
World Economy Shudders as Coronavirus Threatens Global Supply Chains - liroyleshed
https://www.wsj.com/articles/world-economy-shudders-as-coronavirus-threatens-global-supply-chains-11582474608
======
nugget
I have a lot of very smart, research-inclined friends and it's been
interesting to watch their reactions as this potential pandemic develops.
About half are taking it extremely seriously (prepping and encouraging others
to do the same) and have been since China declared a quarantine of Hubei. The
other half are completely brushing it off with statements like "the flu kills
[x] people every year anyway". It's one extreme or the other; almost nobody I
talk with, who is following the storyline, has a moderate perspective.

~~~
forgingahead
The latter extreme ("Flu / falling off ladders is worse!") is a dangerously
misguided line of thinking. Inconvenience is always better than dead, and lest
anyone think "dead" is an abstract/unlikely outcome, collapse of supply chains
(medical or otherwise), overloaded health systems, lack of hospital/ICU beds,
etc can all contribute to death-rates-in-a-pandemic, even if those folks never
got infected in the first place.

So the smart money is to be cautiously prepared -- have 1-2 weeks of "stay-at-
home" supplies, that is food, water, and self-medicating items. You do not
want to dependent on being out and about if this gets worse. Best case, you
can have a canned food party once this clears.

~~~
Allower
1-2 weeks? That seems dangerously optimistic to me.

~~~
droithomme
Yes. But more than that and you run into space issues. FWIW, Mormons are
experts at having enough for a full year for a family that might be 12
members, but they have special things they get like gallon sized cans of
unground wheatberries, for making flour by grinding it.

US Government is currently recommending citizens have enough food and water
for 2 weeks for every member:
[https://www.ready.gov/pandemic](https://www.ready.gov/pandemic)

This isn't a new page it's their advice for being prepared in general for a
pandemic.

Here's a similar page put together by the CDC: [https://cchealth.org/pandemic-
flu/pdf/individuals_and_famili...](https://cchealth.org/pandemic-
flu/pdf/individuals_and_families_checklist.pdf)

~~~
ryanmercer
> FWIW, Mormons are experts at having enough for a full year for a family that
> might be 12 members, but they have special things they get like gallon sized
> cans of unground wheatberries, for making flour by grinding it.

Latter-day Saint here. This indeed was a teaching of the Church for quite some
time, not so much anymore as it has shifted to general emergency preparedness
[1][2][3][etc]. Some indeed still keep decent food stores though, we can order
cases of #10 cans for varying things from the Church online [4] (the general
public can too).

Some people keep a lot of freeze dried stuff, some can their excess that they
grow, others just keep a lot of staples on hand that they rotate through.
Personally I can feed myself for a few months on freeze dried stuff and 10-30
year canned staples then another 1-2 months on stuff I rotate through and eat
daily (beans, oats).

[1] - [https://www.churchofjesuschrist.org/study/manual/gospel-
topi...](https://www.churchofjesuschrist.org/study/manual/gospel-
topics/emergency-preparedness?lang=eng)

[2] -
[https://newsroom.churchofjesuschrist.org/article/preparednes...](https://newsroom.churchofjesuschrist.org/article/preparedness)

[3] - [https://www.churchofjesuschrist.org/church/news/church-
annou...](https://www.churchofjesuschrist.org/church/news/church-announces-
updates-to-food-storage-emergency-preparedness?lang=eng)

[4] -
[https://store.churchofjesuschrist.org/](https://store.churchofjesuschrist.org/)
click all categories, food storage (direct linking to the page will often
generate errors)

------
Vomzor
The daily updates in r/supplychain are a good overview of what’s going on.

