McKinsey's take on virus control, uncertainty, and economic recovery...
From my "silent partner," very good friend and former office-mate back in the early 90s, who went on to fame and fortune at McKinsey and elsewhere after getting his MBA from Wharton. Great article from McKinsey called, "Crushing Coronavirus Uncertainty: The Big Unlock for Our Economies." Based on interviews with numerous CEOs and scientific/economic thought leaders, it makes the strong case that the best economic recovery is rooted in the best virus control approach, as uncertainty is the enemy of the economy and lack of public confidence in the government's and society's ability to control the virus is what drives uncertainty.
https://www.mckinsey.com/business-f...-uncertainty-the-big-unlock-for-our-economies
I only hope the people running this country might actually pause and realize that this wasn’t written by wild eyed liberals, but mainly by fairly "conservative" (in the old school sense) economists and MBAs. The "near zero" virus approach is at least thankfully being attempted in the NE US and West Coast (1/3 of the US population), but I do fear the recalcitrant minority who don't buy the risks of the virus is large enough to torpedo the effort by not following mask-wearing and social distancing as we phase in reopening steps.
The first graphic does a great job of summarizing the various paths forward with respect to virus control effectiveness and effectiveness of economic policies towards recoveryi and how that plays out in economic impact, at least qualitatively for each, while the 2nd graphic shows the huge impact in cumulative GDP losses for scenarios with modest virus control with high uncertainty vs. strong virus control with much lower uncertainty. The excerpted concluding remarks below highlight all of this nicely and summarize how near-zero virus control is achievable and good for improving lives and livelihoods.
It does seem that near-zero-virus outcomes are possible even without running a depression-level economy. With virus spread under control, life can come back. In Hong Kong, for example, restaurants are open again. Yes, they require everyone to wear masks, limit seating to four per table, and maintain a distance between tables of two meters. Yes, there are clear rules—but just thinking about the possibility makes people long for a more normal life. That is exactly how it feels when uncertainty is crushed and confidence returns. But people will only resume their lives when they believe they are safe, not when they merely hope so.
Similarly, the economy cannot be forced to return to normal. People concerned about their safety will not go into their workplaces or flock to their favorite coffee shops and retail stores. We have seen many worker protests demanding PPE before employees would return to their jobs.
In a way, we are saying that lower virus levels are good for protecting lives (for example, you need fewer tests or can detect more with the same number of tests) and good for protecting livelihoods, as it is easier to feel safe “returning to normal.” Of course, there are many potential complications (for example, herd immunity may become the only alternative if a vaccine or better treatments fail to materialize).
The greatest difference achieving a near-zero-virus condition makes, relative to scenarios in which the virus is not fully under control, is that uncertainty is drastically lowered. Near-zero-virus packages and clear communication about the restrictions they require, along with fact-based justifications for them, encourage citizens and leaders alike to make decisions with more confidence. This, in turn, helps unlock economic recovery.
