Tuesday, July 7, 2026

There is no Covid trade-off between health and the economy – Bill Mitchell – MMT


With yesterday’s detailed CPI analysis, I’ve moved to today’s news/music blog posts that usually appear on Wednesday. This morning I read the latest release from the UK – Institute for Public PolicyHealth and Prosperity: Introducing the Health and Prosperity Council (Published 27 April 2022) – It provides a sobering (to say the least) evidence base on how the pandemic is affecting the UK’s health system and labour market. As more evidence emerges from the experience of the past 2.4 years, I wonder when those who are asking countries to learn to live with the virus — essentially denying its existence — will reflect on the folly of their laissez-faire stance.

The IPPR report concluded that “Covid-19 is the worst health shock in modern history”.

The analysis documents the impact of Covid on deaths, illness, “recording waitlists”, increased poverty, and “significant increases in unmet physical and mental health needs”.

I know one of the claims of those who oppose lockdowns is that they exacerbate mental illness.

But the solution to this problem is not to get everyone infected with the new coronavirus. Instead, it requires a well-thought-out health response, which will require a significant increase in NHS funding.

It’s interesting to recall that as early as 2020, economists have come forward claiming that there is a trade-off between protecting lives and health outcomes and economic growth.

Some have gone further, using so-called “value-of-life” arithmetic to claim that it was unwise for governments to take prudent decisions early in the pandemic, when the economic damage greatly outweighed the cost of the loss of life, especially since those more It is possible that those who die are older and no longer work and produce.

Yes, unfortunately, that’s what mainstream economists think.

I’ve written about these debates in these blog posts:

1. The coronavirus crisis – a special kind of shock – part 1 (March 10, 2020).

2. The coronavirus crisis – a special kind of shock – part 2 (March 11, 2020).

The Public Policy Institute report found:

…The size of the recession is related to Covid-19 mortality in 2020.

It is relatively clear that before vaccines gave us some imperfect protection, the countries with the highest death rates were also the countries with the highest GDP losses.

For some countries, such as the UK, the Covid-19 pandemic “caused the biggest drop in economic growth in more than 300 years”.

The IPPR report found:

… the UK labour market has lost more than a million workers compared to pre-pandemic trends – around 400,000 labour market exits combined with long-term illness and Covid-19. This means that in 2022 alone, economic output will fall by £8bn.

When numbers like this come in, the “it’s just the flu” crowd is in denial.

When we focus on shipping and trucking delays – and I notice that the West is now targeting the Chinese government’s attempts to limit the spread of Omicron as a goal of deprivation of liberty etc – we ignore that in the UK alone almost half a million workers have been marginalised by the disease change and ongoing health problems caused by Covid.

The Chinese government is wise in its efforts to limit the spread of the disease.

They seem to have understood the consequences of “letting it go”.

The study was published in The Lancet (April 16, 2022) – Estimating excess mortality due to the COVID-19 pandemic: a systematic analysis of COVID-19-related mortality in 2020-21 – Again leveraging the improved and more comprehensive datasets that become available as we move through the pandemic.

It aims to “estimate excess mortality rates for the COVID-19 pandemic in 191 countries and territories and 252 local units in selected countries between January 1, 2020 and December 31, 2021.”

They use various methods to estimate “expected mortality” and use “an ensemble of these models”. So it’s like a meta-analysis.

They define “excess mortality due to the COVID-19 pandemic”:

…because the net difference between deaths during the pandemic (as measured by observed or estimated all-cause mortality) and those expected based on past trends in all-cause mortality is a critical measure of COVID- 19 The real toll of the pandemic.

They also used new methods to ensure their data was as “clean” as possible (eg, “weeks to exclude heatwaves”).

This includes improving the way to distinguish between dying from Covid and dying from Covid.

They also correct for the fact that lockdowns and other restrictions have also lowered road fatalities, among other things, and increased deaths from chronic diseases that are overwhelmed by hospitals and cannot be adequately treated.

They produced this map of estimated excess mortality.

Until recently, Australia, New Zealand and China had adopted a zero outbreak strategy – and China is still on this path.

this – table – Give a breakdown of all countries in the study.

Some striking results for estimated excess mortality (per 100 000 people):

1. Australia – 37.6

2. New Zealand – 9.3

3. Japan 44.1

4. Canada 60.5

5. U.S. 179.3 (Alabama 293.5; Arkansas 255.5; Louisiana 257.1; Mississippi 329.7; West Virginia 278.4)

6. Western Europe 140 (Belgium 146 6; France 124 2; Germany 120 5; Italy 227 4; Netherlands 140 0; Portugal 202 2; Spain 186.7; Sweden 91.2)

7. UK 126.8 (England 125.8; Northern Ireland 131.8, Scotland 130.6; Wales 135.5)

8. Central Latin America 274.4 (Mexico 325.1)

9. Tropical Latin America 186 (Brazil 186.9)

10. North Africa and Middle East 144.7

11. South Asia 151.7

12. Sub-Saharan Africa 101.6

The study found:

1. “Our estimates of the excess mortality rate for COVID-19 suggest that the impact of the COVID-19 pandemic on mortality is more damaging than is recorded by official statistics.”

