the moral corruption. Walking may be in the form of organized work to rule, or rotating work to rule to force a public debate.
Truthfully, there aren’t enough bedside HCW’s NOW. Subtract the people falling in single or primary custodial groups, subtract those with chronic health problems, subtract those actively pregnant, subtract those who are just scared, and what is left? Hospitals will not make it, one or two people can’t run a 2006 ICU.
You can calm the multitudes with the idea of drafting HCW-the first hint of this and they will hide. Volunteers to man ICU’s—this is an idiotic idea, if it was that easy the hospitals would be standing out on the street now to draft cheaper labor. No folks, if it’s pandemic with high CFR—those few-those very few who show up-will in one glance know they can’t do the job being asked. Hositals are as lean as they can be now in manpower, any drag to the far left or right and the system falls. Period.
Frankly we’ve been engineered to death by MBA’s who have no concept of the meaning of bedside care or how much time it takes to do tasks at the bedside. There have been instances in the past where nurses were monitored and later told by these people we spent too much time talking to the patient/family. And now that this crapola is coming back to haunt everyone, because the majority of nursing’s dedicated best have long left the bedside, and the ones responsible will all be SIP.
Guess society will have to make better choices when re-constructing health care post-pandemic. (Ugh.)
Would work-to-rule now, be able to get preparedness efforts for households started?
‘’Tell the public to prepare to shelter in place at home for an extended period of time,’‘
(twelve weeks would be a nice starting target to work towards)
or hcw will walk/work to rule now?
Free public courses live and online for basic home nursing, basic safety, coping skills… teach in schools, almost anything would help; compared to staying the current course of preventing the public from becoming alarmed enough to change their current priorities…
Public, if they knew the current H5N1 danger, would certainly want money spent for HCW to have PPE (if necessary, take it out of highest-paid honchos salaries; they won’t have a job at this rate); public doesn’t want to lose all people with any useful medical skills in a pandemic…
The only thing the MBA understands is if HCW work to rule now.
It has to hurt the pocket book in this quarter before any attention is given.
I once heard that here a quarter means three months, and in Japan it means 25 years.
(I meant; one quarter of a year = 3 months!)
Can hcw start acting in groups about this? Seems like there is a lot of underground feeling on pandemic plans being hazardous to front-line health, and the public is basically unwarned, or they’d be less of the problem…
gharris – at 12:57
The same thing happens during a catastrophic weather event. Businesses are forced to close whether they want to or not.
But have you noticed that there are always certain types of businesses that seem to thrive in the middle of these situations? Bars and liquor stores are the main problems around here. For that we may need emergency rulings closing such gathering places …. although more than one law official I’ve heard say that if the idiots want to suck it up in a bar let ‘em die there. My guess is what might happen is if a place of business refuses to shut down, they may wind up being put into forced quarantine if things get really bad.
Lesson … don’t go out drinking at a place you aren’t willing to stay 24/7 until further notice. Especially not one that doesn’t have a kitchen and descent bathroom facilities. Of course, neither of those things may work after a while, but so long as the booze lasts no one might notice.
No.
As a school teacher, my school should know enough to close asap. If it does not do so, I’m not going to endanger my family and others by helping to prolong the stupidity of staying open.
I anticipate being out of work and out of income for the duration, and sipping. My school, being a private institution, may suffer irreparable financial harm. Who knows what world we will awaken to 18 months into this. Ready to be flexible.
“Work to Rule”, from wikipedia:
«Work-to-rule is an industrial action in which employees do no more than the minimum required by the rules of a workplace, and follow safety or other regulations to the letter in order to cause a slowdown rather than to serve their purpose. This is considered less disruptive than a strike or lockout; and just obeying the rules is less susceptible to disciplinary action. Notable examples have included nurses refusing to answer telephones and high school teachers refusing to write recommendation letters for their students’ college applications.»
