Americans are facing a difficult dilemma during the pandemic. We have to decide between the economy or maybe your life or my life.
How long are we willing to purposefully shut down our economy to combat the coronavirus and risk losing even more people due to a great depression?
I don't know the answer, which is why I'm turning to you to hear your input.
My gut instinct is that most of our nation is willing to go through at most a 2-month (how wrong was I updating this post in 2021!) long lockdown/quarantine/shelter-in-place before we demand our local and federal governments allow most businesses to operate again, with modifications for safety.
As of March 23 ,2020, there are supposedly ~35,000 confirmed coronavirus cases in the U.S. and 458 deaths (~1.3% mortality rate so far). The number of cases will surely go up as more testing becomes available and more carriers infect others in their community. On the positive side, the mortality rate should also go down as the denominator grows. You can check the daily numbers on Worldometers.info.
To put some perspective on the number of coronavirus cases and deaths so far, please note that since 2010, the CDC estimates that from 12,000 to 61,000 Americans die annually from the flu. Roughly 31 million Americans so far caught the flu during the 2019-2020 season.
Put differently, the number of coronavirus-related deaths in the U.S. needs to increase by 35X – 175X to match the number of flu deaths that occur each year. With the California Governor saying roughly 25.5 million people in California will get the coronavirus within eight weeks if no measures are put in place, the numbers are plausible if we believe him. Some scientists have postulated that 60% of the American population will eventually get the coronavirus.
Let me be clear that I'm not saying the flu is like the coronavirus. COVID-19 looks to be at least 10X deadlier. I'm just providing some numbers so we can think about what we are doing to prevent an unknown toll on human life.
At the same time, we know that millions of Americans will file for unemployment benefits in March, and millions more will file for unemployment benefits each month we are under lockdown. We also know that the S&P 500 is down ~30% so far and that a recession is almost an inevitability.
Eventually, millions of Americans will lose everything. The unemployment rate will skyrocket. Families will break apart. Children will go hungry. Homelessness will increase. Burglary and homicides will increase. Millions more children will be trapped in a cycle of poverty.
The result will be even more strain on the government and on our community to help those who've been most adversely affected. If this strain becomes too great, even more people will suffer.
How Many People Died During The Great Depression?
One would think that the more people living in poverty, more people would die during a great depression. However, life expectancy actually went up during the last one. Ironically, it is actually economic prosperity that increases U.S. mortality.
Here are some interesting insights from History.com.
In the first few years after the 1929 stock market crash, the only major cause of death that increased was suicide, says José A. Tapia Granados, a professor of politics at Drexel University and co-author of a 2009 research paper in PNAS about life and death during the Great Depression.
While suicides went up, Tapia found that deaths from cardiovascular and renal diseases stabilized between 1930 and 1932, the worst years of the depression. Traffic deaths dropped in 1932. Deaths from tuberculosis, the flu and pneumonia also declined.
As a result, the average U.S. life expectancy rose from about 57 in 1929 to 63 in 1933. In both decades, people of color had a lower life average expectancy than white people. Yet when the depression hit, the average life expectancy for people of color rose more quickly than that of whites, increasing by about eight years from 1929 to 1933.
According to the Association For Safe International Road Travel, below are the following crash and death statistics for America:
- Over 37,000 people die in road crashes each year
- An additional 2.35 million are injured or disabled
- Over 1,600 children under 15 years of age die each year
- Nearly 8,000 people are killed in crashes involving drivers ages 16-20
- Road crashes cost the U.S. $230.6 billion per year, or an average of $820 per person
- Road crashes are the single greatest annual cause of death of healthy U.S. citizens traveling abroad
Given this data, a clear silver lining from the coronavirus-induced shutdowns is that fewer people will die from car accidents since fewer people will have to commute to work. Further, given more people will tighten their spending, more people will reduce unhealthy habits such as smoking, drinking, and overeating.
In another study by Bluestone, Harrison and Baker, “The Causes and Consequences of Economic Dislocation” from 1981, for every one percentage point increase in unemployment, they estimated a 37,000 increase in deaths, of which, 20,000 are from heart attacks, 920 are from suicides, 650 are from homicides, and the rest are undisclosed.
If we get to a 20% unemployment rate from 3.6% currently, according to the authors, this might result in roughly 610,500 more deaths. In this scenario, it seems that there will be more deaths in America attributable to a great depression than to the coronavirus itself.
How Much Of A Net Worth Decline Can You Endure?
The uncertainty of the lockdown period is what really hurts Americans. Because we do not know when the lockdown will end, we will have a difficult time planning for the future. As a result, we will rationally hoard as many resources as possible (food, toilet paper, water, cash, ammunition etc) in order to prepare for the worst.
If various governments can give us a detailed time-line guidance, everybody will feel much better and be able to plan and spend accordingly.
For example, if we assume that it takes up to 14 days from exposure for coronavirus symptoms to manifest and another 21 days for a person to recover from the virus, it would be helpful for the government to provide this informational guidance for a 45-day lockdown period.
The guidance can be one of several different lockdown scenarios if they want to hedge their bets.
Unfortunately, because so much is still unknown about COVID-19, this type of guidance has not been forthcoming. Instead, people like the Governor of California are saying that schools could be closed until Fall (in 5-6 months) without any clear guidance as to why. As a result, families in California are freaking out about what to do. Californians are logically extrapolating that most businesses will also be shuttered until Fall as well.
