The day to day skirmishes about (1) whether the non-pharmacologic interventions (“NPI”), i.e., quarantine, travel bans, shelter in place orders, social distancing, hand washing, etc. were or are being handled well or poorly, and (2) when and how to “reopen” the economy are interesting and have some importance, but they pale in comparison and are sideshows to the main event. They distract us from attending to the real issues concerning COVID-19. Let’s sort out what those real issues are.
The uber-issue is how best to balance the dual goals of minimizing the damage that will be inflicted by COVID-19 and preventing the economy from falling below the point of no return (I’m not talking about a return to the robust economy the country had before. I’m talking about returning to a smaller, but sustainable economy—assuming the deficit spending fueled economy we had before was sustainable) with a chance of resuming growth. The cacophonies that have arisen around each of the two goals clouds the real issues concerning the balance that must be struck. Let’s start cutting through the haze.
Both goals are of paramount importance. Sadly, however, to a very significant extent, the two goals are in tension, i.e., the more we do to address one the more the other is impeded:
Economy. Effective NPIs are necessary, but they suppress economic activity. Economic activity stifled too much and/or too long will result in losses of:
- Human flourishing, community, fun;
- The dignity associated with providing for one’s self and family;
- People’s financial security and ability to fund charitable activities;
- Pension plans’ asset value; and
- Wealth and wealth creation which fund job creation, research, development, infrastructure, government activities.
To boot, there will be more illness and deaths from stress, depression, and related illnesses as people’s life savings or life work evaporates.[i]
COVID Damage Mitigation. Epidemiologists appear to be convinced that the COVID-19 is exceptionally contagious[ii] and discriminating as to which groups are spared consequences and the degree to which other groups are ravaged. To not take reasonable steps to mitigate the damage that will be inflicted by the virus would be inhumane.
While taking reasonable steps to address both goals is imperative, taking unreasonable steps would, of course, be unreasonable. That is the easy part. The hard part is figuring out what is reasonable while we have insufficient data from which to determine what works and doesn’t work, and never will.[iii] What experts cannot know is overwhelming:
Economy. There are too many unknowable variables to allow anyone to know how long the economy can continue to be stifled before it reaches the tipping point of no return. For a hint at why that is, consider this: Whether the US can continue to deficit spend (which it has been and is doing to a high degree) depends on foreigners’ willingness to continue to purchase US bonds. The more bonds that are sold, the less demand for additional bonds there is likely to be (the US becomes less creditworthy and the demand for bonds is satiated somewhat with every bond sold). The more the US continues to create money (which it has been and is doing to a high degree), the more likely the value of US bonds will fall because the inflation-adjusted profit from holding US bonds is reduced. As the US imports less as a result of having stifled its economy, the less US cash foreigners will have to buy US bonds. In light of these and many other imponderables, no AI-augmented human mind can calculate where that tipping point is or how soon it will come. Economists can, however, tell us that every day the economy is stifled will likely bring the tipping point more than a day closer. The damage done to Americans and everyone else in the world if America’s economy collapses will result in much more damage than could be caused by the worse scenarios for COVID-19.
Despite the above realities, some people are proposing that aggressive NPIs must be aggressively imposed everywhere until a vaccine is invented, proven, validated by the FDA, manufactured, and widely administered. Here are a few of the problems with that proposition:
- No one can know either that an effective vaccine can be invented or how long the process will take. A time frame of 18 months has been bandied about. On the other hand, that might be as optimistic as early projections as to how long NPIs would be needed (e.g., long enough to get us into the warmer summer months). On the other hand, according to The College of Physicians of Philadelphia. “Vaccine development is a long, complex process, often lasting 10-15 years and involving a combination of public and private involvement.” (Does anyone think we can survive 10 years stifling of the economy?)
- Making matters worse, while there are many great vaccine success stories concerning many viruses, “the record of coronavirus vaccines, however, has not been very successful. In some cases, doing more harm, including death, than good.”[iv]
- The vaccine itself will cause some people to become seriously ill and others to die.
- If a vaccine were discovered and approved quickly, it might be completely ineffective against one or multiple mutations of the current COVID-19 virus, i.e., it wouldn’t solve the problem.
Obviously, input from experts is essential to tackling the problems created by COVID-19. Sadly, however, experts have two unhelpful habits. They tend to myopically focus on their own areas of expertise[v] and, because they have little to say and are motivated not to say anything about the problems associated with their proposals, they say things that distract the citizenry from what it needs to know. If we are going to reasonably address the COVID-19 pandemic, we must listen to the experts but seek information on what we are really up against.
[i] “Suicides Go Up When Economy Goes Down.”
[iii] For example, serious and lively debates among expert economists continue to this day as to which, if any of Hoover’s and FDR’s actions, which were quite similar, to recover from the crash of 1929 did more harm than good.
[iv] “Perspectives on the Pandemic | Dr. John Ioannidis Update: 4.17.20 | Episode 4” (@36:45)