2. “Although the reported COVID-19 deaths between January 1, 2020 and December 31, 2021 totaled 594 million, we estimate 182 million (95% uncertainty interval of 17.1–19.6) deaths globally because of the COVID-19 pandemic (measured by excess mortality) during this period.”

3. “The global excess mortality rate due to the COVID-19 pandemic is 120·3 deaths per 100,000 people (113·1–129·3), and the excess mortality rate exceeds 300 per 100,000 people The population of 21 countries died. The excess deaths from COVID-19 are highest in South Asia, North Africa and the Middle East and Eastern Europe.”

The IPPR report states:

Over a two-year period (2020-21), 180,000 more people died in the UK than expected, and life expectancy fell by a year…

But they also note growing evidence in the UK that:

…about 1.7 million people had long-term symptoms of COVID-19 (based on self-reports), two-thirds of whom reported symptoms that affected their daily lives.

Rising long-term Covid incidence is a global phenomenon that is currently being reported.

I wrote some evidence in this blog post – Long Covid Incidence Rising and Its Impact on the Labour Market (12 April 2022).

The IPPR report lists some related issues arising from the pandemic:

Disruptions in education…increased child poverty…and wider levels of inequality could have implications for population health. Now, this is combined with the cost of living crisis – which the Resolution Foundation predicts will push another 1.3 million people into absolute poverty…

In addition, the pandemic has had a major impact on access to and outcomes of healthcare for those facing non-Covid-19-related illnesses. The NHS elective care waiting list is the longest since records began in 2007… but even this may underestimate unmet need. It is estimated that once unmet need is taken into account… as of December 2021, around 12 million people in England will require healthcare…

All of this is a huge negative shock to the UK economy (and all economies).

So where do we go from here?

According to IPPR, Covid has:

… exposes and exacerbates Britain’s failing population health and economic practices. On the former, it exposes poor health, widespread inequalities, weak contributions to health determinants, and stretched healthcare capacity. On the latter, it exposes an economy marked by low growth, low productivity, widespread inequality, stagnant wages and insecure working conditions. Returning to this broken status quo will damage lives and livelihoods lost. We must rebuild better.

In other words, neoliberal chickens are coming home to roost faster because of the COVID-19 pandemic.

Our health system and labor market have been pushed to an unworkable state by fiscal cuts, outsourcing, privatization, casual labor, wage restrictions, and more – all to make our lives better and freer.

The future of our younger generation is now heavily influenced by trends that make sense to a degree that our grandchildren will have to foot the bill if we don’t pursue fiscal surpluses.

It’s one of the most damaging narratives I can think of.

The IPPR report advocates urgent action – which effectively means we must fundamentally abandon the neoliberal approach.

I’ll leave it to you to study the UK-wide action they advocate.

But I would love to see them use Japan as a model where things can be improved.

They distinguish between “free market economies” such as Anglo countries (US, Canada, Australia, UK, New Zealand) and “coordinated market economies” (Western Europe, Japan)

They concluded:

… Coordinated market economies tend to have higher social spending—higher social spending is positively associated with healthy life expectancy in advanced economies.

They used Japan as an example of “the country with the highest healthy life expectancy” and estimated that if the UK followed suit, its health and economic outcomes would be significantly improved.

in conclusion:

This would take the UK from the bottom of the G7 to the level of the US over the past decade.

My view remains that public policy challenges in 2020 should be aimed at eliminating the virus and using fiscal policy to protect incomes, especially those of low-income earners.

By taking this approach, the more vulnerable workers will be less exposed to the disease and the long-term Covid problems now exposed, and our health system won’t be so severely compromised.

Music – featuring Tommy Flanagan

Here’s what I’ve been listening to this morning at work.

On Monday, I introduced the great — Coleman Hawkins – Who is one of the best tenor saxophonists of all time.

But lurking in his quartet is an ace pianist— Tommy Flanagan – Played with the Coleman Hawkins Quartet from 1961 to 1962.

Tommy Flanagan has played with many great bands and artists, and you can hear him on many records (Kenny Burrell, Ella Fitzgerald, John Coltrane, Sonnello Lyns, etc.).

The song is characterized by his delicate touch with Coleman Hawkins.

It’s from Coleman Hawkins’ 1962 album — today and now (impulse recording).

I play this album a lot.

This song is- Love Song from “Apache” – for the 1954 film – Apache – It’s famous for dressing Bert Lancaster like a Native American.

His girlfriend in the movie – also a lover – Jean Peters – also played her part – brown face.

I’m glad we’ve put those days of racist whitewashing behind us.

The other members of the quartet at the time were:

1. Major Hawley – Double bass.

2. Eddie Rock – drum.

Coleman Hawkins’ tone on this track is amazing and everything is aspirational. Those lower register C notes are beautiful.

And Tommy Flanagan’s piano works are the best.

Here’s a story about how the song was recorded — Coleman Hawkins: Love Songs in Apache.

Enough for today!

(c) Copyright 2022 William Mitchell. all rights reserved.



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