This is a failure by the California government and governments everywhere to communicate and show strong leadership. The Wuhan lockdown lasted for roughly 50 days and economic activity is returning. Why not deliver this message and use Wuhan as precedence?
If you are a deca-millionaire Governor who has aspirations of becoming POTUS one day, you can afford to wait things out for another 5-6 months. Unfortunately, tens of millions of Californians cannot. And if you bankrupt tens of millions of people in your own state, you can kiss your aspirations of POTUS goodbye.
To add some color, I decided to ask several people about how much financial pain they would be willing to endure before demanding the government allow businesses to reopen. I've also shared some of my own thoughts.
27-year-old preschool teacher with no kids.
I share an apartment with three other people. My rent is only $800/month. It's a terrible apartment, but I've chosen to live frugally to save as much money as possible. I spend around $1,600 a month and I've been saving about $2,000 a month for the past six months. I've got about five months of living expenses saved up before I run out.
We've been creating videos at home for our students to watch. As of now, our school plans to pay us for the month of March and April, even though school is shut down. After that, our paychecks will probably stop unless the coronavirus goes away.
I only have about $10,000 invested in the stock market. I'm using this opportunity to buy a little bit of stock ($500), but I also want to save more more just in case I get laid off or don't get a paycheck until the fall or longer.
I would like the government lockdown to be lifted by May 1 (~40 days). My net worth would likely be completely wiped out by the end of the year if we go much longer than a two month lockdown. Most of my friends who are teachers will likely be laid off. I have plenty of friends in the restaurant and travel industry who have already lost 50% – 100% of their income.
We need the government to provide Universal Basic Income for the duration of the lockdown ASAP. They are the ones who are forcing our schools and businesses to close for good reason. I hope they are also the ones who will help us survive during this time crunch. $1,000 a month will help me and my friends a lot.
36-year old mother of two.
I'm a freelancer who used to make about $5,000 a month doing various web design projects. I expect my business to decline by 80% next month as my clients take a wait-and-see approach. We were counting on my freelance income to help us buy a home over the next couple of years. Maybe real estate prices will finally become more affordable.
Luckily, my husband works in the medical field where demand is high. He makes about $170,000 a year. On the downside, my biggest fear is that he will catch the coronavirus at the hospital, has to self-quarantine for 14 days, and then spreads the virus to the rest of our family. We live in a 900 sqft, two-bedroom, one-bathroom apartment.
We've got about six months of expenses saved up in an emergency fund. But we also have about 90% of our net worth invested in the stock market. It is so painful to watch. I am very scared about our future. When the Governor said schools might not open until Fall, I had a nervous breakdown.
I'm using the decline in freelance work to homeschool my children while my husband works. I would like businesses to open up after 30 days. Based on what is being proposed in the Senate, we will not be eligible to receive any financial benefits.
Although the situation looks scary in places like Italy, they have an older demographic with different social customs. We cannot purposefully destroy our economy for longer than a month. I think the coronavirus has already been here for a while.
32-year old food delivery man.
Business is booming, but I'm not making as much as I used to because I lost my other side job as a DJ 3X a week. I'm getting 3X more tips now than I was before the lockdown. Customers who would never tip are now at least tipping me $2 – $4.
I used to make about $4,000 a month at my day job. During really good months, I was making $6,000 a month from my side hustles with a lot more freedom. Due to the coronavirus, I'm back down to about $3,000 a month. It's enough for me to live. But I'm not saving much to get ahead.
I'm nervous about the future, but also hopeful too. I feel patriotic doing my part to help people get their food. With so few people on the streets, I feel safer.
This lockdown isn't going to last forever and I think a lot of things will get back to normal by summer. In the meantime, I'm going to continue delivering meals and groceries because that's where the opportunity is right now. The lockdown has to end by June 1 (70 days).
38-year old restauranteur and father of one.
Our small restaurant (14 tables) is still open during the shelter-in-place order, but only for pickup. We weren't on the various food delivery services because they took too much in fees. But we're going to sign up for at least one of the big ones now.
Business is down about 80% and rent is still due. I have let go of four people. Like you, we still need to pay preschool tuition this month and next month as well. Thanks to the preschool community and the surrounding neighborhood, we are still getting orders.
I don't think we can last longer than a 2-month lockdown. We need to be allowed to open up within two months. To make our restaurant safer, we plan to remove some tables to have a larger separation of space. We will install a hand sanitizer dispenser in the front and another one in the back. We don't expect people to return like they used to. But at least by lifting the lockdown, more people will likely drop by for a meal and order take out.
If the Universal Basic Income proposal is based on 2018 tax returns, we won't qualify for any help.
42-year old father of two (me).
Between December 15, 2019 – March 5, 2020, I was sick with a terrible cough. You can hear my husky voice in several previous podcast episodes. Before this incident, I had never been sick for longer than one month. My mind started to fray in February as I began wondering everyday whether I had the coronavirus. I'm sure I caught the cold from my son who caught it at preschool.
I never had a fever during this time. There might have been one or two days I felt a little achy. But I had enough energy to continue writing 3X a week and play sports two times a week. However, the three months were difficult because I also had to take care of a toddler and a newborn. Every day, I wondered whether I would get my baby daughter sick. She ultimately came down with a cough for five days.
