This is not a war. One can see why many people are using the war comparison: many will lose loved ones, everyone's lives are changing perforce, the disruption is enormous, it will take solidarity to get through it. But I fear the economics might be even worse...
During the war the “real economy” never shut down like this. The Blitz haunted London and the ports but in much of the country economic life went on almost as normal. There were blackouts but not lockdowns. There was disruption but not so prevalent as we're seeing now...
BTW it's also much, much worse than the financial crisis. Unlike banks, pubs/restaurants don’t have capital buffers, big or small. They can't troop into Downing st or call BoE governor before firing staff. UK small businesses are the lifeblood of the economy & many are imploding
It's not a war: we didn't begin at a war footing. Contrary to conventional wisdom Spitfires weren't assembled by keen civilians in their gardens during Blitz. UK rearmed many years before 1939. In this case it's a standing start on hospital ventilators. Tho not without hope 👇
This is not a war. Which is also clearly good news. We are not fighting each other, for one thing, though the deeper the economic turmoil the more likely it is that happens. And unlike a war this could 🤞 last months rather than years. When it's over our economies shd bounce back
But getting there will involve the most almighty fiscal and monetary stimulus in history. More generous even than during a war. In WW2 the govt splurged mostly on arms. This time it'll have to splurge not just on the NHS but on keeping vast swathes of the economy on life support.
Loans are not good enough. Short-term tax holidays are not good enough. In the end the government may have to become the insurer of last resort for the entire economy. Maybe even the customer of last resort for companies whose custom has disappeared. This is unprecedented
Bear all this in mind when you hear about measures from @RishiSunak today or the @bankofengland yday. They are doing unprecedented things because this is unlike anything we've ever had to deal with. Alongside the terrible disease, the economy is having a heart attack
My column in @thetimes this week is about how we confront an economic crisis that is bigger than a war, bigger than anything else we have confronted in a lifetime thetimes.co.uk/article/9e4ef1…
