The Vergecast - COVID-19: How it spreads, how to test for it, and economic impact

Episode Date: March 10, 2020

Verge editor-in-chief Nilay Patel talks with Verge health reporter Nicole Wetsman and Verge deputy editor Liz Lopatto about the health concerns of the coronavirus outbreak as well as its economic effect in the United States.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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build me a revenue dashboard on our Salesforce data. And Retool actually builds it. On your company's data and your cloud with enterprise security built in. Go to retool.com slash Vergecast. We all need to retool how we build software. Hey, everybody, it's the Live from the Vergecast on this week's interview episode. Verge health reporter Nicole Wetzman joins me along with Verge deputy editor, Liz Lapato, to talk about the coronavirus.

Nicole has been covering it very closely from the health angle, tracking its spread, the response of our authorities, how to test for it, how to treat it. And Liz has been paying a lot of attention to the impact on the supply chain, all of the various economic impacts from that and all the events that are being canceled. This was a very eye-opening conversation that really helped me organize the swirl of thoughts I've had as I've been keeping up with the virus news. Check it out. It's Liz Lapato and Nicole Lettsman on the Vergecast.

Nicole Wettsman, welcome with Vergecast. Thanks for having me. And Liz Lapato, welcome as well. Hey. Liz is like a veteran of many Elon-themed episodes of the show. But Nicole, this is your first one. Excited to be here. You are a new health reporter at The Verge.

Yes. And this is your moment. Yeah. It's not a great... Grown in the deep end. It's not a great moment. But here it is. There is a coronavirus outbreak in the world at this point.

And I wanted to bring you both on. Liz, you used to be our science editor once upon a time. You're not a deputy editor. Even spending a lot of time thinking about sort of the worldwide impact of the virus. And obviously, Nicole, you're covering the virus itself. So the day we're recording this minutes ago, Mashable pulled out of South by Southwest, MWC was canceled. We're seeing just these huge effects of the virus. And I wanted to just sort of talk about it from the start.

So Nicole, tell us what is the coronavirus? Sure. So the coronavirus is a novel virus. This is something that we haven't ever seen before. So this is something completely new that emerged in China. researchers believe probably sometime in December. So a coronavirus is actually the category of viruses. There are lots of coronaviruses. Some of them are circulate regularly in the U.S. right now and they cause, you know, pretty much the common colds. They're very mild. We really don't pay much attention to them. But we've also had two other novel coronaviruses emerge and cause outbreaks sort of similar to the one that we're seeing now, and that was SARS and MERS. Both of those are also coronaviruses. So this is a new one. And the naming is still a little bit up in the year.

But the virus itself right now we're calling it SARS-CoV-2. So that's the virus itself that we're dealing with. And it causes an illness that we're calling COVID-19. Naming conventions around viruses and diseases are kind of complicated. And the name of the virus itself could change. People are kind of debating that. But that's sort of where we are now. Nicole, I just wanted to point to something that I hear you saying a lot,

that the virus is new. And that's important because we're just not used to dealing with a virus. Our immune system has no response to it now. Is that right? Yeah. So this is something that the human population has never been exposed to before. If you think about like during colonial times when someone came to a new continent and introduced a virus that the population just had no immunity to because they'd never seen it before, it has a bigger effect. Then it might be if this was something that was more broadly circulating normally and that, um,

people might have a little bit more kind of innate immunity and protection against. So the virus starts in China. It spreads fast out of China. How do you track that? How do you say, oh my gosh, it's a new virus, and then how do you track how it's spreading? So that involves a lot of really kind of old school epidemiology, kind of gumshoe work, detective work. So Chinese public health officials figured out that they had a problem actually really, really quickly. after SARS in 2002, China built up its public health infrastructure in a really huge way. So they had systems in place that were able to detect that they had something new that had never been seen before and were able to try and start containing the spread pretty

early. It was sort of unprecedented is what experts have been saying, who I've been speaking with over the past month. And the procedures then are pretty much you find a sick person, you figure out everyone that they've been in contact with, and you trace then all of these contacts, because this is a virus that spreads through close contact. So it's a respiratory virus. It spreads through droplets. So it's the sort of thing that someone sneezes or coughs, the little tiny saliva, snot particles, hold the virus. And then if that gets into another person's nose or mouth or eyes, they can then become infected.

So we're really just trying to figure out how the virus was passed from person to person to person. and track it spread that way. We're always a little bit behind, right? Because there is this period where you might be infected, but you don't have any symptoms yet so you don't know you're sick. Right. And it's even harder because with this virus, there's evidence that you can be passing it on to other people

before you even show symptoms. So the way that we're functioning, we're working is sort of by looking at a snapshot of the past. And we're always going to be a little bit behind. And that's why moving fast is so important because we're always lagging. So what are the symptoms? The symptoms sort of appear to be a bit like the flu.

The most common symptoms that are being reported are a fever and a dry cough, and then other sorts of flu-y things can come into play as well. For around 80 to 85 percent of people, the symptoms are pretty mild. And that's another reason it's been so hard to stop the spread because people might not even know that they're sick or even really register that they could have a problem. But for about 15-ish percent of people, this is all based on reports coming out of China because they have the largest number of cases. They're best equipped to give us those percentages, just as a sidebar. It can be pretty severe, and these people develop pneumonia and they have to be hospitalized and have to be in oxygen.

