Pandemics collapse the economy

The SARS experience taught us that a mysterious, rapidly spreading, and potentially fatal respiratory infection can trigger a short, sharp, severe economic shock that has longer term consequences. Though less than 900 people died from SARS and Toronto was the only city hit outside the Asia Pacific . region, the losses to airlines, the hospitality sector, and all those associated with the travel industry were estimated at around $50 billion. Two years later, the big hotels in Singapore and Toronto were still recovering. Contrast that with the situation for seasonal influenza: the calculated mortality based on "excess deaths" in the United States alone ranges from 20,000 to 40,000 (250,000-500,000 worldwide) for any given flu year. But influenza is familiar, many of us will have been vaccinated, and the fact that one of the standard strains is circulating does not cause business travelers and tourists to stop flying or induce most people outside Asia to wear face masks in the streets and in airports.¶ Even so, the CDC economists estimate that the total US economic burden, including loss of productivity, hospitalization, and so forth, is in excess of $80 billion for a "normal" influenza year. It may be too soon to cost the "mild" 2009 SW [END PAGE 152] HlNl pandemic, though a 2006 economic modeling exercise put the global expense of an influenza pandemic in the $330 billion to $4.4 trillion range, depending on the severity of the disease. Of course, as the global financial crisis of 2007 taught us, the economic damage that can be done by New York bankers and financial speculators operating in a poorly conceived and administered regulatory framework can be much greater, but the cost of a global infectious disease pandemic is still very substantial, in addition to the enormous social dislocation.