I've learned a lot & thought I'd share

  • Derek Newell

A little optimism during a global pandemic

Updated: Mar 16, 2020

Today we are at war with the coronavirus. This isn't an understatement. This is the largest domestic threat the US has had since the Civil War. It is scary, but there is reason for optimism.

I have thought a lot about how the coronavirus will play out, partly to give myself some sense of control and partly just to figure out what I can do and what I think "we" should do. The more I have thought about it, the more I have moved from fear to hope to a bit of optimism. Since true optimism (not blind ignorance or denial) might be hard to come by right now, I thought I would share.

To be clear, it will be bad, especially because it will happen in a short time and over social media 24/7 (I think social media actually helps - more below). Some scenarios by smart people have 100-200M Americans infected with 20M hospitalizations and >1M deaths. That is very, very, very unlikely to happen. Those models assumed no mitigations and while I am not a rabid proponent of American exceptionalism, we are not that incompetent. There is a known solution that is 100% effective and while politically or economically difficult, when it gets bad enough, we will act (we already are).

It us hard to know what will happen, but with exponentials, the middle scenarios are less likely. We either contain it or we don't. It isn't likely 30M Americans will get infected. It's either going to be something less than 10M (probably a lot less) or the worst case scenario will come true where 150-200M Americans are infected. We either contain it or it gets completely out of hand.

So why am I so optimistic it will be at the low end? Have a I built a better model than everyone else? Nope, but I understand epidemiology (MPH from Berkeley), I am watching what is happening in other parts of the world and I understand people (PhD from "Life University"). The reasons for my optimism are: 1) disease surveillance combined with quarantines work, 2) humans naturally fear contagions, and 3) no person in power wants to see the global economy and social order fall apart.

Disease surveillance combined with quarantines work best when implemented quickly and together. We have already seen it work with coronavirus. Places that executed these well, like Singapore, Hong Kong and South Korea never had the economy or citizenry threatened in a material way by coronavirus. These tools also work when implemented later, like in China and Italy, although the economic costs are higher. Smart governments act quickly and when things get bad enough, everyone acts (even the UK).

The innate fear of contagions means government imposed quarantine aren't always required because humans will automatically start practicing social distancing en mass when the threat becomes apparent. Social media makes the threat apparent before it is actually real, so in this age of social media, we will start practicing social distancing sooner, which will slow the spread of the disease even more. People point out that many people are not doing this. We don't actually need everyone to do it for it to work, we just need most people to do it most of the time. We are taking dramatic actions all over the country because of a few cases largely because of the flow of information. This would never have happened in the pre-social medial past and it will work to dramatically slow the spread of the virus.

Regarding the third, nobody wants chaos less than the people with the most to lose so they are responding:

  1. The US declared a state of emergency and is finally ramping testing capacity

  2. Italy quarantined almost everyone on March 9th

  3. Much of Europe is following Italy this weekend

  4. Dr. Fauci, the Director of NIAID since 1984 and the most experienced member of the response team is already preparing for a national 14 day quarantine in the US

  5. The Federal Reserve is injecting money into the financial markets

  6. Entire sports seasons are postponed or canceled (NBA, NHL, NCAA, and on and on)

  7. Concerts are being canceled

  8. Campaign rallies are being canceled

  9. Primary elections are being postponed

  10. Almost all companies are restricting non-essential travel

  11. Thousands of companies are implementing WFH

  12. Apple and Nike and others are closing all stores

  13. Hundreds of conferences are being canceled

  14. Fast food restaurants are moving to drive through only (especially in the hardest hit areas)

  15. Schools are being closed

Everyone is preparing for doomsday, which makes it less and less likely that it will actually happen. All these actions seem terrifying to people, but it will slow down the spread of the virus dramatically. After the fact, many people will accuse others of "overreacting," not realizing the overreaction prevented the doomsday scenario.

Italy, not China, will provide a playbook for the US. It is one of the hardest hit western countries and it implemented a very significant, but partial, quarantine on Monday (March 9th). The US would likely only be able to implement a partial quarantine. Italy also implemented it later than China, which would also happen in the US, since we have just begun to take action and we are really behind on testing. Epidemiologists in Italy now expect total coronavirus cases to be less than 100K (they are at 25K today) out of 60M people (0.17%), and they expect infections to peak next week and to be a trickle by the end of April.

If that happens, that will be very good news for the rest of the world. It is possible a partial quarantine won't slow it down fast enough or the infection rate could have been already uncontrollably high before the quarantine. Only time will tell, but we know that effective quarantines work and the benefit to the rest of the world is that if Italy's actions do not work, it will reinforce social distancing instincts even more and spur other governments to act even more decisively to keep society from completely disintegrating.

