Coronavirus - Overall
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Is there an economics forum? If so, pls move mods.
It is sometimes said that governments wasted the global financial crisis of 2007-09 by failing to rethink economic policy after the dust settled. Nobody will say the same about the covid-19 pandemic. It has led to a desperate scramble to enact policies that only a few months ago were either unimaginable or heretical. A profound shift is now taking place in economics as a result, of the sort that happens only once in a generation. Much as in the 1970s when clubby Keynesianism gave way to Milton Friedman’s austere monetarism, and in the 1990s when central banks were given their independence, so the pandemic marks the start of a new era. Its overriding preoccupation will be exploiting the opportunities and containing the enormous risks that stem from a supersized level of state intervention in the economy and financial markets.
This new epoch has four defining features. The first is the jaw-dropping scale of today’s government borrowing, and the seemingly limitless potential for yet more. The imf predicts that rich countries will borrow 17% of their combined gdp this year to fund $4.2trn in spending and tax cuts designed to keep the economy going. They are not done. In America Congress is debating another spending package (see United States section). The European Union has just agreed on a new stimulus funded by common borrowing, crossing a political Rubicon (see next Leader).
The second feature is the whirring of the printing presses. In America, Britain, the euro zone and Japan central banks have created new reserves of money worth some $3.7trn in 2020. Much of this has been used to buy government debt, meaning that central banks are tacitly financing the stimulus. The result is that long-term interest rates stay low even while public-debt issuance soars.
The state’s growing role as capital-allocator-in-chief is the third aspect of the new age. To see off a credit crunch, the Federal Reserve, acting with the Treasury, has waded into financial markets, buying up the bonds of at&t, Apple and even Coca-Cola, and lending directly to everyone from bond dealers to non-profit hospitals. Together the Fed and Treasury are now backstopping 11% of America’s entire stock of business debt. Across the rich world, governments and central banks are following suit.
The final feature is the most important: low inflation. The absence of upward pressure on prices means there is no immediate need to slow the growth of central-bank balance-sheets or to raise short-term interest rates from their floor around zero. Low inflation is therefore the fundamental reason not to worry about public debt, which, thanks to accommodative monetary policy, now costs so little to service that it looks like free money.
Don’t fool yourself that the role of the state will magically return to normal once the pandemic passes and unemployment falls. Yes, governments and central banks may dial down their spending and bail-outs. But the new era of economics reflects the culmination of long-term trends. Even before the pandemic, inflation and interest rates were subdued despite a jobs boom. Today the bond market still shows no sign of worrying about long-term inflation. If it is right, deficits and money-printing may well become the standard tools of policymaking for decades. The central banks’ growing role in financial markets, meanwhile, reflects the stagnation of banks as intermediaries and the prominence of innovative and risk-hungry shadow banks and capital markets (see Finance section). In the old days, when commercial banks ruled the roost, central banks acted as lenders of last resort to them. Now central banks increasingly have to get their hands dirty on Wall Street and elsewhere by acting as mammoth “marketmakers of last resort”.
A state with a permanently broader and deeper reach across the economy creates some opportunities. Low rates make it cheaper for the government to borrow to build new infrastructure, from research labs to electricity grids, that will boost growth and tackle threats such as pandemics and climate change. As societies age, rising spending on health and pensions is inevitable—if the resulting deficits help provide a necessary stimulus to the economy, all the more reason to embrace them.
Yet the new era also presents grave risks. If inflation jumps unexpectedly the entire edifice of debt will shake, as central banks have to raise their policy rates and in turn pay out vast sums of interest on the new reserves that they have created to buy bonds. And even if inflation stays low, the new machinery is vulnerable to capture by lobbyists, unions and cronies.
One of monetarism’s key insights was that sprawling macroeconomic management leads to infinite opportunities for politicians to play favourites. Already they are deciding which firms get tax breaks and which workers should be paid by the state to wait for their old jobs to reappear. Soon some loans to the private sector will turn sour, leaving governments to choose which firms fail. When money is free, why not rescue companies, protect obsolete jobs and save investors?
