Why should I be worried about COVID-19?

So, to be clear, the title of this piece is not “Should I be worried about COVID-19?” Because, if you’re not the Buddha or another higher being, you should be worried. 

So you’re worried. You’re not sure why. You watch the news; you see your neighborhood grocery store empty; you gawk at the videos of people fighting over toilet paper; you stare at your portfolio tanking and read the forwards from people talking about how a shot of turmeric infused whiskey is the only known cure. You hear contradictory messages from the people who should know - presidents saying “it's a hoax”, doctors saying “we’re all going to die” and WHO telling you to “wash your hands”.

For most things, it helps to have a target (or targets) to direct our worry towards. So we can focus on issues and problems - some we can solve and make others more manageable - instead of sinking into a nameless dread. The first step towards health is knowing what ails you.

But first, here are some reasons to not worry.

We have posterity.

It’s not the end of the world. Depending on who you are, that may not be good news. But for most of us, surely it will be nice to know that COVID-19 is a speed bump on humanity’s path. It may be an especially big one, but it’s not a dead end. The worst case estimates are 60-70% infected. Based on early estimates, 10-20% cases require hospitalization. Overall, fatality is far less than 1%. In some shape or form, humanity will stumble onwards… to the next crisis.

And we won’t run out of toilet paper. People have stockpiled it but won’t use it anymore than usual. Production hums on and supply will catch up with demand like it does. Might be another week or two according to multiple news sources, but won’t be months. So keep… um… going.

As for reasons to worry, there are a few more.

The First Order

This virus is dangerous, not because it’s lethal, but because it’s highly contagious. Way more contagious than most of the popular strains of influenza, and somewhat more than SARS and MERS. That it is contagious even when the victim is asymptomatic (i.e. showing signs of being ill) makes it even tougher to control. This explains its rapid spread throughout the world (and more on that below).

So far, it appears that the number of actual infected cases double every six days. That’s a quick rate of growth (though it may not sound like that). To make the math simple, it means that starting with one infected person in a population, you will get to roughly 1 million infected in 4 months. If say, you had 10 infected people traveling at different entry points into a large country (a very believable scenario for places like India, the United States, Germany etc), that 4 month figure could be 10 million. The growth will probably plateau out at a lower number in countries with lower populations. But very large proportions of entire countries can become infected if they do not put isolation/quarantine procedures into place. The best guesses from experts put these proportions at 50-70%.

You may have read these numbers before but it's worth repeating - even though roughly 80% of the infected persons are only mildly affected, 10-20% could require hospitalization and close to 1% could die.

That leads to problem number one: the load on the healthcare systems. Most countries have hospital beds roughly 0.1-1% of their populations (or between 1 to 10 beds per thousand). For example, the USA has roughly .3%. Some of these beds are used by people having other critical treatments. So it’s unlikely that there will be over 2 beds per thousand available. Taking the lowest end of estimates, 50% infected times 10% critical gives us 50 cases per thousand, i.e. 25 times the number of available beds.

Now the sharp minds reading this article would have grasped that there is a timing element to these numbers. Not all those people would be sick at the same time. Some earlier cases would have recovered. We would have gotten better at identifying and treating the sick ones as the weeks go by. While that's true, it lessens the scale of the problem - it doesn’t go away - unless there is a huge amount of curve flattening via social isolation - i.e. delaying the onset and spread of the disease by isolating the sick. 

These statistics played out in real life as the various stages of the situation developed in Wuhan. Early scenes showed health workers collapsing and patients literally piling up on the floors of hospitals. As isolation measures took hold, and they increased hospital capacities, the situation improved tremendously.

So the only way to avoid the horror of those early Wuhan scenarios is to force vast populations around the world to isolate themselves. That brings us to problem number two: the economic impact of isolation.

