Coronavirus: Quarantining A Metropolis

Coronavirus

From 8,000 miles away, it is hard to visualize the scale of the Chinese response to the spread of the new coronavirus that has drawn global attention and frightening comparisons. But consider this: What China is doing has never been done before.

The city of Wuhan has some 11 million people, millions more than London or New York. As of Thursday morning local time, nobody other than those on official business was allowed to enter or leave this metropolis. It’s as though a similar ban had been imposed on all of Los Angeles County, and then some.

Within hours, authorities had imposed this near-total metropolitan quarantine in a second Chinese city, Huanggang, population 7 million. It’s comparable to quarantining metropolitan Atlanta or Philadelphia on top of LA or New York. Other Chinese cities in the same province came under partial lockdowns.

All this was happening on the eve of the Lunar New Year, China’s biggest national festival. Each year hundreds of millions of people there use all forms of travel in the greatest recurring migration of humans on this planet. So imagine we imposed these travel restrictions on, say, metro Los Angeles and Atlanta during Thanksgiving or Christmas – but much, much bigger.

It is a staggering response, especially considering that at the time these measures were implemented there had been fewer than 1,000 confirmed cases of the newly discovered illness, and fewer than two dozen deaths – a fatality rate in the low single digits. Nearly all the people infected had been in Wuhan, or had been in close contact with someone who was.

But these early statistics can be deceiving. Authorities suspect the virus could have an incubation period of as much as a week before the carrier displays symptoms. And they have confirmed that the virus can pass from one human to another. (The disease is believed to have first jumped to humans from animals at a Wuhan food market.) Chinese and global health authorities are worried that it might already be too late to stop the virus from spreading. This is literally true: It has already been confirmed in the United States and several of China’s Asian neighbors, with more cases suspected in Scotland and elsewhere.

Even if the illness already exists outside China, however, that country’s vast population and the impending holiday travel season created an imperative that authorities in Beijing – to their credit – felt they could not ignore. Besides the local quarantines and other public health measures, the government promised serious penalties against any local officials who tried to cover up or downplay the extent of the disease. This is a welcome break from the Communist-led government’s long history of trying to make itself look good, or at least avoid criticism for actual or perceived failure, by manipulating publicly available data.

The disease may still spread outside China, but the number of cases inside the country probably will be significantly reduced thanks to the aggressive official response. That is especially important because China’s health care system is not nearly as richly endowed with resources as those in the West. Prevention is always the best medicine, but for many rural or less-affluent Chinese, it may also be the only effective medicine available in a pandemic.

Few major cities, if any, have attempted a total quarantine of indefinite duration to stop the spread of a disease, especially a flu-like respiratory disease. The closest analog in recent times was probably Sierra Leone’s response to the Ebola outbreak of 2014-15. Twice during that pandemic, Sierra Leone imposed a three-day national lockdown, with everyone except health workers in the nation of 6 million ordered to stay home. Medical professionals used those periods to go door-to-door to identify unreported cases of the disease and take steps to stop its spread.

That Ebola outbreak sickened 28,000 people in West Africa and killed 11,000. Aid rushed in from around the world, and the disease was essentially contained within the region. A byproduct of that response was the development of an investigational Ebola vaccine, which health care workers are currently using to address an Ebola outbreak in Congo.

China’s response to the disease some are informally calling the “Wuhan coronavirus” comes against the backdrop of that Ebola outbreak and several other recent pandemics. Notably, China gave rise to both the “swine flu” global pandemic of 2009 and the mainly regional “severe acute respiratory syndrome” outbreak of 2002-03. SARS and a more recent respiratory illness, MERS (for Middle East respiratory syndrome, first identified in Saudi Arabia) are both produced by coronaviruses. Swine flu, a more aggressive disease, was not.

It may turn out that critics will accuse China after the fact of overreacting to the Wuhan-based outbreak. If the disease is relatively mild or the quarantines do not keep it from spreading within the country, the economic and social cost of the disruption may be seen as disproportionate to the benefits. It is also very difficult to fully seal off zones as large as these metropolitan areas. The inconvenience and lost income inflicted on millions may be for naught due to the quarantine’s inevitable evasion by some dedicated individuals. As the BBC reported, more than 20 major roads and dozens of smaller ones converge on Wuhan alone, making perfect isolation a practical impossibility. It is hard to imagine anyone even attempting such an embargo against business and personal travel in the United States, or other nations less rigorously policed than China.

But all such criticism will have the benefit and bias of hindsight. China’s authorities do not have that benefit at the moment. They only know that they face a new disease and an opportunity to at least try to stop it from becoming a big problem. It will be interesting to see how it works out, and unfair to criticize them for at least trying if it doesn’t work in the end.

About Larry M. Elkin 561 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

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