Pandemic: Reality vs. Perceptions of Reality

One of the crazy things in the crazy year that is 2020 is how a health issue has become so politicized.

The coronavirus pandemic has affected the whole world. It is unprecedented in our lifetime and, indeed, in the last one hundred years. How to deal with this new virus was totally unknown at the outset and even now we don’t completely understand it and are still finding data that is seemingly inconsistent. How to react and address it was always a judgment call and Thinking Man can completely understand widely different perspectives, from concerns about health and deaths to concerns about economic devastation and the lives of millions of people thrown into crisis by unemployment and a crashing economy, and everything in between. Simple organizational behavior tells us that people speak from their perspectives and so it’s not surprising that medical people will always tend to err on the side of health and preventing even one death if they can. Business people and economists will tend to err on the side of concern about a contracting economy, high unemployment and the impact of job losses on individual households. Notice the background of the person giving an opinion and more times than not you know their perspective without even knowing what they are going to say.

Any action, anywhere on the spectrum of choices is a judgment and an attempt to strike a balance between a number of bad choices:  health, economic and individual financial outcomes. What I can’t understand is people who view anyone with an opinion other than their opinion being bad or evil or unconcerned. In a problem with so many unknowns, to take that view is, frankly, purely emotional and simply doesn’t make much sense. Unfortunately, however, that is the world where we find ourselves.

Below is a link to an article by the Chief Investment Officer at Franklin Templeton Fixed Income. A PhD, she worked with the Gallup polling organization to compare actual medical data on the pandemic with people’s perception of the pandemic.  That research group then took the demographic data of the people polled to show how perceptions are very different from reality in many cases by various segments of the country. And, as would be important for an investment firm, she draws some conclusions on how all that may impact the economic recovery. An important note: she does not debate the data, but uses the data to project some possible outcomes. For example, people are willing to pay for increased safety measures. How much they are willing to pay has implications for inflation.

The article’s sub- title “They Blinded Us From Science” speaks to how far from the medical are perceptions about the actual medical situation.

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