As WHO declares a pandemic this morning, i thought it might be apt to start to think about the secondary effects of Covid-19?
The lost love between OPEC-Russia looks like an independent event (but i thought there might be some cause-effect as Covid-19 triggered them to meet up, which then resulted in a breakdown in talks).
CORONAVIRUS: THE REAL RISKS AND HUMAN BIASES BEHIND THE PANIC
We tend to focus on first-order effects, not second- or third-order effects – If I wreck my car, I’m most likely to be upset about my wrecked car (first-order effect), not how I’m going to pick up my kids from school each day or how higher insurance premiums will affect my monthly budget (second-order effects), even though the second- and third-order effects will have a bigger impact on my life than the damaged car. Much of the analysis I’ve seen on coronavirus stops at the first-order effects. “Stay healthy, wash your hands, you’re going to be fine.” Hell, that was basically my analysis a few weeks ago. But the second and third-order effects of this could potentially be quite large.
Just one example: the US healthcare system is utterly broken. Roughly 60% of Americans can’t afford to pay for an unexpected emergency and 10% of Americans don’t have health insurance at all. Medicare (which insures old people) is already on shaky financial ground. 20 million extra people hitting the hospitals over the next year could cause a different type of epidemic: bankruptcies.
https://markmanson.net/coronavirus-risks-and-biases
The lost love between OPEC-Russia looks like an independent event (but i thought there might be some cause-effect as Covid-19 triggered them to meet up, which then resulted in a breakdown in talks).
CORONAVIRUS: THE REAL RISKS AND HUMAN BIASES BEHIND THE PANIC
We tend to focus on first-order effects, not second- or third-order effects – If I wreck my car, I’m most likely to be upset about my wrecked car (first-order effect), not how I’m going to pick up my kids from school each day or how higher insurance premiums will affect my monthly budget (second-order effects), even though the second- and third-order effects will have a bigger impact on my life than the damaged car. Much of the analysis I’ve seen on coronavirus stops at the first-order effects. “Stay healthy, wash your hands, you’re going to be fine.” Hell, that was basically my analysis a few weeks ago. But the second and third-order effects of this could potentially be quite large.
Just one example: the US healthcare system is utterly broken. Roughly 60% of Americans can’t afford to pay for an unexpected emergency and 10% of Americans don’t have health insurance at all. Medicare (which insures old people) is already on shaky financial ground. 20 million extra people hitting the hospitals over the next year could cause a different type of epidemic: bankruptcies.
https://markmanson.net/coronavirus-risks-and-biases