Maybe I’m overthinking things here but if I KNEW that H5N1 was in the US I’d have few problems calling in “gone” ( not an essential worker, by any means). However, I just don’t see that scenario as the way this will evolve. I may have to call in sick, or try for leave-of-absence or other such once I’VE determined the threat, but my workplaces (and PTB) haven’t. This starts to get sticky pretty quickly.
Still, I’ll be staying home, SIP, once we go ‘legs up’. Gonna be tough. No $$$ and plenty of bills. The least I can do is not to be a burden to others. Have really taken to heart the folks who feel like this - living in snow country I’m always flabbergasted at the sheer selfishness of…people just getting in the way. Let alone having to call in rescue for your own stupidity.
Most of my work is computer related. I am more than willing to work from home. However, if my places (2 jobs) haven’t considered offsite provisions - to hell with ‘em. I don’t want to work for such shortsighted companies anyway.
Kathy in FL – at 16:30 I thought alcohol killed the flu virus. Surely a bar will be the safest place to be. LOL
History Lover – at 12:12 “1. ALL non-essential personnel should SIP if for no other reason than to stay out of the way. My husband works in the health field, but he’s in administration. He plans to SIP, and I feel that everyone else in administration should do the same rather than walking around spreading deadly germs. No one is that important, and they will need office space for many reasons.” Your comment that admin should SIP and stay out of the way does not sit well with me. The captain and officers stay with the ship, or we all abandon ship together. Why should I go into work, only to be told that my job has been changed cause they need me to do x y or z in the hospital cause people are not coming in to work, and then find that admin types stayed home safe. If admin can’t work, why should anyone else? If it’s not safe for them, close it down. Our hospital plan calls for our admin to be in the trenches doing what needs to be done, cleaning, caring, delivery, clerical. (my bet is they’ll all be in meetings not getting their hands or faces dirty.) If we’re open, someone has to do that things that make the place run, and that is more than just RN, MD, etc. Without dietary, housekeeping, maintenance, clerical, how long would we stay open. And without PPE for those workers why should they work. It won’t take long for them to figure out they aren’t protected and are considered to be expendable. Have the hospital admins counted all these folks in their “how many masks… will we need” count?
Leo7 – at 14:17 You are so right. I might choose to go in to help, but if they lock me in or draft me by force, I won’t work well if at all. A lot of the nurses I know will be AWOL in short order under those circumstances.
Leo7 Well said. Ive already made plans to hide out if they try to draft me. Let the bean counters and managment go work at the bedside, bet they would have bought PPEs and Tamiflu if it was thier butts at the bedside.
I’ll be working from home. If my boss doesn’t like that, I’ll find another job.
I’ve been wondering about a few things. My husband and I are retired govt employees. We get a pension that covers our mortgage and at least a few “primary” bills. DH got another job that pays for the rest of our expenses.
Since I have been squirreling away preps, when TSHTF, our actual monthly expenses will basically be mortgage and utilities. Utilities will be off shortly, so that just leaves the mortgage.
Does anyone have any idea what I can say to the bank or do in advance regarding my automatic govt deposit (that probably will stop when the grid goes down) that will help deal with not paying the mortgage?
Are there any bankers or financial geniuses out there who have ideas as to what to expect?
I don’t see how lending institutions can foreclose on most of their properties at once. The courts will probably close or not handle very many cases. The loan companies and banks will have huge absentee rates, too.
Even if they could forclose on everybody, how would they resell the properties? I’ve got a feeling that these institutions will be more than happy to work out some plan on most mortgages. I hope someone in the government is doing some thinking on this problem. OK,…. I know, I’m an optimist.
Dennis at 13:40, (can do without utilities) how will you power your computer? How will the students power their computers?
Frankly, I doubt people are going to be really interested in college courses if the infrastructure is down. Instead they’ll be out learning to shoot a squirrel.
bgw in MT, ‘I don’t see how lending institutions can foreclose on most of their properties at once. The courts will probably close or not handle very many cases. The loan companies and banks will have huge absentee rates, too.
