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Private Lending During the Corona Virus By Edward Brown, Pacific Private Money
T
he 1918 influenza pandemic has frequently been compared to the Coronavirus outbreak we are currently experiencing in the world today. Varying government agencies have taken similar steps to those during 1918’s pandemic to quell the spread of the Coronavirus; isolation, quarantine, use of disinfectants, and limitations of public gatherings. These measures seem to be the fastest way to rid the general population of this kind of virus. During these times, the economic effects are dramatic. An article by Thomas Garrett, written in 2007 by Assistant Vice President and Economist for the Federal Bank of St. Louis that examines the economic effects of the
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1918 influenza pandemic, indicated an eerie parallel to today’s world. Merchants in Little Rock stated their business had declined 40%. Others estimated a decrease of 70%. The only business in which there had been an increase in activity was the drug store.
over the 1918 pandemic; countries around the world have taken the above-mentioned steps in the early stages of today’s pandemic. With the advent of the internet, many workers can perform their jobs at home. Companies such as Amazon still make home and office deliveries. The proactive measures that the
One difference in the two pandemics seems to be that the one in 1918 was reactive, whereas the current one appears to be proactive. In 1918, not only were businesses hit hard by the isolation/quarantines of people – few people could enter an establishment to conduct business – but the number of workers affected by the illness were tremendous; thus, the labor force and the income derived by them had decreased substantially. The current pandemic has, potentially, some advantages
world is taking will, hopefully, curtail the coronavirus so that it is short-lived and we all can get back to a relatively normal life. However, the economic impact of this virus cannot be ignored. Garrett points out that “most of the evidence indicates that the economic effects of the 1918 influenza pandemic were short-term. Many businesses, especially those in the service and entertainment industries, suffered double-digit
losses
in
revenue.
