Opinion: Investors aren’t irrational. They’re concerned about the government’s ability to handle a crisis. Here’s how the White House could get ahead of the problem
Sina Kian is a vice president at the Blackstone Group, former clerk to Chief Justice John Roberts and adjunct professor at New York University School of Law. The views represented here are his own, not his employer’s.
Instead of demonstrating how much we've learned from previous outbreaks like SARS and Ebola, however, the coronavirus crisis has exposed how underprepared we and many nations across the world are for even a mild pandemic. Here at home we’ve seen a stuttering, unprepared government trying to mask the problem with empty confidence. It’s been a terrible look for our leaders, and as far as the markets are concerned, a costly one.
At this point, it is hard to predict the human costs, but credible experts are suggesting we should be prepared for a very serious pandemic. For example, in a recent presentation before the American Hospital Association, Dr. James Lawler, a professor of infectious diseases, suggested that over four million Americans could be hospitalized, and over 480,000 could die.
Surveying this landscape, anyone in financial markets can piece together that COVID-19 has high potential to be an enormous economic event as well as a serious health crisis. The Organization for Economic Cooperation and Development estimates the virus could cut global economic growth in half, or worse. Many are now bracing for global recession. From an economic perspective, that is a troubling prospect.
But the problem is actually much deeper than any one politician. There's been so much antagonism and partisanship that it seems that we’ve actually forgotten that the government has a role to play in combating something like a pandemic. It's too late now, for purposes of this particular virus, to talk about the missed opportunities to prepare. But the bewildering thing is that months into this disaster, the government still appears lost and without a plan.
The government should identify all transportation hubs and “hotspots”—areas where the existence of the virus is confirmed or where population density creates higher risk—and authorize a $50 billion plan that includes sanitation infrastructure in those areas. The failure of the recent $8 billion aid package to address this is visible to anyone traveling in the United States. Even now, major international airports in New York and Washington D.C.
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