Even if they could forclose on everybody, how would they resell the properties? I’ve got a feeling that these institutions will be more than happy to work out some plan on most mortgages. I hope someone in the government is doing some thinking on this problem. OK,…. I know, I’m an optimist.’
IMO if there are high absentee rates in most businesses and/or businesses are forced to shut down for a period of time during a pandemic- everyone will pretty much be in the same boat financially except for those already independantly wealthy. Banks, utilities and businesses will all have to understand a temporary or even a prolonged inability to pay your bills. If you don’t actually have the money they can’t force you to pay- they can take your home and other assets and you’d have to claim bankruptcy- yes. You and everybody else who had been unemployed for some time. If a high enough percentage of the population had to declare bankruptcy the economy could very well collapse. Alot of people are carrying alot of debt, most of the ones that I know anyway. Car loans, mortages, student loans and that’s not even counting the credit cards. If arrangements of some kind weren’t being made and too many people were financially ruined we could be looking at another ‘Great Depression’ post pandemic. Not that I’m an expert or anything, not at all- but that’s what I think.
Personally, if I can keep my family safe and we all make it in one piece that’s all I really care about anyway. If we end up starting out from scratch again, well we’ve done it before and so be it.
From Fla_Medic on PFP
This is a good summary of likely events for a 1918 type pandemic. All the government intervention in the world won’t stop the laws of economics and “cause and effect”. IMHO. ___________________________________________________________
Not for the faint of heart
In my post-paramedic career, I spent 10 years working in commercial real estate/construction, and my primary focus was obtaining the financing for multi million dollar projects. High rise office buildings, Condos, and even golf course communities. I also hold a mortgage brokers’ license, and have worked for a Fortune 500 homebuilder. So, I have a little expertise in how things work in the financial world.
The question has been asked, what happens if, during a pandemic, I am forced to shelter in place, and cannot work for months, and am unable to pay my mortgage? Will my family and I be put out on the street? What about those who rent? Will they be evicted?
It is a legitimate concern.
Much, of course, depends upon the severity and duration of a pandemic. A 1957 or 1968 style pandemic will have little effect on the economy. A downtick in GNP, some bankruptcies, but nothing devastating. A 1918 style scenario would be far more disruptive. And if it’s worse . . .
Right now, were the H5N1 virus to go pandemic, the fear is 1918 could be a walk in the park in comparison. The CFR for avian flu is greater than 50%. Even assuming an 80% reduction in that fatality rate would be devastating. But for the sake of our sanity, let us assume a 30% attack rate, and a 10% mortality rate. And, since we have no other major pandemic models to guide us, let’s assume 3 waves over 18 months, as we saw in 1918.
These assumptions would generate the following numbers. Roughly 10% of the country would be affected in each wave. That’s 30 million people. And of those, 3 million would die. The waves would last 3 months, and then there would be 3 or 4 months of relative quiescence between them. People would still be stricken, of course, but in far lower numbers than during each wave.
All totaled, we could see 90 million Americans sickened, and 9 million could die. A significant number of the survivors would likely have long lasting, and debilitating after effects. How many? We don’t know. But let’s assume 10% become disabled, and are unable to return to work.
Granted, this is not a worst-case scenario. But we don’t need a worst-case scenario to speculate on what happens next. And what follows is speculation. We’ve never dealt with this kind of economic blow, and would be entering uncharted territory.
Our economic engine, as robust as it is, runs on cash flow. Stop that cash flow, and nasty things begin to happen quickly. Cash flow is generated by the production and sale of goods, and by the wages earned and spent by the populace. Additionally, the government it dependent upon taxes collected from this cash flow to fund its operations.
The assumption is that during a pandemic wave, 40% to 50% of employees will be absent. Some will be ill, others will be taking care of stricken family members, and others will simply refuse to expose themselves, and by proxy, their families to the virus. That number is probably low. It doesn’t take into account the number of businesses that will close their doors during a pandemic. Movie houses, restaurants, sports venues, the list is extensive. And it assumes that most people, who can work, will work.
