At the start of the week, having been self-isolating for a week, as part of the at-risk 20%, we found that our hoard of supplies, built up to be able to survive a period of self-isolation, was already running out of some basic items. We had always intended to be able to top up supplies, periodically, via online shopping. But, Sainsbury's had no delivery slots available for three weeks, Tesco only had a slot available next Wednesday, other supermarkets were the same. We booked a slot with Tesco for next Wednesday. But, then, the fact that supply chains are breaking down, as a result of supply being reduced, as workers follow government advice and stay home, also became obvious. Limits on what could be bought were imposed. For a household of three adults, all self-isolating, the limits are pretty ridiculous, especially if its going to be impossible to guarantee another delivery for another two or three weeks. Yet, even placing an order within those limits has seen, in subsequent days, a withdrawal of several of the ordered items as now being unavailable, illustrating the degree to which the supply chain is breaking down, and production and supply of necessary items is ceasing. We are heading for a crisis of production and supply.
To give an example, dog kibble has become unavailable, and for a household of three adults our order of 6 bananas, has been reduced to just three, which, on the current basis, would have to last us for 2-3 weeks at least, that is 1/3 of a banana per week each! What we have is an introduction of wartime levels of rationing, without the actual issuing of ration cards. It is an inevitable consequence of production being closed down by government diktat, and as a result of workers staying away from work out of fear engendered by moral panic.
Enhancing the moral panic, the government, yesterday, gave into panic over reason, and closed schools, which, next week, will see tens of thousands of workers having to stay home to look after their kids. That will ratchet down production and necessary supplies even further. The inevitable consequence will be that prices will rise, encouraging yet further panic buying and hoarding, which will cause supplies to disappear even faster, and prices to continue an inexorable rise.
On top of that, the government has, today, increased the level of panic. It has now told all pubs, restaurants, theatres, nightclubs, leisure centres etc. to close down. It is nonsensical. The latest figures reported by Sky News, of COVID19 deaths in the last 24 hours showed that they were all of people aged between 49-96, and all of whom had underlying medical conditions. None of them were from the 80% of the population aged under 60, and without any underlying medical conditions, which the science shows are not at any risk of serious illness from catching the virus. Yet, it is amongst this group that would be expected to be found those most likely to be attending the pubs, restaurants and so on that the government is closing down. Moreover, what it shows is that whilst it is trying to get this 80% of the population to cease all normal life, unnecessarily, by self isolation, it has not managed to get the 20%, who actually are at risk, to self-isolate, and has not done anything like what was necessary to enable them to do so. On the contrary, the measures the government has taken, by artificially cratering the economy, on an unprecedented scale, makes it far harder for the 20% to isolate, as well as putting the entire population at risk from all of the evils that will attend a complete economic and social collapse. The idiotic policy of Brexit would have been bad enough, but this is even worse.
The government's decision to close bars etc. is not only irrational, but, as the press conference demonstrated, its not consistent either. The government's stated aim of closing bars was to legally enforce social distancing, by preventing people coming together in such places. But, the PM and Chancellor were visibly stunned when the obvious question was then put to them, as to whether shops and other such establishments were also then going to be ordered to close. After all, if you go to the hairdresser, the nail bar, or to the local newsagent, sweetshop, Greggs, or to your local supermarket, you will be in just the same kind of proximity and degree of social contact with others as you would in a pub or restaurant! In small shops that is particularly the case. But, in a supermarket, it only takes someone to be spending a few minutes browsing in an aisle over what butter or cheese to buy, assuming there is any stock to buy, for a build up of people to gather, and unless you are very quick at shopping, you are going to be in the shop for some considerable time, in contact with other shoppers, as well as shopworkers, out of whom, on average its almost certain that one of them will be a carrier of the virus. So, if the government policy was rational it would also close down shops, supermarkets, hairdressers and so on too.
But, the policy is also irrational because, all of those young people that have continued to gather socially, will now just gather in the way people did in the era of Prohibition. In other words, they will buy booze from the supermarket, or Bargain Booze, and simply come together in people's houses for a shebeen. In the same way that in the 1980's house parties were quickly organised in warehouses and other such venues, so they can be expected to return, in the same way that Prohibition led to the creation of the Speakeasy.
Government policy is being driven by moral panic, populism and irrational behaviour, and necessarily leads to bad policy that is irrational and contradictory. The economic consequences of it are even more dire, which I will look at tomorrow.
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