We need Confidence Play to win it.
Onset of COVID-19 pandemic is a horror story being played with each of us as an unwitting actor. At one end is the impulse to hunker down till there is a sign from above. At the other, many are ignoring words of caution in their effort to not let go of our usual ways of life. Truth be told, both are equally wrong. COVID-19 is very much our World War. We need to come to terms with it in our personal lives, change the way we live, be ready for sacrifices and changes, and reinvent ourselves on the other side. We need resolute leadership that conditions us with the correct mental mapping, and, takes every step needed to be successful. Further, we will need a country that stands in unity against the scourge.
Just like we did in previous world wars.
For both the US economy and the US demand for healthcare services, Coronavirus is mostly a demand issue. Flattening the curve assumes a limit of capacity for the system, a reasonable assumption even if we model in judicious use of the Defense Production Act. No question we should be hard at work on the supply side. We need to look at the demand side at the same time.
We can ease up of demand with a few mental dispositions. It can start with our willingness to accept the possibility that a vast majority of people around will already have the virus inside, tested or not. Most of those exposed shall continue to maintain an ordinary life, with some limitations coming from minor symptoms like low-grade fevers, chills, and, body aches that we face in the normal course of life, with or without coronavirus. Even with the virus, there is nothing medical professionals could do except at a late stage, so a change in how we view the disease is called for.
I should know. Both adults in our household have been working since the start of March under the assumption that each has the virus, showing minor symptoms for almost two weeks now. We were never sick enough to warrant a test but we are maintaining strict quarantine at home. That did not stop us from a full complement of work from home; we could argue some aspects of our jobs are made much smoother as commuting did not take up a lion’s share of our time. But it did eliminate our discretionary pleasures with no end date in sight.
US Economy was in great shape till the virus, but fundamentally nothing changed in the economy except that we cannot get out of our homes, for a very good reason, and that our supply lines are mangled up in parallel scares across the globe.
A fundamental difference between the healthy economy of, say, end of January, and the stalled zombie of today is the exogenous demand shock resulting from COVID-19. On the supply side, logistics are working much harder than normal. Manufacturing is stuck primarily because of its linkages to other countries, a key departure from January, as much as the lockdown sapping up final demand. No productive resource has been taken away, no internal rot is exposed, and no significant source of demand is lost for a while – a big difference from the 2008 crisis.
Therefore, the US economy needs confidence play while it awaits positive news on the healthcare front. We need most of us to buy into the realization that those who are in the workforce have developed a kind of immunity, and that there is proof of it. If people get the disease, we need to be confident that their symptoms are temporary, or that, in a worse case, we have enough ventilators to take care of those seriously sick. In summary confidence will hinge on our informed acceptance that everybody, yes everybody, is infected already, tested or not, but we will all be OK because we have upped our capacity adequately. Confidence play is essential for a war, this time no different. Adequacy of our medical infrastructure is the very first step to get there.
We should also highlight the positive cases, like ours.
At our home, the three of us are close to the end of the period where we could be infectious. The two adults have stopped showing symptoms with nothing more than Tylenol and a few fevers, chills, chest pains and minor shortness of breath, the teenager never showed any distress. We never went to the Urgent Care as we knew they are already overburdened, nor did we get out of house except for a slow drive in our own car with windows shut. The end is nigh, and I hope our situation is not unique, nor too privileged. In our own way we fought a “nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance” by ourselves only and came out ahead.
We need our elected leaders to spread the gospel that everything will be OK to begin a self-fulfilling hypothesis, concurrently as they address the disaster. The current situation is akin to 9/11, or Pearl Harbor, where a fearsome reality confronted us with a ferocity we did not envision before. On each occasion, we rose to the challenge, our political leadership was marked by reason, resolve and remarkable clarity, and, the country stood together, united in wartime.
COVID-19 is the war of our lifetime. Can we have an encore of the last winning performance, please?
[Partha Chakraborty, Ph.D., CFA is an entrepreneur in Water technologies, Blockchain and Wealth Management in US and India. All opinions are of the Author alone, and do not necessarily represent that of any organization he may be part of. The author alone is responsible for any error or omission]