However, though that would provide a brief stimulus, it is a recipe for distorted markets, moral hazard and low growth. Fear of politicians’ myopia was why many countries delegated power to independent central banks, which wielded a single, simple tool—interest rates—to manage the economic cycle. Yet today interest rates, so close to zero, seem impotent and the monarchs who run the world’s central banks are becoming rather like servants working as the government’s debt-management arm.
Free markets and free lunches
Each new era of economics confronts a new challenge. After the 1930s the task was to prevent depressions. In the 1970s and early 1980s the holy grail was to end stagflation. Today the task for policymakers is to create a framework that allows the business cycle to be managed and financial crises to be fought without a politicised takeover of the economy. As our briefing this week explains, this may involve delegating fiscal firepower to technocrats, or reforming the financial system to enable central banks to take interest rates deeply negative, exploiting the revolutionary shift among consumers away from old-style banking to fintech and digital payments. The stakes are high. Failure will mean the age of free money eventually comes at a staggering price. -
@Hooroo said in Coronavirus - Overall:
What I would like to see at the end of the year is the year on year death rates. Did 'X' amount more people die this year because of Covid in the world or was it the same (or was it less due to all the lockdowns)
Apparently Australia's death rate for the flu is down 300 on last year...
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Japan's flu rate was down 5 times in the COVID effected months I heard and Japan is on course to set a record for the fewest criminal cases in a postwar year, a tally of the first six months of 2020 released Thursday showed........ Silver linings.......
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@Winger said in Coronavirus - Overall:
Wearing a tightly sealed protective hazard suit
In reality, that would probably work a treat!
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@mariner4life said in Coronavirus - Overall:
@Hooroo said in Coronavirus - Overall:
What I would like to see at the end of the year is the year on year death rates. Did 'X' amount more people die this year because of Covid in the world or was it the same (or was it less due to all the lockdowns)
Apparently Australia's death rate for the flu is down 300 on last year...
Only cos the Covid got ‘em first!
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@Old-Samurai-Jack said in Coronavirus - Overall:
Japan's flu rate was down 5 times in the COVID effected months I heard and Japan is on course to set a record for the fewest criminal cases in a postwar year, a tally of the first six months of 2020 released Thursday showed........ Silver linings.......
When citizens follow the advice and don't behave like fuckwits
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I'm not sure comparing death rates will be that instructive given we have never before imposed social restrictions of this magnitude. Yeah the flu is down, because we haven't been in contact with bloody anyone. We will probably see cancer deaths rise given delayed treatments, but it's hard to say by how much.
Fucking 2020, the year all stats went out the window.
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IMO Sweden has got it right.
Don’t think anyone in EU-14 got care homes sorted, in part because contemporary systems have evolved without consideration of the possibility of pandemics.
At other end of scale, it will be interesting to see how successfully NZ can refocus economy on domestic demand. I suspect it will come out stronger in long run, even if new normal may not involve as much conspicuous spending.
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@pakman said in Coronavirus - Overall:
IMO Sweden has got it right.
Don’t think anyone in EU-14 got care homes sorted, in part because contemporary systems have evolved without consideration of the possibility of pandemics...
Can't access the article but I'd be interested to know why you think Sweden has got it right?
Firstly an as has been said on here numerous times, it is still far too early to say which country has got it right or wrong, there is still much to come out yet.
Secondly and whilst acknowledging that comparisons between different countries are problematical due to various issues such as population density, travel hub level, demographics etc we can look at Sweden's nearer neighbours that share much of the same levels of impacting issues:-
Sweden deaths per 1M population 568
Finalnd deaths per 1M population 59
Norway deaths per 1M population 47Source:Worldometers 30/7/2020
Sweden is very much the outlier here. There are some issues that may be partly the cause, their population is higher within roughly the same area but in truth that is open to debate on causation as in all these countries the population density is quite small with a significant amount of the population amassed in cities with around 20% of the population in the capitals in each case. Sweden having more large population cities than Norway and Finland, in keeping with their larger population. So a possible cause for a slightly higher death rate within the population but not, in the case of Norway 10 times the death rate.
