Saving the economy and human lives will never be priced

Andrea GalloWhile discussing the effectiveness of the masks worn alone outdoors and whether jogging spreads the infection or not, politicians negotiate for too long on coronabonds, take unnecessary crusades against the ESM and give random dates and strategies for the "Phase 2", the two key factors to counteract the emergency are forgotten: rapidity and clarity of intervention.

The first - despite the call of Mario Draghi - appears already faded. Moreover, the invitation of the former President of the ECB has not been fully understood. The speed of execution of debt-financed intervention, with the issue of state / European securities to cover public expenditure, is indeed necessary to immediately give support to the population affected by the emergency, but above all to prevent the infliction of a deadly blow to the economy, and not only to the European one.

Public financial support for consumption and investment can be guaranteed as long as there is someone - the central banks in the first and last instance - who will buy the debt securities issued by the States, by the EU (ESM or coronabond) and by the rest of the world. But central banks know well that

  • the unlimited use of monetary policy is not possible in the long term
  • it is not without serious consequences
  • it could eventually lead to the collapse of the world economy because globalization is no longer just an abstract term.

For most of the citizens, but above all for some politicians who choose their battles badly, it is perhaps not clear that if central banks buy state debt securities with no limits, eventually the currency - be it the Euro, US dollar, Yen, etc. - it will no longer have value.

So Draghi was once again concise and clear in his message, and who has not fully understood it is only because of a lack of economic-monetary culture.

The second factor, clarity of intervention, is the foundation of the trust that citizens, bodies and companies use to guide their choices for consumption and investment, and this is a principle studied in the basic macroeconomics manuals. Without clear and effective intervention this trust is undermined and expectations lead to consumption reduction and to postpone investment.

Therefore, it's now up to politicians of any flag and governments not to be outdone by the former ECB president, ending sterile controversies, speeding up negotiations, finding solutions that combine the health emergency with the economic one, communicating and implementing them clearly and unambiguously, without obstacles to the population.

The representatives of business associations are saying that without an immediate reopening it will be a disaster. There are those who rail against the scientific-health community because it does not realize the economic consequences of the prolonged lockdown. Opinionists and news directors write that statesmen are needed to ensure emergency management.

An eminent media, the Economist, wonders about the sustainability of costs to save the human lives affected by the virus: "A grim calculus: Covid-19 presents stark choices between life, death and the economy".

Enough please, it's time to say right away where, when, how it is possible to reopen, with criteria established by the WHO that apply to all geographical areas, countries, regions, metropolitan areas, municipalities, municipalities and even the parishes, to shut up anyone who wants to breathe nonsense, with precise and unequivocal behavior that the population must follow.

A recovery, albeit gradual, of the productive activities will perhaps allow the economy to exit from intensive care. It is worth remembering that an economic collapse will probably result in millions of deaths, not thousands of Coronavirus. An economy that dies and will bring death doesn't permit any calculus and has no price, ever.