Beating covid-19: Compulsion or Persuasion and Guidance

March 31, 2020

The number of deaths in the U.S. from covid-19 have doubled every three days over the last 22 days amounting to 3,141 by the end of March 30. At that point there were 163,788 confirmed cases (those testing positive for the virus).  https://www.ft.com/coronavirus-latest  The actual number of cases is thought to be considerably larger but remains undetected because of limited viral testing.  America’s overall strategy for containing the virus is to isolate those infected in order to stop or slow its spread until a vaccine can be developed, tested for safety and effectiveness, manufactured and administered (one to two years after the discovery of the vaccine, with luck) or until enough of the population has acquired immunity as the result of surviving from the disease (herd immunization), i.e., almost everyone who gets it. The details of the approach vary from community to community.

The virus that causes covid-19 is spread from person to person. It can be picked up from surfaces touched by a sick person, coughed or sneezed into the air within six or so feet or by direct contact, but it can only enter one’s body via the month, nose or eyes.  “Prevent-getting-sick/how-covid-spreads”  “Protecting-yourself-from-coronavirus”  Thus those who test positive for the virus should be isolated from the rest of us (quarantined) and the rest of us should self-isolate if we experience symptoms of the disease. To protect ourselves from picking up the virus and bringing it to our faces we can reduce our social interactions (work from home, avoid public gatherings such as religious services, and restaurants, bars and public entertainment). Two measures are more important than any others: test as many people as possible in order to detect and isolate those with the virus and wash our hands with soap frequently.  The President’s coronavirus-guidelines for American

These measures can be imposed by government decree and enforcement by the state or can be urged by public education and voluntary individual actions. On March 17 the Governor of Virginia explained why he had not ordered restaurants and bars to close. “Northam said too many Virginia residents rely on restaurants for their meals to justify ordering they shut down.”  “Northam-adopts-10-person-standard-opposes-closing-restaurants”  For the United States as a whole and for most communities (public health services are administered by cities and states) the restrictions on our activities are voluntary. The specific guidance or rules are determined locally, thus providing useful data on which approaches work best.

As in Singapore, S. Korea, Japan, Hong Kong, Sweden and a few other countries, business closures in the U.S. have generally been voluntary until March 30. But unlike these countries, which have successfully kept death rates relatively low, the U.S. failed to undertake significant testing for the virus for more than two months after the outbreak of the disease in Wuhan, China. After the tenth death, the death rate from covid-19 in the U.S. has doubled every three days and passed the number of 9/11 deaths on March 30. On March 30, the Governor of Maryland, followed by the Governor of Virginia and the Mayor of the District of Columbia, made shelter in place mandatory: “We Are No Longer Asking Or Suggesting That Marylanders Stay Home, We Are Directing Them To Do So.” “As-covid-19-crisis-escalates-in-capital-region-governor-hogan-issues-stay-at-home-order-effective-tonight”

There is general agreement that testing should be pursued vigorously and those testing positive should be quarantined and their contacts tested, etc. This buys time to better prepare for the increased demand for medical care that will be needed and to develop treatments and vaccines. Though many will die needlessly in the U.S. because of a several months late start with such a program, the question remains which policy to follow for everyone else going forward.  Should it be government mandates to shut most things down and keep everyone home (or at least try to), or should we rely on the choices of each individual for how best to protect themselves and their loved ones while carrying on with their lives? What are the matrixes by which that choice should be judged? “This-pro-trump-coastal-community-in-florida-hit-early-by-virus-sits-at-emotional-nexus-of-national-debate-over-reopening-economy-amid-health-crisis”

In my opinion maximizing individual choices about how to respond to the epidemic is both more effective and more in keeping with America’s freedom loving culture. By more effective I mean that it will best slow the spread of the disease with minimal damage to the economy and the quality of our lives. We each have a strong incentive to protect ourselves from contracting the virus. We also care about protecting others from exposure (most strongly our families and loved ones) but can be deterred from that goal by the loss of income if we stay home. The CARES Acted signed into law a few days ago is meant to compensate firms that shut down temporarily and workers who stay home temporarily and thus to better align the incentives to protect others with the financial consequences.

