Covid fears risk a Great Depression and major social unrest

Economic growth


Governments spent most of February/March ignoring my warnings here on the dangers posed by the Covid pandemic. Now many are moving in the opposite direction. Unintentionally, they are helping to create fear and panic, which could well lead to another Great Depression and major social unrest.


I began warning of the risks on 9 February, arguing that Coronavirus disruptions made global recession almost certain. And I continued to warn every week through the rest of February and March. All my warnings came true, most notably those about a likely financial market crash and an oil market crash

The cause of the problem was obvious – incompetent governments and lack of credible information for the general public as I noted in early June:

Inevitably, of course, most governments then pivoted from complacency to panic – from one extreme to another.

Governments panicked as they suddenly realised health services could be over-whelmed by Covid cases. So the world moved into lockdown, region by region. But unfortunately, government incompetence didn’t stop there. In many countries they simply discharged elderly patients into care homes, to create space for the expected wave of hospitalisations.

World-wide, this completely avoidable mistake has cost around half the lives lost so far. And too many governments are still failing to face up to their responsibilities, claiming that a vaccine will solve everything. Vaccines have done wonders for public health, but they are very difficult to develop:

  • We haven’t even got one for the common cold, let alone HIV/Aids and malaria, after decades of research
  • The risk of side-effects from rushed Phase 3 trials could easily be higher than the Covid risk itself – as thalidomide reminds us

All the efforts now underway will no doubt mean that vaccines do become available. But most specialists believe they are unlikely to protect those most at risk, as the World Health Organisation has warned:

“Up until very recently most of the focus of the vaccine community has been on saving lives of young children. The people who need the vaccine the most may actually be the people in whom the vaccine might not work.”


Unfortunately, most governments do not seem to have learnt from their mistakes.  One exception is Portugal, where premier Antonio Costa made clear earlier this month:

“We have to avoid at all costs the solutions we had to adopt in March and April because from the social and economic point of view they are obviously not sustainable.” 

This doesn’t mean doing nothing, or doing absurd things like politicising the wearing of face masks.  It means asking people to be responsible, and to show solidarity with those who are most at risk.

Every death is a cause for sadness. But we also all know that “only death and taxes are certain in this life”.  And as the chart from the Financial Times shows, the key metric for the Covid-19 pandemic is not infections, or hospitalisations – it is “excess deaths“:

  • Peru and Ecuador are in urgent need of help from the international community
  • Italy, the UK, Spain, Belgium, Chile, S Africa and the USA need to ask themselves serious questions about the effectiveness of their policies
  • Sweden, the Netherlands, Iceland, Israel, France, Portugal and Switzerland shouldn’t be satisfied with current results

Of course, some governments are so incompetent that this key data is not even available.

But that doesn’t mean we should instead focus on misleading data, just because it is available.  In soccer, for example, we don’t focus on the level of chanting in the crowd because we can easily measure decibels.  We focus on goals scored.

The same has to be true with the pandemic. We now know that most Covid deaths are in people over the age of 70, and that young people are at far more risk of dying in a road accident. So governments should take measures to protect those over-70, and allow everyone else to get on with their daily lives.

Otherwise, we will all wake up during the winter and suddenly start to realise that lockdowns don’t just suppress rates of Covid infections. They also mean that:

  • Millions of people with other diseases and illnesses are not getting the treatment they need
  • The economy is grinding to a halt, with unemployment rising rapidly – particularly amongst young people

If there was a competition to devise a plan to create a Great Depression and major social unrest, then I would back current policies to win. And young people are starting to realise they are the innocent victims of government incompetence. So the risk of major social unrest is rising every day.


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