The Pandemic Economy — Part I: Current State of Affairs (May 1st 2020)
Part I describes the current state of affairs in the Covid-19 crisis and why this is a long term world wide problem that requires us to live with it permanently.
Part II describes the immediate actions we must do to actually stop COVID-19 and reopen the country safely, and not like happens today, too unprepared.
Part III describes how different aspects of the economy and society will have to evolve in the context of a permanent presence of a pandemic virus.
Part IV describes how our laws will change to cope with a pandemic environment and how the way governments will use the money creation process to pay for pandemic adaptation.
Table of Content — All
Part I — The current state of affairs (May 1st, 2020).
Context
How did we get here?
Will social distancing save us?
Part II — How to get out of this Pandemic.
What we should not be doing with social distancing.
A frightening thought: the plateau is the new normal
What we should be doing in social distancing
- Vision — the new normal
- Communication — inform and educate the population
- Mobilisation — activate the population
- Protection — organise the production
- Testing — know where the virus is
- Contact tracing — outflank and ringfence the virus
- Privacy and other considerations — not Big Brother but Caring Mother
Part III — Structural changes in the economy and in society
- Going out & traveling
- Shopping and eating out
- Work
- Supply chains
- Transport
- Urbanization, migration, housing & energy storage
- Think about the children!
Part IV — From legislation to practical objections… like money
From legislation
To practical objections… like money
Epilogue
Context
Every pandemic starts with a scientist whose warning was ignored by the government.
Marc Wathelet, a Belgian virologist who examined SARS in the US in 2003 and thus can be called an expert, tried to warn the Department of health for COVID-19 at the end of February. However, he was dismissed and named a “drama queen” by the competent minister on Twitter. Was he the proverbial pain in the ass who is preferably ignored? Maybe. Unfortunately, though, the facts show now that this ignored expert was right across the board contrary to the other experts with closer ties to the people in power.
It is difficult to make predictions, especially when they are about the future.
In this era of what we call the Anthropocene, where we adapted our environment to our needs and turned our natural enemies into endangered species, we were caught off guard by the smallest of the smallest, that turned ourselves into our own greatest enemy.
From vanitas vanitatum to sic transit gloria mundi in less than 3 months.
Only, it is more likely a systemic failure to absorb the already existing information and to draw logical conclusions in order to leap into action, as this Harvard Business Review calls it.
In this “green paper” or discussion document, is to draw up a scenario for a future in which the Coronavirus does not disappear. A scenario in which we need to adapt ourselves to the permanent presence of this virus in our society. If we want to preserve it, there will be a number of permanent restrictions and constraints in our freedom of movement. By some, this stance is being seen as an extreme scenario. However, given the history of earlier pandemics, it should be rather seen as the logical course of action. When handled well, it could look more like a choreography than as a restraint.
It is hard to write a text for the whole world, especially because different countries have different contexts. Therefore, this text takes Belgium as its basic context and by extension, Europe, as well as the US on occasion. Wherever possible, situations will be described generically so that it should be possible for others to relate. The author recognizes that for people from areas outside that geography it might be too far away to relate. This is simply a limitation of the text.
We take what happened till beginning of May 2020 as a basic point of departure and formulate subsequently the steps that should be taken immediately (that had to be taken months ago, in fact), and then what should happen longer term.
For people following the subject, they should not come as a big surprise. Very often, these measures have already been discussed or are under way, but they were reported on in a fragmented way. This text does not claim to propose something of an extraordinary originality but rather provide a synthesis and then goes one step further to take a look at how this might evolve further.
By putting together all the information, a logic emerges that indicates the necessity to reorganize society in order to handle this virus, or future viruses for that matter.
This is not the last word to say on the subject. The situation evolves every day and literature is filled with people who put their necks out and said: “This time it’s different” and turned out to be wrong.
The 2000 stock market crash, 2001’s 9/11, the 2008 Global Financial Crisis; time and time again, newspapers were filled with opinions on how this was going to change everything and, eventually, nothing really changed.
The author of this paper is very much aware of this and, frankly, hopes that it will be the case this time as well. Only, the facts are such that this possibility is difficult to believe.
The difference lies in the fact that the former named crises were crises we brought upon ourselves (like much of what happened in Game of Thrones, if anyone remembers that). They formed part of our society’s internal organization and could also be solved that way. We controlled the situation.
Today, there is an ‘externality’, a ‘stressor’ that is imposed externally (like the White Walkers), with which we cannot negotiate and which follows its own chain of causality, independently of whether we like it or not.
This text can be read as a serious piece as well as fiction, depending on your own viewpoint, or, in these times, depending how you ‘feel’ about things. It is ultimately an opinion, albeit a rather long one.
Good leadership is not about minimizing things until more information is obtained, but to be ahead of the curve, to accept errors and adjust. It is about announcing in advance the things that you know that will happen in any case, so that everyone knows what is to come and what is being expected of them.
Almost nobody has experience with pandemics today.
Once the basic parameters of infection and how to handle them are known however, it is about working with the evidence as presented, thinking ahead, identifying which measures might derive a desired result, drawing the implementation architecture to execute those measures, as well as its planning, and then, execute it.