It's critical, critical medical term for really, really bad in probably around 5 percent of people. And we're still trying to figure out how many people will go on to die from this, although estimates are putting in. it around two or three percent probably. Just for our listeners, what's a dry cough versus a wet cough? So I'm not a doctor, but today I'm a medical professional graduated from med school. A wet cough would be a dry cough would be something that's not like a flemy cough. Yeah, you're not bringing up mucus. You're not bringing a mucus. It's in your chest. It's like the type of cough that is like maybe a little rattley. and can come with like shortness of breath and things like that. So how much more fatal is it than the flu?

I mean, because really you're describing this is a virus. It's similar to a virus that causes a cold. It's more deadly because it's new. It's novel. But obviously some people are getting it and just getting better. It seems like mostly older people are the ones who are experiencing it in a fatal way. Where does all the fear come from? Is it just that it's more fatal?

The fear comes into play because this is something that's new. Like we just have never seen it before. And so we don't know, we have some idea of how it spreads. We have some idea of how it affects the body, but we know so, so little about it because this is something that's only been around since December. So that's really scary for doctors. It's really scary for public health officials because we just don't know what the effects of it could be. People compare it to the flu, but it's kind of hard to make that comparison because the flu is something that we know super, super well. We're really experienced with dealing with the flu.

We can predict its seasonality. it's something that we can handle and prepare for. This is something that just emerged kind of out of the blue, and we were not prepared for and don't know very much about. The flu tends to have a seasonal fatality rate. This can vary depending on the severity of flu season of about 0.1%. The projections right now are putting the fatality rate for this at about 2% or 3%, again, with the caveat that that is something we are not going to know for sure for a long time. So it is looking more dangerous than the flu. The other concern comes because it is flu season, and so our hospitals are already full of flu patients.

And if we add another illness on top of that, that's causing people to become very sick and need to be hospitalized and put on supplemental oxygen, that is adding another layer of crowding on top of already full hospitals. If we're prepared for flu season, we're ready to deal with the patients they would see then. but this is just more. Yeah, and it sounds like that fatality rate is orders of magnitude larger. It appears to be at this point, yes. So how do you test for this? Because this is one of the big controversies right now, is the United States was not necessarily prepared to test for it.

There are other tests available. Are CDC one? What does a test mean? So the test that people, the type of tests that people are using to try and find people who have this virus is basically, looking for little bits of the virus in their body, or in their, like, respiratory samples. So they have little, we know what the genome of the virus is. We know what the genetic sequence is. And then we take little bits of that and we kind of look for it in the saliva samples that

were testing. The CDC wanted to make their own test. They were able to do that fairly quickly and able to start testing in the centralized CDC lab. But when it came time to start trying to distribute their own test to other labs around the country, we ran into problems because they were testing, they were looking at three little snippets of the virus's DNA, and the test for one of the little snippets apparently was not working for most labs. So the CDC ended up scrapping that one, and we're testing with two. This is very wonky.

This is what we're here for. If there's one show that we want to be this wonky on, it's this one. Great. So that then presented an issue because it was taking a long time for test results to come back. State labs were not able to test close by to our patients were. We had a really low number of people tested in the U.S. as compared with other countries. And the thing about a virus like this is that, and the predictions for how it was spreading, are that there were probably cases here, and just because we didn't see them, doesn't mean they

weren't there, it just means we weren't testing for them and being able to identify them. So that is a huge problem when you're trying to prevent an outbreak, because you cannot identify and isolate people who you don't know have the virus. So it looks like testing capacity is ramping up. State labs are getting permission to develop their own tests from the FDA. It's also a little bit complicated because the CDC is in charge of developing the initial diagnostic, right? But the FDA is in charge of approving and shipping out or kind of getting commercial tests ready to go.

So it involves both of those agencies. A lot of the heats falling on the CDC for this, which their test was not working properly. Great. But the FDA also has a lot of responsibility here in terms of getting tests approved and kind of out into the world. And arguably that delay in testing has already had consequences in watching. Is that right? Yes. So we're seeing a pretty significant outbreak at a nursing home in Washington State.

Washington State had the first case of the illness reported, first of all, that was someone related to travel. But we're starting to see instances of community spread. So that's people cropping up who test positive for the disease, who don't have any connection with anyone who we know had it. So it means that it was spreading undetected through the community. And in Washington State, we had an outbreak at a nursing home. There have been a couple of deaths associated with that nursing home where the outbreak is occurring.

And just today it was reported that someone who died last week in a hospital in Seattle was found to have died from this new virus. And we just hadn't detected it. And that was a patient who was living in the nursing home where the outbreak is occurring. So it seems that this has been spreading in Washington and in the Seattle area for probably a couple of weeks now. And because we didn't have the testing infrastructure, we weren't able to find it. And that's also because the CDC's recommendations for who should be tested have been changing and haven't been very broad. So for a long time, only people who had traveled to regions where we knew the virus was were recommended for testing for this new virus. And that was expanded

a little bit, but it's still in order to be tested, according to the CDC, you should have either travel to one of those places, had contact with someone who we know has the virus, or have a severe viral pneumonia that requires that you be hospitalized. That seems like one thing is not like the other situation. Yeah, so the severe pneumonia that requires that you be hospitalized is trying to catch people who maybe had community exposure and so have developed a severe form of the illness and they didn't test positive for other viruses that could have caused their. sickness. The problem with that is, as we said at the beginning, around 80% of people don't have

severe symptoms that require that they be hospitalized. So if we're only recommending that people who are hospitalized be tested, we're probably missing a lot of people who are walking around with what looks like maybe a mild colds, which is bad. I have a mild cold right now. I have to tell you I'm living in terror. It's going to be fine. I'm pretty sure it's not the virus. I can't help but look at this through a product lens. Like, that's who I am. It seems like developing a test, manufacturing a test, making sure the test works. Those are just like classic product problems, right?

