(Bloomberg Opinion) --
Covid-19: The View From 40,000 Feet
Greetings from the mid-Atlantic. Concluding a strange holiday season defined almost in its entirety by the pandemic, I am now on my way back to the U.S. following almost a month in the U.K. After being in London for what appears to be the peak of the omicron variant there, my family and I might be just in time for another one in New York. Britain has had yet another political row on this, while the U.S. is about to rake over the issue once more.
The latest news items about the pandemic are still driving the daily moves of bond and stock markets, even though Covid-19 hasn’t stopped them from creating remarkable wealth over the last two years. At the time of writing, that continues with bond yields rising in reaction to evidence that omicron really isn’t as severe as previous variants. It’s easy to lose perspective.
Here then follows an attempt to view the pandemic from 40,000 feet (literally), based less on the Johns Hopkins University statistics with which you can track the virus on the Bloomberg terminal, and more on my own attempt to sum up what we’ve learned since early 2020, particularly the last month. Be warned that I won’t attempt to go into any detail on financial markets, but I hope that this will be useful.
- Covid is far too easy to cast in moral terms. That is why it has become so politically and socially toxic
Many mistakes have been made by many people throughout the pandemic. As they were dealing with truly unprecedented circumstances, and a prohibitive uncertainty, it might be best to assume those mistakes were honestly made by people trying to do the right thing. The issue has become so entrenched because both sides impute morally bad behavior and motives to the other. Politicians trying to protect the populace are not necessarily dictators, and those who object to lockdowns and vaccines aren’t necessarily selfish. With both sides convinced of the other’s evil intent, compromise and reconciliation grow difficult. That is the greatest risk for the future. It’s also a shame because:
- The story of the last two years was the steady resolution of uncertainty, and fitful moves toward an approach that all can accept
This is an incomplete list of the things we know now about Covid-19 that weren’t clear two years ago:
- It’s not spread by contact, but primarily through the air.
- Masks are, therefore, a good idea.
- Good masks make a difference. With the highly infectious omicron variant, N95 masks are still protective, cloth masks much less so.
- Natural immunity from being infected by the virus is finite, making herd immunity via infection elusive.
- Vaccines are helpful but not “the answer” as the immunity they confer is also finite.
- Covid-19 and its aftereffects are severe enough to make it worth going to some lengths to avoid it, and to very great lengths to protect the most vulnerable.
- The virus isn’t dangerous enough, however, to justify a major shutdown of society.
- “Lockdown” is an overused word — measures of economic and transport activity make clear that countries without official lockdowns have often seen greater reductions in activity than those that were more laissez-faire.
- Tests, if they are quick, can set us free.
When all of these things were uncertain, the draconian and deeply damaging lockdowns of March and Aril 2020 were probably justified. With greater knowledge, we can manage something better. And for evidence of this, I with some amazement offer the case of Boris Johnson.
The Boris Johnson Experience
The U.K.’s prime minister was in serious trouble by early December, thanks to various domestic scandals. Omicron arrived just as he was politically weak, and when his cabinet was divided over how to respond. Scientific advisers urged significant restrictions, while libertarians in the cabinet said the British public would never stand for a second successive canceled Christmas.
Johnson’s moves as the government tried to deal with omicron were viewed almost entirely through the lens of political calculation, but the middle ground he sketched out seems, whether by luck or by judgment, to have been a good one. The essential elements of the “plan” that emerged were as follows:
- “Plan B” restrictions on movement. People were urged to work from home “if they could,” and required to take tests before entering crowded venues. There was no forced lockdown as such.
- Strong advice from government scientific advisers that omicron was very infectious, and that people should try not to catch it.
- A massive campaign to offer booster vaccine shots. It wasn’t compulsory, but it was free, and publicized aggressively.
The government asked people not to spread the virus, and with free vaccines and tests offered the chance to protect themselves and be responsible citizens. But they didn’t force people into anything. This was lambasted from both sides. Many felt that the government had failed in its duty to protect the population, while others viewed it as an unacceptable infringement on our liberties.
