We Need to Prepare Better for Crises
COVID-19 felt like it came out of nowhere. But the possibility of an outbreak becoming a global pandemic upending people’s lives and the world economy was hardly unforeseen. Movies like Outbreak (1995) and Contagion (2011) offered fictionalized accounts of devastating diseases spreading rapidly. Journalists have written long exposés investigating our readiness for a pandemic comparable to the 1918 Spanish flu. A series of other contagious diseases and novel strains in recent years—SARS, avian flu, Zika, swine flu, MERS, Ebola—were grim warnings. In a now-famous 2015 TED Talk, Bill Gates declared that the greatest risk of mass fatality no longer came from bombs but from microbes, and warned that we had done virtually nothing to prepare. Netflix’s documentary series Pandemic, takes a close look at the possibility of a respiratory virus sweeping the globe; it premiered in January, just as the coronavirus was starting to do just that. And the All England Lawn Tennis Club had the foresight to insure against a closure due to pandemic, receiving $141 million when it was forced to cancel Wimbledon for the first time since the Second World War.
We can and often do predict “unforeseeable” risks. To prevent a repeat of the COVID fiasco, however, we must institutionalize the practice to make sure we are ready for whatever arises. The federal government should establish a new U.S. Board of Preparation to identify potential catastrophes and take all necessary steps to prevent and prepare for them. Real risk control requires substantial thought and expertise. It requires long-term investment and planning and the willingness to make short-term expenditures to mitigate events that likely will not occur. And it therefore requires that the strategists be insulated from the short-term demands of the political cycle.
For the board’s membership, appropriate models are apolitical institutions like the Federal Reserve or the Federal Communications Commission, with lengthy terms and a mandated bipartisan makeup. The board would have two responsibilities. First, it would be tasked with identifying, analyzing, and prioritizing risks, work for which it could draw on the considerable resources of the intelligence community, the National Academies, government research groups like the Department of Defense’s Office of Net Assessment, and private-sector experts. Second, the board would fund—either through direct contracts or via grants made to other government entities—only projects narrowly tailored to address specific risk-mitigation projects.
Insofar as possible, appropriations for the board must be removed from the political system. Ideally, the funds would be moved out of Congress’s annual discretionary budget process and treated as mandatory spending (alongside such programs as Social Security and Medicare); that way the funds could be fenced off and not used to plug gaps elsewhere in the budget. There are various ways this could be done; perhaps Congress could require that some amount of funding, pegged to a small percentage of gross domestic product, would be assigned to the board each year, and that figure would only be alterable with a 60-vote majority in the Senate. To prevent bureaucratic waste, the board’s overhead should by law be capped at a small percent of its budget, and an inspector general could provide oversight.
The truth is that not only are most catastrophic risks foreseeable but they can be prevented or substantially contained at minimal expense. In his TED talk, Gates cited a World Bank estimate that an influenza pandemic would kill millions of people and cause $3 trillion in economic loss. In actuality, the COVID-19 crisis has resulted in much greater economic damage from a far less deadly illness. Gates did not quantify the cost of his recommended strategy: research into vaccines and diagnostics, a medical reserve at the ready to deploy with the military, and constant “germ game” simulations. But it would certainly have been minuscule compared to the cost associated with tens of millions of people out of work, tens of thousands of businesses shuttered, and trillions of dollars of debt run up by the government.
A board of preparation would ensure we take the actions that are never at the top of the agenda for politicians or the media. Consider our electric grid. National security experts have flagged potential damage from an electromagnetic pulse—whether manmade or from a solar flare—as a major issue for some time, an event that could send part of our country back to the nineteenth century. The cost of hardening the grid against such an attack is, by one estimate, less than $4 billion. Yet legislation to do just that has been languishing in Congress since 2013.
Or take the risk of an asteroid collision. A space rock in the last few days came within two thousand miles of the earth, the closest ever, without being detected until after the fact. Yet, as former astronaut Ed Lu of the B612 Foundation recently told me, the cost of a permanent early warning and prevention system could be as little as $1 billion, less than 0.001 percent of the amount spent on the CARES Act. The list of “known unknowns” is well-known: cyberattack, nuclear proliferation, earthquake, attacks on satellites, tsunamis, mass terror, biological weapons, and climate change, to name just a few.
Benjamin Franklin’s maxim that an ounce of prevention is worth a pound of cure is as true as it ever was. It is the logic we all employ when we pay insurance premiums. In the private sector, insurance has been used for catastrophic risk management for centuries. On Wall Street, investors buy “tail-risk hedges” for their portfolios by buying cheap options that pay off asymmetrically if the market crashes. Most of the time, these hedges lose small amounts of money. But when the market does swoon, the cost proves worth it.
In the policy sphere, Ronald Reagan used the insurance analogy to good effect when he and George Schultz spearheaded the Montreal Protocol in 1987, a treaty that successfully prevented the further degradation of the ozone layer. As with climate change today, scientific knowledge of the problem was imperfect and vocal opponents were skeptical that human use of chlorofluorocarbons were to blame, but all agreed that the ozone layer’s destruction would be catastrophic. So Reagan put it simply to the critics: What if there is even a small chance they were wrong? You don’t take out an insurance policy because you think your house is actually going to burn down. The argument prevailed. “As it turned out,” Schultz later said, “the scientists who were worried were right and Reagan’s Montreal Protocol came along just in time.”
We currently have no systematic program in place to identify and prepare for risks. Politicians focus only on the present and address crises only when they become acute. Various executive-branch agencies may work on risk-related projects, but only in scattered and piecemeal ways and in competition with other nearer-term responsibilities—so their level of focus is inadequate.
The coronavirus crisis has been devastating in lives lost and in economic damage sustained. But let us learn the hard lesson of small steps not taken that could have made it far less catastrophic. We must consistently devote a small amount of our resources—financial, political, scientific, and intellectual—to risk management. What we insist every driver do for their automobile, we should do for our way of life.