For isolation to be effective with COVID-19, it has to be at least two weeks. Given that many of the infected are asymptomatic, people face a choice - keep getting tested regularly or just isolate yourself even if you don’t show any symptoms. For most it becomes the latter as other than a few East Asian ones, at this time no country has anywhere close to the required number of test kits. For many employees and employers (and especially those in lower paying blue-collar or service jobs) this is an impractical timeframe for employees to be away from work.

This piece would have been published earlier, but the true economic impact of isolation was still being debated till China released the January and February economic data on March 15th. It showed a decline of 13.5% in industrial output in January and February from a year earlier, 20.5% in retail sales, and 24.5% in fixed-asset investment. This could lead to the first quarterly contraction in China since data started being recorded in 1989. The global ramifications of this (even in the absence of other countries’ own economic woes) would be, to put it mildly, negative.

The way the stock market has behaved in the last few days is also a good indicator of the coming economic perils. While stock markets don’t always follow underlying economic fundamentals, in this case it’s interesting to note that monetary stimulus by the central banks seems to have limited (sometimes negative) impact on stock markets. It seems like investors are looking for a solution to the real problem rather than the symptoms.

What that tells us is that there will be likely a harsh decision that most countries will face in the coming days - lockdown and minimize the healthcare crisis while risking significant loss of income and employment, or keep economies running as best they can and risk losing large numbers of people to the virus.

I would like to end here, but unfortunately this dilemma is only the beginning.

Ripple Effects.

The only simplification with the framework presented above - society vs economics - is that it’s a choice in the short run. In the long run, there is a strong correlation between economic and societal well being - and they will both suffer.

More and more experts are talking about social isolation as not a temporary but a long term process. And it makes sense that the more we push down the number of cases in the short run, the longer we will need to keep those measures in place as the infection travels (slowly) through the entire population.

Thus, the slowdown in economic activity will be long and painful. People will be laid off. Lives will be disrupted as schools close and parents are forced to spend time on childcare. Others will be forced to self isolate for longer because they are older, or live with older parents. Businesses will close. In the extreme case, some banks will fail.

And as we saw with the last recession, just fixing the proximate problem of the financial markets will not solve the twin problems of business profitability and individuals’ earning power/employment. These things don't take long to collapse, but a long time to build back up. 

What are the implications of all this? Here is a glimpse of what lies in store over the rest of 2020. 

Foremost, many people in the vulnerable age groups are likely to die. A back-of-the-envelope calculation shows potentially 3 mln deaths in the USA alone - hopefully the number will be lower. Fatalities are more likely for those not well to do or who live in areas with poor access to healthcare. This will be the saddest part of what's about to come.

It's true the math tells us that, in the long run, the numbers will be lower than heart disease, cancer, even accidents. But we live in an age where we expected to be winning the war against some of these afflictions. Not losing against a new one. 

Then there will be the social tensions. The lack of medical resources and a quick path to a vaccine or cure will lead to a deepening of divides along economic fault lines. We should also expect layers of racism and anti-immigrant rhetoric to creep in.

What could add a further sinister twist to this crisis is the difference in the way it affects younger (read millennial) vs older (read boomer) people. Asking those who feel disenfranchised to make personal sacrifices for the sake of those who they count as oppressors will not go down well. 

International trade and its bedmate international relations will take a beating. The globe has been getting increasingly fragmented and regionalized - sometimes isolated. A pandemic is the perfect catalyst to push it further in the same direction. 

International trade is a fairly fragile process dependent on several things going right. As the virus causes disruptions, nations will realize how much they rely on each other for things such as nitrile gloves, face masks and paper products, let alone food, vaccine production and high value medical equipment. They are likely to be forced by their citizens to become more self reliant in some or most of these things. 

International relations will hugely suffer as nations place travel and entry restrictions. This will be made worse because many major countries have recently shifted to more nationalist and anti-immigration policies. The news that the USA was trying to lure away a German vaccine maker to make vaccines for the exclusive use of Americans should come as no surprise given the current political climate. And we should see it as part of a larger picture where the reflex action for most nations will be to put the short-term interests of their citizens above any benefits of cooperation.