With now roughly 25% of our net worth in equities (~21% before the selloff), we've so far taken a ~7% hit to our net worth with the S&P 500 down about 30%. Our real estate holdings are also in a precarious situation if the S&P 500 goes down much further and does not rebound in the second half. Overall, we expect to take up to a ~20% hit to our net worth during this bear market versus a ~35% hit during the 2008 – 2009 bear market.
Although both my wife and I don't have jobs, we do have various sources of passive income that provides for ~160% of our existing living expenses if we don't cut anything. With the excess investment income, we've been saving and reinvesting the proceeds since I left work in 2012.
As stock dividend payouts and several rental income sources gets cut, I expect our passive income to decline by ~20%. A 20% and 30% decline in our passive income will result in a reduction in expense coverage to 133% and 117%, respectively. To increase the buffer, we will cut down on extraneous expenses if things get more dire.
We also have Financial Samurai, which continues to generate online revenue despite a shutdown. Although traffic is down 16% YoY for the trailing 30 days as people work from home and shun their finances, there is little risk of Financial Samurai shutting down. Operating expenses are extremely low. For example, you can start your own website right now for less than $5/month. You can customize a free generic template. You also don't have to pay yourself anything.
I would like California to open for business after a 45-day shelter-in-place. A 45-day shelter-in-place order should be sufficient to flatten the curve. 45 days provides for 15 days of quarantine and 30 days of recovery if you have the virus. I also expect folks who end up sick to take more time off to protect their community. In the meantime, I expect the government to provide at least $1,000 in Universal Basic Income for two months or at least a total of $2,000.
Because our government and the media have sufficiently scared us straight, when the shelter-in-place ends, the majority of Americans will be much more careful going out when sick, much more diligent washing their hands, and much more considerate in practicing social distancing.
Losing 30% of our net worth (S&P 500 down about 70%) is where I draw the line and will start protesting to get our small and large businesses open again. At this level of net worth loss, I will risk getting the coronavirus to support local businesses by getting a haircut, getting a beer at a bar, buying some flowers for my wife, getting a massage, and going to the mall. So far, we've been delivery-ordering 90% of our food to support our local restaurants.
I assume by the time our net worth is down 30%, our country will be safer from the coronavirus since we will have likely been shut down for longer than three months. I also assume given our relatively conservative net worth asset allocation, if we get down 30%, millions more will feel even more pain and lobby for change.
How Long Are You Willing To Suffer?
“It's a recession when your neighbor loses his job; it's a depression when you lose yours.” – Harry S. Truman.
To combat the coronavirus, I'd love to know how long you'd be willing to shelter-in-place and how much of a net worth loss you're willing to take before you demand the government open up businesses again. How do we make sure the cure is not worse than the virus?
When do you think the inflection point will be when the economic loss of a lockdown will be much more devastating than the loss incurred by the coronavirus? By answering the two survey questions below, I think we can get a decent idea of when Americans can get back to business.
The coronavirus figures coming out of China and South Korea look promising. These countries went through a serious two-month lockdown. I think most of us are willing to do the same provided our government communicates a clear plan why.
It seems like the entire world will only recover after there is a successful, concerted global effort to control the virus. Though China is mostly back in business, its stock market is still struggling. They can make all the widgets they want, but if the rest of the world isn't buying, there's no point.
Loading ... Loading ...Update 2021: All I've got to say is thank goodness there are several efficacious vaccines being rolled out. Also thank goodness stocks and real estate have rebounded. Let's all hang on until her immunity!
Pandemic Post-Mortem 2023!
The pandemic is finally declared over as of May 11, 2023. HOORAY! It is surreal that we all went through this time period and I decided to write some wins and some regrets we had during the pandemic.
My biggest regret was not seeing my parents more. I'm also sad my kids haven't gotten to know their grandparents. Time is so precious! The pandemic took away at least two visits. We plan to make up for lost time.
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Update June 10, 2020: Lockdowns are easing across the country and by July 1, the majority of the country will no longer be under lockdown. The stock market has returned to an all-tim high and I think it's worth looking for any laggard real estate listings from sellers who think the worst is yet to come.
Related: Personal Lessons Learned From The 2008 – 2009 Financial Crisis
No one had to die from COVID-19, as well as many other diseases. In our Declaration of Independence, we are guaranteed life, liberty, and the pursuit of happiness. So where and when did everything start to fail. Treachery and Tyranny and the path to the Magna Carta. Treachery means lying, deceiving, and ignorance. Tyranny is those who lie, deceive and are ignorant of suffering.
It’s all about the economy, money is the root of all evil and everyone must trace the money to find the evil. I am self-taught and I use the Richard Feynman technique to solve problems.
Great post and analysis, Sam. I also echo your sentiments that our economy cannot survive more than a 2-3 month shutdown. Do we want to live with an illness that as a 99% chance of survival (see my analysis below) or a depression where all bets are off and millions of people have no livelihood. I’m in the O&G industry. If oil goes down to $10 a barrel and stays like that, not sure of any energy company that will stay afloat. And that’s just one domino in the global economy. Can you imagine if a company like XOM were to go bankrupt? Uncertain if that were to happen, but I never thought I would see oil dip below $20 in my lifetime. At the moment, I still have a job, but if we have a shutdown of 3+ months or more? Not sure as I am part of overhead. I haven’t even checked my 401K but I suspect it is down 20%. Fortunately, I also am a cash hoarder and have enough to tide us over for 12 months.