But then, all assumptions are lies.
When I worked for a fortune 500 builder, my job was to prepare pro-formas, essentially spreadsheets, that showed the likely expenses, and returns, when building high-rise office buildings. The owners would give me their numbers, and I’d plug them in. Turns out they made 3 sets of pro-formas. One for the bank, one for investment partners, and one that was kept in-house. The bank pro-forma was the most optimistic. Fanciful occupancy rates, exorbitant rental rates, and the construction costs were downplayed. The second one was a little more realistic, but not by much. And the third, only slightly optimistic. Almost, but not quite, realistic.
Even a break-even project, one where no profit was foreseen, was worth building, simply because another project brought in cash flow. As long as there was another project in the wings, the corporate ship stayed afloat.
This is how big business really works.
But I digress.
Every business operates on assumptions. Car dealerships bring in inventory based on anticipated sales. Homebuilders build spec houses based on their projected sales rates six months in the future. Even the corner nail salon owner makes assumptions as to how many manicures a day they must provide, in order to cover wages and overhead. And nearly all business ventures borrow money, in order to fund their operations. Auto dealers don’t pay for those cars, they floorplan them, and pay the interest until the cars sell. Homebuilders get construction loans, and the funds are released as the building progresses. And that nail salon probably had to float a loan to remodel their storefront. Debt is a way of life, made workable by easy credit.
In many ways, businesses make the same assumptions we all do. We work, and we budget based on what we can afford, based on our bringing in a paycheck every week. We base our mortgage payments, rent payments, car payments, and credit card bills on the continuation of that income. The age of saving, and paying cash for the things we want, is long gone. Want a new house? Sign a 30 (or now 50) year mortgage. Fancy that 42 inch LCD TV? Put it on the Visa card. As long as you can make the payments, life is good.
Americans average roughly $10,000 in credit card debt, and most make minimum monthly payments. And mortgages today routinely run into the hundreds of thousands of dollars. And everything works, more or less, as long as nothing upsets the apple cart.
Now, comes a pandemic, and a serious monkey wrench gets thrown into the works.
The auto dealer will find that his inventory simply sits in the lot, because no one is in the mood to buy a new car, and those that might like to, are out of work, or fear they will soon be out of work. But the dealership’s interest payments continue unabated. The house builder, with dozens of spec homes in various stages of construction, ceases construction, and their bank draws stop, but the interest keeps accumulating. Employees are laid off, and even those who might wish to work, find their income has evaporated. But their credit card bills, mortgage, or rent payments go on.
The scene is repeated in millions of homes, and businesses across the country and around the globe. Restaurants close. Sports events are canceled. Movie theatres are locked up. And most people stay home, fearing the virus more than they fear bankruptcy.
Government revenues fall drop like a stone. With half of the workforce out, and most discretionary spending sharply curtailed, the government’s income plummets. And yet, their spending, including servicing the debt, go on.
There will be calls, of course, for the government to do something. A moratorium on evictions for non-payment of rent, or mortgages. And I suspect some will be tempted to impose such a law. For a short-term crisis, it might even work.
But no legislation, no matter how well intended, can repeal the law of economics. Forbearance by creditors may seem like a great idea, and is bound to be popular among those who owe money, but it won’t solve the problem.
The bank that holds your mortgage didn’t lend you its money, it lent you its depositor’s money. Or money from institutional investors, like insurance companies, 401K’s, and large corporations. Banks rarely have more than 7% of their deposits on hand in cash assets. The rest is loaned out. If you default on your mortgage, they will find themselves unable to borrow money from the FED to satisfy requests for withdrawals.
What happens next is totally predictable. Loans, both commercial and residential, will go into default. Depositors, fearing for the stability of their bank, will demand their money. It won’t be pretty. And the FDIC insurance fund has only 1.3% in reserve to cover deposits. Meaning they can only pay off the first 1.3% of defaults, or pay out a maximum of $1300 on a hundred thousand dollar deposit. After that, the Fed’s cupboard is bare.