Having said all that I am not arguing that they have got it wrong, I am arguing that you cannot really suggest that they have got it right in any meaningful or measurable way.
Yet.
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@Catogrande said in Coronavirus - Overall:
@pakman said in Coronavirus - Overall:
IMO Sweden has got it right.
Don’t think anyone in EU-14 got care homes sorted, in part because contemporary systems have evolved without consideration of the possibility of pandemics...
Can't access the article but I'd be interested to know why you think Sweden has got it right?
Firstly an as has been said on here numerous times, it is still far too early to say which country has got it right or wrong, there is still much to come out yet.
Secondly and whilst acknowledging that comparisons between different countries are problematical due to various issues such as population density, travel hub level, demographics etc we can look at Sweden's nearer neighbours that share much of the same levels of impacting issues:-
Sweden deaths per 1M population 568
Finalnd deaths per 1M population 59
Norway deaths per 1M population 47Source:Worldometers 30/7/2020
Sweden is very much the outlier here. There are some issues that may be partly the cause, their population is higher within roughly the same area but in truth that is open to debate on causation as in all these countries the population density is quite small with a significant amount of the population amassed in cities with around 20% of the population in the capitals in each case. Sweden having more large population cities than Norway and Finland, in keeping with their larger population. So a possible cause for a slightly higher death rate within the population but not, in the case of Norway 10 times the death rate.
Having said all that I am not arguing that they have got it wrong, I am arguing that you cannot really suggest that they have got it right in any meaningful or measurable way.
Yet.
Edit: Also Sweden has around 8 times the number of cases as Norway and Finland with pretty much the same level of testing taking place. 2 times the number would be expected, 3 times would not be unrealistic.
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@Catogrande said in Coronavirus - Overall:
@Catogrande said in Coronavirus - Overall:
@pakman said in Coronavirus - Overall:
IMO Sweden has got it right.
Don’t think anyone in EU-14 got care homes sorted, in part because contemporary systems have evolved without consideration of the possibility of pandemics...
Can't access the article but I'd be interested to know why you think Sweden has got it right?
Firstly an as has been said on here numerous times, it is still far too early to say which country has got it right or wrong, there is still much to come out yet.
Secondly and whilst acknowledging that comparisons between different countries are problematical due to various issues such as population density, travel hub level, demographics etc we can look at Sweden's nearer neighbours that share much of the same levels of impacting issues:-
Sweden deaths per 1M population 568
Finalnd deaths per 1M population 59
Norway deaths per 1M population 47Source:Worldometers 30/7/2020
Sweden is very much the outlier here. There are some issues that may be partly the cause, their population is higher within roughly the same area but in truth that is open to debate on causation as in all these countries the population density is quite small with a significant amount of the population amassed in cities with around 20% of the population in the capitals in each case. Sweden having more large population cities than Norway and Finland, in keeping with their larger population. So a possible cause for a slightly higher death rate within the population but not, in the case of Norway 10 times the death rate.
Having said all that I am not arguing that they have got it wrong, I am arguing that you cannot really suggest that they have got it right in any meaningful or measurable way.
Yet.
Edit: Also Sweden has around 8 times the number of cases as Norway and Finland with pretty much the same level of testing taking place. 2 times the number would be expected, 3 times would not be unrealistic.
The comparison with other Nordics is heavily skewed by care home numbers. For EU-14 types it is clear they all need to reform the care systems as a result of lessons learned.
But take that out and I doubt other Nordics much better. AND Sweden much if not all way to herd immunity, no no masks and no real fears of second wave.
Other Nordics have no such luxury.
And Sweden has fared no worse than other EU-14 countries which implemented lock down.
Life in Sweden seems back almost to normal.
They stuck to science, and by law were required to let health scientists make the decisions.
Most other countries are labouring with confused and often contradictory policy making.
Can post text of article later, but off to town...
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@pakman said in Coronavirus - Overall:
@Catogrande said in Coronavirus - Overall:
@Catogrande said in Coronavirus - Overall:
@pakman said in Coronavirus - Overall:
IMO Sweden has got it right.
Don’t think anyone in EU-14 got care homes sorted, in part because contemporary systems have evolved without consideration of the possibility of pandemics...