Perhaps I am still in denial, but I also am quite puzzled by the over reaction to the virus compared to swine flu. I do not dispute that the virus has a higher mortality rate than H1N1, but IMO it’s still premature to say that it is 10x higher. With all the issues with testing, I believe the actual number of COVID cases is probably 3-10 times higher than actually reported. Meaning the denominator will be much larger than the the numerator. I also am fairly certain the virus has been circulating in the US since late January 2020. If you read the scientific paper on H1N1, the doctors had to build in huge fudge factors for the numbers. BTW, I don’t put any stock in the reported numbers from China. They are telling us in a country with a population that is several times larger than the US, they only had 88,000 cases? BS, even with the draconian measures that were put in place. At the end of all this, I wouldn’t be surprised if the mortality rate will be around 1%, which means 99% of people will recover (which all of social media and the news media seems to ignore).
At any rate, I don’t know the right answer, but IMO I don’t think our society can sustain this shutdown for more than 3 months.
First of all, thanks to those in the front lines of fighting coronavirus – be it medical professionals, grocers, public space cleaners, restaurateurs, etc.
How much am I willing to lose? Not much as the bulk of my savings are in a CD account and an emergency fund in a regular account and I ‘hopefully’ won’t be too affected. My pension has a guaranteed 3% interest as my employer foots the difference in case of negative returns. How long can I go with a shut down? On a personal note, as long as is needed. I work for an international organization and our positions and salaries are secure. We are now working from home and we have not had many issues with technology. Many of our short term consultants’ contracts were extended by 40 days above the regular days this FY because of the pandemic – of course there must be a business need for their services. Contractors, e.g. cafeteria staff, will be paid by my organization for a period of time even if there are no services received during the shut down. This has given many staff a peace of mind because we were worried about them. How long can I go with a shut down – from the perspective of circumstances outside my personal life? Not as long as in my personal life, definitely. I think of those who have already lost or will soon lose their jobs and have no savings. I think of economies being affected, which will affect me in the long run as well. I was fortunate to have not felt the effects of the 2008 recession as I was already with my organization and my job and salary were secure.
It would be great hear some comments from folks on why so many can’t develop an EMERGENCY FUND. This may seem like an insensitive remark but please don’t let these events pass without starting one as soon as we get back on our feet. God bless all.
South Africa imposed 21 day lockdown. No food delivery only groceries. No real financial support as the country is poor, but 2 billionaires have pledged $50m to help businesses. We’ll be fine, but I think most South Africans will be fighting the army soon if they cant work. They’re a tough bunch though having had to deal with hardship all their lives.
Its interesting that the Governmenr took the compassionate route of lockdown, but have no money to support anyone.
Find the propublica article online about a medical worker describing terrifying lung failure even in young patients.
I am really surprised by your take on the situation. How many of you are prepared for your loved ones or even yourself to die like this needlessly just because you are concerned about your stock portfolio.
What you should be focussed on is the incompetent administration and it’s enablers because if you had a normal president this crisis would have been dealt with better.
What many have missed is that if you have half hearted measures and then after a while you lift the restrictions, the virus will re-emerge in larger numbers and threaten the capacity of hospitals, even more people will die and also it will impact the economy then.
So it’s better to try to get on top of it now and improve the testing etc so that when you lift the restrictions you are in a good position to contain further outbreaks.
Your government is not doing this so I fear you will end up with more deaths/ economic costs in the long run.
It is hard. The more you speak to the people on the front lines and think about others, the more important it is to find solutions. All one way or another isn’t a good long term solution.
Only the wealthiest people can really afford an indefinite shutdown.
I’m also a physician. The trends are already looking better. We need to get back to work ASAP, but differently. We need to create work environments that alerts allow for social Distancing as well as social acceptance of wearing masks for a period of time until vaccine. Aside from suicides, neglect, domestic trauma, child abuse and depression will ultimate cause more damage.
I’m an emergency medicine physician, go to the front lines, I know it’s difficult for all of us, but the collateral damage will be too high.
I hope we don’t have an extended lockdown.
Incompetent hospital administration is like a cancer within the US. Constantly understaffing, lack of equipment, and stretching the residents thin for the almighty dollar. It was only a matter of time something like this happened. Hopefully it will wake them up
Will the Covid 19 go away completely? My husband and I are willing to stay put 3 months max despite having a new born and elderly parents with us. However our employers won’t let us and we still have to pay our bills. Unless we deplete our savings, we would have to return once it’s deemed safe by the govt. I am disappointed but I realized the American economy is only for the rich. Basically ultra rich people and their descendents will get to live and most of us will have to gamble with our life!
I expect three to four weeks from now, this will stabilize to the point where we can start making economic projections for future investments. By that time, I expect at minimum eight million people to be living on continued government assistance (unemployment insurance or employer loan subsidies), and probably closer to ten million. Between now and four weeks from now, you are likely to catch a falling knife, in spite of the literally insane actions over at the Fed that are currently propping up WORLD credit and equity markets.
In 2009 the swine flu killed about 12,000 people in the USA. It infected approx 580,000 right here in the USA. And no one seems to remember it! Why? My guess is the media’s dramatic approach is much more intense this time. It’s creating excessive fear. In 2009 the market didn’t crash like this. No lockdowns. Nothing, we just pushed through it. I am thankful we are taking this seriously but overreacting is going to cause more harm that good if we aren’t careful.
SP crash, has nothing to do with virus, that just pushed us over the cliff.Liquidity problems have been surfacing since last Sept.This will be a rear view mirror thing.
