You Can’t Spell Pandemic Without Panic

By April 27, 2020Commentary

We can anticipate that in the future when the reaction to the coronavirus epidemic is discussed, it will become an example of a panicked reaction based on bad information.  Our policymakers took bad information, in the form of exaggerated modeling outcomes, and failed to consider other information–the likely harms from shutdowns, both economic and non-economic, and allowed themselves to be stampeded into rash actions.  It is an amazing example of group-think, because one country or state took this action, we have to take it.  Fear of being criticized played a role as well.  From the President on down, there has been very limited willingness to be more thoughtful, to consider a wider variety of information, before making a decision.  There are a few exceptions–the government of Sweden, several state Governors, but by and large the response has been driven by nothing but fear.  And now that it is apparent that the economic damage, especially job loss, is far worse than people anticipated, and that the virus poses little danger to anyone other than the infirm elderly and those with pre-existing conditions, our leaders are too stubborn, too prideful, to afraid of losing face, to admit that they made a mistake and need to change course.  Instead they keep telling us how dangerous the epidemic is and how many lives they are saving, all of which is completely misleading.  These errors are costing us tens of millions of jobs and trillions of dollars in economic output.

Humans seem uniquely susceptible to crazy group-think, much of it financial, but not exclusively in that realm.  Since we all have lots of down time these days, if you are looking for some interesting reading that would explain how we got ourselves into this mess, let me suggest the following works.

Charles Mackay, Extraordinary Delusions and the Madness of Crowds  1841 (the seminal writer on this topic, with one of the first analyses of the tulip bulb mania in the Netherlands)

Kindleberger and Aliber, Manias, Panics and Crashes

Fooled by Randomness, Nassim Taleb

Akerlof and Shiller, Animal Spirits

Barbara Tuchman, The March of Folly

Daniel Kahneman, Thinking Fast and Slow   A particularly useful guide to the fallacies of typical human reasoning.

 

 

Join the discussion 2 Comments

  • Matt R says:

    Your analysis might be far too kind. While Hanlon’s razor (“Never attribute to malice that which is adequately explained by stupidity”) is often helpful, one has to wonder if the ongoing actions are no longer fair to let off on the basis of stupidity alone. MPR today ran a scare piece about how school in the fall will require all sorts of new adjustments, like spacing desks out, limiting class sizes to 12, not allowing any major events, etc. etc… on what evidence? There doesn’t seem to be a shred of evidence in support of any recommendations, just more “expert opinion”. But as you have so skillfully demonstrated, there is no shortage of evidence that the risks,especially to school age children are practically non existent. The bus ride to school is more dangerous than the coronavirus… Are the experts stupid? Or are they Malicious? Neither is good…

  • Matthew Fisher says:

    Another good post. To Matt R, I agree but think there is a third possibility in addition to stupidity and malice: cowardice. Its hard to buck the trend when most people are clamoring for even stricter measures due to being scared stiff. Of course that’s what we need our leaders to do, stand up and show courage in the face of rampant fear. Its now clear that Walz isn’t up to the challenge in this area, which is to say he’s not up to the challenge of leading.

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