Vaccines, Covid and the Economy

The US has rarely been as polarized as it has become in the last few years. It seems that every issue takes on political overtones and that has certainly been the case with the pandemic. In truth, this issue has polarized every nation on the planet as it triggered the most dramatic government intervention into the daily life of its citizens since WWII. The threat was unlike anything seen before and there was little coordinated action. The assumption was that a few weeks of shutdown would end the threat (remember the assertions of a May 2020 rebound?) That became two years of restrictions and mandates and a whole series of economic challenges and dislocations.

The 2020 recession was one created by edict–the forced shutdown of nearly the entire service sector. Millions of jobs lost, tens of thousands of businesses shut down. Still the disease killed and sickened millions. Faith in the government wavered and this bred suspicion of any other move made to deal with the pandemic. The messages from the government were rarely consistent and often contradictory.  In 2020 the polls suggested there was over 90% support for vaccines but by the time they were actually developed that support had tumbled to less than 60%. The frustration over the shutdown and the fact this tactic didn’t succeed in thwarting Covid created a suspicious and reluctant public.

The evidence is overwhelming when it comes to the effectiveness of the vaccine. Those that have the protection are not the ones showing up in the intensive care unit and dying. The vaccine has allowed some measure of normal business to resume and the economy has been growing–perhaps too fast given the supply chain crisis and the surge in inflation. The problem now is that Covid protocols and the continued impact on the population continues to inhibit a resumption of normal patterns. There are still too many people absent from work, too many people unwilling or unable to return to work (women who are required to stay home with children as schools go virtual). There are still bottlenecks due to Covid restrictions. Expansion of vaccination to the “herd immunity” level would allow the economy to fully recover, but that means at least 85% vaccination rates and the US has been stuck at about 65% for the last several months.

Those that refuse the vaccination are motivated by a lot of things–fear of the vaccine itself, a sense they don’t have exposure in the community they live in and some have made opposition to the vaccine a political stance. The likelihood of a change of mind is very remote and that means that Covid will remain a major drag on the economy through the remainder of this year and likely for many years to come. The US is not the only nation facing this dilemma and thus the pace of global economic growth has been stunted as well.