This Pandemic has shown on the world stage who are the great leaders, and who are not. The turning of the tide has shown which ones have been swimming naked if that was not yet clear.
The current state of affairs (May 1st, 2020)
How did we get here?
There is little sense in wondering how to get somewhere if we do not know where we are now.
The Coronavirus has ridiculed the whole (Western) world. It was probably the most announced disaster of all by scientists, as well as the most mediatised one (12 monkeys, Outbreak, 28 days later, the Walking dead, Contagion, Resident Evil, Zombieland, World War Z, Planet of the Apes…). Still, we have turned out to be completely unprepared. There are not enough tests, ventilation equipment, hand sanitisers, planning of scenarios, and … toilet paper.
Particularly the story on how Belgium let mould its “strategic reserve” of millions of masks by the army for austerity reasons could be the practical joke of the century if it were not so painful. Pennywise, pound foolish does not even get close to describing it. Partly because of this, shortages turned elderly homes into morgues, while the police are performing their checks without protective gear.
There is still no contact tracing and the communication has not allowed the population to realise and internalise how to act or even to be convinced of the situation’s gravity. The journey does not look fabulous. The most sarcastic description of the situation and handling thereof could be the ‘Chernobyl’ quote: “not great, not terrible”.
Nonetheless, the situation’s gravity should have gotten to everyone. The facts show it; on 29th February, there was 1 contamination. By the beginning of May, 2 months later, there were more than 45.000 infections registered. The real number of infections is much higher than what is registered, since, for a long time, there were not enough tests to make statistically relevant estimations. Worse, even at Easter, we were capable to use only half of the available test capacity (5.000 of the 10.000). Germany, by contrast, made sure to have access to the necessary capacity of tests and can use them.
In the meantime, partly as a result of the lack of preparedness and according to numbers released by the European Centre for Disease Control, we occupy the 6th place worldwide with regard to the total number of deaths at the beginning of May, and that for weeks now.
Germany, in turn, counts less deaths in a country that has 8 times more inhabitants. Even though we managed to keep enough beds available in our hospitals and the health care system did not get overwhelmed, the result is far from good as it went at the expense of people dying elsewhere, out of sight.
What we also see is that the number of people dying day after day went up in Belgium, till well after the moment where the number of cases in the hospitals went down. This is partly because the fatalities in nursing homes were considered only long after those in hospitals, which allowed the virus to roam free there. When the focus will switch from hospitals to the rest of the country, the real mortality rate will be found many times higher than the number measured up till then. Indeed, many more people, between 2 and 4 time the amount measured, died without ever having reached a hospital, studies in Italy and New York show.
Measurements on 3000 people in Belgium demonstrate that, even after more than 1.5 months of lockdown, already 4.3% of the population (450.000 out of 11m) has antibodies. Double the amount of 2 weeks before. This means that the total mortality in Belgium is around 1.5%, or much and much higher than for the flu. It also demonstrates that COVID-19 is not like the flu, regardless what some people would like to think. Finally, it shows that the virus (at the beginning of May 2020) is still prevalent among the population or it would not double in two weeks.
In a study conducted by the Economist, looking further at the “excess mortality”, or mortality above what is normally expected from observations in other years, all countries observed show a sudden peak in deaths above what could be expected.
In fact, COVID-19 became the single most important cause of death in April, and that is after the countries were placed on lockdown, although a number of casualties were obviously contaminated before.
When we look specifically at Belgium, we see a trend that is also visible in other countries, and that shows that only a bit more than half of the excess deaths was attributed to COVID-19. This can have several reasons: the number of deaths to be attributed to COVID-19 is undercounted, there are more non-COVID-19 deaths because, according to a UCLL study, people postpone other treatments due to COVID-19, or, there is something else that adds to excess mortality independent of COVID-19. The common flu season of 2017 was especially deadly. This year, however, this does not seem to have been the case.
While you can think of many reasons to explain why Belgium has so many more infections and deaths than elsewhere (like accounting), even after adaptation it shows that our response to the crisis fell short. The lack of preparation, both in Belgium and elsewhere in Europe, is reflected in the current result and contrasts with the countries that were prepared (Taiwan, Hong Kong, Singapore, Germany, most Eastern European countries and South-Korea).
Although most of the infected persons show “mild” symptoms — a word that regroups a wide range of grades of severity — a significant amount of the infected needs to be hospitalised. Taking the 4.3% of the population as infected, using Belgium numbers on hospital admissions (May 1st 2020), around 3.3% (15.000 out 450.000) of infected require hospital admission. A significant number of these need to receive care through respiratory equipment. For the latter, the chances of survival are low (50% or even less) because of the lung damage they have already suffered through the virus and which is being aggravated by this equipment. Worse, many of the elderly living in nursing homes die without ever getting to a hospital.
The number of people infected by a carrier of COVID-19 (R0), 5.7 (twice as high as originally though, according to recent research), without measures, is several times higher than that of the flu, 1.3. In a worst-case scenario where we let the illness take its course unfettered, Belgium could have to hospitalise hundreds of thousands in a short period of time because of the diseases high degree of infectiousness, and the associated high level of required infections (85%) to achieve herd immunity.
