Thread by @x2IndSpeculator

The two of the best economic blogs I've been reading for years are written by brilliant, independent individuals: calculatedriskblog.com by Bill McBride @calculatedrisk, and bonddad.blogspot.com by the anonymous blogger called New Deal Democrat.

The recent post by NDD about #SARSCoV2 illustrates the prevalent reasoning that led to the current policy blind alley.
"A year ago I thought that between nearly universal vaccinations & an increasing percentage of the population already infected...

the virus would wane into a BACKGROUND NUISANCE BY NOW.
No more. I am now thoroughly convinced that there will be an UNENDING SERIES of VARIANTS that will create CONTINUING WAVES of new infections and, increasingly importantly, RE-infections."

That's what the vast majority thought. By drawing parallels with the Spanish Flu, they believed the pandemic would dissipate after two years when everybody is immunized through vaccinations and/or (re)infections. From the beginning, the fight was always meant to be temporary.

The idea was to pump the maximum fiscal & monetary stimulus to weather those two years (plus pacify the population) & prepare our economies to skyrocket out of the pandemic into the 2nd Roaring '20s. The idea depended on the return to normalcy. What a spectacular miscalculation!

Pushing the pedal to the metal while the car (economy) was still running on three wheels led to overheating of the engine & circling in vain. This added to shortages & supply chain disruptions, when there simply aren't enough healthy willing people to support the overheating.

Essential workers quitting or disabled/dead & non-essential refusing to return to the office. This car won't repair itself: investments are needed. While waves continue & people keep getting reinfected, labor shortages + low productivity will erode confidence & sustain inflation.

We now have negative real earnings while the pandemic treasure trove was spent, speculated or defrauded away, so money is simply wasted for nothing, and our FUTURE POLICY OPTIONS DEPLETED & BLOCKED BY INFLATION, while, like in Groundhog Day, we seem to be stuck in the same place.

Acting according to what was "promised" to them, policymakers' patience and money has run out, so they're now brutally (& stupidly) dismantling all the pandemic tools: vaccinations, testing, surveillance, etc. The pandemic MUST end, no matter the reality.

That's why, facing the 7th wave in the US, everybody is now suddenly surprised (perplexed!) that the game is not over, reinfections are not rare, waves continue indefinitely, the decoupling from severe is not complete, and long-term sequelae from #COVID keeps adding up.

How did we end up here? The FED, politicians, advisors & analysts all listened to the wrong, rosy advice presented unscientifically as a "common knowledge" by the most clamorous "experts" of the scientific community that they cherrypicked to listen to themselves.

The problem is those experts were either too dogmatic to understand all the nuances of the long-term #SARS2-problem complexity (massive reinfections, chronic disease, etc.) or were, for their own benefit, feeding the policymakers what they wanted to hear: "it will all go away".

Conclusions:
Wrong predictions surprise into confusion!
Bad advice leads to bad policy!
Now we have to face the consequences.