About a week ago, a pretty dramatic announcement came blasting out from Wall Street: The Pandemic Recession is officially over! Woohoo! Champagne flowing all around!
The pandemic sparked recession ended in April 2020 after just two months, according to the National Bureau of Economic ResearchThe covid recession is officially over, and it was the shortest on record: CNN
Of course, the reason that you probably haven’t heard about this pretty momentous news is that it’s been buried by a far scarier story: The resurgence of the Delta variant in the USA.
In the past two weeks, the number of average new daily cases has more than doubled, from 13,200 on July 4 to more than 32,300 on July 18A Fourth Wave of COVID-19 Is Brewing in the U.S. Is There Enough Time to Stop It?: Time
Both stories can be correct at the same time. Recessions are defined by 2 consecutive periods of a country’s GDP contracting. That happened last year when the world took the unprecedented step of shutting down our economies all at once in order to try to limit the spread of the virus, resulting in the single largest recorded annualized GDP drop of 32.9% in the 2nd quarter of 2020. But as our vaccination campaign really started to gain steam in early 2021, businesses started reopening, stock markets started rampaging, and the economy is hiring people so quickly that they’re running into a labour shortage.
On the flip side, the pandemic ain’t over. In fact, after a pretty impressive beginning of the year when vaccines successfully crushed case counts in much of the country, we are seeing surging infection levels that are already worrying the CDC that we are entering the dreaded “4th wave” of the pandemic.
Financial markets reacted swiftly to the news, with the Dow Jones Industrial Average nose-diving last Monday over 800 points in the worst trading session of the year as Wall Street grappled with the uncomfortable reality that we might not be over this.
So are we all screwed? Could we be headed into another lockdown-induced recession?
A Pandemic of the Unvaccinated
Before we dive into that question, we need to point out a very big difference between the 2020 pandemic and the 2021 pandemic. In 2020, everyone was in danger of being infected, but the people that were in the most danger were the elderly and the immunocompromised. There were no vaccines, there were no treatments, and there were no cures. If we got the disease and passed it on to our parents or grandparents, there was a high likelihood that they weren’t going to recover.
In 2021, the people who are being infected and hospitalized belong to a very different group: The unvaccinated.
And that’s not just me guessing. Study after study in multiple countries has confirmed it. In Canada, the UK, and the US, over 99% of the deaths are patients that haven’t received both shots of the vaccine.
And only about 150 of the more than 18,000 COVID-19 deaths in May were in fully vaccinated people. That translates to about 0.8%, or five deaths per day on average.Nearly all COVID deaths in US are now among unvaccinated: AP News
That doesn’t meant that people who are vaccinated aren’t still getting COVID. For those people, most cases are asymptomatic so they don’t notice, and of the ones that are symptomatic, their symptoms are so mild that it’s basically a bad cold. The ones who are in imminent danger of being hospitalized or dying are nearly all unvaccinated. And with the Delta variant’s higher transmissibility rate, the US CDC is saying that if you’re not vaccinated, you’re virtually guaranteed to eventually catch it.
Now there are lots and lots of reasons why people aren’t vaccinated. Some are uneasy with the speed at which the vaccines have been developed. Some distrust the government’s intentions due to historical reasons, like the infamous Tuskagee Study in which African American residents were experimented on without their consent. Some are children below the age of 12 who can’t be vaccinated yet because the FDA hasn’t approved it.
The single biggest factor among adults, however, is political affiliation. In a recent poll, 41% of registered Republicans say they will never get the vaccine.
To say this is confusing to the rest of the world would be a massive understatement. Being a conservative voter and being an anti-vaxxer are not connected in other democracies. In Canada, the percentage of people who want to get vaccinated is about equal across all political parties. In the UK, Tory voters also overwhelmingly want the vaccine, with 93% of conservative voters polled saying they had or were planning on getting it.
Yet in America, nearly half of Republican voters still think the pandemic is a hoax and that the vaccine is poisonous. That doesn’t make any bit of sense, considering that the vaccines were developed and funded by the Trump administration!
So regardless of why we got into this mess, the question remains: Will the resurgence of the Delta variant cause a new wave of lockdowns and therefore a new recession?
Personally, I don’t think so. And that’s because…
People Have Run Out of Empathy for the Unvaccinated
Remember when the lockdowns started at the beginning of the pandemic, when there was this shared desire to keep our parents safe, and protect each other, and everyone was like “We’re all in this together”?
Yeah, those days are long gone.
I don’t know if it’s the polarization of the media, or lock down fatigue, or whatever, but whatever sympathy the vaccinated and the unvaccinated had for each other seems to have evaporated.