Are they rate limiting who gets a test because they don't have enough tests or the tests aren't accurate? They might be. It's very popular. I mean, we have a limited number of tests right now. Like the states, even though the testing capacity is ramping up. How do you manufacture a test? Well, these are what's called a PCR test, reverse transcript is P. PCR test, which is a kind of chemical reaction that looks for a little bit of DNA in a sample.

So that's the sort of thing that, like a PCR is something that labs run all the time. It's just a matter of commercializing and automating the tests so that they can be run more easily, basically. Yeah. And also characterizing the false positive and false negative rate, right? Because that's an important part of any kind of test, no matter how you're running it. You just need to know how often it's going to be inaccurate. Right. I just feel like there's a part here where, particularly maybe for the Verchkess audience,

like what we have is a measurement problem, like at a very direct level. Like, we just don't have the data to know what's going on. And part of that is that the product that would generate that data is bad or missing. Yeah. And that just seems bonkers to me because there's like clearly a lot of demand for this product right now. It doesn't seem like we can make it. but other countries are testing at scale. Sure, yeah.

And that has been a huge amount of the criticism put on health and human services, the CDC, and the FDA, because other countries are testing thousands and thousands of people. And the CDC's answer has, for the past couple weeks, sort of been we have a limited case criteria based on what we think the risk is and who we think is at risk. That's been a little bit of sort of the party line on why our testing has been lower than other places. because flight restrictions and travel restrictions went into place so early, it's looking like that is just not an acceptable answer anymore because we have seen community spread in a number of states.

And it's obvious that those restrictions did not stop the virus as much as maybe we thought that they did, or we'd have liked to think that we did. Yeah, so there's just a part of this that we haven't really talked about yet, which is like a political leadership aspect to this whole situation, I'm going to take Nicole out of the hot seat for that question because I know you have a lot of thoughts about this. It seems like we're not aggressively responding to this virus at the time. Not as aggressively as you might like.

And I will say one of the things that's disappointed me is how focused Donald Trump and his administration have been on the economic effects rather than on the human health effects. And that's stupid for two reasons. Reason one is that obviously human life is valuable. I can't believe I'm saying that out loud, but it's true. We're going to get some anger tweets today. But two, if you want to reassure the business community, what you say is something like the following. We will do whatever it takes to curb the spread of the virus. We are testing very aggressively.

We are trying to find out through surveillance testing how many people in the population might have mild cases or might be sick. And we will spend as much money as it takes to make sure that this is under control. We are not concerned about the markets right now. what we want to do is just get a handle on this and make sure that we can treat it as best we can. Because paradoxically, saying that is the thing that actually does reassure the markets. Right, because you're controlling the problem and not. The symptom that you're worried about, which is the market's falling. That's exactly right.

And right now I'm seeing a lot of response to the symptom and not the cause. And so, you know, there's been confusing information that's been released throughout the, frankly, incoherent press conferences that President Trump has held on this disease, which I personally do not find reassuring. I can only speak for myself, but I would feel a lot better if I were being communicated with by people who were, for instance, epidemiologists or virologists or other kinds of area experts rather than, you know, career politicians. And the fact that Vice President Pence is the person who is leading this fills me with a great sense of foreboding because one of the things that he's, he is known for in his time as the governor of Indiana is making an HIV outbreak worse.

Nicole, you wrote that story for us. How did he do that? Pence decided that he did not want to allow the rollout of needle exchanges, which are, you know, evidence-based strategies to reduce the risk of kind of needle transmitted diseases like HIV and drug users. And Pence decided he didn't like that. And so he kind of dragged his feet and delayed the introduction of those very evidence-based policies, which allowed HIV to spread through the community more than it would have were those policies implemented much earlier. So there's definitely an interplay here. I wanted to get that specific out because there's an interplay here between what the doctors and scientists are saying to do based on the evidence

that they have and the data that they have. They're maybe hamstrung in how much data they actually have based on the testing problem. And then there's the what are we going to do? now that it's here moment that we seem to be in. Right. It's definitely here. It's definitely spreading. I think there was another case announced in New York today. We're reporting this, by the way, we keep saying today and this week and last week.

We're recording this exactly one week before you're hearing it. A lot's going to change. Something else is going to happen by the time you're listening to this. But there was another case in New York. We see cases are spreading. It seems like in Washington in particular, in Washington State, there's been many, many more cases. We have several here in the Bay as well. Is that going to sort of break the political law?

jam is that, do you see that that happened? Nicole's just made a horrible face to me. What is going on there? Well, we hope so. Look, there's a lot of cases that are being reported. Cases are going to continue to be reported because we have just ramped up testing so that

we can find them. Like, they're already there. We're just turning on the lights, basically. And hopefully, as that starts to happen, you'll see more aggressive action, what that action looks like. whether it's effective remains to be seen.