Once the number of cases reaches the capacity of the health system, the latter collapses according to operational management theory. No health care system can handle such high numbers and, in such a case, most people that would require it would not receive treatment, resulting in an extremely high mortality rate because of a lack of care.
Therefore, we must apply the measures of “social distancing”, or quarantine, to which the whole country, even the whole world, must submit. We hope that, over time, following the example of South-Korea, Taiwan, Hong-Kong, Singapore and New Zealand, this measure will break the chain of contaminations and sufficiently bring down the number of contaminations.
This so-called “Flattening the curve”, intends to level off the peak of the contamination curve, spread it over time and continuously limit the total number of cases so that our health services are able to give to the patients the care they need and keep the mortality rate under control. This is why we have to stay at home.
The current trend (beginning of May 2020) suggests that the quarantine measures work (in Belgium). The available beds in the hospitals were never filled more than just over half and, if the outflow remains bigger than the influx, we are probably well over the turning point.
Austria, Denmark and Czechia, 3 countries that took measures way more rapidly than other countries, were already studying how to take up again ‘normal’ life. Belgium is now envisaging partially openings during the month of May. Given that, at the end of April, there are still between 100 and 200 deaths daily compared with the much fewer when the country went on lockdown (see picture excess deaths above), the answer to the question whether this will not be too early, seems self-evident as shown in the simulation below. To be continued.
Will social distancing save us?
At this moment, the only result of the current social distancing measures is a deferral of the pandemic. Once the measures are removed, it will immediately flare up again. The earlier mentioned 4.3% who got the virus, means that it will have a reservoir of more than 95% of the population that can still be infected since they have not yet been immunised. So, we are right back to where we started.
In other words, the only thing that social distancing achieved, is that we have bought time. Time that we need to use to act in order to remain one step ahead of the virus and to learn how to live with it before it permanently destabilises our society. The question is how much longer and how to use that time.
Indeed, we will have to keep the balls in the air a bit longer, a long bit that is. Already, new contamination waves appear in Singapore, Hong-Kong and China, brought in by infected travellers.
The Spanish influenza from 1918 returned 3 times and killed 10% of the half billion people who got contaminated, on a total world population of less than 2 billion.
A Harvard study from mid-April 2020 shows that, taking as a starting point the behaviour of other coronaviruses, the COVID-19 virus will return strengthened and weakened every season for several years and the chance to create permanent immunity is small. Although this simulation does not offer certainties, it shows a range of possibilities whereby the pandemic is nevertheless never shown as a one-off event. Chances are that the efforts we are doing now will be lost if we do not put in place structural measures to suppress future outbreaks.
The thesis that the pandemic will continue in waves beyond 2022 is supported by other experts.
Bill Gates, who probably has more insight in the matter than anyone else, says that we should expect a new pandemic every 20 years. We have been lucky for the last 100 years because, together with the discovery of vaccination, we have been able to ban successively most of the existing communicable debilitating diseases from our society. Because of that success, we have organised ourselves in a way as if we would never again need a buffer against these kinds of events.
Until today.
We are living again in a world dreamed of by anti-vaxxers.
This is our life right now.
New vaccines, after all, are not ready to be pulled out of the drawer whenever we need them. They are not invented just like that. The 12 to 18 months’ delay announced are wildly optimistic, taking into account the standard vaccine research timelines.
After 35 years, we still do not have an AIDS vaccination, although tens, if not hundreds of billions of dollars have been spent on its research and development. There still is no permanent vaccination for the flu and none for the common cold, umbrella terms for a series of other coronaviruses. Unless being “lottery lucky” with Remdesivir, it will take years before we will come up with a vaccination that is efficient and safe. And then, it still needs to be produced massively and administered effectively to 8 billion people.
It doesn’t help that we still do not know much about the virus. Originally thought of as a virulent and deadly respiratory disease, we now find that it has weird symptoms, unheard of in other diseases.
Take, for example, the low oxygen levels without visible effects until it is too late, its effects attacking all sorts of organs (see pictureà, including the skin, the fact that especially people with comorbidities like obesity are affected, that it forms blood clots causing strokes, killing even young and healthy people and that treatments that worked on other respiratory diseases, like ventilators, do not help at all. In combination with much higher death rates, these issues make this virus quite different from a seasonal flu.
In fact, we still do not know how the virus is killing us.
One of the reasons might be that the virus, just like other Coronaviruses like the flu, is mutating so fast, so that many different strains are currently running through the population and cause different effects and levels of mortality. It might mutate to a more benign form, but it can also become more harmful, and start to target children. The reality is that the changing nature of the virus and the different strains that are present at the same time may lead to us never finding an effective vaccine. It also indicates that immunity will probably not be permanent and that the virus is going to be with us to stay for a long time .
So, when people talk about shortening timelines by compressing and parallelizing the different trial phases, understand that there first must be something that actually works and is sufficiently safe and efficient. And if it is there, would you want to be the first person to have it, given the short development cycle?
Part II describes the immediate actions we must do to actually stop COVID-19 and reopen the country safely, and not like happens today, too unprepared.
