In my first job I traveled a lot between world capitals, often spending weeks at a time on an airplane supporting senior government officials and their teams. One of them was an especially interesting guy, extensive experience in business, politics, and government, and had a set of “rules” he would would give out. They really weren’t rules per se, but a collection of quotations and reflections based on his experiences, some funny, some thoughtful, that covered working in the White House and government, business, and how to stay sane in life in general. As a young officer I found them very valuable – I still have my signed copy. Later on he became (in)famous for saying ..
…because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.
That is a restatement of something developed in the mid 1950’s known as the Johari Window. As a concept it’s been around for a while, especially in the intelligence and aerospace communities. The basic idea is that the things that you don’t know you don’t know are the ones that have the potential to cause you the most trouble. It’s a useful tool for assessing information and decision making. Recently several sociologists have suggested adding another category: things we do know, but don’t believe for one reason or another. And I think that is the most dangerous category of all, and what we are facing at this moment in several areas such as with this virus. People are thinking and acting like some information is unknown, when it is in fact known – but for various reasons don’t want to believe it.
On COVID-19, I’m at this point much more worried about the economic impacts than the direct health impact of the virus itself. All of the data suggests this is manageable. It’s always scary and unsettling to discuss mortality rates – these are people with families we are talking about, but we need to look at this objectively to make rational decisions. Don’t be confused by case statistics and scary numbers that are not rooted in context. When you hear things like “one in 50 die from COVID!” immediately ask “One in Fifty of WHAT POPULATION?” In that case, that number seems to be based on the number of people who get sick enough to be hospitalized, which is biased towards more vulnerable populations (elderly, existing immune or lung problems). In terms of the total population it’s at least twenty five times smaller – 1 in 1250 – and probably smaller than that. In the US, it will likely be like a bad flu season if it takes off. We are in a race between the end of cold/flu season and the spread of the virus. There is reason to be hopeful that in six weeks this will be dying out. But let’s say that this virus doesn’t respond that way (a known unknown). The bad case scenarios are pointing to 150,000 to 200,000 deaths, but most scenarios are in the 40-70,000 range. That may sound like a lot, and in many ways it is, but consider that the 2017-18 influenza season killed 61,000 people, and 35 to 40 thousand people a year from traffic accidents. There are between 160 to 170 thousand “accidental” deaths a year. So while the high end COVID19 deaths and sickness rates would be bad, and of course any death to accident or disease is a personal tragedy, in perspective they are not catastrophic. It would increase the annual mortality rate in the US by about 10 percent. Yes, precautions and vigilance are warranted, but in short, this isn’t the Spanish Flu. People are scared, but at the moment there is no solid reason for that. What we are seeing in this situation puts us in to the “known but don’t believe” realm.
What should the average person do? Basic precautions and common sense should keep this under control – hand washing, covering cough/sneezing, stay home if you don’t feel good – basic stuff. Don’t bother with masks, etc. unless your Doctor recommends it. Take precautions? Certainly. Some checklists and things to do are here at ready.gov for a variety of disasters including pandemic. Check the CDC summaries for more information. Should you panic? Buy your favorite talk radio host’s recommended Zombie Apocalypse Survival Kit, pull your money out of the markets and buy gold, move to Wyoming? I just don’t see the need for that. My thinking is that in 6 weeks or so, with the coming of spring, the end of flu season, and mass testing, we will find that (a) it wasn’t so bad and (b) a lot of people had it and didn’t know it.
What should governments do? They need to strike a careful balance between prudent precautions and not causing panic (and deaths, by damaging the economy). It probably makes sense to limit mass gatherings in areas with active outbreaks (like some areas of Italy) until we are absolutely sure that infection rates and mortality statistics are solid. I keep hearing things like “China wouldn’t have done X unless things are worse than they are saying! They must know something!” I have to chuckle about that. Chances are they don’t have any better data than anybody else. In addition, China has internal political calculations that don’t always make sense from an external, non-totalitarian perspective. So the measures taken there may not be a good guide to what might happen here. As noted in a previous post, bad data (or misinformation) to the public can push decision makers in to bad decisions, even when they know it’s bad data. Again, that pesky “known but can’t/don’t want to believe.”
Why is everyone freaking out, especially the economy? I think several reasons. First, the markets were ripe for a correction anyway. Most economists were expecting one, they just weren’t sure what would be the trigger. Second, there are legitimate supply chain concerns, given our dependence on China for so many items critical in our economy. If any good comes out of this it will hopefully be a move towards improving the resilience of our economy to these kinds of single-source disruptions, especially for critical items like hospital supplies. Third, this is a politically sensitive time in the US, with minimal trust in institutions combined with forces who want to further degrade what trust there is in the current administration to influence the upcoming election. That’s all a very dangerous combination. As I’ve been saying for some time, our financial system is rather vulnerable, with some structural weaknesses that could result in a bad recession, depression, or even worse. This, again, is a “known but don’t want to believe.” Will the COVID-19 (over)reaction spiral and take on a life of it’s own, and trigger something bad? It’s possible. If the credit and financial transfer system starts to lock up it could get very bad. What are the chances of that? Maybe 1 in 10? Scary.
All this said, I’m starting to be more worried about the situation in Syria. Thursday between 30 and 40 Turkish troops in Syria were killed in an airstrike by Syrian Government forces (or, possibly, Russian forces supporting them). The Turks illegally invaded Syria over concerns the Kurds were starting to negotiate with the Syrian Government and were gaining too much independence, along with other complex factors. They are likely to escalate. Russia is moving two guided missile cruisers in to position to bolster their forces in the region. This is a dangerous situation in part because Turkey is a member of NATO, and is making noises about invoking Article 5, the mutual defense clause. Which places the US in an insane situation: being asked to get involved in going up against Russia because Syria/Russia bombed Turkish troops who had illegally invaded Syria and were supporting Al Qaeda terrorists in their efforts to suppress our former allies, the Kurds. This is the world turned upside down.
But it’s worse than that: this morning (Saturday), the President of Turkey Recep Tayyip Erdogan has said that he is “opening the doors” to Europe, and will no longer prevent refugees from the various Middle East and African countries from crossing the borders into Greece. This has the potential to destabilize the entire Balkans, which were none too stable to start with, and inflame relations with Greece (which, of course, are none too friendly to start with). Mass refugee movements, a global pandemic underway, fragile political situations, all are starting to interact in unpredictable ways. Hopefully, nobody does anything stupid. To be sure, hope isn’t a plan, but when it comes to many foreign affairs issues involving strong, conflicting agendas, hope is all we have sometimes.