We're under a public health state of emergency right now, which is declared by the Department of Health and Human Services. Florida and California are currently in statewide states of emergency. There are states of emergencies at various county levels across the country. That means that officials have a menu of kind of powers that they can draw on to try and act more quickly and aggressively. What actions will be taken? That kind of remains to be seen. I think the thing that I'm looking for next and what I think should happen in response to the increasing number of cases here is that the CDC should change their criteria for testing to include not just people who are hospitalized because a lot of people who have this disease do not need to be hospitalized.

And we also need to have more ongoing kind of background surveillance. So we do regular flu surveillance in the country where state public health labs, look at samples taken for various reasons from people and just kind of check to see, you know, what viruses are here, what flu is circulating that often happens by like batching samples together because you're not diagnosing a person. You're just looking to see if there's a virus in the community population. We need to be doing that for this new coronavirus so we can see what levels it's at in the country. And we just need more data on that front. So hopefully when now we're going to see more urgency around those decisions. It is concerning from a leadership perspective to hear

reports of the nation's leading infectious disease official Anthony Fauci not being able to present at certain meetings or give certain interviews because he's very good at communicating to the public about emergencies and about risk. That's like something that he's very well known for. And so when something like this is happening, what you want to do is put someone who people trust, who is good at this, and who has good information in front of the camera and say, you know, tell people what's going on. It's very confusing when you have different messages coming from politicians, coming from the CDC, coming from HHS, which is what we've been seeing over the past couple weeks.

It's not reassuring. And also, to speak to Fauci specifically, like, he's outlasted a number of presidents. It's not like he's some partisan hack, you know? Like, this guy has been in his job for death. decades. He's really good at it. And like, I've talked to him. I think you have too, Nicole. Like, he's around. We know him. And it's one of the reasons I think that people are feeling really skittish is that this trusted figure who has been around forever and has handled most of our infectious diseases is, in some ways, it seems, being prevented from talking to the public. And trust is really important

in situations like this. I wrote a story a couple weeks ago about, you know, why in public health emergencies, trust is kind of the most important resource that officials have because if there isn't trust in these institutions, people aren't going to follow their instructions. And when people don't follow instructions during an outbreak like this, people die. Ebola is a very different disease than COVID-19. But during the Ebola outbreaks in West Africa, lack of trust in public officials delivering health information meant that people kept sick relatives in their home. where disease could spread, and that made the outbreak worse and harder to control.

It turns out that the CDC, as of right now, or has, you know, in the past couple years, tends to have a higher level of trust from the American public than other institutions like the presidency or Congress. So hopefully that remains in place. But it's important that people trust the officials who are giving them instructions about when to go to the doctor, whether or not they should get masks, what they should be doing to prepare them. themselves for potential disease in their community. It's a no on the masks and it's like a yes on the extended hand. Hard no, hard no on the masks.

Yeah. Yeah. But a yes on the extended hand washing. Yes on extended hand washing 20 seconds or longer if you're feeling fun. I will say that just the cultural aspect of the songs you should sing while washing your hands is just one of those like emergent, hilarious behaviors enabled by social media. The chorus of landslide is 20 seconds. I'm just letting you know. I've been singing the chorus of Africa.

See, it's perfect. That's what I've been doing. I have a small child, so it's definitely just happy birthday in our house. It's perfect. Happy birthday twice, by the way. Last big zoom out question. We've had Bill Gates on the show. Bill Gates likes to talk about pandemics.

It's his thing. Well, I guess two questions. One, does this meet that criteria? I mean, I know there's, like, a technical one, and then there's, like, the scary one where you get to make movies about it. And then we'll answer that question first. Does this meet either one of those criteria? So some people would say yes.

Some people would say no. I mean, there isn't really a definition of pandemic, which is the hard part. The World Health Organization has said that they are not ready to declare a pandemic because the word is associated with a lot of fear and people sort of freak out when they hear you say it. That's why they were reluctant for a long time to say that we were in a public health emergency of international concern, which is like the other thing that they declare. And, you know, we can sort of think of a pandemic as something. Wait, those are the only two steps on the scale.

There's nothing public health emergency of international concern and pandemic. And then, well, there's epidemics and then there's pandemics. I'm just saying, like, you need a little bit more gradation on that scale, perhaps. Yeah. Well, those are, so those are World Health Organization terms. They, you know, tend to be a little more conservative with doling stuff like that out. But, you know, if we think about a pandemic as an outbreak of an illness, that's affecting lots of places around the world and spreading and causing death.

You know, that's sort of what we're seeing right now. I mean, that doesn't mean it's time to freak out. There's still, you know, it doesn't mean that this is going to cause the end of the human race. We're not in a situation like that. In China, the number of cases reported per day appeared to be going down, which seems to indicate that they've got what looks like a little bit more of a handle on things. and that wasn't just necessarily because of the, like, hugely stringent quarantines they instituted. There were also, you know, more social distancing measures, and the Chinese government changed some rules around how many prescriptions you could get at a time so people could stay home and testing and cost for things like health care.

And it appears that some of the things that they were doing was working. It remains to be seen how well some of those things can or should be implemented in other countries. but it's not unstoppable. It's just a matter of mustering the resources, political will, and expertise to do that, even if it is a pandemic. So this is the second part of my question. Is this the sort of thing where you can just throw money at it to go away? Like if Bill Gates or Mike Bloomberg was like, you know what, this idea I have is bad, I'm going to spend the billions over here. Could he just fix it tomorrow?

