The Virus Not Politicians Will Determine When Economies Can Safely Reopen

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(Bloomberg) – In January, before Covid-19 had become a global pandemic, a doctor from Tennessee told me something wise. “It’s all about the virus,” said Dr. Mark Denison, director of the division of pediatric infectious diseases at Vanderbilt University School of Medicine. “It’s all about the bug. We’re along for the ride and responding as best we can.”
Keep that in mind as you track the pronouncements of President Donald Trump and other world leaders as to when they expect to reopen their economies. Because ultimately, it doesn’t matter what they and their teams of medical experts want to do. All that matters is what the virus itself allows us to do.
Unfortunately, the latest news from the research front raises serious questions about the ability of economies to operate on anything like a normal basis without an acceleration of the spread of the coronavirus.
In Wuhan, China, where the outbreak began, each infected person probably passed the virus to an average of 5.7 others, according to a mathematical analysis from Los Alamos National Laboratory. That’s more than twice what the World Health Organization and other public health authorities reported in February. While the Los Alamos finding applies only to Wuhan, if the infectiousness elsewhere is anywhere near that bad, Covid-19 will be extremely hard to stamp out.
In South Korea, about 50 patients classed as having been cured have tested positive again, the nation’s Centers for Disease Control and Prevention said this week. There have been similar reports from China. The optimistic take is that these were testing errors—perhaps a false negative on the first test, or a false positive on the second one. The scarier possibility is that the virus somehow reactivates.
Meanwhile, countries such as Japan, which seemed to have beaten the virus without extreme isolation measures, are seeing cases increase alarmingly. On April 7, Shinzo Abe, Japan’s prime minister, declared a one-month state of emergency in Tokyo and surrounding regions.
The good news is that shutting down the economy does seem to suppress Covid-19, albeit with a lag. China’s Hubei Province proved that. Hospital admissions for the lung disease are also growing at a slowing rate, or even falling in such jurisdictions as New York City that have taken the most extreme steps to keep people from infecting one another.
The bad news is that this virus is harder to beat than it once appeared. It could come surging back as soon as suppression measures are eased. “Any level of (gradual) relaxation of the confinement will unavoidably lead to a corresponding increase in new cases,” according to an internal draft memo of the European Commission viewed by Bloomberg.
Investors are cheering the rescue measures from Congress and the Federal Reserve, but what ultimately matters is the nature of the pandemic itself. As that Tennessee doctor said: “It’s all about the bug.”
 

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