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The markets have been messing themselves over the coronavirus. Here’s an interesting take on the implications. Excerpt:
My first session was with Michael Milken, the noted financier and philanthropist. Milken was cautious for the short term, but generally optimistic. Computer power for gene sequencing and AI models to predict infection spread, he said, are vastly more capable than during the SARS scare of 2002-2003 and the H1N1 epidemic of 2009-2010, when 700 million to 1.4 billion people became infected worldwide and upwards of 500,000 died. Technology can identify and solve problems much faster today.
Milken cited the U.S. polio epidemic of 1952 and the HIV/AIDS panic of the late 1980s as times when fear gripped the population. “People were afraid to be in the same room with someone infected with HIV.”
Fear, of course, is hard to break. The polio fear persisted a few years after the Salk vaccine. Milken said it was popular figures like Elvis Presley, photographed during his Army vaccine, that broke the spell. What lifted the clouds for AIDS were new drug cocktails that eliminated the death sentence, along with thriving patients such as basketball star Magic Johnson.
Capitalism, reasonably regulated, Milken reminded us, has remarkable recuperative powers. The COVID-19 crisis has created the lowest mortgage rates in U.S. history. Oil and gas are priced almost at the lows of early 2009 [update: and now significantly lower.] “The cost of living is going down. Purchasing power is going up.” Milken said, which will lead to a faster recovery of any recession caused by COVID-19.
There’s an old saying: “Today’s problems are solved with tomorrow’s technology.” While it’s hard to make predictions, especially about the future, it’s likely that the coronavirus outbreak will be over sooner and with less loss of life than earlier, similar outbreaks. Why?
Because of technology. Technology developed in free-market conditions, technology that made a profit for its developers and oh, by the way, improved quality of life for millions into the process.
Yesterday the daffy old Bolshevik from Vermont was trumpeting that, should he be President, any coronavirus vaccine would be “free.” Let’s set aside the ridiculous notion that anything can be “free” – TANSTAAFL applies – and imagine how swiftly private companies would develop a revolutionary new vaccine with only the promise that a socialist government would demand that said vaccine be handed over at cost to Imperial practitioners, to be administered with no direct cost save the massive tax increases The Bern has promised.
Left to themselves, markets usually get things right on their own – that includes meeting needs through innovation. A vaccine for the COVID-19 would be no exception.
