I overall agree with the tone of this post. It's as if everyone who feels smugly clever is sitting around a TV broadcast with horrible static (this is the old school type with rabbit ear antennae), yet a whole slew of them are certain they can see and hear clearly exactly what is happening. To put this in different terms, we have witnessed the media, government officials, "elites," HN commenters, etc. partake in the high-status equivalent of millenarian preachers emphatically predicting the rapture (repeatedly), but this time with human lives in the crosshairs.
In fact, I think the only criticism that can be leveled at these groups are ignorance of risk mitigation strategies and cost-benefit analysis. More or less what Scott put in his post. (Short aside: the mask calculus seemed incredibly obvious to me from the start. I was not embarrassed to wear a mask on a flight back east from CA in late February, but I did hear about my stupidity from quite a few of the aforementioned. Including my wife. Who knows if the masks work, but the critics failed critical thinking 101. They're all Goofi. Except my wife.)
With that in mind (and at the risk of indulging in what might consider "arrogant ignorance"), I would like to gently push back on this sentence:
> We're on target to massively screw up the economic relief, which will make the economic stimulus phase all the more challenging. People need to be more predisposed to having possible intellectual and knowledge blind spots.
What specifically are you referring to? Is the rescue plan doing too little? Too much? No effect? Is Congress making uncertainty worse by not replenishing the fund for small
business loans? Are they even a good idea?
The problem is no one can say much of anything about this crisis because it's unprecedented. We haven't had a financial crisis or some spontaneous crash in asset prices. The shock came from the real economy first, at least as far as I can tell. I debate with my economist friends (most of whom have advanced degrees in the subject beyond my B.S.) about whether this is even mostly a supply or demand shock. The opinion is mixed (two economists -> three opinions). I've probed what policy responses should be enacted from a variety of perspectives, or what economic recovery looks like. All over the map again.
I've been a bit more optimistic than most, since I see this as primarily a demand shock starting with entertainment, travel and hospitality and then spreading to other sectors (enforced by fiat). Keynesian response might be quite effective. And the rescue plan is quite close to what Keynes himself wrote in ch. 24 of the General Theory: nationalized investment and income redistribution to those with the highest marginal propensity to consume. But my assumptions could be way off. It could be that this thing really was a supply shock through and through, or that debt of all types really has been untenably high, or that there are serious problems that have arisen in the real economy as a result of the crisis.
I do find that alongside degrees of confidence (which is a good mental cold shower for making bold claims) some skin in the game is useful as well. (Mine is that I have a $10 bet with a friend that $DIS will be above $120/share on August 1 (might lose that one) and that I've moved a few grand from cash into the market at times during the past 7 weeks or so.) I really appreciate that you gave a clue that you have made some bets, but I'd be curious as to what those are. That would represent some skin in the game as well, and reflect your beliefs about what the economic problems will be.
I will say I know a lot more about economics, but I was a lot more confident that an epidemic would occur than I am about any particular short-run economic outcome.