The Markets And Irrational Hysteria

This op-ed by CGA Chairman Christopher Burnham originally appeared in Forbes, March 12, 2020

First let’s start with the facts: an estimated 100,000 Americans die every year from hospital caused infections-mostly sepsis. That is 273 deaths, on average, every day. My mother died in a life care facility from sepsis four years ago. The CDC estimates that during this flu season (October 1 to today), between 20,000 and 52,000 Americans have died.   This isn’t from COVID-19, this is from the flu that strikes every year of which there are two main types: A and B.  Flu A is made up mostly H3N2 and H1N1 (we called this Spanish Influenza back in 1918 even though it started in China), Flu A accounts for about 75% of all annual flu cases in the US, Flu B accounts for most of the rest.

We also have had Coronaviruses floating around that infect humans—seven to be exact, out of the dozens that also exist in the animal kingdom. The two most dangerous are SARS and MERS, with COVID-19 the most recent addition to that category. Avian Flu (H5N1) is the last one of real concern. I was a member of the United Nations Avian Flu Taskforce in 2005-2006, when we thought this virus would also sweep the world. However, back then you could control it by culling millions of ducks and chickens—something China is again doing, based on a recent outbreak in southern Hubei Provence.

So far 40 Americans have died from the COVID-19 flu. Of these, 26 were residents in the nursing home facility in Kirkland, Washington, and over 50 of the residents, who numbered 120 pre-flu, have been diagnosed with COVID-19. That leaves 14 other Americans who have died as of March 12. The evidence is difficult to gather on the average age and status of underlying conditions, but it appears that all of the US COVID-19 deaths involve either advanced age (the vast majority), or travel to impacted countries such as China or South Korea, or both.

California’s first two deaths were men in their 70s (who had been on a cruise ship) and both had underlying health issues. The third death was a woman in her 90s. In Florida, 2 men died both were in their 70s and both had recently returned from international travel. In South Dakota, the death was a man in his 60s with underlying health issues. The death in New Jersey was a 69-year-old man with diabetes and emphysema.

Speaking of emphysema, Wuhan is the tobacco crossroads of China. 62% of all men have smoked at some point. In addition, China, like most of the emerging markets, also suffers from a lack of doctors, nurses, and access to a standard western level of healthcare. As such we need to toss any statistics that come from China right now, and focus instead, on those just in the United States. We are not China; about 350 million Chinese live on less than $5 a day and certainly do not have access to US level healthcare. We should not use their statistics.

However, we do have a problem. Until next week we have not had reliable test kits for COVID-19. That was the purview of the CDC, but, and I hate when this happens, all their test kits they mailed out turned out to be flawed. Fortunately, the CDC and FDA lifted their prohibition of the private sector making test kits, and now millions of kits are being made in record time. And to think some people still want government to run all of healthcare!

What this means is that we have no idea how many Americans have COVID-19 or have had it. There is a reasonable assumption that almost all of us will be exposed to it (and may already have been), and those who are elderly with underlying health issues are deeply susceptible to it. The only country that comes close to reliable data is South Korea, which has not had any testing issues, and as Business Insider pointed out a week ago, they have tested 140,000 individuals, compared with fewer than 2,000 in the U.S., and the death rate in South Korea is a fraction of what it is in the US. Of course it is when your denominator is totally flawed due to a massive CDC screw-up. 

Again, the CDC has no idea how many Americans have already contracted, recovered, been exposed, or currently have COVID-19. We know with good certainty that 40 Americans have died since the start of the pandemic. We also know, because the CDC tracks this, that as many as 52,000 Americans have died this flu season from regular old flu, close to 100,000 will die from hospital caused sepsis and infections, while 40 have died of COVID-19.

We are experiencing Irrational Hysteria.