Theres living in a dream and living the dream.
All things revert to the mean in time.
Best to have your bases covered as best u can
“And no one seems to remember it! Why?”
Well, for one thing your numbers are off by a couple of orders of magnitude. If 12 thousand had died out of 580 thousand infected, that’d be over 2% death rate and people would surely have remembered.
As it turns out, it was 12 thousand deaths in US out of 58 or 60 million cases (call it 58,000,000 if you wish) for a death rate of 0.02%, not 2%.
Note I do not disagree with your premise that the media, by and large, are milking this for all it’s worth.
Alright, my bad. So, in 2009 we had 12,000 people who died in the USA of the swine flu. 60 million were actually infected instead of the 580,000 that I thought. Got it! And no one seems to remember the swine flu!
It is interesting how the media slept through swine flu, and is in 24×7 hysteria now. The hysteria will likely save many lives, but at what cost? Suicides spiked by 20% or so after the Great Recession started, so we have to strike the right balance. I can say I hate Trump, but clearly the media is out to get him and is intensely celebrating any bad news they can tie to Trump; it is disgusting to watch even while Trump displays less than zero empathy for the sick and those crushed by the fallout. I hope all the players learn an ounce of humility and respect from this crisis.
I guess I never answered the ultimate question of this post. Financially, I don’t care (personally) how long it goes on. I’m retired but still working profitably a few hours a week, and while I’ve lost maybe $700K in market value, it’ll come back and we’re not cash strapped.
But I think it is horribly damaging to the nation and the world. Someone upthread mentioned the Yale doctor David Katz’s opinion piece in the NYTimes that we were going about this the wrong way, in the most wrong-headed way. Economist Thomas Friedman had another piece in the NYTimes (linked below) echoing his and others epidemiologists’ thinking that we’re going sideways on this whole crisis.
nytimes.com/2020/03/22/opinion/coronavirus-economy.html
I don’t know what the actual correct answers are, and again, I don’t care personally because we’ll be fine either way.
But if there’re ways to do this with less damage to more vulnerable Americans, I hope the people in charge start looking at those ways.
That’s all.
“echoing his and others epidemiologists’ thinking that”
Sorry – on reading this I recognize it sounds like I’m lumping TF in with the epidemiologists. He’s not – he’s an economist and a journalist. Apologies for any confusion.
It’s funny during all this you never hear on mainstream media about boosting your immune system with Vitamins A C and D3 Zinc and staying hydrated. All you hear about is drug this and drug that. Masks. Wash your hands. Sorry people, virus and germs have been around a long time and is part of nature. Take care of your own health and immune system and the virus will take care if itself.
Best market day since 1933 today. Crazy volatility!
Crazy volatility indeed.
“Best market day” headlines are so pointless though especially when one of the worst consecutive days preceded the “best” day. It’s like saying, look, my portfolio went from $100 dollars to $15 dollars yesterday, but today, it gained 300%!!!. Best day ever.
About 18,000 coronavirus deaths worldwide up to this point in time.The seasonal flu kills 300,000-650,000 worldwide per year.And how many lives will be lost and financially devastated due to the economic shutdown? I’m not buying the fear mongering hype narrative.The USA is headed for a socialistic/fascism state.The Fed is buying up every asset known to man and many corporations will be nationalized under the Govt umbrella.They’re even talking about implementing a new digital currency in the future.”Don’t let a good crisis go to waste”- Rahm Emanuel Our future liberties are in jeopardy!
Long time reader/ health care profession here. Thank you for the article, it was very thorough from the economic stand point of course. Couple of things, the thing with Covid-19 is that we are dealing with a lot of unknowns, literally everything is new and we are learning as we go. For example as for the mortality rate, if you compare the numbers that are coming out of China with Italy you arrive at very different percentages in China the confirmed cases= 81,171 Death=3,277 in Italy Cases= 69,176 Death=6,820 So far…) simple math shows that the 1-2% mortality rate simply does not hold true, there are variety of factors involved that can explain the variations between different countries. But we can easily increase the mortality rate Anywhere by not having enough I.C.U beds and not giving the proper supportive care to our patients. And having too many patients at the same time can easily do it. I work in semi-rural areas where I.C.U beds are extremely limited or just do not exist. In the hospital that I work at they just cleared out an old morgue that wasn’t being used for a long time. We are still not seeing cases, but who knows what tomorrow will bring. On a personal note, my home country ( will not mention its name,) has been hit hard with Corona and my father ( a physician himself) has lost a dear old friend/colleague to the Corona. Basically his hometown was hit hard by the disease and a lot of doctors just closed down shop and refused to see patients in fear of contracting the virus in the light of shortage of protective equipment. And yes he did fit the profile, 66 y.o male with underlying conditions, but he was not going to jump ship and abandon his people . Everything happened so fast, less than two weeks, the day before he died he felt much better and was sending texts from I.C.U to his family( especially for his new grandson..) promising them to return soon. After his death I have immersed myself in all the papers, interviews, studies that is out there regarding Covid-19, nobody really knows much… This virus can be really deadly and take you by surprise really quick. Don’t bet on the experimental treatments (medication wise)that are out there, they are just that Experimental. What you need is supportive therapy in a proper I.C.U, and a warning to young people : it can kill you too, the probability is lower but it is still possible.
