banking royal commission

There’s no doubting the stupidity of some of our business “leaders”.

Just as Australia’s (half) measures seem to be having at least some positive effect in slowing the spread of infections, the call has come to weaken our already globally weak restrictions to “get the economy moving”.

The Australian Financial Review, whose COVID-19 coverage has generally been strong, couldn’t help but publish the views of middling or washed up business leaders whose views on COVID19 are about as reliable as their management skills.

Leading the charge was former AMP boss Andrew Mohl, who claimed:

Australia is flattening out the curve as we’d hoped. The elderly are being well protected. The economic and social costs should be considered in the next phase, when an easing of shutdown policies is likely to be warranted.

Mohl (who, incidentally, hasn’t been a business leader since scurrying from the disgraced CBA board in 2018) wasn’t the only expert the AFR was relying on. It also deferred to embattled Flight Centre boss Graham Turner, who just weeks ago was criticising the since-vaunted travel ban, saying “the devastation to the economy has got to be taken into account to some extent”.

A few pages later, Joe Aston observed that Turner (and his Flight Centre co-founders) were contributing less to the company’s emergency discounted capital raising than they received last year in dividends.

Then there’s former Macquarie leasing exec and now CEO of struggling Allied Credit Group John Moodie, who ventured, “I wonder how many of the global deaths that will be attributed to COVID-19 would have occurred within the next year or two anyway? It’s time for our political leaders to take a reality pill before it’s too late.”

Moodie must not have gotten the memo. The “only old people die anyway” principle doesn’t look so smart now that hundreds of Italian doctors have been killed, or that 20% of New York ICU admissions are aged under 44.

While likely not strong enough, Australia’s shutdowns are working and, without question, have saved lives. The notion of winding back a successful policy in favour of something killing thousands of Italians and New Yorkers is the very definition of stupidity.

Even more nonsensical is the notion that saving lives and saving the economy are mutually exclusive. They’re almost completely correlated.

As I’ve repeatedly argued, the hardest element for business owners and managers to navigate is the uncertainty that flows from an extended lockdown. Most businesses (other than those which probably would have folded anyway) can survive a month or two of zero revenues (many businesses intentionally shut for a month over Christmas).

What businesses can’t cope with is six or twelve months of little or no revenue. This is why we need a hard lockdown. A harder lockdown means a shorter lockdown. This not only going to saves lives, but it’s going to save a lot more businesses.

The only reason to ease restrictions now is on the basis that getting new infections down is not possible. But China showed that it is not only possible, it can be done in a little over a month.