What Is In and What Is Out in the Days of The Pandemic

Third week of the “stay home” reality for us in the US and things are not looking good.  Lives are in suspension, minds try to conceive new meanings, and ….. finding interesting new shows to stream has gained a whole new sense of urgency.  When boredom drives you to do your tax returns even when the government (US) tells you they aren’t due until three months later, you know this is not things as usual.

The drama is being played out in multiple stages.  In the hospitals, where heroic doctors, nurses and other aides give their best despite the risks they take.  In homes, where we try to overcome the dullness of repetitive daily patterns.  In the supermarkets, where we try to avoid everybody else and hope to find what we need.   (Why is it in this “Greatest Country of All” we can’t find masks and sanitizing materials?)  In the news, where all we read or see is about new cases and deaths and frantic hospital scenes.  I wonder what life would feel like if every day we were told how many people contracted this or that deadly disease.   In the government, which struggles to put us ahead of the curve but its announcements often don’t match the reality on the ground.  When Covid-19 cases stand at over 250,000, the most in the world, and deaths at over 5,000, what should I make of the message we are doing better than anybody else?  In the research labs, where scientists from around the world are putting their brains together to fight our way out from this pandemic.  It is in the hospitals and the labs I see our hope and redemption; where I see our collective humanity at work.

Facts are stubborn and hard to argue against.  Sooner or later they make us adjust our perspective on many things.  So here is a list of what is in and what is out given the facts of this pandemic.

Acceptance is in, denial is out.  Not that long ago, our government and its supporters told the nation that the coronavirus pandemic was a foreign agent, another manufactured political ploy, and, if real, one that would whisk through these blessed United States of America like a light breeze, to dissolve into the warm mist of April.  Over two trillion dollars of emergency aid, massive layoffs, and projections of 200,000 potential deaths later reality has sunk in.

Scientists are in, lawyers are out.  Nature is a bitch.  You can’t fight it with sycophants, lawyers and lawsuits.  Used to taking out rivals by using all the levers of the justice system, now for this, his life’s greatest challenge and fight, our president, discovers that his best comrades are scientists, like Dr. Anthony Fauci and Dr. Deborah Birx, and all others in this country and around the globe.  You can’t take Covid-19 to the courts, nor can you shut it down with another NDA.  The only ones to fix this now are doctors, nurses and scientists.

“Make ventilators” is in, “make tanks” is out.   The defense budget is the sacred cow of the US.  We have enough power to kill everybody on earth several times over, but we don’t have what it takes to defend us against this tiny virus.  You see, defending against pandemics has no lobby to match those who push for more money to build missiles and fancy weapons.  Even mighty countries can go down by the force of their folly rather than the force of their enemies.

Living the moment is in, living for the future is out.  When the epidemiologist in charge (in the US), Dr. Birx, put on the screen the graph of potential deaths a few days ago, I bet many of us wondered whether we would still be alive when that long right tail of the curve finally hits zero.  When planning for the future – weddings, trips, parties – depends on the uncertain path of a deadly virus, then our best option is to live each moment and make the most of it.  We would also live more relaxed lives in ordinary times if we could master to live the now instead of worrying about tomorrow.  Planning for the future has its merits; but when it consumes our thoughts and energy or creates anxiety, let’s go back to enjoying the moment.  Going back to Dr. Birx’s presentation, she told us that with mitigation the model predicts about 200,000 deaths by end of August.  What if instead she had said “By August we expect 329,800,000 Americans to be alive out of 330 million today?”  Most of us would feel better, though, nothing would have changed.  Humans are emotionally biased to respond more strongly to bad than good news.  Her statement, deliberate or not, stood a better chance to make us focus on the bad outcome and thus remain extra cautious.  If, you want, however, to boost your morale, think that you have more than an excellent chance to be one of the 329,800,000 Americans still alive by August.  In fact, the probability not to die because of Covid-19 is 99.94 percent!  But remember that every time you let your guard down that probability declines.

Uncertainty is in, calculated risk is out.  If we are averse to risk, we are even more so toward uncertainty.  We talk of risk when we can, even with some error, estimate the odds of failure (and conversely of success).  If I have a deck of 52 cards, I know that I have a 4 over 52 chance to draw, say, an ace and win a wager; or I have a chance of 48 over 52 to lose.  That’s the risk I take and it is informed by that probability.  What if, however, I have to estimate my risk and I don’t know the number of cards and the number of aces in the deck?  This is uncertainty.  Insurance firms sell us coverage against risk not against uncertainty.  Investing, airplane safety, and much more in our lives are informed by risk estimates.  But risk estimates are based on patterns of events we have identified.  To our misfortune, this pandemic face us with uncertainty and that’s why it is a lot more terrifying and hard to manage.  Because it is new, we have no knowledge about the pattern of infections and deaths.  Human life has improved tremendously thanks to our ability to wrap our hands (brains if you wish) around risk.*  Now this advantage is taken away.  The essence of our battle against Covid-19 is to reduce uncertainty and improve our estimation of risk.  That’s when we ‘ll know we are taking control of this pandemic and our lives will return to some normalcy.

All this is sobering stuff.  Living with restrictions is annoying.  And if you lost someone you knew the loss is crashing.  But our blue planet will churn one more time and the sun will rise again tomorrow and more spring flowers will bloom.  And the probability to breath at the end of the summer is 99.94%.

* A wonderful book on this subject is:  Against the Gods: The Remarkable Story of Risk, by Peter Bernstein.

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Author: George Papaioannou

Distinguished Professor Emeritus (Finance), Hofstra University, USA. Author of Underwriting and the New Issues Market. Former Vice Dean, Zarb School of Business, Hofstra University. Board Director, Jovia Financial Federal Credit Union.

3 thoughts on “What Is In and What Is Out in the Days of The Pandemic”

  1. One modification: “Used to taking out rivals through demolition, together with the wrongful cooperation of others, of the levers of the justice system….”

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  2. Yes, the most frustrating thing is not being able to plan for the fun things in the future- parties, trips, annual reunions and holidays. Life on hold is hard to find purpose in. Survival with hopes that this will pass soon- and that you and yours will be here on the other side- that consumes the mind when not keeping busy. I think of those who came before us who got through world wars and I think that if they got through it- without WhatssApp, the Internet and Netflix- then we can get through this.

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