The answer: One week
By Scott Sumner
The question: What’s the difference between Italy and the rest of the Western world?
The FT provides a graph:
Here are a few misconceptions I see:
1. It’s not that bad because the death rate is only around 1%, and it mostly kills old people.
2. It’s not that bad because it’s likely to fade away once the weather gets warmer.
The “misconception” part of each claim is the “It’s not that bad because”, not what comes later. Wuhan’s medical system was overwhelmed by the disease, despite less that one percent of its population becoming infected (maybe a bit more unreported, but at most a few percent.) Some experts believe that half of the entire population would be infected without social distancing. Italy’s medical system was also stressed, especially in Lombardy, despite a much lower infection rate than in Wuhan. If it truly became widespread, medical systems might be unable to handle the caseload. As for only one percent dying, if 50% of Americans become infected that might be somewhere around 1.6 million deaths. I certainly don’t think that will happen, but that raises the question of why won’t it happen?
The second claim sounds reassuring, but at a 33% daily growth rate we’d be overwhelmed long before we reached summer, (and we don’t even know yet whether the virus will slow down in the summer.) Again, I don’t expect the 33% growth rate to continue, but that raises the question of why won’t it continue?
We are already seeing quite a few shutdowns of universities, large social events, travel, etc., despite a relatively low rate of infection in the US, thus far. That tells me that when the highly risk averse US public becomes fully aware of the severity of the crisis, there will be much stronger measures taken, much more social distancing.
This is a frustrating problem because it’s not obvious to me that there are any attractive solutions. There might have been if the US government had had a plan for dealing with pandemics, as did the (quite small) governments in Singapore, Taiwan, and Hong Kong. But we did not. Nor did the Europeans. It’s like the old joke about the farmer who told the motorist, “First of all, if I were going there I wouldn’t start from here.” It’s too late for the Taiwan solution.
Instead we seem to be faced with two unpleasant choices:
1. Lots of deaths and lots of overburdened medical systems.
2. Lots of social distancing, and perhaps a recession.
Because I believe the second option is far more likely, we need to focus our attention on that outcome. In my view, the stock market is already assuming that outcome, and also assuming that this outcome will last for longer than a few months. Even if the caseload falls back in the summer months, it’ll spike again in the fall and winter. (Given that the caseload in Florida is rising rapidly, there’s no reason to assume it will go away entirely in the summer.)
So I expect social distancing to last until there is a vaccine, and perhaps a few months after that. We may face 18 months of greatly reduced social interaction.
Is there a more optimistic scenario? The caseload in China is down to very low levels. The main risk in China right now (outside Wuhan) is from international travelers coming into China. And even they get quarantined for 14 days. The Chinese are now restarting their economy. The optimistic outcome would occur if China were able to restart their economy without cases spiking upwards. So if we were able to achieve Chinese levels of social distancing and reduce the outbreak to extremely low levels (a big if) and if we could then restart our economy without a resurgence in the epidemic (another big if) we could get a much better outcome than the 12 to 18 month plague that I’ve described.
But can we?
PS. If you think my criticism of our pandemic preparation is just Monday morning quarterbacking, consider that Tyler Cowen (who is not known as an especially negative complainer) made this observation on February 23:
Here is further information about the obstacles facing the rollout of testing. And read here from a Harvard professor of epidemiology, and here. Clicking around and reading I have found this a difficult matter to get to the bottom of. Nonetheless no one disputes that America is not conducting many tests, and is not in a good position to scale up those tests rapidly, and some of those obstacles are regulatory. Why oh why are we messing around with this one?
That was three days before the very first case of community transmission in the US. It was more than a month after the epidemic had reached crisis proportions in China. Other countries were doing widespread testing. And it turns out that widespread testing is essential in preventing a wider outbreak of community transmission.
PPS. This NYT article on government incompetence is horrifying:
To repurpose the tests for monitoring the coronavirus, they would need the support of state and federal officials. But nearly everywhere Dr. Chu turned, officials repeatedly rejected the idea, . . . By Feb. 25, Dr. Chu and her colleagues could not bear to wait any longer. They began performing coronavirus tests, without government approval.
What came back confirmed their worst fear. They quickly had a positive test from a local teenager with no recent travel history. The coronavirus had already established itself on American soil without anybody realizing it.
“It must have been here this entire time,” Dr. Chu recalled thinking with dread. “It’s just everywhere already.”
Read the whole thing. And then weep.