The Worldwide Panic Over the COVID-19 Coronavirus is Unjustified.
February 27, 2020 11:32pm
I'm no epidemiologist, but I do want to weigh in on the worldwide reaction to the COVID-19 Coronavirus. Let me change a word in that sentence. I want to weigh in on the worldwide OVERREACTION to the COVID-19 Coronavirus. It is an unjustified panic.
In the last four days, the Dow Jones Industrial Average plunged 3226 points. Is that drop of 11.1% justified? Not in my opinion. But markets can be motivated by both irrational exuberance and by irrational fear.
People are acting as if COVID-19 is a painful, super-contagious, extremely deadly, incurable disease. It is not. The official fatality rate is less than 3%. But it's probably lower than that because there are certainly more infections than are officially tabulated. For comparison, the flu's fatality rate is about 0.2%
But who is dying? The elderly and people with preexisting health problems such as heart disease or diabetes. Fully 99.8% of the young and healthy who contract the coronavirus survive.
People aged 80+ have an official fatality rate of 14.8%. But the official fatality rate for people under 50 is less than 0.5% (with 10-39 year-olds dying at a rate of 0.2%). I'm 54, which means I have a 98.7% statistical probability of surviving a COVID-19 infection. And even an 80 year-old has a 85.2% chance of NOT dying. So what the hell are we so afraid of?
This is a situation where the fear is worse than the disease. I would travel to Wuhan, China tomorrow without any concern that I would get sick and die. The symptoms, while not pleasant, are no more severe than many other illnesses that infect our bodies.
Worldwide, the coronavirus will cause far more economic damage than biological damage. With businesses in China closed, the pipeline for parts and manufactured goods around the world is in the process of being seriously disrupted. Chinese companies face bankruptcy and may never reopen. The ripple effects are being felt across the entire globe.
Airlines have reduced services. Cruise lines have canceled cruises. Entire towns in Asia and Europe are quarantined. Many sports leagues in Asia are playing games in deliberately empty stadiums. Schools have closed. Festivals were canceled. Religious facilities have been shuttered. Saudi Arabia has prohibited Haj pilgrimages. There is even talk of Tokyo not hosting the 2020 Olympics.
With people afraid to travel and congregate, the flow of money will dramatically slow. And it is the speed of money changing hands that fuels the economy. Fast cash flow is good; slow cash flow is bad. And credit defaults have a cascading negative effect even on businesses with strong balance sheets. Fear resulting from the media's hype will do more damage than the virus.
Symptoms of COVID-19 range from mild to severe fever, cough, and shortness of breath. In other words, it's just like most respiratory infections. I acknowledge that COVID-19 is worse than the common cold. But it's not the Black Plague either. Be reasonable. Wash your hands. Cover your coughs and sneezes. SARS, MERS, Ebola, H1N1, and the West Nile Virus didn't kill anywhere near as many people as the alarmists predicted. And neither will COVID-19.
And now to get political (because in 2020 EVERYTHING is political). If the American economy tanks as a result of this media-induced panic, and people become concerned about their access to health care, who benefits from that? The candidate promising the most free health care. And that ain't Trump.
As the curse claimed to be of Chinese origin says, "May you live in interesting times." These times are certainly interesting.