As for the economic side of things: It pains me to walk in our downtown and see my favorite restaurants , coffee shops, bookstore and other businesses close with no end in sight. I worry about my own sister who is almost done with her post doc in New York and is ready to move back to California, what will be her job prospects next year? I worry about my friend who has a photography business and drives UBER too and helps out his old mom, what will become of him( I am even not sure how to reach out to him and offer him help with offending him.) And many more…
I have no answer as how much pain are you willing to endure, trust me those of us on the front lines are just living our lives one day at a time, I have effectively isolated myself from family and friends for indefinite period of time. A lot of my colleagues who relied on their parents for childcare are scrambling in fear of infection their elderly parents and so on . We are all paying the price of poor planning and preparation for an epidemic that we saw coming. I do not believe that a restaurant worker who probably has not much saved or an ER doctor with two young kids at home who relies on her elderly mother for child care should be paying the price of this failure, but it is what it is. At this point we are hoping for two months of insanity if all goes well… but then again most of us Do not know anything…. I like to say those people who got us into this mess at first place, and had access to data that none of us had, have to get us out of this mess.. But at the end of the day nobody is going to come to rescue us, so lets hope for the best and prepare for the worst… the good news is that there are other countries who have dealt with this problem longer than us and it seems like the infection rates are stabilizing and not growing exponentially, so I say there is hope…
I was concerned and preparing for this back in January when I saw what was happening in China. Strangely I couldn’t get anyone to take me seriously and people were even teasing me. I happen to be in the Seattle area which is among the hardest hit. Now my neighbors and friends are panicked glued to the news while I am going for walks, watching comedies, and making the best of it.
I find it strange how so many can switch from being blissfully ignorant to panic mode.
This will be my third downturn so I am not worried about stocks. The government has proved that it will do everything in its power to prop it all up. If I get wiped out, 90% of Americans will be worse off and something will be done.
I hope you’re right about the stock market coming back. This is my first real crash where I invested 97% of my net worth in stocks. I was happy until the crash . Now I can’t sleep at night . On top if it I lost my job. I realize now how reckless it was to take on so much risk, but if the stocks come back I should be fine. I am just not convinced about how probable that is within a few years . I think it will take a decade or more . I remember how a small Greece or UK would cause 8 to 10% drop in s&p 500. Now we have the whole world to contract significantly. So economic depression is probable (defined as severe drop in gdp like 10%, with high unemployment of 20 %, which both are very likely now in the US and the rest of the world). Many, including the stock market down at just 30-35 % , believe that the economy will snap back , otherwise we would be down by 60 – 80 % ,however looking at how quickly the virus spreads and how much hysteria there is in media and people’s minds the damage will probably be much bigger and contraction more severe and prolonged than most think ) . It took 25 years for stocks to recover from the Great Depression, but the good news they did recover! So I am staying invested . While the current crash is very depressing it’s nice to hear an upbeat perspective from a person who went through 3 crashes … That makes me feel a bit better , I hope you ‘re right
By you saying this is your first crash, hopefully this means you are much younger than average and also have a much lower absolute dollar amount invested. If such is the case, then this crash could be an incredible blessing for you.
I mean this is my first “real” crash where I am fully invested. I am 46 and was ready to FIRE a month ago. I lived through 08 crash, which taught me to stay fully invested so I went all in about 6 years ago. What I learned – all stock portfolio still works. In the long run it’s the most lucrative option, but this strategy requires the nerves of steel when you lose 35% of your wealth in just a few weeks. Yes, it might be ok to forgo some gains for better sleep during the next crisis and put 30% into physical real estate (after the stocks recover) . Just can’t see the traditional advice 60/40 to be working all the time as (corporate) bonds sold off big time too.
As scary as it looks now , we do have the back of the Fed and the mighty US government to prop the markets. So the chances that the stocks will recover within 10 years in real terms are great. Thanks for your support – I felt much better after airing my concerns here and that 10% + daily declines seems to be subdued for now.
Another take on this: how many of your fellow citizens are you willing to imperil even to death so you can preserve your life savings? This is not a condemnation. It’s a real moral choice. We are living a real-world actual trial of the Trolley problems — how many people are you willing to kill to save (others/yourself).
The next one could be even worse. Are we willing to change our society at the other end of this to respond as effectively as the Koreans to the next one.
It’s not exactly the Trolley problem, because you or your loved ones are among those your are either condemning to death or saving. Our collectively social isolation increases the chances of every individual’s survival but also financial demise. While my chance of infection and subsequent death is average, my ability to withstand a financial downturn is far above average. It’s an obvious choice for me personally.
Guys, this all goes away. We are all going to die. Just enjoy today, be happy with what you have. You are just a little insignificant blip that doesn’t matter.
Take It easy, take it easy
Don’t let the sound of your old wheels
Drive you crazy
Lighten up while you still can
Don’t even try to understand
Just find a place to make your stand
And take it easy
If covid 19 kills large numbers, opening the economy will suffer regardless. People will drastically alter behavior to avoid infection. Even if you think you are healthy, your at risk from increased morbidity from infection. Without citing articles there are cases of end organ damage in healthy subjects, decreased lung function. Also you could have an unknown chronic disease process that has yet to present, then covid 19 hits you, you end up in the ICU. But ICU could be full so someone will need to decide who lives or dies. Thousands of front line physicians and nurses develop ptsd and cause a long term, hard to measure hit to society. What I’m babbling about is this does not end well.