It would help, I would say. I mean. Money always helps. Money helps. Because what we have to do, I mean, the work of stopping a public health emergency and stopping a disease outbreak is low tech, actually. It's we need to figure out who's sick. We need to figure out who they've been in touch with. And we need to figure out if those people are sick.

And that work takes a lot of manpower. And we need resources like a test that is working really well to do that work well. And we also need people who are sick to tell their doctor that they are sick and stay home. rather than going to work because they don't have sick leave at their job. And we need the tests to be available to people so that they don't feel scared, that they're going to have an enormous medical bill if they go to the hospital and say, I don't want to put people in my community at risk. So in that sense, money matters a lot, but it's low methodical epidemiological work. And it's the same public health tools that we use for other things on a large scale. And they have to happen quickly.

But we know how to do stuff like this. It's just a matter of doing it. Nicole, I want to return to something you said earlier. You mentioned social distancing. For anybody in our audience who might not know what that is, can you sort of give them a sense of what that is? Because that might be something that they can practice themselves if they're feeling worried about this. Sure. Social distancing is basically just means staying away from other people at sort of a fundamental level. Social distancing recommendations or practices might include canceling large gatherings, canceling school for a period. of time, asking people to work from home, because this disease spreads by close contact, so people that you're really in close touch with for some amount of time we don't really know

for sure, if you're not around other people, you minimize your chance of getting the disease, but you also minimize your chance of spreading the disease. So if you're someone who has a mild case or is asymptomatic, staying away from like a nursing home, for example, minimizes the chance that you would be a carrier for a disease into a group of people who are particularly vulnerable to it. So we've seen some of those measures put in place. A school in New York closed because a parent of one of the students was diagnosed with the virus. There have been a lot of event cancellations, as we know, over the past couple weeks. And that's what the CDC calls a non-pharmaceutical intervention, non-pharmaceutical intervention. So it's not a drug, but it's something that can help

slow the spread of an illness. Okay, so we're going to take a break. That's a great transition to what I want to talk to Liz about, which is the sort of cultural and economic impact here. So we're right back. We'll talk about that. Support for the show comes from Framer. Framer is an enterprise-grade, no-code website builder,

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People don't want to fly. And then underneath that all is, I think, the thing that's really freaking out the markets, which is the supply chain disruptions that we're seeing around the world. Walk me through that part of it. Okay. Well, as long time listeners know, I am the chaos correspondent, so here I am. If you think about where your laptop comes from, you might be aware that many hardware companies are heavily dependent on China. There is one company in particular that is specifically dependent on China, and it is Apple. Steve Jobs specifically hired Tim Cook to fix Apple supply chain, which was at the time broken. And if you read stories from this period, like there's a 2008 article in Fortune magazine where, you know, they write that Cook,

closed factories and warehouses around the world and established specific relationships with contract manufacturers. He thought that inventory was, quote, fundamentally evil. And so he basically reduced the amount of time that inventory was sitting on the shelf. Because if you think about tech, much like with the fashion industry, the longer you hold on to something, the less valuable it becomes because there's so much quick product turnover. So basically what Tim Cook did was he streamlined all of this by integrating something called Just in Time Manufacturing. And to be clear, this is not just Apple. Just in Time manufacturing is something that's pretty common in the car world as well.

And the idea is that nothing sits on the shelf for very long. You don't have much of an inventory, that you're getting things supplied to you as you need them. And this actually is logistically quite difficult and a fairly complicated thing. So, you know, that's great for profits because you aren't losing money while stuff sits. But it is a problem in terms of resiliency. So if something happens in, let's say, China where your supply chain is, you potentially are looking at shortages. And that's part of the problem here. There are a couple of problems if you think about the supply chain.

Problem one is that most companies like Apple, they don't have visibility all the way into the supply chain, right? Like, they know who's sending stuff to them, but they don't necessarily know where those companies are buying their raw materials from. And I've been talking to some supply chain analytics experts, which are... The rowdyest bunch. And, you know, they're saying things that are, to me, a little bit alarming. So the supply chain is being disrupted in several places because of these illnesses. Raw materials are stacking up. They're tied up in inventory.

Nothing is happening with them because they don't have the people to do things with them. And then all the way down the chain, things are being slowed down because of that, beyond the fact that there are also problems for manufacturing products like phones and laptops that require a lot of human labor. And that human labor has not been totally available. So you've seen Apple cutting its forecast. They were among the first to do it. I mean, we've seen since then Microsoft and others have done it too, but Apple was like among

the first companies to say this is going to affect us. Yeah. I think Apple is probably among the most severely affected, specifically because its supply chain is so dependent on China. But there's like a lot of other things. And I'm just going to read you my favorites from this Bloomberg story because it's like watches, it's board games. It's masks. It's some medications. It's auto parts. It's garments. It's most hilariously to me personally, lobsters.

Oh, yeah. Of course. Like, there's just a lot of things that are being touched. And because this is all pretty diffuse, it can be really difficult to get a handle on what exactly is going to happen. And I think if you know anything about the markets, you know that they don't like it when there's uncertainty. And so that seems to be leading to, um, a lot of discomfort among people who are interested in economics and in stocks specifically. And so is the problem that they just don't know what's going to happen in the supply chain, or is it we don't know when it's going to start up again? Or is, oh my gosh, just in time manufacturing has fatal flaws here, the whole world has to change? Honestly, I think it's a little bit of all three. So there have always been people who have pushed for resiliency in supply chains.