[https://www.reddit.com/r/supplychain/comments/f87aec/covid19...](https://www.reddit.com/r/supplychain/comments/f87aec/covid19_update_sun_23rd_february/)

~~~
andrewflnr
What a neat little subreddit.

------
taiwanboy
Every country needs to take a hard look at the supply chain of critical goods
such as medical supplies or chemicals and figure out how to reshore these
factories. Even if the Chinese migrant workers comes back to the factory
(estimated only around 20-30% did), most of the small businesses might be gone
by then.

[https://asia.nikkei.com/Business/Industry-in-focus/Virus-
hit...](https://asia.nikkei.com/Business/Industry-in-focus/Virus-hits-China-s-
economic-heart-its-small-businesses) 35% of 1,506 Chinese SMEs surveyed in
early February expect to run out of cash within 1 month, 85% within 3 months.
Chinese small business which account for 99.8% of registered companies in
China and employ 79.4% of workers, according to the latest official
statistics. They contribute more than 60% of gross domestic product and, for
the government, more than 50% of tax revenue.

[https://www.zerohedge.com/economics/chinese-workers-
refuse-g...](https://www.zerohedge.com/economics/chinese-workers-refuse-go-
back-work-despite-beijings-demands) Chinese workers refuse to go back to work

[https://www.zerohedge.com/economics/jpmorgan-now-expects-
chi...](https://www.zerohedge.com/economics/jpmorgan-now-expects-china-q1-gdp-
drop-1-crash-4-if-coronavirus-not-contained) JPMorgan Now Expects China Q1 GDP
To Drop To 1%, Crash To -4% If Coronavirus Is Not Contained

~~~
rfoo
And imagine what would happen if an incident like this hits TSMC, the world
definitely needs some reconsideration on where we manufacture things.

------
danans
We shouldn't forget that the novelty of this disease, and the unknowns
surrounding it, are causing the (probably necessary) extreme reactions like
those we're seeing now.

In the longer run, after the patterns are better understood and treatment
protocols are in place, we will probably normalize to whatever the non-zero
steady state infection and fatality rates that results, much as we do with
diseases like influenza, malaria, etc.

As that happens, the reactionary controls that are in place today will
gradually lessen and we'll be back to a business as usual.

Of course, the short term shock of this might send a fragile world economy off
the rails, but pretty much any globally correlated emergency incident would
have done that.

------
remote_phone
This is the exact equivalent of distributed service going down or suffering
latency issues and affecting critical downstream services. There are supply
chains set up but no real thoughts or solutions when catastrophic problems
occur, like if China suffers a pandemic crisis for example.

I wonder if those things will be in consideration going forward or if we will
keep making the same mistakes over and over again.

~~~
icegreentea2
I mean, it's literally a coordination problem. Redundancy and resiliency
rarely decrease costs in normal operation. If you're operating in a vertical,
and all your competitors are operating diverse/redundant supply lines, you are
at a tremendous advantage to defect and slim down. It's only when disruptions
become frequent enough to model in a straight forward way (and also frequent
enough to loom in people's memories) that we can expect a pure market
solution.

The same way tech companies rarely actually go for multi-cloud setups.

Our primary system of incentives are not setup to consistently deliver black
swan redundancy.

------
elkos
I understand that the impact of COVID-19 plays an important role. Shouldn't we
be pointing out on other systemic issues that impact the global economic
system? Is it as robust as it could get?

------
xvilka
It might trigger the bigger move to automation and robotization of the scale
manufacturing and services. On the other hand, more people will be left
without the job.

~~~
flukus
It's hard to tell the scale of it, especially as an outsider but I've read a
couple of articles like this one: [https://www.techinasia.com/chinas-
ecommerce-robots-delivery](https://www.techinasia.com/chinas-ecommerce-robots-
delivery) . Once the dust has settled many might not have jobs to go back to
and in turn this probably makes it harder to quarantine people, would you take
a "holiday" if there was a good chance you'd be replaced by a robot before you
returned?

------
iends
America's response has been somewhat alarming. In 2018, the Trump admin cut
funding to a lot of health programs to deal with pandemic responses at the
CDC, HHS, etc: [https://foreignpolicy.com/2020/01/31/coronavirus-china-
trump...](https://foreignpolicy.com/2020/01/31/coronavirus-china-trump-united-
states-public-health-emergency-response/)

Recent proposals are asking for more cuts:
[https://foreignpolicy.com/2020/02/10/trump-world-health-
orga...](https://foreignpolicy.com/2020/02/10/trump-world-health-organization-
funding-coronavirus-state-department-usaid-budget-cuts/)

Recently, the CDC has botched test kit rollouts, preventing widespread
testing: [https://www.politico.com/news/2020/02/20/cdc-
coronavirus-116...](https://www.politico.com/news/2020/02/20/cdc-
coronavirus-116529)

Without getting too political, I don't have any confidence that America's
response will get it done.

~~~
pbourke
Yeah the messed up testing is very concerning. The US has done 500 or so tests
in total. SK is ramping to 10,000 per day. I don’t think it’s clear when the
US would be in a position to mount a similar response if needed.

