Notes to Know: Looking to the Past


"If I'd have had more time, I'd have written a shorter letter" ~Blaise Pascal


Our colleagues at Alger Capital recently shared this insight: The source article can be found here.


Looking to the Past

The Spanish Flu was a deadly pandemic that surged in 1918; some 675,000 people died in the US and the economy sank. However, various local economies fared better than others. Today we can learn from the past as we face our own fears.

Lift or Keep Restrictions?


  • The chart above shows cities that took aggressive measures to thwart the Spanish flu as compared to neighbors that were laxer. The cities that enforced longer public health restrictions saw higher increases in manufacturing employment than their peers.

  • Minneapolis was one of the first cities to move on the news of flu deaths. The city shut itself down, closing churches, theaters, pool halls, and schools, and remained shut down for 132 days. Nearby St. Paul on the other side of the Mississippi River, however, remained mostly open until three weeks after Minneapolis closed and shut down for only 28 days. As a result, the fatality rate in Minneapolis was markedly lower than in St. Paul and its economy turned out better too.1

  • Cities that implemented longer interventions didn’t suffer because they disrupted their economies longer. Many of these examples enjoyed larger gains in manufacturing employment (as shown above) and manufacturing output. Indeed, an extra 50 days of social distancing was worth a 6.5% increase in manufacturing employment in a U.S. city.2

  • As the country and the world navigate the coronavirus pandemic and consider how to mitigate its health consequences as well as its economic effects, we must balance many different perspectives in a very dynamic environment. While we do not have a solution to the problem, as investors we find looking at history to be instructive as it pertains to potential economic outcomes.

IN SHORT: Here is to the efforts to restart our economy… but it is OK to be safe!


Make it a Great Day!


1,2: Sergio Correia, Stephan Luck, and Emil Verner, “Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu,” 2020.


The information contained within is the view and opinion of the author as of the date it was written, and not necessarily of Cascade Financial Management, Inc. Such views are subject to change without notice. Cascade has no duty or obligation to update the information contained herein.

This is for educational purposes only and should not be used for any other purpose. It is not intended as planning or tax advice for any individual or entity. It does not constitute and should not be construed as an offering of advice or an offer to sell, or a solicitation to buy any services or related financial instruments or advice of any kind. Your tax and financial situation is unique and you should not take any action or make any investment decision without first discussing your particular situation with your CPA, tax, or legal advisor.

Certain information contained herein concerning economic trends and performance is based on, or derived from, information provided by independent third-party sources. Cascade believes the sources from where this information has been obtained are reliable, however it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based.

Any distribution, use, or copying of this information by anyone other than the intended recipient is unauthorized.

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