To help put myself to sleep at night, I’ve been reading a 
500 page book on the history of modern economic science. I actually (secretly) find it quite fascinating.
Surprisingly, the book (which I started many months ago) has helped me discover a new frame for the current Cornavirus Pandemic (CVP.) (For my earlier, first excursion into finding new frames for the CVP see, “Why I Aint Afraid of No Ghosts.)
In a nutshell, I am now viewing the current (viral) CVP fear and near panic as a clear proof of the law of supply and demand. Or, more specifically, as pointed out in my last post, the temporary lack (subtraction) of supply which leads to exaggerated and irrational demand, not only in those products and services necessary to combat the virus but in other, unrelated areas (toilet paper? Coca Cola?)
To begin at a fundamental level, we have a massive lack (subtraction) of supply when it comes to coronavirus testing. If we had a test as readily available and as easily applied and understood as the test for pregnancy, a large piece of the current fear surrounding this phenomenon would immediately disappear. People could—would—test themselves and their kids and grandkids and not worry whether they should be babysitting. Those who test positive can take appropriate measures.
Although, for various political reasons, we are a month or two “in arrears” when it comes to having enough test kits available, the good news is that the industry is ramping up, and within the next week or two, maybe three the test kits will be much more available all across the country. On March 10th Vice-President Pence suggested that four million test kits would be shipped within a week. Alas, that didn’t happen, but major laboratories and manufacturers are indeed ramping up and within the next several weeks to a month the market will undoubtedly be flooded with test kits—some of them do-it-yourself, at-home kits. But enough “real” kits for every community.
With the long-overdue increase in the supply of test kits, we naturally will see a spike in “cases reported.” But we will also see the beginning of containment, and reduction of paranoia. South Korea originally had the highest number of “positive” cases outside of China, but the Korean government had prepared ahead of time and had hundred of thousands of test kits available. In South Korea the cases at first spiked but have now leveled off and even begun to significantly decrease. South Korea seems to have the MVP somewhat “under control.”
Singapore, Hong Kong and Taiwan have likewise, for various reasons, escaped the anticipated serious spike in reported cases—for a variety of “well-preparedness” reasons—but widespread and consistent testing was one of the core deterrents.
The widespread fear that we are now experiencing in the U.S. is basically because we don’t know who is infected and who is not and most of us ordinary folks have no way of finding out. So be it. That’s our experience right now.
But this will be a short-lived fear, because within a couple of weeks and months the supply of testing kits will undoubtedly grow geometrically. It’s basic economics: the current demand for test kits is huge. We have the technical capacity, the manufacturing infrastructure and the entrepreneurial chutzpah such that the supply of test kits will inevitably, and quickly grow to more than meet the demand.
Lack of Perspective
A second basic area where “supply” does not meet demand is in perspective on our own personal chances of catching the virus.
“I think 70-80% of us will get the virus,” an old friend with advanced degrees recently confided.
“What? No way!”
“That’s what I heard. I just hope they have enough respirators when I get it.”
My friend has a definite lack of supply when it comes to accurate perspective. As does the Governor of California who recently suggested he anticipated 25 million Californians will get the virus, or 56% of California’s total population. What?
To get a more accurate perspective, let’s look at the facts: In China, as of March 16, 81,000 cases had been reported. Some observers suggest many more cases were present, but not reported. For convenience, let’s say the cases were “under-reported” by 20-25%. So, to use round numbers, let’s estimate 100,000 cases of the virus in China. With China’s over one billion people, that means that less than .0001 percent of the Chinese population became infected.
For our own new, hard-fact “supply” of perspective, let’s up that number ten-fold and say that one million Chinese were actually infected. (Remember, there’s no evidence whatsoever for such an exaggerated number). Even with that exaggerated estimate, that still means that 99.98% of the Chinese population did NOT get the virus.
Alas, for some reason that the governor of California never explained, he expects his state to be 55 times worse than what happened in China! If he had talked to any seasoned epidemiologist, he would be told: That simply won’t happen!
Even in Bergamo, Italy, the hardest hit city in the Lombardi region of Italy, where the virus has spread to more citizens than anywhere else on the planet and the death toll tragically continues to rise, the percentage of people who actually experience the symptoms of the virus is much less than 2%. (Exact numbers of those infected are not available because Italy, alas, also, has a huge lack—subtraction—of testing kits!)
For the California governor to suggest that his modern U.S. state will suffer 55 times worse than the people in China or Italy is completely irresponsible. (Or maybe he was just trying to make his case for more federal dollars.) Here’s the deal: based on what’s already happened in the hardest hit spots around the world, we can fairly assume that most of us—much fewer than 4% (probably fewer than 1%) of us, will not get the virus, and less than 4% of those who do get it (¼ of 1%) will die from it. (May you rest in peace.)
Of course, we do need to follow the hygiene and distancing guidelines that are being outlined for us. But it’s clear, as the California Governor plainly showed, that we currently face a basic lack of supply of factual perspective, and thus framing, of what we are all now experiencing. It’s not the first time, and won’t be the last when supply and demand become lopsided.
We currently have exaggerated demand (for toilet paper and grounded CVP perspectives) which leads to short-term lack of supply. But human beings in general, as they have demonstrated over many millennia, naturally move and work toward balance, equilibrium, orderliness. Where there’s a demand, supply (eventually) shows up.
We are heading in that direction. Testing kits are now being mass produced. And neighbors are talking to neighbors to help ground the perspective in facts, and thus ease the panic.
It’s nice to remind ourselves that spring always does follow winter. Summer always does follow spring. Basic economic, and natural principles assure us that we are now—or soon will be– heading back to normalcy. Demand and supply will, once again, balance each other. Just watch.
This rather wordy essay is offered to help increase the supply to meet the demand for new perspectives on what we are now experiencing. You’re welcome to offer back to me the old, fear-based perspective if you want. But I don’t have much demand for it!
