What is the scenario for going back to work? Testing and tracing. In fact, two types of tests. First, the test for COVID-19 which says if an individual is infected. After deadly delays caused by the FDA and CDC we unleashed the private labs and the states and are now ramping up the number of tests. As of today, we have run about 80 thousand but we need many more and with every positive test we need to isolate and contact trace. Test, isolate, and trace. Health care workers need daily testing. We don’t need to test everyone but we do need to test enough to get the number of new cases down to a level that people feel comfortable returning to work, to shop, to eat. In China yesterday there were no new local infections. We can get there.
The second test is for COVID-19 antibodies which indicate that the person was infected and recovered and may thus have some immunity. An antibody test was just announced. The test looks only at one antibody and this doesn’t guarantee immunity. Nevertheless, people who have been infected and recovered are valuable. The blood of recovered individuals may be useful as a treatment. (N.B. The NIH Vaccine Research Center is looking for otherwise healthy recovered COVID-19 patients who are willing to donate their blood for study. Please contact.) In addition, recovered individuals have a kind of superpower and would be highly desirable workers. Recovered individuals are better able to help the sick at lower risk, for example (David Balan made this point in an unpublished piece). Moreover, a non-infected person would be very willing to work with a recovered person so the effect on labor supply is amplified.
As with the financial crisis, there are some bad risks out there but no one knows where and so every borrower/worker is suspect and no one is lending/working. With more information we can separate out the bad risks and get the majority of people working again.
To be clear, things are going to get worse but there is a reasonable scenario for recovery. Social distancing, including all the shutdowns, will start to show an effect in a week or two. With luck and effort we may stop SFO, Seattle and NYC from going critical and we can then start to bend the curve nationally. If we greatly expand testing, it’s possible that we can get people back to work in one or two months. That will not end the crisis–a fall rebound is possible and we can expect outbreaks. But if we test quickly and widely at the first sign of an outbreak, outbreaks can be contained. A vaccine is also possible and perhaps faster than most people think. Treatments will also improve. Testing and tracing buys us time.
We can get the economy back on track. Testing, isolating and tracing will do it much faster and cheaper than dealing with a prolonged recession.