And it may not matter if you have assets in the bank, and could pay your mortgage out of them, if those funds are unavailable.
For the beleaguered mortgage owner, this might provide some breathing room. Banks that fail won’t be able to evict delinquent payers, at least not in the short run. But failed banks will eventually go into receivership, and attempts will be made to recover their losses.
Worse, the fuel for the economic engine, credit, will have dried up. The stock market will likely have crashed. Investment firms will be leery of lending money in a high-risk environment, particularly while the carnage is ongoing. When the first wave is over, many businesses will find they have no available credit, and even if they want to, may find it impossible to restart operations. Ergo, many will find their jobs, and businesses gone. And the cascade deepens.
No matter what, the expectation will be that a second, and perhaps a third, or even forth wave will be coming. The window of opportunity to restart things could be only a matter of weeks or months. And the consumer market, for items like autos and new houses, will have been destroyed. Builders will find they are unable to complete the houses under construction, and probably wouldn’t want to, as long as their existing inventory sits unsold. Non-essential businesses, like the nail salon, will simply vanish. We could wait months, expecting the next wave, and the economic crisis will only grow worse.
The cascade effects are almost unthinkable. And the Federal government, already mired in debt, will see little or no tax income. Their ability to help jumpstart the economy will be nil.
With 3 million dead, and another 3 million disabled, from the first wave, vital skilled workers will have been lost. Insurance companies, where many have invested their 401K’s, will be devastated. Banks will be closed, or struggling to merge, leaving their accounts in disarray. And the economy in ruins.
The second and third waves, if they come, will only add nails to the coffin. If the pandemic lasts 18 months, as in 1918, we won’t know with certainty that it’s over for at least 2 years.
And what happens here, in the United States, will be repeated in every country around the world. While the economies of 3rd world countries may not be as badly affected, trade, and foreign aid to these nations will evaporate.
We learned in the 1930’s how difficult it is to restart an economy in a depression. It took 10 years, and a world war to prime the pump. And that was caused by a stock market crash, and did not have the accompanying death and destruction that a pandemic would bring. During the height of the Great Depression, the unemployment rate was 25%, but debt was far lower. Restarting the economy, when all economies are equally devastated, will require enormous luck and a Herculean effort.
This nightmare scenario is what our government, and governments around the world, fears most. A loss of millions of lives would be tragic, but it would pale in comparison to the loss of our global economy. Governments could, and likely would, fall. Social systems disintegrate. And the rebuilding could take decades.
Property values will plummet. A decrease in population equals a decrease in demand. And fire sales will occur as investors try to dump properties for pennies on the dollar in a futile attempt to keep alive thru cash flow. Office buildings will sit empty. Condos and houses will sit unfinished, and disintegrating from neglect.
There will be some who will say `good riddance’, the system in place today is both flawed and unfair. But what takes its place could be far worse. A busted global economy would destroy our ability to produce vaccines, or provide health care, or a safety net for those in dire need. Life, as we know it, in a consumer driven society, will be ended. It would leave a hard scrabble life for the survivors, for years to come.
What then can be done?
I expect the federal government will try to keep as many people working during a pandemic as possible, trading infections and deaths, for keeping the economy stumbling along. To do that, they will have to `sell’ the pandemic as being less lethal than it really is, and will use propaganda, and incentives, to get us to go out into the fray. It would be a long shot, but it might work.
As heartless, and cruel as that sounds, it may be the only practical solution. For as horrible as a higher death toll might be, the losses in human life in a collapsed society could be far higher. This is the terrible dilemma facing governments around the world. Sacrifice the few, to save the many.
It would not be an entirely altruistic decision, of course. Those in power covet remaining in power. The rich will try to remain rich. And this course of action would help promote both agendas. But it may still be the right thing to do. Even if our leader’s motives aren’t pure.
But personally, I doubt it would work. Sure, I expect they will try it. But people will know, despite the `happy news’ reports, if the pandemic is ravaging their communities. And few will be willing to be virus fodder.
