Burning Kouk a moth to virus flame

The Kouk just can’t well enough alone:

A group of 122 economists (at last count) have signed a letter arguing against an early relaxation of social distancing measures in Australia.

They say “some commentators have expressed the view that there is a trade-off between the public health and economic aspects of the crisis. We, as economists, believe this is a false distinction.”

There is no doubt they mean well, but it seems they have not thought that issue through.

The government has chosen to reduce the number of deaths from COVID-19 but as a trade off there are between 3 to 3.5 million Australians unemployed or underemployed, up to a quarter of a million business are closing and Australia is experiencing the deepest recession since the 1930s Great Depression.

At the same time, tens of thousands of people are unable to pay their rent. Many more are having trouble with their mortgage payments, which risks morphing into a banking crisis after the ‘mortgage repayment holiday’ ends in October.

These facts highlight the folly of the letter.

Governments trade off health and the economy every day.

Decisions of what drugs to include in the pharmaceutical benefits scheme are one such example. Decisions are made by the government whether to include hugely expensive medicines on the PBS to save a few lives.

The 122 economists for some reason, do not look at the health costs of the ‘lock down induced recession’ in areas outside the COVID-19 space. Already, there is evidence of higher risks of suicide, domestic violence, drug and alcohol abuse from the millions unemployed and in financial and personal ruin. And this after just a few months of lock down.

This is rubbish. The evidence is that lockdowns do not cause economic damage, the virus does. What do I mean? This:

Sweden versus Denmark. What did each country do? Via the paper:

Starting on 11 March 2020, Denmark took measures to limit social interaction in order to contain the virus: congregations of more than 10 people were prohibited; schools, universities and other non-essential parts of the public sector were shut down; borders were closed for foreign nationals; and the population was encouraged to stay at home and minimize social contact. The measures had direct implications for many types of economic activity involving high social proximity: restaurants were not allowed to seat customers; the entertainment industry including nightclubs, cinemas and concert venues was shut down; personal services such as hair dressers and dentists were closed; retail was restricted to highstreet shops with malls being shut down entirely; and public transport was limited. Compared to Denmark and almost every other Western country, Sweden took a much lighter touch approach: the population were encouraged to stay home if feeling unwell and to limit social interaction if possible; large-scale events were prohibited, and restaurants and bars restricted to table service only, but private businesses were generally allowed to operate freely. Consistent with the notion that restrictive measures help reign in the pandemic, mortality rates in Denmark and Sweden diverged sharply around two weeks after the Danish shutdown.

The academics think that because in the weeks leading up to 11 March the countries experienced similar recorded caseloads and death rates, a comparison between the two is fair.

Data and results

Danske Bank is one of the biggest lenders in the region. The research uses data on 860,000 customers – 760,000 in Denmark and 100,000 in Sweden – and their spending via cards, cash withdrawals, mobile wallets and settlements of online invoices from 11 March to 5 April 2020, and compares them with the same payments made at the same point in 2019:

Beyond the headline finding, there are some other interesting aspects. Chief among them that older people spend more than they do normally, while younger people spend less.

As one would expect, younger people spend less largely because they are participating less in social activities. More counterintuitive is that, by imposing rules on retailers or on the use of public transport, those at higher risk appear encouraged to go out and use them more:

In other contexts, it would be highly surprising that constraints on the availability of certain goods and services cause some individuals to choose a higher overall level of consumption. In the context of the pandemic, however, shutting down sectors with high social proximity reduces the prevalence of the virus in society at large. This implies a lower risk of contracting the virus in, for instance, public transit and retail shops, which stimulates the spending of individuals with a high underlying health risk.

The flipside is that it suggests that the pandemic is having a much more pronounced impact on the social and economic habits of younger people. Policymakers ought to think of this in their efforts to curb the virus.

In other words, there is a kind of Ricardian equivalence at work in which the less lockdown that the government does, the more the private sector does.

Why anybody would be surprised by this result? Who wants to die? Or volunteer their elderly loved-ones for the knackery? Yes, yes, there’s a few…

In addition, all of the evidence from past pandemics shows that harsher, earlier lockdowns lead to swifter recoveries. Presumably this is because there is less scarring to the populace, among other things.

Finally, why would anyone listen to the Kouk anyway? His contribution to the virus debate has been nothing short of overwrought.

Early on, Mr Koukoulas blasted the decision to implement a travel ban on China:

He then called for the travel ban to be lifted on the eve of global disaster:


He also played down the economic impacts:

Next, Mr Koukoulas slammed into reverse gear, warning of widespread economic damage from the virus and demanding massive stimulus:


Next, he attacked those that did call it right:

Oh no:
We are seeing an array of Steve Keen wannabes starting to emerge saying “I called the crash”.
Amazing that they were more prescient than every medical professional in the world.

— Stephen Koukoulas (@TheKouk) March 25, 2020

Mr Koukoulas has since oscillated, almost minute-by-minute, between attacking the Government for taking on too much debt, and demanding more stimulus. If he had signed both competing economist’s petitions it would not have surprised anyone.

I make a final plea to Mr Kouk today: stop flying into the virus flame, it’s no fun to report upon your self-immolation.

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)


  1. DominicMEMBER

    The Kouk’s buffoonery aside, I would seriously like to know how many of those 122 signatories either lost their jobs or took a pay cut as a result of the virus. You see, it’s easy to support an argument when it doesn’t impact you in any way. Economists, by default, occupy ivory towers and gaze at models which really have no connection with the real world.

    Just saying.

