White swans have historically been so common that black ones were almost mythical. Nowadays, the phrase has been popularized – by author Nassim Taleb – as a phenomenon that comes as a surprise, has a huge impact, and then gets inappropriately rationalized later with the benefit of hindsight.
Where the current coronavirus is concerned no one expected this shock, but the size of the impact remains unknowable at this stage. However, it should be taken seriously with action. The virus has broken containment and poses multiple risks to the United States and Utah’s economic environment as well.
Everything changed last week for a few key reasons: fatality rates, transmission and supply chains impacting markets. While data regarding fatality rates is sketchy coming from China the epicenter of the current outbreak, one fact remains its transmission rate is high. The World Health Organization has come out and stated there may be sustained human – to – human transmission that could become widespread for the foreseeable future.
The Centers for Disease Control and Prevention finally warned that it expects spreading among communities in the United States that could cause “severe” disruptions. While cases in the U.S. remain small at present the long incubation period works against containment as those traveling may have the virus without symptoms. The recent experience with cases popping up in isolated Iran, Iraq and Italy suggest the virus is moving fast and hard to contain.
Further, the CDC has outlined what closing schools and businesses would look like while urging the public to prepare for a serious pandemic. The point is that preparations for Utah businesses and families need to start now to mitigate any possible disruptions. It is recommended by the Utah Department of Health that you post this flyer in your workplace to educate your employees. Families can purchase protective masks to mitigate airborne transmission and always wash your hands or use hand sanitizer. These are simple steps to counter what might be fatal risks that Harvard epidemiologist Marc Lipsitch theorized to the Wall Street Journal could turn into a global contagion.
The United States Chamber of Commerce Foundation has created a resource page for businesses to follow and the Utah Department of Health linked here are good pages to monitor.
Finally, this matters for Utah businesses on several fronts. First, our state annually receives about 84,000 Chinese visitors to national parks and other attractions according to The Utah Office of Tourism. This number will obviously suffer and lost revenue for the state will have an economic impact as traditional figures suggest they provide 127 million a year.
As China faces a prolonged disruption to factory workplaces in order to contain the outbreak supply chains are beginning to break down. Trump’s trade war with China had the fortuitous effect of shifting some supply chains out but many remain the product pipeline ranging from medicine to car parts for most American consumers.
The Trump Administration remains confident in their planning but news broke Tuesday from a classified briefing on the Hill that key leaders are skeptical. Sen. Mitt Romney of Utah voiced his concern after the meeting that he was “very disappointed in the degree to which we’ve prepared for a pandemic, both in terms of protective equipment and in terms of medical devices that would help people once they are infected.” Noting that we are at this stage “substantially underinvesting in what would be appropriate for a setting which could be serious.” Companies doing business in China have seen steep drops in their stock price including Utah – based Nuskin whose stock is down nearly 26% in one month.
While one party has rooted for economic decline to hurt the sitting President no one could have predicted the impact of a virus from Wuhan, China. The market has sounded the alarm, global leaders are sending economic warnings and health officials are tasking us with the responsibility to be ready as a community. Onset Financial of Draper took the proactive step to give employees $250 dollars to buy goods and showing they make the health and safety of their employees a part of culture. It would be wise for Utahns to heed the old aphorism that if you are prepared you should not fear. Take the simple steps now to get some supplies in case there is a disruption around the corner.
David Hursey is an analyst of international affairs who has worked on Capitol Hill in Washington, DC and several presidential and congressional campaigns.
He holds a Master’s degree in Middle East Studies from The University of Utah and lives in Salt Lake City.