Overreacting to coronavirus? The perverse logic of panic during a potential pandemic

The best time to panic, that is, overreact to a potential pandemic is shortly after a novel pathogen has been detected. So say famed student of risk, Nassim Nicholas Taleb, author of The Black Swan, and his colleagues. Of course, at that point, by definition few people have the virus and therefore it does not seem like a threat to the whole community.

In hindsight it is perfectly obvious that the extraordinary efforts now being made by individuals and communities across the world to prevent the spread of COVID-19 should have been made in those areas where the virus was first discovered when it appeared. However, it is natural that authorities do not wish to be criticized for "crying wolf" and, if they are elected officials, beaten at the next election for unnecessarily interfering with the life of the community.

But it is precisely what would be called an "overreaction" that might have stopped COVID-19 in its tracks at the beginning. I've written previously about those whose jobs are to make sure that small problems never become large and that some problems never even appear. The piece was called "Asymmetrical accolades: Why preventing a crisis almost never makes you a hero."

Taking a short break - no post this week

So many half-formed thoughts about our current predicament are running around in my head that I'm taking a short break this week to sort them out. I expect to post again on Sunday, March 29.

Spectacularly wrong: Why Wall Street doesn't understand the corona virus

Investment professionals on Wall Street spend their days reading financial reports and looking at numbers flash on screens. These numbers record the moment-to-moment changes in the collective wisdom of markets about the value of stocks, bonds, commodities and a distressing array of derivative financial products.

From the comfort of the sealed caverns of Wall Street the actual physical and social world is just an abstraction to be quantified and analyzed. One of Wall Street's most prominent investment research and management firms released an analysis that says the corona virus won't be all that bad for the economy.

Analysts from Morningstar Inc.—which is actually headquartered in Chicago's cavernous downtown—say that this pandemic will be a "mild pandemic." I'm not sure how pandemics can be mild, but the analysts outline cases for "moderate" and "severe pandemics."

One of the things that gives these analysts such a sanguine view, particularly in the United States, is the country's advanced health care system which is "likely much more prepared for the taxing of our hospital system, as we appear to have a massive lead over other developed nations in the number of intensive care unit beds per citizen."

And yet, a first-hand report from a physician in those hospitals suggests that there will be very little room for severe corona virus cases in any hospital ICU. Those beds are already being used by patients and not just waiting empty. In all likelihood, hospitals will be quickly overwhelmed and forced to decide who gets critical live-saving treatment and who does not. The "who does not" number could be very large if the Italian experience is anything to go by.

Coronavirus reminds us we are organisms in an environment

A close friend of mine, a professor of English literature, has been researching American philosopher John Dewey, whose book Quest for Certainty captivated me so much many years ago that I read it again right after I had finished it the first time. My friend has been reminding me why I found Dewey so profound while shedding new light on the philosopher's thinking.

Dewey, it turns out, is one of the few thinkers in American life who absorbed the true import of the work of Charles Darwin. Dewey reminds us that, quite simply, Darwin posited that we humans are organisms in an environment just like every other organism. Dewey's star faded after World War II.  American and world society have since lapsed into a narrative that puts humans above and outside nature, protected by technological advancements that supposedly shield us from nature's demands and vicissitudes. The general narrative is that we are heading into a push-button, voice-activated technocratic paradise. (I think of the various Star Trek television series as popular cultural reflections of this view.)

But, the first pandemic in a century is forcefully and sadly reminding all of us that Darwin was right about our place in the natural world, more specifically, that we will never be outside of it.

Coronavirus financial collapse: "Central banks can’t come up with vaccines"

In a global society optimized for finance, it is easy to believe that finance holds the answer to all problems. In 2008 as shipping slowed to a crawl in the wake of the financial crash, sellers of the merchandise on board those ships became increasingly reticent about accepting letters of credit from wobbly banks as payment guarantees from buyers.

And, banks were increasingly hesitant to provide other forms of trade credit to buyers. The solution—as for so many other problems that year—was government financial guarantees for banks, depositors and various other financial institutions. That's because when the essence of the problem was financial, a financial response could work.

Today, it is the coronavirus which menaces the world economy—and the people who contract the virus, of course. Much of the Chinese economy—China has been the epicenter of the epidemic—has now been shut down in an effort to halt the spread of the infection which is believed to kill around 2 percent of those who get it. But as anyone reading headlines knows, coronavirus has now landed on every continent.