Business as usual’ will fail. And with that, goes the economy. And then, in all likelihood, society.
Pessimistic? Yes, very. But realistic, I fear. Try as I might, I’ve been unable to find any good reason to believe that the economy could survive a long-term severe pandemic intact.
I would love to be proven wrong. That there is some miracle in the pockets of our leaders that would lead us out of the abyss. But I hope, for all of our sakes, we are never put to this test.
Can this go in the main wiki side somewhere?
I was a mortgage officer/credit analyst/business owner from 1985 until last week. One thing I know; No positive cash flow, no business. I can’t think of a single business, including the Governments that can withstand a long term 20–50% reduction receivables, never mind the rest of the issues that the Pandemic will bring.
Governments can print more money, but that creates hyper-inflation and will not work in the long term at the level being considered in a major Pandemic. IMHO. Paper currency is only as useful as the amount of confidence placed in it by the people.
I suppose it depends on if the trains can even run. With our world’s just-in-time supply system we are all so dependent on, keeping supplies moving, if they can, will be important.
Just an example though. The other night I was called to transport a crew to their train. One of the crew members (a man in his 60s) was there at the depot waiting, the other (a man in his 30s) had called in sick (no surprise to me as he was obviously not well several days earlier when I had driven them). Since no other local person could be found to take the sick man’s place, their trip (and mine) was busted and assigned to a train crew and a driver from the hub at the other end of the line (we are at the mid point of the line). The supplies got where they needed to go because the railroad was able to find an available crew (we have drivers all over so they got a driver from that end as well). Still, during a pandemic, what is going to happen when thousands of people are sick all over and no crews can be found? So many of these guys out there running our nations trains are in the 18–40s age range that there many be some serious supply shortages.
So will I work? My job may be deemed “essential” by the government during a pandemic. The only way I may be able to get out of working is to quit or be ill myself. Neither is a pleasant option. Lately I have begun handing out tissue packets, small bottles of hand gel, throat lozenges and mints, and reminders that it is cold and flu season. Some of the men are catching on and trying to take better care of themselves. Many are thankful of the small bottles of hand gel to keep in their bags and are starting to use it more regularly. Those with the coughs and itchy throats really appreciate the throat lozenges and mints to settle those irritated throats. Often they stop coughing pretty quickly and fall asleep until we get to their destination. I was concerned at first they all might think me a nutty germ-o-phob, but they are seeming to realize I am just being sensible by saying that by looking out for them I am helping both of us. They understand it when I tell them I simply cannot afford to get sick and if I get too sick I can’t work.
So will I work… I guess we will cross that bridge when we come to it.
I’ll work until they shut down the schools.
ho,esteader at 8:28
What about if businesses have some prior preparation?
I mean, your comment could be true about most households as well — very few average households could manage to stay “in business” i.e feed themselves, pay their bills — without work (income) for one month. BUT with advance notice and by prepping, they could manage for as long as they had prepared for, right?
Couldn’t the same be true for businesses? If they lay in supplies, cut down to bare esentials, etc., they could suvive with no cash flow for a little bit longer than otherwise?
(I suppose this post belongs more on the Economic Thread but that one scares me….
I have saved and scrimped for a year. I bought preps for my sons family [7 souls] I have enough cash on hand to pay electric and property taxes for two years with some cash left over. Our house is paid for. Im going to my daughters, shes preped to the hilt. So no I wont be working. After everthing is over. I will be living like the Amish. They seem real happy. I did the mother earth thing in the 70s Im going to dust off the goat milking cheese making hog raising hide tanning, soap making, grow your own skills. I will still have my family. We will do just fine.
ACM at 20:46
Some businesses might be able to do what you suggest but I don’t think enough would even if they could to make a difference.
Take shopping malls. I have to think they will be closed down like schools, churches etc. . .That is a lot of employees and payroll nationwide. Think about nail salons, hair dressers, lawncare, the building trades, car dealers, Walmart after the shelves are bare and the stores have been looted, and on and on. The ripple effect will be too great.