There are many bad actors out there who will feel they can tighten their grip on the reins of political power using external threats. The pandemic provides that perfect threat. The UK’s “wartime footing” will become a phrase used more and more around the globe. It’s fine as long as it is just a turn of phrase, or a way to describe how the military could help the civilian population using their expertise and resources. The problem is that, if global supply chains break down and nations find disruptions in their supply of essential food, energy or medical needs, it can trigger actual wars, messy regime changes and migrations. In the more developed economies, where this is less likely, we can still expect cases of power grabbing by politicians who can postpone inconvenient elections at a time of “national emergency”.

The long-term impact of all these breakdowns will probably last beyond any recovery in the core healthcare situations. Global trade and military alliances have gradually been shifting to regional theaters and a multipolar world as a difference to the bipolar/ unipolar world we have seen since the end of WW2. Liberal points of view and democratic institutions have been under threat over the last few years. These are all fundamental shifts driven by several geopolitical factors and the coronavirus will hasten them along. 

Life changes

At an individual level, probably the biggest lasting impact is likely in how we work. While the technology to allow work from home has been available for at least a decade now, it has always been considered as either a last resort, or as a way of work suited to consultants, part-timers or shirkers.

As business normalize themselves with large parts of their workforce working from home, there will be changes required in the way of working. Information security, automated monitoring of projects and deliverables, communicating without non-verbal cues - all these challenges will need solving. But the rewards to employers in terms of reduced spending on infrastructure, and to employees in terms of flexibility and time saving, will drive a larger proportion of the workforce staying at home.

Given that building construction and operation, and transportation are the two largest contributors to GHG emissions, even small changes in the overall mix of home vs office workers could have a fairly large impact on climate change scenarios. And on energy prices, which are already taking a beating.

The shifts to virtual meetings and education, paperless documents and gig work - all of which were already underway - will in accelerate the months long isolation periods being recommended at this stage.

What we don’t know could be comfortable

All of the above is based on a number of factors which are only barely known at the time of writing this piece. As time progresses we will learn a lot more about how COVID-19 is influenced regarding external factors - Is it seasonal? Does it go dormant or die off in certain temperature and humidity ranges? Why does it seem to not affect children? How long do the antibodies last - i.e. can we get re-infected soon? Answers to these questions will help designing effective strategies to combat its spread and will also serve as green or red signals for investment and employment.

In time there will also highly likely be a vaccine just like for the H1N1 flu. We can only hope that it’s effective enough so we can eradicate it like smallpox or polio.

Yes, odds are on the side of human ingenuity winning the war if not the battles. As Willie Nelson said, “I woke up still not dead again today.” 

In the meantime, the simple rules for survival would seem to be:

1. Follow the science - listen to reputable organizations and follow their advice. Conversely, do not take part in the spread of rumors and unverified information from potentially biased sources.
2. Be kind to the old and infirm - if that was not already a value you held dear, this would be a good time to begin for part of the population that has a 1-in-5 chance of dying if infected. If for no other reason than the fact that we will all be old someday and more vulnerable to COVID-19.
3. When in doubt assume that people are good - as tempting as the analogy is, the world is not turning into an episode of the Walking Dead. While we should all be attentive to the threat of bad actors, being trigger-happy in stressed times will only create vicious spirals of violence.
4. Embrace the new ways of living and working - if the long-term effect of this pandemic is to make people and businesses more resilient and allows them to break bad habits like commuting for 10% of their waking life, that’s progress.

Be safe. Till the next time.

References:

Liz Sprecht does a great job of explaining the math of how COVID-19 spread can overwhelm healthcare in the USA - on Twitter via the Threader App.

Carl Bergstrom explains how flattening the curve works with limited healthcare capacity.

China’s first time quarterly contraction article on Bloomberg. 

NASA’s images showing before/after imagery of air pollution over China.