So that means that, like, maybe you have. like an operation in China and maybe you have an operation in South Korea and maybe you have an operation in like, I don't know, someplace else. The United States, I think, is one that comes up frequently in this conversation. Sure. The U.S., why not? That would be novel. But like, let's say that you have all of these different places.

Like it's a little less efficient. That's definitely true. But it also means that if something goes wrong in any one of those places, you're not stuck. And the upside to this is that, you know, if your competitors were all relying on that one place, but you weren't. When they're experiencing shortages, your goods are still available, and so more people will buy your goods during those sort of disruption events. So a story you told me was about red paint after the tsunami at Fukushima?

That's the one that has stuck with me the most. Tell the people that story. I have heard this story like three times now from different supply chain analysts. So you may remember several years ago there was this nuclear event in Japan in Fukushima. And so, like, a lot of stuff got closed down. And, again, not everybody has, knows what's going on in the supply chain. And this was, like, an ugly surprise because carp makers ran out of red paint. And what had happened was that the sparkly part of red paint was made in exactly one place,

and that one place had been affected by the Fukushima nuclear disaster. So it wasn't making any more sparkles. And that was the end of red paint for a while. And that's just one of those, like, butterfly effect situation. right? Like you just don't, you can't possibly foresee that. It's nearly impossible to foresee this kind of thing. And that's, I think, part of the reason that you're seeing people freaking out is that we actually don't know what's going to happen. We don't necessarily know where the shortages are going to be. We don't know how severe

there will be. And that kind of uncertainty is a kind of uncertainty that people don't like. The way I've been thinking about it is regardless of the sort of political noise about nationalism, We live in a hyper-globalized world, right? Like, the biggest companies in the world paid only the slightest attention to the fact that countries exist in many ways. This virus is sort of similar. It's obviously just crossing borders as it will. And it's sort of like highlighting the routes the globalization has taken. It's highlighting where the supply chains are.

It's disrupting those things. Beyond just the market impact, Liz, is that having sort of the cultural impact that you would expect from that moment? Are people paying more attention to it? Or is it just, oh, man, we're not going to be able to get phones. Apple stock has going down? I actually don't know that people are thinking about it that seriously. I do see some folks in the money world who are thinking about it this way. But I don't know that the average person is.

I don't know that the average person really thinks about where their iPhone comes from at all. But the other thing that I will say is that what is specifically interesting about this outbreak is where it started. Wuhan is a major manufacturing center. I think it's got something like 500 auto parts manufacturers around it and in it, and it ships to the entire world. So, you know, if you're thinking about how diseases are transmitted, it's pretty much by people. And so you have a lot of people who are there to, for instance, oversee manufacturing. You have people who are interacting all the time with people from other countries. And that makes it much, much easier to spread around the world.

Yeah, the stat that also came to mind was, I think United Airlines got in trouble last year because they had put one of their banners and one of their events leaked. And it was like, thank you Apple for being like 8% of our total revenue because Apple just buys 50 seats a day back and forth from China. And I just don't think the normal person in Apple store considers just the fact that Apple sends 50 people to China there and back every single day. and that's just on one carrier, and they have contracts with many other carriers as well. It's not part of their brand.

It's not part of their image, but it is the mechanism by which they make the products. And once you shut that down, I think that has to have some huge effect on not only just the products, but the company itself. Like, all those people are just sitting around now. They have nothing to do. Like, they're obviously not making new stuff. They're not refining the old stuff. They're not doing any work. What does it mean for companies of this scale that sort of hit pause?

Great question. I don't know that we know. I think that there is probably for some of these companies, there's a certain amount of inventory because if you think about shipping stuff from China, that takes a while, right? So specifically when it comes to cars, car seats are usually made very, very close to where the final car is assembled. And so in that assembly plant, you might have two hours worth of car seats on hand at any given time because there's just a truck going back and forth, bringing car seats, because that's how close they are. But if you're thinking about components that are coming from China, you know that that's going to take longer, particularly if you're shipping them. That's a while.

So maybe you're shipping more of them. There are some things still on the shelf. This also occurred around the Lunar New Year, which is a period when all work stops in China. So maybe there was a stockpile around that. But I don't think we have a good idea of what this means. I don't know what happens. I don't know what happens here. And, like, one possibility is that more companies start thinking seriously about resiliency in their supply chain. And one possibility is that as soon as this passes, everybody goes and goes right back to doing the thing they were doing before. Yeah, that kind of brings me to the next thing that is happening. Because, you know, we all fix the supply chain. That is a decade-long project, right?

I mean, Apple is flirted with building phones in India. it's mostly the older ones. They're not ready to build their flagships there. Samsung has diversified a little bit, but they build phones actually quite differently than Apple. This is a long process to completely diversify it, particularly out of China. So that's like the medium to long term. The short term is we're all just not going to parties anymore. Right.