Can't access the article but I'd be interested to know why you think Sweden has got it right?
Firstly an as has been said on here numerous times, it is still far too early to say which country has got it right or wrong, there is still much to come out yet.
Secondly and whilst acknowledging that comparisons between different countries are problematical due to various issues such as population density, travel hub level, demographics etc we can look at Sweden's nearer neighbours that share much of the same levels of impacting issues:-
Sweden deaths per 1M population 568
Finalnd deaths per 1M population 59
Norway deaths per 1M population 47Source:Worldometers 30/7/2020
Sweden is very much the outlier here. There are some issues that may be partly the cause, their population is higher within roughly the same area but in truth that is open to debate on causation as in all these countries the population density is quite small with a significant amount of the population amassed in cities with around 20% of the population in the capitals in each case. Sweden having more large population cities than Norway and Finland, in keeping with their larger population. So a possible cause for a slightly higher death rate within the population but not, in the case of Norway 10 times the death rate.
Having said all that I am not arguing that they have got it wrong, I am arguing that you cannot really suggest that they have got it right in any meaningful or measurable way.
Yet.
Edit: Also Sweden has around 8 times the number of cases as Norway and Finland with pretty much the same level of testing taking place. 2 times the number would be expected, 3 times would not be unrealistic.
The comparison with other Nordics is heavily skewed by care home numbers. For EU-14 types it is clear they all need to reform the care systems as a result of lessons learned.>
I guess that is the gist of the article?.
But take that out and I doubt other Nordics much better. AND Sweden much if not all way to herd immunity, no no masks and no real fears of second wave. >
TBC!
Other Nordics have no such luxury.>
As above
And Sweden has fared no worse than other EU-14 countries which implemented lock down.>
Marginally better than UK, Spain and Italy (much better than Belgium) but with very different population densities to these others. On a par with France and the Netherlands. Much worse than Germany, Portugal, Austria, Ireland - most again with much higher population densities.
Life in Sweden seems back almost to normal.>
Did it really change much? But that really is not the issue at present. The issue is whether or not this is a good thing - unproven in my book.
They stuck to science, and by law were required to let health scientists make the decisions.>
This makes sense to me and I can see how this would help form an overall opinion.
Most other countries are labouring with confused and often contradictory policy making.>
No argument!
Can post text of article later, but off to town...>
Would be grateful thanks. Oh and I hope you're wearing your mask and keeping your distance!
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@pakman said in Coronavirus - Overall:
IMO Sweden has got it right.
Don’t think anyone in EU-14 got care homes sorted, in part because contemporary systems have evolved without consideration of the possibility of pandemics.
At other end of scale, it will be interesting to see how successfully NZ can refocus economy on domestic demand. I suspect it will come out stronger in long run, even if new normal may not involve as much conspicuous spending.
Masks may only have been mandatory in British shops since yesterday, and British airports for a couple of months, but what I saw as I arrived in Sweden this past week already felt oddly transgressive, almost indecent.
At no point on the journey does anyone tell you that you can remove your face mask, so when we landed in Stockholm, my fellow passengers on the quarter-full SAS flight from Heathrow kept them on up the gangway and into the airport terminal. Then you notice that the customs officers aren’t wearing them as they check your passport, nor the airport staff swooshing around on silent scooters, but you keep it on just in case. Only when you finally emerge from the baggage hall and into the row of waiting taxis do you realise: nobody is wearing one. Not a single person. In Sweden, it’s a mask-free world.
In central Stockholm the restaurants and shops are busy, even if less busy than they might normally be; there’s a table-service-only rule, so many bars have queues of patient Swedes outside to avoid any overcrowding inside. The outside watering holes of Stureplan and along the waterfront at Strandvägen are positively booming.
There’s nothing reckless or denialist about the atmosphere here; nor anything of the grim experiment-gone-wrong that much of the international media would have you believe about a country which did not impose a national lockdown.