Anyone who says 2 months or less doesn’t grasp the seriousness of this health problem. We are basically at war. If bombs are falling all over, you don’t go outside and pretend life is normal. If this thing is raging in 2 months and we look like Italy, we will see how many insist on living a normal life. We must isolate to get this under control. How well we do that determines the financial pain we will endure.
Bombs kill 100% of the people they detonate on, this virus kills 1-10% depending on demographic. I agree there will be adjustments and life will not be the same but it will be up to everyone to determine the risk they want to take when they try to start opening things up again.
I appreciate the seriousness of the situation you are describing. However, in fact, people do carry on some semblance of normal life during a war. It’s a sad fact of survival in dire situations that people must choose between venturing out for work, supplies, etc. and facing bombs and bullets vs. staying at home and starving.
Widespread testing and isolation of the infected and the high risk are reasonable long-term solutions. Mass social isolation is not a viable long-term option beyond 2 months. Other health problems caused by the financial stress may outweigh the human cost of isolation.
We cannot use Wuhan’s lockdown numbers. They produced PPE and ventilators and erected entire hospitals overnight. In addition, their lockdown was draconian, which you can do in a totalitarian state. None of these tactics work in a western society. I understand the calculus but as a healthcare worker, saying you will allow the spread, knowing full well a percentage of patients and healthcare workers will die from lack of resources as a consequence of an economic decision doesn’t seem ethical to me. It’s possible to achieve containment. Look at South Korea, Hong Kong, Taiwan, etc. It just takes a level of government oversight and individual discipline we simply don’t have.
I am a 34 yo pregnant anesthesiologist. I cannot sleep worrying about my own risk of preterm labor/miscarriage, the health of the residents at our hospital, my coworkers and our high risk patient population. The risk of increased mortality, both for people with covid-19 and any other chronic health condition, from an overwhelmed healthcare system is very real. For anyone who does not feel the severity of what is happening, ask yourself if you need any type of emergency medical treatment, what would you want or expect? If you are in a car accident and need surgery, if your mother has a heart attack or stroke, if a friend has cancer, would you want and expect good medical care? If your answer is yes, you should be supporting quarantine for as long as it takes hospitals to get ramped up and prepared for the surge of sick patients that have/are inevitably going to come. When hospitals become overwhelmed as they have in Italy and Europe, do not expect the same treatment you would have gotten even 2 weeks ago. If you are okay with getting no medical care, and will refuse any treatment, and will not contribute to overburdening the health care system, then, I would say you are free to continue your life as you wish. Anyone working in high risk professions (first responders, emergency departments, respiratory therapists, nurses, doctors) are scared for the health of their families and patients. Our department is understaffed at baseline; we can’t just stop working because there won’t be enough staff to run the hospital and enough people to take care of our patients. Hospitals are already running out of and rationing basic protective equipment to keep health care providers and thus all patients in the hospital safe, and we are only at the beginning of this. It only takes one super spreader to infect 30-60% of a hospital. 30% of positive tests in Wuhan were asymptomatic carriers and not included in official case numbers from China. China did not halt their economy and build thousand bed hospitals in a week for nothing. The US (particularly NY) is on a worse trajectory than China or Italy. Yes, everyone is going to be affected by this.
Thank you for summoning this up well. I have tried to explain this to patients, over the phone, that are young and healthy. I’ve been to war torn areas of the world…Iraq and Afghanistan. People need to take it seriously and realize they need to sacrifice to help win many battles to win a war. Doing things right will cause less suffering than in these places hit the hardest in a battle.
Thanks for your reply – it’s always nice to hear from people with strong medical credentials about their take on this. Your response was honestly more eye opening to me than a lot of what has been peddled on the news. Thanks and stay safe as much as you can.
I agree completely. We’re asking medical professionals to make huge sacrifices. We need to support them.
I agree with everything you said having spent my nearly 40-year career working with Healthcare professionals. First and foremost, I pray for safety and security for you and your unborn child.
Second, for all of these folks who think it’s time to reopen America, look at how well the grocery stores were stocked when the surge hit and imagine that is our healthcare system when YOU or someone you care about becomes sick. The reality is our healthcare system needs time to gear up for when the worst is upon us and not when we have no time to react to the surge that will inevitably come. If we are prepared, we can deal with it but the system needs some time to get ready which is why the restrictions in place now matter more than ever.
Inconvenience in the short term is much better than having to choose between who lives and who dies in the long term because of rationed ventilators/respirators caused by an under-resourced healthcare system, not to mention the number of unavailable caregivers who wind up sick themselves and can’t be available to help anyone else.
This was an excellent post. I am an anesthesiologist too and my wife is pregnant. Take care of yourself and your baby.
I have many family members in the medical profession who continue to work. The least we can do is to maintain the quarantine to support them and the rest of society. This would be bad time to go to the hospital. The 3 months before this whole thing hit, my immediate family went to the ER 3 times, 3 family members were hospitalized in unrelated incidents, and everyone was ill with something.
Thoughts of the virus do not keep me up. But I do consider multiple scenarios in my planning. Beyond an individual calamity (e.g., car accident, flu, chronic problems, etc.), one should also plan for a secondary mass event. What would happen to hospitals if we were to suffer a major earthquake right now? What would happen at supermarkets if we suffered a power outage for a few days? What if there were severe wildfires or snowstorms? Anything can be a tipping point.
I don’t mean to be an alarmist and I don’t obsess over these scenarios, but I am keenly aware of the frailty of our support structures. Covid-19 is the all encompassing focus right now, but there are other risks out there.