We're canceling MWC. GDC got canceled, the Game Developers Conference. Io got canceled while we were doing this. So Google I.O. is canceled. Facebook conference was canceled. The smaller Google conference, Cloud Next was canceled. I think we are, by the time you listen to this, we might know if South by Southwest is canceled. I think it's increasingly likely. It feels that way. But, you know, like that's like a huge, like South by Southwest is a huge hit to like the economy of Austin. Yep. Like a lot of Austin, Texas is built around, you know, three extremely decadent weeks that occur.

What are those ripple effects like? Are they trackable? Are they meaningful? I think they're meaningful. I think they're hard to track because, again, they're going to be diffuse. But let's imagine you're a local restaurant and you rely on Southby to give you maybe the most lucrative month of the year. And that doesn't happen. Maybe that makes it a little harder to pay your rent for the rest of the year. And then so if you fold because you can't pay your rent, that potentially is a problem for your landlord.

because rent is important if you're a landlord and also real estate people tend to be pretty heavily leveraged in order to purchase products so they need to pay back money on their own debt. And if they can't do that, that's a default, which is a problem for the banks because then they're holding bad debt. And if you remember 2008, you may remember that bad debt can be real troublesome. Yeah, I'm sorry. I'm only now reacting the fact that IOS is canceled while we were talking. I was like, wait, what?

Google I.O. is in May. Uh-huh. It's in the middle of May. That's a long time away. Is that realistic? Is that... I open that to both of you. Is looking all the way out to the middle of May and saying we're canceling this a realistic

thing to do? Yes. At least in my opinion. Both of you said yes. Yeah. Okay. So Nicole is going to probably have some more details about this than I do, but I can sort of give you my spin, which is we're at the very beginning of this. We still don't

know how broadly the virus is circulating. We still don't really know where it's circulating. We haven't done the sort of surveillance testing that would give us a handle or a picture, at least, of what's going on. We don't know what's happening. And so personally, I have just been viewing every conference this year as subject to cancellation because we don't know what's going on, and there's a possibility it's worse than we know. And the Olympics might be canceled. So we're looking at a lot of really enormous global world events that are kind of hanging in the balance as we try to figure out what's going on

and how bad it is. And this is all just to stop people from commingling from different. Yeah, this is like what we call social distancing. That's what you're saying before. Yeah. But like once it's in every country, do you have to maintain social distancing? You want to slow the spreads so that you aren't all. Everybody isn't getting sick at once and overwhelming an emergency.

room. So like one of the mistakes that was made during the 1918 flu pandemic was that there was this parade in Philadelphia of soldiers that were coming back. And there had been a couple cases of the flu. And the town didn't want to cancel the parade because they were worried that might undermine public confidence. So there was this parade. And then a lot of people got sick immediately afterwards and overwhelmed the medical system. So we're looking to do. what's called flattening the curve. Epidemiologists talk about the epi curve of a disease. So it's like how the cases increase and then how they decrease. We want to flatten that out so that we don't have a spike in the number of people getting sick at one time because if we have 1,000 people

who are sick and 15% of those people need to be hospitalized, that's a lot of people that need to be hospitalized at one time and need a hospital bed. So by flattening that out, we, we, we We kind of reduce strain and we add slack to the system, which lets us get people better before the next person gets sick. And that also buys us time to do things like making sure that the treatments that we're testing actually work. And vaccine development is a long, long ways away. But time, every day matters in terms of kind of trying to figure out how to stop the spread of this. So are these cancellations? Are they happening because of those reasons?

And authorities are saying stop it. we're in control, we want to flatten this curve. Is it a bunch of just big companies saying, oh, we can save some money in the budget this year? Or is it some combination of people trying to do the right thing and these commands? How does that interaction work? It's a really complicated kind of interplay. I mean, people are really bad at perceiving risk in general. Like, humans are really bad at telling how risky it is to do a certain thing. Like, people are more afraid of flying than they are of driving in a car. You're more likely to die in a car crash and a plane crash, things like that.

Risk perception is really hard. But in a situation like this, people organizing these conferences are probably doing a combination of public health advice. What would it mean if something did happen at the event and what are the exposures in that respect, like kind of risk mitigation and management in the event that there was an outbreak at their event and economic considerations, political considerations? So it's going to be a combination of factors going into those decisions. I will say at least from my point of view, watching the way that I've seen the national authorities responding to this, I think we all owe our local health authorities a debt of gratitude because a lot of the responses that we're seeing are coming from them, whereas the sort of message from Donald Trump and Mike Pence has been, you know, all business as usual, here's a basis. Here's a 50 basis points rate cut.

maybe we'll do tax cuts. And the response that leads people to potentially like cancel these events, even though like probably they've already sunk money into them that they can't get back, is maybe somebody who's a little more local saying, hey, this is really not a good idea right now. Yeah. You know, it's funny that that sort of White House responsible pressure the Fed into cutting rates or we'll do a tax cut.

It's completely at odds with what Nicole has been talking about, which is most of the work here is fairly old-fashioned. It's not old-fashioned, but like it is not the highest tech. It's not a bunch of scientists in a room together concocting a solution. It's a bunch of scientists out in the field doing stuff, and that just takes time and money and effort and, like, patience. Whereas a rate cut or a tax cut sort of takes that element of it completely for granted. Right. Like, this is, what's just stuff going to happen?

So we'll just cut rates so we can even things out while that happens all by itself. seems like a real mismatch of priorities. Yeah, I think that's true. I think it's trying to shore up people's confidence. And I think it's a mistake to try to shore up people's confidence by saying, hey, the economy is going to be okay. Like the thing that people are really worried about are, you know, the supply chain stuff, rightly so.