It’s still too early to pass judgment. But at this point, it looks like the compromise has worked. London in the two weeks before Christmas was unnaturally quiet. It wasn’t the total standstill of spring in 2020, but it was easy to get a seat on the tube, even at rush hour. Offices in the City of London were virtually empty. People voluntarily withdrew from society.
But Christmas still happened. Museums and theaters were mostly open, and by the week after Christmas there was plenty of festive activity. Outside London, where omicron hit first and worst, activity was much less dented.
Certainly, cases went through the roof. But as of now, it looks as though the National Health Service should just about deal with the pressure. Omicron’s essential mildness, and extra protection from vaccines, have tended to keep people out of hospital, particularly intensive care.
The critical tool has been the availability of rapid lateral flow tests. Demand has swamped pharmacies in Britain in recent weeks, while the U.S. remains largely without them. Making rapid tests widely available is a logistical challenge. But it needs to be done. Swift testing alleviates moral dilemmas and makes everyone safer.
From my own personal experience (and everyone in Britain seems to have similar tales): We twice canceled dates to meet friends because they’d tested positive. My daughter delayed her flight to the U.K. due to a positive test. We didn’t head for my elderly parents’ house until we’d checked that we were all negative. Test results got us into the British Museum, a theater, and a couple of football matches. All of this is on the “honors system” — you read the result of your test and send it to the NHS. It has no way to check whether you are lying, and instead trusts people not to go to crowded places, get together with close friends, board a plane or meet someone vulnerable if they know they’re infectious. And libertarians and paternalists alike can agree that anyone who does such a thing is contemptible.
The results are still unclear, but at present it appears as though Johnson’s gamble will succeed. Omicron will inflict some economic damage, some loss of life, and some long-term ill health. It succeeded in dampening Britain’s Christmas somewhat. But in all cases, the damage looks as though it will be tolerable. A messy compromise based on new knowledge seems at this point to have reconciled all the opposing demands.
The Market Read-throughs
Covid has already made many fools on many occasions, so predictions for the future are dangerous. The most likely scenario at this point is that the economic damage will continue to diminish, messily. Inflation, the issue of the day, will tend to increase both supply and demand. The impact on prices will depend on which effect is greater.
As it grows ever clearer that dealing with Covid is a huge logistical challenge, the implications for the international order are intriguing. Ridding the emerging world of the virus and its future variants is going to be a mighty difficulty. Meanwhile, strict lockdowns look harder and harder to sustain. The experience of the continental European countries that opted to clamp down in response to omicron, such as the Netherlands, will make a handy control test for the success of the Johnson Variant in the U.K.
But the most important issue concerns politics. It’s just faintly possible that we are finally at a point where the political sting of the pandemic can be drawn. Its greatest threat has been neutralized, and we now have ways to control it that reconcile the warring camps.
But this still seems a faint hope. So many have convinced themselves that profound moral principles are at stake, and that those who disagree with them are evil or irresponsible, that it will be difficult, going on impossible, to return to equilibrium. This is the greatest risk ahead, and the passionate and intemperate debates of the last month make it hard to see how it can be avoided.
That, at least, is the view from 40,000 feet.
Survival Tips
This survival tip is also from cruising altitude, and it’s arriving very late. But I’d like to recommend “The Mare of Easttown,” one of last year’s biggest television events. If you haven’t seen it yet, I think you should. It’s set in Pennsylvania, features Kate Winslet’s flawless local accent, and is as dark as television drama gets. But it’s excellent, intricate and believable, and worth your binge-watching.
Points of Return written sitting in front of a Bloomberg terminal will resume tomorrow…
More From Other Writers at Bloomberg Opinion:
- Theranos Directors Pay No Price for Holmes’s Fraud: Tim O’Brien
- Why Interest-Rate Hawks May Not Sweep All Before Them in 2022: Daniel Moss
- The Bond Market Sends a Hopeful Message About Omicron: Brian Chappatta
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
John Authers is a senior editor for markets. Before Bloomberg, he spent 29 years with the Financial Times, where he was head of the Lex Column and chief markets commentator. He is the author of “The Fearful Rise of Markets” and other books.
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