People are behaving responsibly, social distancing where possible, but determined to continue the serious business of living their lives. In the warm sunshine of a Stockholm evening, I got a sense of a people for whom unencumbered enjoyment of their brief summer — those precious moments of beauty and levity and warmth on the skin — is not a “nice-to-have” that should be surrendered on an uncertain cautionary principle. It is something closer to a human right.
I interviewed the architect of Sweden’s Covid-19 policy, Anders Tegnell, for UnHerd’s LockdownTV.
It’s fair to say he’s feeling chipper — suntanned, back from his own summer break, and looking at a set of coronavirus figures that are going rapidly in the right direction. Case numbers, having first surged as they massively increased testing, are now coming down dramatically; admissions into ICU are now so low that for two days last week there were none at all (the first time that’s happened since early March); and deaths with Covid-19, despite being counted more stringently than almost anywhere in the world, are down to lower levels than ever since the peak.
The uncomfortable fact remains that Sweden has had a much higher total mortality per capita than its Scandinavian neighbours (although still under that of the UK), but Tegnell insists that that was mainly the result of poor shielding of care homes, not their lack of lockdown. They’ve improved that and are now seeing the results. Certainly, whatever they are doing now seems to be working — and that doesn’t include wearing masks.
Tegnell makes no secret of the fact that he is baffled by other countries’ rush to mandate face masks. “The evidence base for using masks in society is still very weak,” he tells me – despite lots of countries now mandating them in different ways “we haven’t seen any new evidence coming up, which is a little bit surprising I can say.” He believes that masks may be counter-productive as people then forget social distancing and even go out when they are ill, which ends up increasing the spread of the disease. And most importantly, things are going perfectly well without them. “At a time like right now, when we have extremely few admissions into hospitals and the total number of cases is rapidly falling, it is not the time to introduce something else.”
All of which, of course, could be said of the UK as well.
As a half-Swede I’ve been paying anxious attention to their more laissez-faire response to Covid-19. It seems fair to grant Tegnell his request of deferring full judgement until a year from now, once we know how other countries fare in the autumn and spring. But whatever the final outcome, there is something about the atmosphere of the discussion in Sweden that I wish we had a bit more of in the UK.
Decisions are taken entirely by the health agency with almost no involvement from politicians, which lowers the temperature from the outset. Anders Tegnell is a physician and technocrat with no voters to please or polls to fret about. The prime minister has been keeping a distinctly low profile on the issue.
There’s also a Swedish bloody-mindedness that in other scenarios can be maddening but in this context is a breath of fresh air. They will stick to their plan, make decisions based on their reading of the evidence, and not bow to social media furores or international condemnation, whether from their Nordic neighbours or the New York Times (who recently dubbed Sweden “the world’s cautionary tale”). At a time of such widespread insecurity and finger-pointing it feels like an oasis of calm.
Most of all there’s a clarity about those aspects of life that are worth defending, even in the midst of a global pandemic. Swedish children have not missed a single day of education; and they have protected the open society they cherish.
Perhaps a culture’s readiness to change on a sixpence to a “new normal” is inversely correlated to their affection for, and confidence in, the “old normal.” The Swedes like their way of life, and are enviably reluctant to give it up.
Freddie Sayers is executive editor of Unherd
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@pakman said in Coronavirus - Overall:
@pakman said in Coronavirus - Overall:
IMO Sweden has got it right.
Don’t think anyone in EU-14 got care homes sorted, in part because contemporary systems have evolved without consideration of the possibility of pandemics.
At other end of scale, it will be interesting to see how successfully NZ can refocus economy on domestic demand. I suspect it will come out stronger in long run, even if new normal may not involve as much conspicuous spending.
Masks may only have been mandatory in British shops since yesterday, and British airports for a couple of months, but what I saw as I arrived in Sweden this past week already felt oddly transgressive, almost indecent.
At no point on the journey does anyone tell you that you can remove your face mask, so when we landed in Stockholm, my fellow passengers on the quarter-full SAS flight from Heathrow kept them on up the gangway and into the airport terminal. Then you notice that the customs officers aren’t wearing them as they check your passport, nor the airport staff swooshing around on silent scooters, but you keep it on just in case. Only when you finally emerge from the baggage hall and into the row of waiting taxis do you realise: nobody is wearing one. Not a single person. In Sweden, it’s a mask-free world.