If 80% of Americans catch the disease, a 1-10% fatality rate means 2.6-26 million deaths.
After 3k Americans died on 9/11 the United States went to war for 19 years and counting.
We can afford to increase the social safety net to support Americans through this crisis.
Love what you wrote and put things in perspective. I work in mental health, your comments on suicide are a good reminder on what we can focus on. Made me curious about the Great Recession, looks like suicide rates did not increase (Link below). But, I recall many calls from clients who were suicidal due to their financial situation at that time. Great article. I still grab take out, go for walks and meet up with a healthy friend. Other than that we stay home majority of the time. We stay away from older and immune compromised people. Willing to do social distancing for as long as needed.
Not concerned for my health, more for others.
On a side note from your other article, my hope is that you are successful in your endeavors. I take no pleasure in you not succeeding.
https://pubmed.ncbi.nlm.nih.gov/28625812/
There is no benefit to anyone getting yourself into a fetal position or running around like a headless chook!
Enjoy the time away from the 9-5 grind.
See this as an opportunity to look within and discover what is in your control and how this can benefit you.
You may discover that what is really important to you, costs less, is already within reach and has been there all along waiting for this moment to reveal it self to you.
Excellent post, Peter!
My comments are not going to be popular. But, I personally don’t think we can afford to do a shutdown at all. Maybe two weeks while we get it together so to speak. First, most folks can’t afford it. Many of them because they were too lazy or too selfish to prepare. That doesn’t matter though. It is a reality and it has to be dealt with. They will not shelter in place. We are already seeing it and it will only get more and more obvious with each passing day. I have a nice view of my city from a very tall condo building and I can see with each day it is getting busier and busier. Construction workers are building, folks are out exercising, …. plenty of people are showing up to work (I am also in a shared office space in a downtown building nearby). Second, and here is the part you are really not going to like, we have given a playbook to every terrorist and rogue nation on the planet for how to cripple us. It is not that hard to create another one of these viruses. We simply cannot afford to do this again and again. It will destroy everyone’s way of life. It’s a sad reality. Thousands will die. That is simply the way it is and we need to deal with it like adults. You cannot shut down the world every few years. Way more people will die from poverty than a virus (at least one of this strength).
Let’s flip the switch back on and ask everyone over 60 to stay in place while we work on a vaccine. Then let us send everyone of them a $100,000 check for the inconvenience. It would be cheaper. Way cheaper than what we are doing. Let’s all pitch in and bring them food, computers, whatever… Let’s dump another 500 billion into hospitals and ventilators, etc. Let’s all volunteer to help them. Whatever it takes. This current strategy though–is a loser from the word go. It won’t work, it cannot be sustained, and most importantly, it can never be repeated. Let’s use this case right now as a test case and figure it out the hard way.
Finally, Sam, you want to put a more impressive stat up on your website? Put this link:
https://www.cdc.gov/tobacco/data_statistics/fact_sheets/health_effects/tobacco_related_mortality/index.htm
“More than 480,000 deaths annually” from smoking. If we really cared about our healthcare system we would start by banning smoking today–right now. That would clear up a ton of hospital beds. But, I can still go by a pack right now (even with the shutdown). If this country (or this world) really cared about people dying, smoking would be a thing of the past. It offers zero value to society. It exists because we are a free people by and large. Free to kill ourselves (and apparently others via secondhand smoke). If we are going to do something as extreme as shutting down the whole world, let’s make some even bigger decisions while we have everyone’s panicked attention. If the government can’t ban smoking to save nearly a half million people annually in the U.S., then it has no business shutting down the country to save 50,000.
I predict you will be drafting an article in six months with the title “What were we thinking???”
Great point! Although we are willing to distance ourselves, agree on those that are vulnerable to stay home instead. The problem is most people who think they are healthy have poor immune systems, so it will be hard to identify these folks and might still overwhelm our healthcare system if we don’t identify clearly who needs to distance themselves. Plus those with multigenerational families, they run the risk of exposing those at home. Adolescents can be immune compromised and not even realize it. (These are the answers I’ve gotten to my equally unpopular comments that you mentioned in your comment).
I totally agree.. I am 70 and could get the virus but I dont think I will.Even if I get the virus I have a 97 percent chance of living. GOOD ODDS . I had a heart attack 6 years ago and I coded twice. I think survival rate less than 10%. Let’s go on with our lives and not shut everthing down.
We have to be okay with looking like we overreacted and saying “what were we thinking?” That means the shutdown worked. If we don’t, we will be Italy and if that’s the scenario you want, then please don’t come to my hospital when you can’t breath, I won’t have a bed for all those who need one.
It is not your hospital. That’s a concept you may want to get comfortable with very soon. it is an American hospital. When kids are starving in the streets in a few months I don’t have to be “okay” with the overreaction. Life is a tradeoff. I will trade the young for the old. That’s what caring adults do and it includes myself. We are destroying the next generation to save people in their 80’s. Ask someone in their 80’s if they are okay with that. I bet you will be shocked by the answer.
Since I take care of patients in their 80s, I can assure you that the majority of them (and their families who love them) would disagree with you entirely.
When the bodies start piling up, people will change their tunes. By then, it will be too late. In the abstract, a death is just a statistic. When people are literally dying in hospital parking lots due to lack of space, people will finally understand the tragedy.
Unfortunately, our government did not seem to have a plan for this. We must buy time in order to develop a comprehensive plan.