New guidance from the Centers for Disease Control and Prevention says 43% of Americans who are fully vaccinated can safely stop masking most of the time.
But the CDC also says masking should continue in healthcare facilities, on planes and other public transportation, and in businesses that need it. And masks are still recommended for the unvaccinated population, which (for now) still includes almost all children under 12.
CDC focuses on maintaining the whole population sure. But it is not the same as protecting individuals.
A policy can reduce overall risk while breeding risk within certain groups. “Success” at the population level does not necessarily mean that everyone is a winner.
The same goes for monetary policy, fiscal policy and just about anything government does. The consequences rarely hit everyone the same.
With that in mind, consider how this masking policy change will affect health risks and economic risks.
The vaccines seem to be very effective. Serious side effects occur but are rare. Since getting COVID-19 can also be serious, the benefits of being vaccinated seem to outweigh the risks. And ditching the masks makes it even more appealing.
The problem is that businesses and public places have no practical way of knowing who is vaccinated. Walmart (WMT) and many other large retailers are moving to an honor system that “asks” unvaccinated people to please wear masks.
How many will? I don’t suspect much.
The result will therefore be more domestic contact between unmasked and unvaccinated Americans.
People vaccinated in the same rooms should still be relatively safe (but not 100%), even without a mask. Others take a greater risk, like those 8 million Americans over 65 who haven’t even received a single dose of the vaccine.
If they are infected, they are vulnerable to serious illness or death, and their risk of infection may increase. Younger people are not necessarily in the clear either.
Meanwhile, inflation concerns dominate financial news. The consumer price index just posted its biggest 12-month change since 2008. We are seeing higher prices for food, energy, housing and other things.
Just as the CDC’s job is to manage the country’s disease risk, the Federal Reserve is supposed to manage our inflation risk.
Still, Fed officials seem indifferent. They think a little inflation is actually a good thing, and they don’t think it will increase too much.
The risk of inflation is certainly increasing. But like the COVID-19 risk, it doesn’t hit everyone equally. Indices like the CPI attempt to measure the impact on the cost of living of the “average” household when very few households are average. Spending habits vary widely depending on your income, location, and lifestyle.
That means your the inflation risk may be higher or lower than the national inflation risk monitored by the Fed.
This is partially under everyone’s control. We can choose how we spend our money. We can demand higher wages. Business owners can raise prices. We can all substitute other products for more expensive products. Our collective decisions have a feedback effect on the economy. Over time, they can lower inflation.
Likewise, our collective decisions regarding behaviors that spread COVID-19 affect public health. But there is one key difference.
The COVID-19 risk and the inflation risk are both individual and collective risks. Your own choices matter, as do the choices of others, which you probably cannot control.
Thinking exercise: what if you could get an injection that protected you from inflation? It shouldn’t be perfect. Only 90% effective would be great.
The shot can have side effects. For example, clinical trials show that a small percentage of those vaccinated against inflation experience temporarily higher prices for avocados.
It’s not practical if you like guacamole. But I’m sure most people would take it anyway.
But alas, the inflation vaccine is hypothetical. COVID-19 vaccines are real. In the United States, at least, they are now widely available to everyone from the age of 12, free of charge. Yet almost half of the eligible population did not even receive a single dose.
Yes, some people lack transportation or face other obstacles. We have to help them. But we’ve almost reached the point where those who aren’t vaccinated are to choose to remain vulnerable themselves and possibly infect others as well.
This choice affects both their individual health and overall public health. It also affects the economy … for everyone.
If you are part of this group, I hope you choose wisely.
My partner John Mauldin predicts an unprecedented crisis that will lead to the greatest wealth erasure in history. Most investors are unaware of the pressure that is mounting at the moment. Learn more here.