In central Stockholm the restaurants and shops are busy, even if less busy than they might normally be; there’s a table-service-only rule, so many bars have queues of patient Swedes outside to avoid any overcrowding inside. The outside watering holes of Stureplan and along the waterfront at Strandvägen are positively booming.
There’s nothing reckless or denialist about the atmosphere here; nor anything of the grim experiment-gone-wrong that much of the international media would have you believe about a country which did not impose a national lockdown.
People are behaving responsibly, social distancing where possible, but determined to continue the serious business of living their lives. In the warm sunshine of a Stockholm evening, I got a sense of a people for whom unencumbered enjoyment of their brief summer — those precious moments of beauty and levity and warmth on the skin — is not a “nice-to-have” that should be surrendered on an uncertain cautionary principle. It is something closer to a human right.
I interviewed the architect of Sweden’s Covid-19 policy, Anders Tegnell, for UnHerd’s LockdownTV.
It’s fair to say he’s feeling chipper — suntanned, back from his own summer break, and looking at a set of coronavirus figures that are going rapidly in the right direction. Case numbers, having first surged as they massively increased testing, are now coming down dramatically; admissions into ICU are now so low that for two days last week there were none at all (the first time that’s happened since early March); and deaths with Covid-19, despite being counted more stringently than almost anywhere in the world, are down to lower levels than ever since the peak.
The uncomfortable fact remains that Sweden has had a much higher total mortality per capita than its Scandinavian neighbours (although still under that of the UK), but Tegnell insists that that was mainly the result of poor shielding of care homes, not their lack of lockdown. They’ve improved that and are now seeing the results. Certainly, whatever they are doing now seems to be working — and that doesn’t include wearing masks.
Tegnell makes no secret of the fact that he is baffled by other countries’ rush to mandate face masks. “The evidence base for using masks in society is still very weak,” he tells me – despite lots of countries now mandating them in different ways “we haven’t seen any new evidence coming up, which is a little bit surprising I can say.” He believes that masks may be counter-productive as people then forget social distancing and even go out when they are ill, which ends up increasing the spread of the disease. And most importantly, things are going perfectly well without them. “At a time like right now, when we have extremely few admissions into hospitals and the total number of cases is rapidly falling, it is not the time to introduce something else.”
All of which, of course, could be said of the UK as well.
As a half-Swede I’ve been paying anxious attention to their more laissez-faire response to Covid-19. It seems fair to grant Tegnell his request of deferring full judgement until a year from now, once we know how other countries fare in the autumn and spring. But whatever the final outcome, there is something about the atmosphere of the discussion in Sweden that I wish we had a bit more of in the UK.
Decisions are taken entirely by the health agency with almost no involvement from politicians, which lowers the temperature from the outset. Anders Tegnell is a physician and technocrat with no voters to please or polls to fret about. The prime minister has been keeping a distinctly low profile on the issue.
There’s also a Swedish bloody-mindedness that in other scenarios can be maddening but in this context is a breath of fresh air. They will stick to their plan, make decisions based on their reading of the evidence, and not bow to social media furores or international condemnation, whether from their Nordic neighbours or the New York Times (who recently dubbed Sweden “the world’s cautionary tale”). At a time of such widespread insecurity and finger-pointing it feels like an oasis of calm.
Most of all there’s a clarity about those aspects of life that are worth defending, even in the midst of a global pandemic. Swedish children have not missed a single day of education; and they have protected the open society they cherish.
Perhaps a culture’s readiness to change on a sixpence to a “new normal” is inversely correlated to their affection for, and confidence in, the “old normal.” The Swedes like their way of life, and are enviably reluctant to give it up.
Freddie Sayers is executive editor of Unherd
Great read
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And simply saying 'we should have got our aged care protection right' is one thing, actually doing it is another.
The higher the number of infected citizens, the harder it is to wall off your nursing homes and hospitals. Nurses have to come in, and cleaners and doctors and other workers. And in Sweden they are at greater risk of catching the virus at the shops, or at a cafe than someone in a nearby country.