Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford
“As flies to wanton boys are we to the gods. They kill us for their sport.” Gloucester’s despairing words in King Lear have been etched in my memory since I first heard them as a schoolboy. The gods also amuse themselves by sending natural disasters to humble vainglorious leaders.
The world has all four of the horsemen of the apocalypse these days: pestilence, war, famine and death. There is, of course, the pestilence now known as COVID-19, spread by the new coronavirus. There is war in Syria and a nascent civil war in the streets of India. There may well be famine, too, if the locusts continue to ravage the crops of east Africa and south Asia. And there will surely be more death in 2020 than in a typical 21st-century year.
Fortunate is the American president who is not confronted by at least one devastating hurricane or terrorist attack or mass shooting. Fortunate is the president who does not have to console grieving survivors in at least one devastated city. But 2020 is a whole different divine sport.
COVID-19 is not so life-threatening, to be sure. According to the best available data at the time of writing, there have been about 85,000 confirmed cases worldwide, roughly 94 per cent of them in China and 78 per cent in the province of Hubei. The implied global mortality rate is 3.4 per cent, but that is surely an overestimate because the denominator (total cases) is being underestimated by infected people who don’t feel sick or don’t check themselves in for medical care.
We also know that COVID-19 disproportionately kills the elderly and those with existing conditions such as cardiovascular disease. Worry about grandparents: the mortality rate for people in their eighties is above 14 per cent, whereas it’s close to zero for those under 40.
But those who blithely say, “This is no worse than the flu” are missing the point.
What makes COVID-19 dangerous is not so much the threat it poses to the average person’s life, but the threat it poses to economic growth. Uncertainty surrounds it because it is so difficult it is to detect in its early stages when many carriers are both infectious and asymptomatic. We don’t for sure how many people have it, so we don’t exactly know its reproduction number and its mortality rate. There’s no vaccine and there’s no cure.
Last week, this uncertainty, crystallized by a leap in the number of Italian cases, gave the U.S. stock market its worst week since the great banking crisis of 2008-09.
I have often been asked in the past few years where the next financial crisis would come from. I have said time and again that it would come not from the United States but from China, now the second-largest economy in the world. Sure enough. A pandemic is very different from a bank run, to be sure. But in each case we witness the same phenomenon, which is characteristic of a networked world: a cascade of consequences driven by fear of the unknown.
Though old enough to be in the vulnerable part of the population, Donald Trump, 73, is well known for his high standards of personal hygiene (“Germaphobia”). It is his presidency that is in mortal danger from COVID-19 more than his life.
Although his administration did indeed take the right decision, early in the Chinese outbreak, to limit travel from China to the United States, it did little to prepare for the eventuality of a large U.S. outbreak. Worse, last week, Mr. Trump made the mistake of playing down the risk. But there will seemingly soon be an outbreak in California. No one knows for sure because, we learned last week, there are just 200 functioning diagnostic kits in the entire state.
As president, George W. Bush had at least four brushes with the horsemen of the apocalypse: the September 11 terrorist attacks, then the war he launched against Saddam Hussein, followed by Hurricane Katrina, which would have made him a one-term president if it had happened a year before. Finally, there was the financial crisis, which drove his popularity down to its nadir and doomed John McCain’s attempt to keep the White House in Republican hands.
A COVID-19 outbreak in one or more large U.S. cities would inflict a September 11-level hit on the U.S. economy and a Hurricane Katrina-level hit on Mr. Trump’s popular approval.
The fact that the principal beneficiary in that scenario would be a lifelong democratic socialist committed to universal public health care must be the kind of thing the gods find entertaining.
©Niall Ferguson/The Sunday Times, London.