3 Little Birds: Lessons from COVID-19, 9/11 and Bob Marley
This Is My Message to You
Many people around the world remember where they were during the terrorist attacks on 9/11/2001. It was like a lightning bolt striking out of a clear blue sky, and it feels like nothing has been the same since. Conversely, COVID-19 crept in like a dense fog; we can’t look back and pinpoint the exact moment we heard about “coronavirus”. But like 9/11, it appears that this pandemic will change everything. There are many cultural, economic, and operational lessons to be learned that may help us process current events and better prepare for the future.
So where does Bob Marley come in? The cultural environment after something like this happens is chaotic and stressful. It can make us wonder if this is the end of the world (as we know it). But contrary to the famous REM song, these comparisons should allow us to reassure ourselves that as challenging as things seem right now, “every little thing is gonna be alright”. Perhaps with this soundtrack, we can remind ourselves to be kind to ourselves and those around us, to assume positive intent, and to extend grace instead of judgment.
The cultural impact of events like a terrorist attack or a pandemic is intense. One similarity between the two events is reactive racism. In an article in the New York Times, Omer Aziz says about post-9/11 life as a Muslim-American, “I’m still mourning the life I lived before I learned that I was different.” A Chinese-American teenager in an eerily similar Times article shares, “…there’s another virus spreading that we need to be talking about. Young Asian-Americans like me are feeling hate infect every part of our lives.”
While this note of xenophobia has wound through both cultural melodies, the reaction of the Chief Executive in each instance has been markedly different. Days after 9/11, President Bush held a press conference at an Islamic center, where he called on Americans to remember that “in our anger and emotion, our fellow Americans must treat each other with respect.” Conversely, President Trump has been criticized for remarks about “the Chinese Virus.” Figure 1 provides a comparison between well known remarks made by President Bush during the first 120 days post-9/11 with quotes from President Trump since the beginning of the COVID-19 crisis.
Post-9/11 was a pre-social media world. It was important that we touch each other in comfort, in solidarity, in mourning, and in love. Thousands of people flocked to Washington DC and NYC to volunteer and be part of the community. COVID-19, on the other hand, largely strips away the comfort of human physical interaction. As we practice social distancing, our connections with others become increasingly virtual, and safety precautions limit the opportunity for physical touch and personal presence. Social media may connect us in some ways, but drive us further apart in others as online disagreements provide an outlet for our frustrations. The social distancing exercise may take us back towards the post-9/11 period. It may help bring families closer together, and become an enlightening moment on how to interact with others without the aid or veil of social media.
If cultural impact is intense, the economic concerns are visceral. The average citizen cares about three things: a potential recession, impact on unemployment rates, and when it’s all “going back to normal”.
As many people adjust to working from home, and parents are tasked with homeschooling on the side, others worry about where their income will come from — and whether they’ll have enough to live on. Small businesses strive to balance customer service with survival. Hourly and shift workers, among others, wonder if and when they’ll be able to return to work. Economists surveyed by the Wall Street Journal estimated that 1.5 million new jobless claims were filed last week. The Labor Department has indicated that jobless claims rose to 281,000 in the first week of March, an increase of 70,000 from the prior week. Former top economic advisor to the White House, Gary Cohn, says that, “The US unemployment rate will rise swiftly and dramatically as the coronavirus brings the American economy to a stop.” The system isn’t built to handle this influx of claims, so system crashes are causing delays in processing when people need benefits. Prior to the impact of COVID-19, unemployment rates in February were at a 50 year low.
As this crisis forces opposing parties to work together to find solutions for the economic impact, The Wall Street Journal reported that, “Lawmakers and the Trump administration reached an agreement on an estimated $2 trillion stimulus package aimed at shielding the U.S. economy from the worst consequences of the coronavirus pandemic.” The bill is said to include provisions for investments in the healthcare system, one-time payments to Americans under certain income levels, expansions in unemployment benefits including to gig workers, and billions of dollars in loans and aid to small businesses and corporations. Markets responded to the news, with the WSJ reporting that the Dow surged more than 11% in its biggest one-day jump since 1933, as seen below in Figure 2.
Despite the positive uptick, a recession is inevitable. Along with the impact on unemployment, social distancing has shut down demand for goods and services and disrupted all supply chains. The picture changes every day, and investors are making decisions based on a moving target. An injection of cash from the government could stimulate the stock market to rebound, but this could also send false signals that motivate irrational behavior. In the short term, stocks won’t be rebounding because of business performance or innovation; they will be artificially stimulated.