      • DominicMEMBER

        Basically all cut from the same cloth, skip. If you’re not an adherent of the ‘orthodoxy’ then you’ll never work as an economist — certainly not in Gubmint or at the RBA. Even the private side guys are the same as their job is to predict policy moves and understand where these are coming from (if you have an ambition to work in a particular country, it’s probably an idea to be proficient in the language if you’re going to succeed).

        The AET guys, such that any are officially schooled in it (is it even possible to be schooled in it?) are all traders and investors.

  2. Jesus that is some epic burn

    Imagine the KOUK file on your computer with Twitter swipes etc, that sh$t be Kouky homies!

      • Stewie GriffinMEMBER

        Lol – he blocked me when I used a Clownify app to turn multiple images of him into various clowns…. but that was on another Twit account long since lost. As Stewie I can once again enjoy seeing which way the wind is blowing.

  3. ApotheoticMalaise

    Koukoulas is hands down the worst economist in Australia. I am yet to come across a single public-sector economist who takes him seriously, or think he has much value to add.

    • DominicMEMBER

      And yet, he has made a handsome living from it. Only in the field of economics …

      Helps to be a blowhard, of course.

  4. Quelle surprise. For a so-called lefty (or so-called professional) he has very little compassion. I thought “let the old folks die and screw the working class, I want my economy pumping out the sweet sweet green” was for the LNP, not a Labor Party minion?

      • Jumping jack flash

        Been that way for quite some time. They have exactly the same amount of efficacy – they all exist in the same political landscape, terraformed by Howard and Keating using the Thatcherist model.

    • Almost as bad as the GOP and Democrats in the US (the crazy and stupid parties respectively), whereas the dumb and dumber here aren’t YET as dangerous….

  5. DingwallMEMBER

    Come on … they all need those open houses going strong and open slather so they can offload their IP’s quick smart.

  6. but the choice we are given is a fake one – again
    Basically we are told that the only choices were possible so we had a choice between Sweden and Denmark

    of course Swedish economy suffered as well, but it didn’t suffer from covid19, it suffered from the excessive fear spread by media, politicians, celebrities, …
    we were never given the option that we get every year during the flu season, the option where health care system and some institutions (like aged care facilities, travel industry, …) do introduce measures against epidemic but general public doesn’t get scared to death despite large number of deaths caused by those epidemics.

    If covid19 happened in 80s or 90s world wouldn’t react almost any different that it does during flu season every year. Slightly increased mortality in some places would be assigned to bad flu season and economic impact would have been unmeasurable while annual mortality would not even increase in huge majority of places.

    Instead we were scared, locked down, impoverished … by fake information about morbidity and almost all other aspects of the virus and the epidemic. Reality is that the virus is not much or any worse than flu in 99% of places around the world, and not worse in places that had very few or no measures or late measures.
    The whole thing is simply fake and at the end of the year even in the worst hit places like Bergamo, Madrid, Toledo, NYC annual mortality is not going to be much or any higher than in a year with a bad flu season.


    In most of hard hit places mortality is already now well below averages – so at the worst covid19, moved forward some deaths by few months at the most

    Even in the worst hit Bergamo where most of population got infected and where some people died because there were no spots in hospitals IFR (infection fatality rate) from Covid19 of old people 70-80 and 80-90 is lower than a normal annual mortality rate. Please, notice that the paper estimates covid19 deaths to be almost double than what official data is reporting.

    • TightwadMEMBER

      Thanks for your efforts in rebutting the nonsense constantly spouted on this site. I fail to understand why they can’t do the basic maths and reach the same conclusion other than their credibility is so tied to this narrative that they don’t have the courage to admit they are wrong.

  7. Or looking at the data another way, those at less risk (the young) lost their casual jobs and income and so were unable to spend.
    The older population, more at risk from the virus, continued to enjoy employment and working from home or continued to receive their pensions and spent more while the young paid the price for them.

    • reusachtigeMEMBER

      This! As usual, the young MUST be sacrificed for the profits of the old. As it should be.

  8. this is how those who took Covid19 “seriously” plan to improve the economy:
    New Zealand Prime Minister Jacinda Ardern has suggested that more flexible working options such as a four-day working week and more public holidays could help stimulate the economy and domestic tourism amid the global pandemic.

    so more spending and less producing is the way to get revive the old industries …LOL

    • DominicMEMBER

      Poor Jacinda — that is some f#cked up logic.

      A society can’t consume more than it produces (in aggregate)
      And, you can’t consume until you’ve produced (except by stealing or borrowing someone else’s production)

      Not to worry though, cause Keynes has found a way: Consume your way to prosperity, citizen! (yes they teach that at Uni and no, students are apparently not bright enough to question the logic. Yikes)

  9. BabundaMEMBER

    there is evidence of higher risks of suicide, domestic violence, drug and alcohol abuse

    I’m obviously missing all the stories about our hospitals being overrun by DV victims. Ever heard of a counterfactual?

  10. mikef179MEMBER

    Chemical imbalance in his brain, I think. He probably needs to get on some mood-stabilising meds.

    Or get off the illegal ones. One or the other.

    • DominicMEMBER

      I was going to suggest the coke was finally having its way with his mental faculties – highly prevalent in banking circles – but it may just be the isolation. A young man from QLD just bludgeoned his parents to death a few days back as he was isolating with them.

      I guess they asked him to unstack the dishwasher just once too often.

  11. TrooDohMEMBER

    Those tweets from February show that the Kouk is a clod who shouldn’t be taken seriously. Yet some people still act like the guy is some sort of sage. Astounding.