Janetn: Don’t you dare mention hog raising to my wife! She has been militating big time to get some pigs! I believe she has the cheese making supplies ordered :) I love cheese.
Homesteader,any moratorium on debt payments would also apply to creditors and employers own obligations.You cannot have a two tier system in which the bulk of the population is required to SIP without reqirements also being imposed on business.Sacrifice in an emergency is imposed on all and cannot be an excuse by business for massive looting of mandatorily unemployed workers assets.Do you really think the business system would survive the reaction to that?
Reconscout,
I don’t see where I implied that “business” would loot unemployed workers assets. My post at 21:49 was meant to express my opinion that a lot of businesses aren’t going to be able to maintain operations and pay employees. No more than that.
Another thing to keep in mind that many insurance companies have put riders for terrorism, rioting, and looting for business insurance (I noticed that change when we had to renew our business insurance - I guess it was due to Katrina and what happened in New Orleans). If businesses are looted, they may not be able to recover because insurance companies will refuse to cover the costs of replacing the items that were stolen/damaged.
Homesteader — I have no business background so please excuse me if I do not use correct terminology!
The reason, say, a nail salon can’t stay in business if it loses its income for, say, 3 months is — they can’t pay their rent (so the space is rented to someone else) and they can’t pay their employees (so the employees leave) and meanwhile, the owners have to pay their interest on their borrowed money for start up costs or to expand, and they also owe money for the last order of nail care products, so they can’t order new ones to get started again. The owners need money to pay their own rent or mortgage, and to eat and pay their bills, so they have to sell the business or go bankrupt if they are out of customers for any length of time.
But if every business in the mall, and every nail salon, is similarly affected, then they wouldn’t be immediately kicked out of the mall for failure to pay rent (who else would you rent it to?) and their employees would come back (maybe) or just the owners would work, and if they had prior planning, perhaps they could have saved enough to pay their debt an extra month ahead, and perhaps they could have stocked up on 3 months worth of nail care supplies to get them through the rough times ahead.
I agree — it’s a long shot that many businesses could do this, just as it is a long shot that many families could. But I think this business planning is the focus of at least some pandemic seminars, maybe for the larger companies. I’m sure a lot of their solutions though will revolve around letting workers go.
I don’t know — I can’t see a nail salon staying in business during a pandemic year anyhow, so it’s not a good choice. Most malls don’t survive economic downturns anyhow — they don’t really offer much that people really NEED, that’s the biggest problem.
I agree that there will be great long term economic disruption; I’m just wondering if it has to be a complete disaster, maybe with some prior planning at least some companies can make it. Maybe with prior planning, instead of a complete collapse we could have a depression but one we get out of more quickly that the Big Depression.
Homesteader,I don`t think you implied that;I simply don`t think you realize the implications.If the general population is forced to pay creditors while at the same time being manditorily unemployed by a SIP policy imposed on the whole society then a vast wealth transfer to a very few people will occur.Such a thing would amount to the greatest plunder in history.This is obvious and is unsustainable socially,economically or politically.I don`t think business will be mad enough to insist on this-or at least I hope not.
ACM:
I hope for the best as well.
Maybe the car dealership would be a better example. No one comes and buys a car, (keep in mind this isn’t one dealership but pretty much all dealerships) No sales so no positive cash flow. Employees get laid off. No payments to the bank who floor planned the dealership, no applications for car loans, no new orders for cars from Detroit, Japan, Germany and Korea. No orders for car parts from the car makers to the myriad shops that provide all the parts and widgets, no shipping of parts via ship or truck by the shipping companies. No orders for steel from the steel plants. Most of those employees who aren’t sick or caring for the sick get laid off, no credit card payments, car payments, no purchases for anything that isn’t absolutely essential to life and health, manufacturers of non-essential items get no orders, lay off workers, shut down plants and so on and so on. Sooner rather than later the writing will be on the wall for the banking system; customers withdrawing all their cash and no payments being received on the loans out on the street, so again the cash flow is all negative and they either close the doors voluntarily or by government order. The result is the same. . . a much reduced banking system world wide. . .stock market tanks as many companies suspend operation or declare bankruptcy. And on and on and on. We are all connected and the connections are strands of world wide JIT inventory.
