Real World Economics: Compound growth tells us how virus behaves

In his dying moments, South American liberator Simon Bolivar said, “We have plowed the sea.” He meant “we accomplished nothing.” If you plow on land, you look back and see furrow after furrow. Plow through the sea and the water closes back in. You see what he meant.

Edward Lotterman

That is how I, an economist, and a lot of teachers of logic or math and others who promote critical thinking skills, feel when we hear much of the debate over COVID-19. This is especially bad among state governors who should be able to think more clearly, or at least be able to listen to trusted advisers who do.

That was evident at the beginning of May when five Midwestern governors wrote an op-ed for the Washington Post boasting of how their states, Missouri, Iowa, Nebraska, Arkansas and Wyoming, had shown the nation how to beat the pandemic. They were going to teach the nation just how to power a state’s economy back to full-bore. (The Washington Post’s website may require a subscription to read the article).

To say that the governors’ arrogance and ignorance is stupefying is not an exaggeration.

Halfway through the piece I was thinking: “Why would a coach dump the Gatorade over his own head 12 seconds into the first quarter just because his team had advanced the ball three yards?”

Since then, COVID cases in the first four states, in respective order, have increased 20, 13, 11 and 29 times over. I don’t have all the data for Wyoming. Factors for deaths are somewhat less. Totaling the four states, 380,000 citizens of their states have tested positive since the gubernatorial Gatorade dump, and 5,700 have died.

Meanwhile in Idaho, by early June, Gov. Brad Little saw the job as nearly done and issued guidelines for opening the economy. Previously declared COVID mandates were removed and replaced with recommendations. All businesses could open, no limits on numbers of people gathering. Social distancing and masks were good but not a matter for government to meddle in. About this time the Idaho Legislature had a special session. The pressing issue? A law prohibiting Idaho’s regional Health Districts from closing or limiting schools!

Since then, Idaho’s cases have increased 22-fold and deaths 8-fold. Some 48,000 additional people have gotten sick and 450 died. Little’s office backpedaled swiftly and “decentralized” management of the epidemic to the health districts. But his tragically obsolete plan for reopening still stands proudly on the state’s web page.

Why be so premature in claiming success? Well, it may be a lack of knowledge of history, including that of the 1918 epidemic.

And — economically — it must include ignorance of exponential growth.

The so-called “lilypad example” is familiar to many: A biologist spots a tiny colony of a dangerous invasive plant in his town park’s five-acre pond. It is only the size of the end of a pencil eraser, but it doubles every day. He alerts authorities. They decide they will deal with it when it is large enough to warrant sending crews and machinery to clear it up. When it equals a football field, or even a basketball court, they will act.

So, when will that be? Well, from an eraser, it will grow to the size of a sheet of plywood the morning of the 18th day. The basketball court would be covered at breakfast on the 25th day and the football field at dinnertime on the 27th. All five acres of the pond will be covered 30 days after the growth was first spotted.

Sure, COVID cases don’t double daily. For example, at Minnesota’s daily 1 percent growth in infections in April (starting from April 2 because of a large adjustment on April 1), it would take about 70 days to double. August’s was identical, an average 1 percent per day. Surprisingly to many, it was once again 1 percent per day over the first 15 days of October. There were higher rates in intervening months.

Now let’s look at actual numbers: At those same rates, we added some 8,100 cases in April but 21,000 in August. At the same percentage over first 16 days of October, we are already at 19,000 additional cases.

This is the mushrooming characteristic of exponential growth: A given percentage increase on a small number affects few people. The same percentage of a larger base yields increasingly large daily numerical totals. In most states, average daily infection rates have fallen, but numbers are now burgeoning.

Going back to the pond analogy, with an increase at the same rate every day, 100 percent, it will go from five acres at the 30th day to a square mile on Day 37, the size of Ramsey County early on Day 45 and would cover Minnesota on an hour into the 54th day.

Granted, a doubling every day happens in only a few scenarios, such as California fires and bacteria on laboratory plates. But if we continue even at 1 percent a day, we will greet 2021 with a quarter-million cases. I hope that does not happen. But it could, and the daily rate could accelerate if winter’s close quarters and stale air take hold.

The lesson is one that any former Fed economist would know: Always hedge your numbers! Never make confident predictions! Wiggle room, always wiggle room!

More than a dozen GOP governors initially threw caution to the wind and opposed masking requirements and bar closings. Now they are all retreating, both in policy and in face-saving. They were misunderstood; they were not against masks at all; they were only against mandates. Funny that they never have come out against mandates like speed limits or blood-alcohol levels. And a few, like Florida’s Ron DeSantis and Texas’s Greg Abbott, seem to be fighting doggedly until the last Floridian or Texan is left standing.

We are on a wild ride and economics helps us understand why and how it could get this dizzying this fast, and where it might go before it is over.

Be safe and be well.

St. Paul economist and writer Edward Lotterman can be reached at 

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