It goes both ways. The vaccinated crowd asking the unvaccinated to get their shots or stay indoors to protect their children who, again, can’t be vaccinated are met with a derisive “Why should I give a shit about your kids? They aren’t me!”
And on the flip side, the media coverage of sick, unvaccinated people being put on a ventilator or dying in an ICU that used to be met with at least concern is now being met with an unhealthy dose of schadenfreude. “Screw ’em. Let them die, they did it to themselves.”
Don’t believe me? Here’s an entire Reddit forum dedicated to making fun of anti-vaxxers who die from COVID.
Keepin’ it classy, as always, Reddit.
And that’s why I don’t think we’ll go back to lockdowns. Lockdowns require the vast majority of people to comply in order for it to be effective, and when there was no vaccine and it seemed that ANYBODY could get it, that healthy dose of fear made people agree to stay indoors.
But now that vaccines have been available for months and the vast majority of people who get sick chose not to take it, I have a very hard time believing that there will be any appetite for the shared sacrifice demanded by a lockdown in order to protect these people.
Recessions are not caused by viruses. They’re caused by lockdowns.
So if you don’t have lockdowns, you won’t have a recession. You will have a whole lot of unnecessary suffering and death, but unfortunately, I think we’ve reached the point that the majority of the country is OK with that.
New Variants vs. mRNA Vaccines
The real danger to the economy is not the Delta variant, but an as-yet-unknown variant that might be produced in the future. So far, the variants that have popped up all over the world have varied in their transmissibility and deadliness, but so far haven’t been able to evade the protection that vaccines provide, especially among those that are fully vaccinated with two doses.
If that changes, of course, all bets are off.
This is the nightmare scenario that’s keeping health experts up at night, but something that gives me optimism that this won’t spin us back to 2020’s year of endless lockdowns is just how amazing of a scientific achievement that mRNA vaccines are.
Unlike traditional vaccines which normally take decades to develop, mRNA vaccines allow scientists to almost 3D-print a piece of RNA that causes our cells to produce any arbitrary protein spike they want. The current mRNA vaccines produced by Pfizer reportedly only took 3 MONTHS to develop after the original virus was sequenced by researchers in Wuhan.
The reason it took almost a year for the vaccines to become available was because of testing, getting through the FDA regulatory requirements, and ramping up production to be able to produce the volume that we needed. If we were to need a new, updated vaccine because of a new variant cropping up, the amount of time needed to bring this updated formula to market would be way, way less because creating a booster to an already-approved vaccine doesn’t require the same amount of testing to get approvals.
In fact, Pfizer and Moderna are already designing booster shots that target Delta. Scientific consensus is that COVID will never become eradicated like polio. Instead, it will remain endemic in our population like the flu and common cold, mutating and evolving over time, and we’ll keep needing to get re-immunized each year to protect against new variants.
In that way, the long-term destiny of COVID isn’t wiping out humanity. Instead, it will eventually become just another annoying, but seasonal respiratory disease like the flu.
“Sorry, boss. I can’t come into work today. I think I caught the COVID.”
“Oh, OK. Well, drink lots of chicken soup. Hope you feel better soon.”
Wouldn’t that be nice? Now if we could just convince these people to take their damned shots…
This has been a long, difficult 16 months for everyone, and the last thing anyone wants is for us to regress back into living in our basements like some common troll. And while there are still troubling signs that we may never completely eradicate this damned disease, I believe we’ve reached the stage that (in the US and Canada, at least), we’ll be able to live with this virus and keep it reasonably under control while we go about our lives going forward without resorting to shutting the economy down again. Call me an optimist, but I really do think that this recession is over for good.
What do you think? Are we more or less done with this pandemic or is there a scary variant lurking around the corner that will put us all back in lockdown? Let’s hear it in the comments below!
Hi there. Thanks for stopping by. We use affiliate links to keep this site free, so if you believe in what we're trying to do here, consider supporting us by clicking! Thx ;)
Build a Portfolio Like Ours: Check out our FREE Investment Workshop!
Earn a 1.25%* everyday interest rate. No Everyday Banking Fees: Open up an EQ Bank Savings Plus Account! (Canada only, excluding Quebec)
Travel the World: We save $18K a year by using AirBnb. Click here to get $40 off your first booking!
Don't Pay FX fees: We used the Scotiabank Passport Visa Infinite card to eliminate foreign exchange fees around the world! Plus, get 40k points in the first year, and free airport lounge access too! Click here to sign up!
Earn 10% Cash-back: Earn an extra 10% back for a limited time with a Tangerine World Mastercard! Click here to sign up!
*Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.