We protect ourselves and others by diligently adhering to enhanced hygiene practices (frequent hand washing) and by reducing unnecessary social contacts (no hand shaking etc.). As with most everything else in life we are each better able to determine how best to balance the risks of social interactions (whether to work from home or in the office) with safer isolation, than are government officials making general rules for everyone.  The countries that have adopted this approach have left their citizens free to go to work or restaurants but undertaken extensive educational programs on the best practices to protect against transmission of the virus. “South-korea-keeps-covid-19-at-bay-without-a-total-lockdown”

South Korea, Singapore, Taiwan and other countries taking this approach provide their citizens with honest information needed by them to evaluate the risks of different choices. This includes information on who is infected and identifying infection hot spots. In the U.S. a person’s health status is private. But when a person carries a contagious disease into the public, his/her condition should be made known to those who risk exposure.  “Coronavirus-data-privacy”

Government mandates to shelter in place or cease many business activity will become increasingly difficult to enforce (have you watched the “Steven Soderbergh movie Contagion”). Persuading the public to adjust their behavior in ways that slow the virus’s spread and providing helpful guidance on how best to do so until a vaccine is found or most of the population becomes immune would be both more effective and more politically popular.

Covid-19, Why Aren’t We Prepared?

Following the Ebola epidemic of 2014 President Obama established the National Security Council Directorate for Global Health Security and Biodefense “to do everything possible within the vast powers and resources of the U.S. government to prepare for the next disease outbreak and prevent it from becoming an epidemic or pandemic.” “NSC-pandemic-office-trump-closed”.  This unit was “disbanded under a reorganization by national security adviser John Bolton” in May 2018.

America’s disorganized and late starting response to the spread of Covid-19 in our country can be attributed in part to this act. What was obviously a mistake with the benefit of hindsight, however, was a more difficult judgement at the time. Two classes of judgements were involved: a) what organizational structure would service the country’s interests best (for Bolton, everything always seemed focused on the preparation for war), and b) how many and what resources should be devoted to events that might never occur?

The government’s role in disaster management is spread between a number of agencies, from FEMA (Federal Emergency Management Agency), the Department of Homeland Security, the Department of Health and Human Services (HHS), Food and Drug Administration (FDA), and the Center for Disease Control and Prevention (CDC), to state and local health services, fire departments etc. I have no idea if each potential disaster is managed by the most appropriate agency but coordination between them is often very important. That requires designated leadership.

Assigning resources to prepare for dealing with possible future epidemics means not assigning them to something also of value. What are the tradeoffs? We keep emergency reserves of many things: oil, medicine, face masks, excess capacity at hospitals, etc. What is the right amount? We keep a large military in case of war that we hope will never occur (unfortunately we have very foolishly used them unnecessarily too often and in too many places). What is the right size of the military given that every additional soldier is one fewer of whatever else she might have done?  Keeping a military reserve that can be called up in the case of war is one of the approaches we have taken in dealing with this question.

It is hard to impossible to know for sure the best answer.  Devoting resources to being prepared for an event that never occurs might seem (increasingly) wasteful. But so might an insurance policy for something we hope never happens, and we are generally wise to have it. Not taking the time and resources to be prepared can be extremely costly if the disaster occurs.  Large banks are now required to test the resilience of their balance sheets against financial shocks of one sort or another (stress tests) and to prepare living wills for how they would be liquidated if they became insolvent. These are costly exercises but well worth the cost if it helps avoid bank failures and/or makes the orderly liquidation of an insolvent large bank feasible, thus making market discipline of excessive bank risk taking credible. https://wcoats.blog/2012/06/29/spains-financial-crisis-first-principles/

There are rumors that the HHS blocked the use of foreign tests for the Coronavirus to preserve business for American pharmaceutical companies and that President Trump exempted the UK and Ireland from his initial European travel ban because he owns golf courses in Scotland and Ireland may or may not be true. https://wcoats.blog/?s=crony+capitalism.  Fortunately, we still have a free press, which is likely to get to the bottom of that.

Where the stakes are high, we should pay the cost of reasonable preparations for disasters of one sort or another. The lives of tens of thousands of citizens are at stake. Getting the balance right, as in so many other areas of governance is not easy. But the United States today is neither well organized nor properly prepared to mitigate the damage of the epidemic now about to sweep over us.  We will pay a much larger cost for this than we should have.

However, it is not only the country’s lack of preparedness that is a major problem in this national crisis. The President himself appears unprepared to handle facts or rely on his medical experts and convey confidence to the public by making accurate statements about what is being done and what the public should expect. His recent oval office statements about an all-encompassing Europe travel ban including the banning of cargo coming from Europe and the availability of free tests and treatments was basically wrong. Each claim had to be corrected and re-explained in an already confusing and panic-induced environment. The White House has not presented a clear, coherent plan for containing the damage of covid-19 that the Trump’s own administration understands or is behind.  Along with starting late to address the challenge, the Trump administration has been and remains incoherently organized to move forward from here. Stay tuned for the next tweet.