Putting Lipstick on a Pig

Get used to it. Pandemic Influenza is an ugly pig, but in the lead up to it’s arrival; there are many who will try to make it seem less so. That is, admittedly, a difficult job. It’s never easy to turn the deaths of millions of people, and the disruption of the global economy, into a non-event. But that’s why we have talking heads, PR departments, and `experts’.

Today our expert is Martin Meltzer, senior health economist at the U.S. Centres for Disease Control and Prevention (CDC). And you have to give the man credit. He has stood up and proclaimed that the economic recovery from a pandemic should be swift. And he reportedly did so with a straight face.

A few choice snippits from a Reuters report:

SINGAPORE (Reuters) - A bird flu pandemic will hit world economies for one to two quarters as tourism and demand for consumer goods fall sharply, but growth should rebound at a pace similar to Asia's swift recovery from SARS, a senior economist said on Wednesday.

Apart from tourism, a human-to-human pandemic would also have a huge impact on airlines, restaurants and hotels as people stop travelling and stay at home, said Martin Meltzer, senior health economist at the U.S. Centres for Disease Control and Prevention (CDC).

Economies would also see a rapid drop in demand for consumer goods -- including everything from refrigerators to automobiles, he said.

The biggest impact of an influenza pandemic, which would likely last less than four months depending on the size of the countries affected, would probably hit growth for just one to two quarters, Meltzer said.

"After that, I expect to see a great rebound," he said. "People will return and we will see normal growth rates."

The leisure and hospitality sectors might take longer to recover, while healthcare will need more time to recoup from the strains caused by a pandemic, he said.

Meltzer, who has worked at the CDC for 11 years, said that governments are getting better prepared.

Where do I begin?

Mr. Meltzer is basing his `happy’ analysis on a pandemic being over in 3 to 6 months. Considering that Mr. Meltzer works at the CDC, you’d have thought he would have gotten the memo:

Most medical experts believe that a pandemic would last a year; maybe two, with recurring waves that would last for several months, subside, and then return. In 1918, there were 3 distinct waves, over 18 months. With multiple clades (versions) of the virus out there, two years may be optimistic.

I guess the doctors and scientists didn’t get his memo. A pity. They could abandon their efforts to create a vaccine; undertakings that will cost billions of dollars and take no less than six months (and probably years), because the pandemic threat will be over in 3 to 6 months. All that money could be used elsewhere, priming the economy. Seems like pointless government pork barrel spending to me.

And the industries likely to be effected by a global pandemic are reassuringly limited to hotels, airlines, restaurants, and the tourism industry, along with a drop in the demand for consumer goods. One must expect that body bags and coffins will be an exception, and the manufacturers of those should be considered a BUY.

The article (which I did not quote in its entirety) goes on to say Mr. Meltzer used the 2003 SARS outbreak, which killed hundreds, as the basis for his models.

Had I only known that this tactic was acceptable, I’d have posted a picture of Brad Pitt under my profile at the top of my blog, instead of the one I used. I am, after all, just about as close in appearance to Pitt as Mr. Meltzer’s pandemic scenario is to the 1918 event. I suppose I could change it, but my reader might become suspicious.

The financial interests around the world are desperately hoping a pandemic will sneak up on investors before they can sell their stocks. That the greed will overcome the fear, and that people will be locked into their investments and have no choice but to ride it out, even if the recovery takes years. After all, we wouldn’t want a messy recession to start now, would we?

So expect more happy talk. Reassurances that the economic impacts of a recession will be limited, and brief, and that the recovery will be swift.

And if we get exceedingly lucky, and the Avian Flu turns into a bust, they may end up being right. It could happen.

But I wouldn’t bet my assets on it.