Coronavirus: Experts Have Failed Us (Expensively)… and They Will Again
By: Peter Harrigan
Tags: Economics, Coronavirus, Risk, Health

Let down by a system of experts that had promised competence.

The novel Coronavirus has shown that our current system, that relies on experts at the top, lacks either the skill or the inclination to protect us — our jobs, our savings, our lives. Yet, we give this system approximately $4.9 trillion every year to do just this. For this money, it has missed obvious risks, over and over. And it continues to ignore future calamities.



How much longer do we lend legitimacy to this system of experts that doesn’t work for us?



What Color Are All These Swans?



Should we really blame this system of experts for a crazy black swan event like the Coronavirus? Well, if it were truly a Black Swan, probably not. But a Black Swan is not merely an unforeseen event, it is an unforeseeable event. This particular swan is, to use Nassim Taleb’s categorization, grey. That is to say, it is a risk we absolutely knew was out there. We did not know when it would hit, but we knew it would eventually.



In 2015, Bill Gates was giving TED talks about the threat of new viruses.

And in October 2019 the Bill and Melinda Gates Foundation hosted Event 201 in NY, in conjunction with the Johns Hopkins Center for Health Security and the World Economic Forum, to discuss how best to respond to a pandemic .



Gates is not exactly a fringe character. Other experts have warned of the dangers of new viruses. Taleb himself pointed out that our increased interconnectedness means diseases spread more rapidly.



Not Prepared for Swans of Any Color



Was our system standing by, for years, with additional medical equipment? Did we have resources in place, ready to jump into action? It appears, instead, we had failed virus test kits from the CDC and an FDA process that slowed down the adoption of new tests.



And now, as these experts warn us that this crisis could overwhelm our medical systems (future readers will know whether they got that one right), one wonders, why weren’t there stockpiles of supplies, additional ventilators, emergency facilities?



The system of experts has not given us readiness, but red tape, pharmaceuticals dependent on foreign ingredients, and brittle supply chains.



Criticize Trump if you wish, but this lack of preparedness predates him. In 2008, the financial crisis struck. Was the “mortgage meltdown” unforeseeable? Of course not. The Federal Deposit Insurance Corporation had never had enough money to insure more than a few percent of depositors money. It was built to stop runs on a few banks. Fannie Mae owned literally trillions of dollars in mortgages, with very little capital. In fact, a company guaranteed by the government in turn guaranteeing mortgages pushes the system toward over-leverage and too much risk by its very nature. It was another brittle system.



And this system of experts is ignoring future crises now. We’ve known for 40 years that the Social Security and Medicare systems are out of balance by trillions of dollars. State pension plans are massively underfunded, as well. Are our leaders devising a strategy to resolve this? Of course not. And when those particular chickens come home to roost, our system will look for black paint and tell us the chickens are swans.



Mammoth Budgets Misplaced



And the cost of all this incompetence? Well, ignoring state and local governments, and the costs of regulations pushed onto people and corporations, the Federal government alone spends $4,900,000,000,000 every year. That’s $14,893 for every man, woman, and child in the country.



Imagine if we invested 0.1% of this budget on preparedness. That’s $4.9 billion per year.



Information Systems are Not Enough



We’ve all heard glowing accounts of how our new communication tools allow the flow of data around the world in an instant. And it’s all true.



But data from too limited a set of sources is fragile. And data without the means to take action is useless.



Let’s Find Another Way



Imagine the year is 1998 and I just asked you to take a video in your home, add music, and post it on the Internet for the entire world to see. Ten years earlier, you would have said, “what’s an Internet?” But in 1998, you could have done what I asked if you owned the right camera, knew how to upload the content to your computer, had the right editing software, and had the knowledge to put the whole thing together. Now, you just make a TikTok.



What required expertise and special tools is now easy. It is as though we have made people experts, to the point where that expertise is no longer special. And in place of a set of tools that an expert would use, we’ve embedded the expertise in the tools, enabling easy interaction with others.

Let’s give people tools with the expertise embedded.

Now, let’s do the same thing, but for the big stuff. Let’s give people tools for interaction, with the expertise embedded, to handle their financial lives and risks, to give them more options, to improve their health, to safeguard our economy.



Once we’ve built these kinds of tools, people will come together to solve their problems without relying on experts. In the financial arena, they will seek return knowing the real risk they’ve taken. Businesses will protect themselves against the risks that can end their business. But this dynamic of exchange and action can occur outside finance. It can lead to improvements in life and health.



In other words, we’ll give people the ability to generate their own ideas, find real solutions, and interact in ways that benefit them most.