Before you get upset about the title, let me make my case. The unprecedented lock down across the much of the world is like nothing any of us have experienced before. The virus continues to rage with no peak in sight. Unemployment in the US shot up by 3.28 million on a weekly basis last week and that was considered an undercount. The senate passed a $2 trillion relief package, this will be tacked onto a a federal budget deficit that last year reached $1.1 trillion and will balloon the debt which our kids and grandkids will have to pay back. Hospitals desperately lack equipment, staff is getting infected and over 1,000 people have died in the US so far due to the virus, including those that are relatively young and healthy. All this while a debate rages as to when people can start to go back to work as well as if a deadly second wave will envelope the world and produce something just as bad or worse than this first wave.
Many feel a loss of control in this type of environment gripped by fear and uncertainty. They try to compensate for this feeling by hoarding food and home goods in an attempt to make themselves feel more secure. Children are out of school and those lucky enough to still be working have to deal with the distractions of home life as they try to focus and worry themselves as to what may come next.
I am here to tell you that if you are in a The US or Western Europe and going through this, you are one of the lucky ones. I want to take a moment to look at the totality of this pandemic and look at the at the overall reasons to be optimistic and to be concerned, and they aren’t where you necessarily think.
Reasons for Optimism
Information has us Acting Faster than any Pandemic in History – If you took a look at my recent post called What the Spanish Flu Tells Us About What Will Happen With Coronavirus you will note that although the Spanish flu managed to travel to every corner of the world, the information tended to move much slower than it does now. There were likely tens of thousands if not millions of people that had to get sick before the world started to take the pandemic seriously and take countermeasures.
Part of the reason for this was the suppression of information in many countries as they were still on a war footing towards the end of WWI. The other reason being that information just tended to travel more slowly back then and the medical field did not have much of the basic knowledge to educate the public on that they do now. Since then, our medical knowledge and understanding of how viruses develop and spread has improved. The internet has also allowed information to travel at light speed around the world and with that ability has come a thirst for up to date and accurate information like never before.
When we compre to how the Spanish flu went down in 1918, it’s likely that many more had to be infected and many more had to die from the Spanish flu before governments could take countermeasures to slow or prevent the spread. Even though the daily numbers we are seeing now are alarming, especially in New York City, we should take some comfort in knowing that we know the number and that we have an idea of how prevalent it is. That type of information and knowledge about things like data lags and undercounting just didn’t exist in the past and has given us a powerful ability to take countermeasures very early on in the process to prevent even more deaths.
I do think the initial response and the reaction which could have prevented this was inept, but that’s in the past now and we have to deal with the virus that is here and around us. However, the reaction once it was here and in our midst has really been without precedent in terms of speed and coordination among millions of people to mitigate the virus.
We should take some solace in the fact that our technology has given us a fantastic tool that enables us to save lives on a scale that our ancestors couldn’t have dreamed of. In the US, we could be doing even more still if we really wanted to control the spread of the virus as I described in my post Solving the Covid-19 Crisis: A Pandemic Patriot Act but it seems the political will for this total solution on par with what South Korea has isn’t there yet.
Testing and Knowing it’s Location Before People Die – Besides the information, we are able to test widely for the virus. Although again, here there has been some frustration as there have not been enough tests in the New York area to test everyone who wants it, testing is at least on a scale large enough for politicians to be able to make informed decisions.
Widespread testing will ramp up in the coming weeks and be done more quickly. The consequence of this is already being anticipated and acted upon. A classification system is now being proposed on a regional basis which will dictate how severe quarantines need to be. Those areas that are outbreak hotspots like New York will see more social distancing restrictions while those with slower moving infection rates and smaller clusters will have more freedom of movement. As testing increases on a wider scale, this will enable more targeted testing until I believe we will start to approach something like a Korean model where those infected are identified and targeted quickly for lockdown. The key will be how quickly we move towards this policy in the US.
The Resources are There – Capital markets remain robust. An army of sophisticated investors and financial intermediaries see to that. Rich world governments would not be able to deliver fiscal stimulus on this scale nor take central bank action without a highly competent and sophisticated financial sector that channels government borrowing to investors. Bankers are often maligned and they in no way are on the front lines of the pandemic like healthcare workers, but channeling help from those with the means to provide it on a global basis will likely be one of the unsung factors that contributes to helping overcome the pandemic. This means that the rich world can easily tap savings to tackle the public health crisis as well as the economic shock it has produced.
Reasons for Pessimism
The Poorest Will Suffer – It isn’t all sunshine and rainbows and unfortunately, this pandemic will likely take a toll in a similar manner in a way the Spanish flu did in 1918: on poor and emerging countries. Outside of the rich world media spotlight, those in poorer countries will likely suffer silently for a number of reasons.
The first being that many more people love hand to mouth in poorer countries. Neither the government nor working people can afford to self quarantine if they depend on work for their daily food and housing. Family can help, but for those in extreme poverty, they will have little choice but to work sick and spread the virus to others. With no unemployment and no safety net, which is temporarily provided by things like the relief bill in the US, many will feel they have no choice but to risk infecting others so that they themselves have a chance of survival. Because of this, those models that predict herd immunity once 50% to 70% of the population is infected may be most applicable to emerging economies rather than rich world ones where the economic means to shut down down the economy and still be able to feed its people still exist.
The governments and hospitals of many emerging countries will not have the resources either. The US and European countries can borrow well in excess of their entire GDP to be able to provide benefits to their populace to weather the storm while emerging economies don’t have the option. Borrowing even 50% to 60% of GDP for an emerging economy may be a tall ask so many of them will be forced into choosing countermeasures like quarantine even when the virus has not arrived or is in low numbers just to not overburden their own fragile healthcare systems. Uganda was issuing stay at home calls before anyone was even infected in the country.
Given that so many people are clinging to the edge of survival on a daily basis before the virus, large lockdowns in emerging economies like the one India is attempting are a social experiment that we have never seen before and remains to be seen that it will be successful.
The Response Remains Disorganized and Uncoordinated – From states competing with each other for resources to slow moving and bureaucratic responses, outside of East Asia the response has been woefully inadequate. The misinformation rife in the age of memes and short attention spans doesn’t help and contributes to the support of ignorant politicians who then delay responses and make the situation worse through their lack of action. By the time the rhetoric dies down and they see they have a problem, it is usually already too late. We are seeing attitudes like this from local government in parts of the US that still remain skeptical of the response to the virus and seem to be prioritizing the economy still for the moment.
Why We’re Lucky
Despite the slowness of government response, if you are able to sit at home with your family, buy food at the grocery store and receive a check, be it unemployment or a paycheck, consider yourself one of the lucky ones. You are incredibly privileged to be able to stay inside long enough for the virus to peak and pass. Much of the world does not have this luxury and as a result will have to watch some of their friends and family die. Despite all the complaining and blaming in the US on those in charge, how many of us really would be able to take care of ourselves if we had no safety net at all? How long would many of us be able to survive if we didn’t have unemployment and stimulus cushioning the blow? Before you complain, count the blessings you have right now because there are many others in the world who don’t even have the option to complain, they are too busy searching for their next meal.
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