And the health stuff also rightly so. And so, like, maybe you can't necessarily affect the supply chain stuff because that is happening in China. But perhaps you can do something about the health stuff. for instance, by authorizing a bunch of money to make sure that there are testing, there's like testing available for anybody who wants to or needs to get tested and that they don't have to pay for it themselves. Or creating a fund for people who don't have paid sick leave but can't afford not to go to

work so that you can pay somebody to stay home when they're sick so that they can still make their rent. Or any of a variety of other things, like it's not like economic solutions or bad solutions. It's just that those two particular economic solutions, I think, don't speak to the actual root of the problem. Another problem with the messaging mismatch is that it's just bad risk communication, emergency communication practice to say that everything is fine and going to be okay when you don't know that that's the case. Because if the other shoe drops, then that makes it worse. You know, prepare for the worst, hope for the best sort of conversations are better practices in a situation like this where you say, you know, this is. could be bad and you should get ready for it. We're going to do everything we can. That's not

the messaging that's coming out of the White House, the administration right now. We seem to do a more responsible job of communicating that stuff with like snowstorms in New York City, right? Like every year, twice a year, they're like, it's going to snow a really bad state. And everyone's like, it didn't snow. And like, yes, we keep listening to it. You were ready. So I usually end these conversations by asking what's going to happen next. Yep. No idea. Just confused faces all around. Well, I mean, we do have a couple ideas, right? We're going to see the case counts go up.

Right. Like, that's going to happen because there's more testing. So if you do see the case counts going up a lot in the next week or so, don't panic. That is to be expected. That's because we've changed the testing criteria. That's all that's happening there. It's, you know, we're just trying to get a handle on what's going on. So that's going to happen.

But beyond that, it's a lot of question marks, right? Like, maybe some more things will be canceled. Maybe there will be some shortages. For instance, there's already a drug shortage, though the FDA won't say specifically which drug that may happen more broadly elsewhere, specifically for things like laptops and phones and maybe also for cars. But beyond that, it's hard to predict. We might also see things like schools closed and life disrupted in that way more broadly if things continue to spread in certain communities. So, you know, we're expecting disruption of some kind. It kind of remains to be seen exactly what form and how bad that disruption will be.

But this is going to do stuff to day-to-day life. Yeah. Is this the rest of the year, do you think? I don't know. Five years? I don't know. I mean, Nicole wrote a great story where she's pointed out that there are a number of possible outcomes here. And one possible outcome is that this coronavirus sticks around and becomes a seasonal infection like the flu.

And if that happens, we'll adjust to it and it won't seem as scary anymore because we're just used to it and we'll also know more about it, probably have treatments and hopefully have a vaccine at some point if it becomes just like a regularly circulating virus. I mean, that's bad because then we have another circulating respiratory virus that causes more people to have to go to the hospital. But over time, you know, cognitively we adjust to having something around. That's what happened after HIV AIDS emerged. It caused not the same but similar types of panic and response and research efforts. And now we sort of have adjusted to this being another disease that we have around. So that could happen here. And, you know, when something starts circulating through the population, you know, you develop more innate exposures and immunities and it becomes less intense.

So, like, that's one outcome. Another outcome could be that we are able to contain it. It's not looking super, super likely just because it spreads really subtly. But, you know, it's still a possibility. Experts still say it's not out of the realm quite yet. And it could just circle the globe for a little while. I mean, that's another. It's new.

It's got its walking shoes on. Exactly. It's on the road. Yeah. On spring break. You know what I keep thinking about. There's a saying, may you live in interesting times and it's considered a curse? Yeah.

Well, kids, the times are interesting. It definitely seems that way. Well, I am very happy that I have the Virgin Science team. I've Nicole, Liz overseeing the whole thing, paying attention to where our car paint comes from. It's deeply important to me. Is black paint affected? Because that's really the only one. You just want to know if you can have a murdered out Mustang.

That's all I want in this world. Keep an eye on Nicole's work at the Verge. The whole Verge science team, we're paying a lot of attention to it. Liz has promised me a story about the supply chain impacts. I can't believe I'm being publicly shamed. I do it to Dieter on the other show every week. All right. Well, so here's the deal is that I have been trying to track down what's going on with the supply chain.

But unfortunately, there's been so much breaking news around the coronavirus. I haven't had a chance to write it. So if everybody would just like chill out for a day or two, too so I can sit down and write my story. That would be great. All right. When it is out, we'll let you know. Thank you both. Thank you both. Thank you both for taking the time with me. I know you're both very busy. I actually, I've had a swirl of information that's very helpful in organizing it. All right. That's it. Thank you both.

Thanks. Thank you. All right, my thanks to Liz Lapado, Nicole Westman on the Vergecast. You can check out all of Nicole's reporting on the coronavirus on the site, Theverge.com. Liz, she's going to write that supply chain story. She's going to mad at me that I said this here, but she's going to do it. It's going to be great. I do it to Deter every week. I'm doing it to Liz this week. We'll be back later this week with the chat show. We'll back next Tuesday with the interview show.

Keep it going. You can tweet at me. I'm at Reckless. I love hearing your feedback. Love hearing who you want me to talk to you next and what you want us to cover next. Get at me. I'll be listening for it. Talk to you soon.