This is Going to be a Long Fight

By John Banks

A global pandemic is about as serious as it gets, and this is going to be a long fight. Even if an “apex” comes in April, we’re only at the beginning of this thing. It’s important to be clear on this.

If you look at a situation realistically, without downplaying it or sugarcoating it, you can steel yourself for the hardships and challenges ahead, and then you can focus on building and executing a plan.

Once the plan is in place — if it’s a good one — you can then feel hopeful about the plan.

But in order to have justified hope, as opposed to false or irrational hope, you have to work through the hard part first (being realistic about dangers, challenges, and hardships).

Then, having worked through the hard part, you can pour all your energy into executing the plan — and emerging victorious on the other side.

Leaders have been using this formula since time immemorial. Clarity and realism come first. Logical planning comes second. Hope in the plan comes third, with praise and encouragement for those who carry it out.

Andrew Cuomo, the governor of New York, has used this formula well. It’s not a trick or a gimmick, but the right thing to do. When leaders a hundred years from now are faced with a crisis, they will likely use it, too.

But one of the many challenges America faces right now, in our view, is a “false hope” problem in respect to thinking, or rather irrationally hoping, the pandemic fight will be over soon.

Our tendency as a country is to think about past national traumas as one-off type events. There is a market meltdown, or a terrorist attack, or a national disaster, and then the event is “over.”

The aftermath and recovery period stretch out, but the event itself, in terms of what we’re used to, is a clearly defined thing in a narrow space of time.

A pandemic isn’t like that. The realities of a pandemic stretch out over not just days or weeks, but months and quarters and years.

We aren’t used to thinking about a slow-rolling emergency that continues to be an active, present-reality “crisis” for a long and hard-to-define stretch of time.

And when it comes to COVID-19 we are going to be in this fight, whether we like it or not, until a vaccine arrives in mass quantities.

That is a long way off — so we should start adjusting to the long fight here and now.

The mentality required here is in some ways the opposite of the “almost over” vibe centered around April being the worst of it. The worst headlines may indeed come in April, but the battle will roll on and on. 

Simple math demonstrates this. Think about the following numbers:

  • 12 to 18 months — the length of time it will take to develop, test, mass manufacture, and mass distribute a vaccine. Even if records are heroically broken and the time is cut to, say, nine months, we won’t see a mass-distributed vaccine until some point in 2021.
  • 320 million or more — the number of U.S. citizens still prone to infection. We know the actual case rate is far above the reported case rate (because COVID-19 cases are expanding orders of magnitude faster than tests are being administered). But even if you multiply the roughly 350,000 reported U.S. cases (as of this writing) by a whopping 20X to account for unreported cases, that is still just 7 million people — leaving 320 million Americans as yet vulnerable.    
  • 80 to 95% — the estimated percentage of a population that has to be exposed to a virus, and develop an immunity to it, in order to create “herd immunity” conditions so the virus dies down and the population is safe. Even if 7 million Americans (a very aggressive estimate) have already had COVID-19, that would only be 2% of the population — 40 times less than 80%. 
  • Three out of four — the number of U.S. hospitals already dealing with COVID-19 cases, keeping in mind that only a tiny percentage of the total population (i.e. 2% or less) has been infected.

In recent weeks, a majority of Americans have joined in a nationwide effort to “flatten the curve.” In many parts of the country, this has shown helpful results and kept hospital systems from buckling under the strain of COVID-19 cases.

That is excellent news, and it represents the whole point of “flattening the curve” in the first place.

But getting past the “apex” of daily U.S. fatalities, with predictions this could happen in April, is only the first phase.

The United States as a country will still need mitigation and suppression measures — highly aggressive ones — on the long road to a vaccine. If we get it wrong, this could involve rolling shutdowns and “stop and go” work stoppages that are even more disruptive than the first effort.

Think about why the United States is set to have an April “apex” in the first place:

  • The virus circulated on U.S. shores undetected for weeks in January and February, infecting significant numbers of U.S. citizens on both coasts.
  • As curve-flattening efforts kicked in, largely due to governors sounding the alarm and implementing social distancing, the contagion level of the virus dropped as fewer people passed it along.
  • The fatalities registered in April have a time lag measured in weeks. They were born of infections that occurred in March if not February, and should thus “apex” as a result of slowing the contagion rate in March (by flattening the curve.)

The problem here is simple, but wickedly hard to solve.

If we let up on social distancing, we will simply have another infection cycle — remember there are still hundreds of millions of people who could get this thing — and another “apex” as the virus rips through the population again.

Nor can we simply “tough it out,” because the hospital systems couldn’t handle a full blast of COVID-19.

Seeing less than 2% of the population get infected almost broke the hospital systems in multiple urban centers. (We also have yet to see how upcoming hotspots will fare.)

Then, too, in a great many rural areas, there is no hospital system at all. Can you imagine what would happen if, say, even 5% or 10% of the population was allowed to get COVID-19 en masse? 

The virus can’t be given free rein. That would destroy the economic system we are trying to save. But nor can we stay in our homes another six or 12 or 18 months.

That’s why victory is our only option between here and a vaccine.

We already explained the victory elements in a March 25 piece, The Four Things America Needs to Beat the Pandemic (and Save the Economy).

To briefly recap, the four things required are:

  • Test Kits
  • Masks
  • Ventilators
  • Supply Chain Coordination

We need those four things in mass quantities to “open the country up.” Again, read the “four things” piece to understand why.

If we don’t have those four things — and we still don’t have a vaccine — any attempt to “go back to normal” will just be a death sentence. To fight and win, we have to mass-mobilize.

This is also, in part, why the fate of the stock market depends directly on the pandemic response.

Until we beat the virus, we don’t get our economy back — and the virus can’t be fooled. 

Do we have enough test kits? Do we have enough masks and ventilators? Do we have a functioning hospital system free of supply shortages on a more or less nationwide basis?

If the answer to any of those questions is still “no,” re-opening the economy would likely be a grave mistake, allowing the virus to roar back and force us back into our homes, creating a “stop and go” lockdown situation and increased harm to the nation’s psyche.

In terms of gear and logistics, we don’t have what we need yet — not even close. The powers that be are working on it, but it will take time to get there.

The market hasn’t accounted for this reality, in our view.

Our suggestion is to focus on justified optimism rather than false hope — born of a clear plan, logically and cleanly executed — and dig in for the long fight.