Opinion

Is coronavirus really a black swan event?

The coronavirus, although dangerous and scary, isn't some unpredictable event

The global spread of the coronavirus is making America more anxious by the day. And those deepening worries are reflected in the gyrating stock market. Both the long economic expansion and 2020 presidential race seem poised on a knife's edge. Politico reports, "Trump faces 'black swan' threat to the economy and reelection." The New Yorker puts it this way: "As Coronavirus Spreads, Stocks Fall Again and the White House Frets About a Black Swan."

But the coronavirus, although dangerous and scary, isn't some unpredictable, "Gosh, who woulda thunk it?" black swan. And employing that powerful metaphor lets governments evade their responsibility to keep us safe and avoid accountability if they fail.

Recall that the phrase "black swan" gained currency a decade ago during the Great Recession and aftermath. It provided a compelling way of thinking about the simultaneous crises in banking and housing. Those economic shocks elevated investor and mathematician Nassim Nicholas Taleb to global celebrity. His best-selling 2007 book about unpredictable events, The Black Swan, seemed eerily prescient of the terrible downturn starting later that year. More than that, it gave investors and academics a conceptual framework for thinking about potential risks that were both highly destructive and low probability.

Taleb's definition of a "black swan" synced perfectly with the global financial crisis: From his 2007 book: "First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme 'impact.' Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable."

Nailed it. First, an imploding banking system and a nationwide decline in housing prices hadn't been seen since the Great Depression. Most experts thought a 21st century recurrence was impossible due to regulations and the structure of modern finance. Even Federal Reserve Chairman Ben Bernanke, a scholar of the Great Depression, initially underestimated the risk. Second, the impact was extremely bad, with a loss of more than $2 trillion in global economic growth. Third, the risks seemed obvious in hindsight: a housing bubble bordering on mania, complicated and novel financial products, and rising interest rates. But in real time, not so much. There's your textbook black swan.

The coronavirus, on the other hand, is a bad fit for Taleb's definition. Yes, it is carrying an extreme impact, in terms of human lives, dislocation, and economic losses. But is the emergence of such a dangerous virus really an unpredictable outlier that suddenly swooped in from outside our "regular expectations?"

If asked, many American could easily cite several dangerous global outbreaks from the past two decades: SARS in 2004, H1N1 in 2009, and the Ebola outbreak in 2015.

And a good chunk of American popular culture this century — World War Z, 28 Days Later, The Walking Dead, The Last of Us — has revolved around the idea of a mysterious, apocalyptic virus — although it may turn you into a zombie after killing you. Our entire society has been soaking in this scenario. Take the 2011 Steven Soderbergh film, Contagion, starring Matt Damon and Gwyneth Paltrow. It grossed $135 million in the domestic box office and is currently one of the hottest films in the Warner Bros. library. The origin of the virus in that film even echoes what many scientists think occurred with the coronavirus. Hollywood wasn't making brainy thrillers about Wall Street mortgage derivatives in the early 2000s.

Moreover, in the years since the 2009 H1N1 flu outbreak, which killed more than 12,000 Americans, there have been numerous studies and public speeches from experts warning about a systemic lack of preparedness. A 2014 Department of Homeland Security study said the U.S. was ill-equipped to handle a pandemic. In 2018, the head of the World Health Organization warned, "A devastating epidemic could start in any country at any time and kill millions of people because we are still not prepared." Also in 2018, Microsoft cofounder Bill Gates said he had raised the issue of a "large and lethal" pandemic with President Trump.

For now, governments around the world, including America's, need to focus on containing the outbreak and finding a vaccine. But when it comes time to review their performance, loose talk about unpredictable black swans shouldn't be tolerated by any of us.

Want more essential commentary and analysis like this delivered straight to your inbox? Sign up for The Week's "Today's best articles" newsletter here.

More From...

Picture of James PethokoukisJames Pethokoukis
Read All
Inflation is now a real, serious threat to Biden
President Biden.
Opinion

Inflation is now a real, serious threat to Biden

Why Apple's $3 trillion valuation bodes well for us all
The Apple logo.
Opinion

Why Apple's $3 trillion valuation bodes well for us all

Is nuclear fusion finally for real?
Fusion.
Opinion

Is nuclear fusion finally for real?

Grateful for Jerome Powell?
Jerome Powell.
Opinion

Grateful for Jerome Powell?

Recommended

Fauci: It's too soon to say whether Omicron will hasten pandemic's end
Anthony Fauci
fingers crossed

Fauci: It's too soon to say whether Omicron will hasten pandemic's end

French lawmakers approve vaccine pass
French President Emmanuel Macron
vous shall not pass

French lawmakers approve vaccine pass

Djokovic forced to leave Australia after court upholds visa cancellation
Novak Djokovic
game, set, match

Djokovic forced to leave Australia after court upholds visa cancellation

Hundreds of students walk out of schools over Omicron concerns
Masked high school students
Too cool for school

Hundreds of students walk out of schools over Omicron concerns

Most Popular

Will 2022 bring another Miracle on Ice?
The Miracle on Ice.
Samuel Goldman

Will 2022 bring another Miracle on Ice?

Omicron may be headed for a sharp drop because so many people are infected
Dr. Janet Woodcock
Omicron Blues

Omicron may be headed for a sharp drop because so many people are infected

California deputy DA opposed to vaccine mandates dies of COVID-19
Kelly Ernby.
covid-19

California deputy DA opposed to vaccine mandates dies of COVID-19