However, that artificial stimulation is key to the recovery cycle. Fiscal spending and rate cuts are the central bank’s best bet for dealing with the short-term economic impact of the pandemic. As the pandemic cycles through, the Chinese economy should recover first, and US spending will only help that recovery. Europe and the US will soon follow, and the market should end the year at much higher levels than we are seeing now.
So how long will this all take? History tells us, as depicted in Figure 3, that we can expect recovery to take 2–4 years. The graphs below depict the three epic financial crises: Black Monday, September 11th, and the 2007–2008 financial crisis. Economists look to these events as they are the only times that the DOW lost more than 25%.
A better question might be, “when will this be over?” While we have the benefit of hindsight for the three crises depicted, we don’t know where we are on the slope of 2020’s red trend line, as depicted below in Figure 4. This is the first month of decline, while the predecessors experienced a range of peak to trough decline of 2, 17, and 33 months. A lot will depend on how our efforts to contain this pandemic evolve.
While the current state looks bleak, the graphs in Figure 2 should be reassuring. We’ve been here before, and we know what to do to stimulate economic recovery. Patience is advised, and a dose of kindness. Those fortunate citizens who aren’t seeing a negative financial impact may want to consider how they can support small businesses from the comfort of their own homes by continuing gym memberships, purchasing gift cards for future services, or ordering takeout from local restaurants.
While we are — optimistically — reading from an established playbook on economic restoration, the COVID-19 pandemic has truly exposed the global lack of preparedness for an operational calamity of this magnitude. Just like the 9/11 tragedy was preceded by smaller scale terrorist attacks, the COVID-19 pandemic has been preceded by other outbreaks — such as SARS, MERS, and Zika — that demonstrated the possibility of a pandemic. This foreshadowing should have led to development of contingency plans. While 9/11 was a black swan event, the COVID-19 pandemic is not — the overwhelming voices of experts were ignored for months. From the lack of personal protective gear, to the paucity of intensive-care beds in hospitals, to medical staff who haven’t been adequately prepared, to the inability to create testing kits and scale production, to the delay in establishing quarantine protocols and limiting spread by shutting down both domestic and international travel — we as a collective have failed.
Despite warnings from medical experts, President Trump seems inclined to ease restrictions sooner rather than later, stating during a Fox News Town Hall broadcast that our people don’t want to be “locked into a house or an apartment” because “it’s not for our country, and we are not built that way”. However, State Governors — even Republican ones — aren’t on board. Republican Larry Hogan of Maryland said, “Most people think that we’re weeks away from the peak, if not months.” Those governors are stepping in and implementing restrictions, with only nine states demonstrating limited action as reported on covidactnow.org.
However, even with strong leadership from the governors, time is running out to contain the pandemic in a meaningful way. The same model uses # of available hospital beds along with estimates about the spread of the virus to predict the point at which hospitals would be overloaded with limited action, three months of social distancing, or three months of shelter in place or lockdown. It also gives a date by which shelter in place must be implemented to avoid hospital overload. In states like Maryland, time is running out despite the strong social distancing methods and message being implemented by Governor Larry Hogan.
In the gathering and sharing of data and information, and the coming together of the country, there is measured hope that the COVID-19 pandemic will bring out the best in us, just like it did after the 9/11 tragedy. That we could experience a sense of comradery and solidarity as we all acknowledge the impermanence of life. We hope humanity can set aside the debate on who owns the ‘intellectual property’ rights on the COVID-19 viral genome, testing kits, vaccines and drug development. We hope we can learn to rely on the area/content experts rather than trying to rationalize things we don’t understand and making ill-informed decisions that affect the well-being of humanity. We hope we can all hold hands in this bucolic setting, “singing sweet songs, of melodies pure and true.” But whether we reach that idyllic state or not, one thing we know is that we’ve survived worse. We’ve discovered new solutions and lessons, and we’ve come back stronger than before. And there’s no reason not to believe that “every little thing is gonna be alright.”
Jessica Ridlen, Dr. Saad Usmani, and Brendan Rafferty are part time graduate students enrolled in the MBA@UNC program at the University of North Carolina at Chapel Hill. Jessica is a pharmaceutical executive, Saad is an oncologist on the front lines of COVID-19 response, and Brendan is a Wall Street executive. After a UNC course that was scheduled to take place in Vancouver, Canada in mid March was canceled due to COVID-19, the three friends attended a full day online course offered by the University to explore the business and health implications of COVID-19. During discussions with each other during this class, they realized that there were many similarities between COVID-19 and 9/11, and decided to write this essay. Please feel free to find, follow, and reach out any of them on Linked In!