We will know how well the quarantine in Italy worked in less than two weeks. We will know how big the spike will be and a few months after that, we will know how long the tail will be. Once everyone sees it working, everyone will breathe a collective sigh of relief. The worse it is for Italy (the higher the spike), the better for everyone else, because everyone will then take quicker and more decisive action. It will temporarily dent the economy but people will celebrate because there is a playbook that can be applied everywhere.

Post quarantine, governments will ramp up disease surveillance to spot clusters faster and they will move faster to quarantine people and small geographies (like Honk Kong, Singapore and South Korea successfully did) in order to protect the economy. Individual people will also comply more because of the scare of the first round of outbreak. Healthcare capacity will open up and the industry will take learning from the crisis and turn it into better care protocols which lower the death rate dramatically. We might not even need a vaccine because, given the speed of its spread and the need to act quickly, it is unlikely to become endemic to humans.

The hardest hit countries will take a relatively small reduction of GDP to halt a pandemic. Since the coronavirus is currently concentrated in wealthy countries, after (or even before) the economic hit, governments will provide large stimulus packages to the economy. If the dent in the economy is hard only for 2-3 months, everything could return to normal over the next 12-18 months as the virus makes its way around the globe and international teams are deployed globally to repeat the same playbook.

The main thing driving the current fear in the US is that we don't know where we stand because there hasn't been widespread testing. The only real risk is that the US gov't doesn't get widespread testing working, meaning hundreds of thousands of tests per week, within 2-4 weeks. The longer we wait, the bigger the problem and the harder it is to stop. At this point there is just too much pressure and it is too important - they will fix it and in 2-4 weeks we will start to understand the scope of the US problem. In the same timeframe we will likely see that the Italian quarantine is working. Then everyone will react in a way that will halt the spread.

It is probably better for everyone in the long run if in the next 4 weeks we learn that there are a large number of US cases (>500K). It is hard to know if we have that many cases, but if we do and we can measure them, this crisis will be one step closer to being over. People will panic, the markets will tank and politicians (even Trump) will take action that will halt the spread of the virus. They will lock down the economy and social interaction. They will use Italy to show it is the right thing to do and it will be the right thing to do.

If we can detect >500K cases in the next 4 weeks that means we will have built a solid disease surveillance infrastructure. We will then use it to do what Hong Kong and South Korea did in all the places where the disease spread isn't out of control yet. Even Trump will figure out this is his best shot to save his election and take credit for making all the hard decisions. He will have a playbook right in front of him that will guarantee him victory over the virus and probably win him another term. If we act quickly and decisively, it will work, because good quarantines and disease surveillance work.

Corporate interests could impede him, but they won't. Despite the short-term economic costs, corporate America will line up right behind him for four reasons: 1) they will be appropriately more terrified of a global economic meltdown than a one or two (or even 4) quarter hit to their earnings, 2) the data from Italy will show it will work, 3) they will get at least partially compensated by the government for their losses, and 4) they will be even more terrified of the potential of having democratic control of the executive and legislative branches if the crisis drags on through the election. This is the exact kind of crisis that could make Medicare for All a reality and turn the US into a progressive dystopian nightmare for them.

Politics could also impede him, but they won't. If there are >500K cases in the next 4 weeks no politician in their right mind is going to oppose a quarantine if Italy shows that it works. They will line up behind Trump because it is the right thing to do and because they will have no other choice.

It will still negatively impact the economy, but with an election in the US and China & the EU needing a strong US for their economies, the stimulus packages will be enormous. Those three regions control >60% of global GDP. Everyone will pull out all the stops to avoid a global recession.

There are many, many scenarios that are much worse than the one I think will happen. The worst is probably the combination of the US "only" finding tens of thousands of cases in the next month and continued delay and inadequacy of the disease surveillance infrastructure. If this resulted in people downplaying it, politicians bickering, business people complaining about the impact to their short-term bottom lines, people relaxing social distancing norms, and schools reopening, this virus could be with us for much longer and likely represent a much bigger problem in the end.

But even if we find "only" tens of thousands of cases, social media might save us. The reason is, without a doubt, one area of the US is going to become a war zone. Hospitals will be overwhelmed, people will be dying rapidly and it will be horrifying. Social media will amplify it 1000x. No one will want that to come to their home town and we will collectively make the tough call. Italy is the main reason we are even at the level of response we are now. Once that happens on US soil, we will act.

People will die and the economy will suffer, but I do not think this is a doomsday scenario where 200M Americans get infected in the next 18 months, millions die and we tumble into another great depression. There will likely be a recession, probably moderate. Some industries will be fundamentally transformed. It will be devastating for many, beneficial to a few, and hardly noticeable for more. Human behavior and buying patters will change for potentially decades and that will create losses for some and opportunities to other.

To keep myself sane, I'll be watching Italy data and the disease surveillance capabilities in the US closely, but for now I am optimistic.

God, I hope I'm right.

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