Hope it is only the mildest of pandemics.
I think what’s lurking in my head is that — our economy can probably survive a pandemic IF we have prior planning AND it is short. (Even if it is not mild.)
But it’s the long drawnout scenario that will be the real problem.
What you are describing is a recession, right? The cascasding effects of people out of work. They don’t get paid so they don’t buy anything; so more people are out of work.
People keep blaming JIT but it seems our (global) interconnectedness is just as much if not more to blame. If every business in our country had a 4 week stockpile of goods in their back room, it doesn’t sound like that would help anything in the long run. If people are out of work, they couldn’t afford to buy all those stockpiled goods anyhow.
We all hope so homesteader!It is worth noting that the traditional stock and commodity exchage floor would finally disappear-too many people packed together.The main alternative,internet trading ,may survive but only if the net stays up.
Reconscout,
You bring up a good point about the internet. With so many companys pandemic planning including increased telecommuting, does anyone “in the know” have an estimate about how long the internet would stay up? Assuming the power grid stays up of course.
Sniffles - there was just an article this week (I think) on new insurance riders to be placed on policies to deny claims due to pandemic problems. Watch your policy notices.
Thankfully I am now retired, and DW is very close and could walk out anytime, which is exactly what she will do if Phase V hits anywhere, announced or not. No job is worth dying for. Federal Government has a plan to call back retired workers if the Pandemic attrition is high. No Way. Reading Doc Woodson’s latest book note that he recommends getting not only some cash, but also some 1/10 ounce Gold Eagles and some Silver Eagles also. I have a modest Federal pension, DW a small SS check. Not much worried about not being able to pay bills even without any income. We will all be in the same boat, a sinking one at that. Now have given up trying to persuade or educate others. Very few listened. Tired of people who think I am insane, that tell me it will not happen. TPTB who I have contacted barely have a clue and think they have a plan. When told nicely that the plan is not worth the paper it is printed on they just talked over me. Certainly hope IT doesn’t, but if IT does they can all go to that very warm spot..
Sadly, the points some of you have made pretty much seal the deal. There will not be a mandatory SIP because of the buisness problems just described. Remember each city will be hit differently some mild, some severe—in some areas commerce will be like normal. By the time JIT goes down everyone—nearly everyone will have been exposed,and the the cards will fall where they will. Being in the .5% who follow Tom’s freak, the majority here might make it because of early warning.
I’m going to work and I’m going with a camera (also have a hidden lens just in case there’s a special squad designated to monitor the HCW’s). I will say this though, the moment someone points a loaded weapon at me, I’m recording it, and then I’m calling the uncle who will get me out of the hellhole. The last stand for health care must be recorded for the Pandemic museum.
Sniffles - here is the link for the insurance info. http://tinyurl.com/y8p95w
Association Files to Exclude ‘Virus or Bacteria’ Related Diseases November 7, 2006
The American Association of Insurance Services (AAIS) is filing a new “virus or bacteria” exclusion designed to exclude losses that arise from organisms that can cause disease.
Advertisement The exclusion, now being filed countrywide under AAIS commercial lines and farm insurance programs, was developed in light of the possibility of a pandemic of avian flu. However, it addresses contamination from any disease-causing agent, including, but not limited to, SARS, rotavirus, listeria, legionella, and anthrax.
Specifically, the endorsement states that coverage is excluded for loss, cost, or expense caused by, resulting from, or relating to any virus, bacterium, or other microorganism that causes or is capable of causing disease, illness, or physical distress.
In addition, the exclusion explicitly applies to any loss, cost or expense arising from denial of access to property because of any virus, bacterium, or other microorganism.
closed for speed -restart thread if needed