Japan’s Coronavirus Emergency Declaration Was a Mistake

Just when it was time to lead, Japanese Prime Minister Shinzo Abe became a follower of irrational panic.

After Japan’s more than two months of successful limited testing for the coronavirus, he bowed to polls showing that 80% of respondents wanted a declaration of emergency. Glued to headlines from around the world and hair-on-fire social media feeds, citizens decided that because most of the Western world opted for hysteria despite the virus’s low fatality rate, so should they.

The numbers show that they are not thinking straight.

According to JTB Tourism Research & Consulting Co., Japan welcomed a record number of tourists from virus-hit areas in January: Visitors from “China, with 924,000 travelers (+22.6% from the previous year), together with Taiwan (461,000, +19.0%), and Hong Kong (219,000, +42.2%), increased compared to the previous year and recorded the highest figure for January in history.”

The coronavirus outbreak in Wuhan, China began in December. With hundreds of thousands of Chinese circulating freely in Japan in January, the virus was almost certainly unleashed in Japan on a massive scale.

Japan did not go into lockdown. Instead, the government decided early on that it would run a limited testing program—and it worked.

The number of fatalities from coronavirus remained low. Because the vast majority of infected people exhibited no symptoms, it was fine to wait for people to develop symptoms and manage only the ones who did.

Health ministry official Yasuyuki Sahara said at a news briefing on March 17: “Just because we have [testing] capacity doesn’t mean that we need to use that capacity fully. It isn’t necessary to carry out tests on these people who are just simply worried.”

Hear, hear. If an infected person never develops symptoms, there is little reason to care. They could spread the virus to others but the vast majority of them would never develop symptoms, either.

Following what are by now well-known mitigation techniques, including washing hands, sanitizing surfaces, wearing face masks, and practicing social distancing, Japanese people lived life basically as usual with limited impact from the virus.

The results were impressive. Through April 6, Japan counted less than:

4,000 cases
100 deaths

In other words, the way things had been proceeding was fine.

It was time for Prime Minister Abe to take to the airwaves and tell citizens demanding a declaration of emergency:

“Our approach is working. The time for declaring an emergency, issuing recommendations to shelter at home, and other dramatic measures, is long past. Keep yourself clean and covered. Do not gather in large groups. If you develop symptoms, go to a hospital. Other than that, carry on.”

That would have been leadership.

Instead the leader followed misguided opinion to issue an utterly belated, meaningless declaration of emergency. Rather than raising a victorious fist, he wet himself on the world stage.

— Jason Kelly is the author of The Neatest Little Guide to Stock Market Investing and The 3% Signal, and writes an investing newsletter called The Kelly Letter. He lives near Tokyo.


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19 Comments

  1. John Prather
    Posted April 10, 2020 at 12:05 pm | Permalink

    Jason,

    As you know, I have labeled this COVID-19 outbreak the “Clickbait Flu.”

    When we click, we are working for somebody. The reality of the world today is that if you can get clicks, likes, or views, you can make money.

    Creating a clickbait farm or a like factory can make you an influencer or, if you are the media, can set your asking price for ads or allow you to get your agenda accepted even if it’s suspension of Constitutional rights or money for your supporters.

    We will hear all sorts of things in the near future, such as: Minorities have been hit harder, so to resist our desires for major change are racist. Even the Pope has said recently that COVID-19 is a result of climate change. The House of Representatives wanted to add money for abortions to the bill to help those affected monetarily by the virus.

    Given all this attention, how can we not raise the discussion to a level above the day-to-day death count, and who does not have a mask and why?

    We have to look at this in the cold, hard light of day and ask what we are doing.

    What long-term precedents are we setting? Is okay to shut the world down with no idea when it can reopen? We also live by work and an economy that provides for our needs. How long can we ignore that?

    Roosevelt said all we have to fear is fear itself. There is a lot of fear right now. Where did it come from? Who fanned the flames and why?

    Let’s raise the level of discussion!

  2. RJM Consulting
    Posted April 10, 2020 at 11:21 am | Permalink

    I find it quite surprising that straight-laced arguments are being offered comparing Covid to seasonal flu, and/or labeling this a media pandemic.

    When was the last time refrigerated trucks were lining up outside of hospitals because the morgues were full? Urban legend? Easily disposed if so, and yes the cliche of “if it bleeds, it leads” is being heavily leaned on. But it does bleed, and there is no credible conspiracy theory arguing that these are just sensational anecdotes or that the global “elites” have a vested interest in drowning our economies in debt. The pooh-poohing, is, I suspect, a new version of whistling past graveyards.

    • John Prather
      Posted April 10, 2020 at 12:28 pm | Permalink

      Not everything that bleeds leads. 140,000 dying of measles would be one that comes to mind.

    • John Prather
      Posted April 10, 2020 at 12:34 pm | Permalink

      Somebody picks which bleed leads. How do they do that? Maybe it fits their current narrative or one they would like to create. What do you think RMJ?

    • John Prather
      Posted April 10, 2020 at 12:57 pm | Permalink

      We had a hurricane and hundreds of bodies were washed up from cemeteries and set in trailers for months until they could be sorted out. Who heard about that? I guess that one did not bleed enough.

    • John Prather
      Posted April 10, 2020 at 4:22 pm | Permalink

      Gatemouth Brown, a famous blues singer was one of the bodies washed up. A group got together to make sure that Gatemouth got his due on a new tombstone. Point is we work through these tragedies and are not paralyzed by them.

      So what if bodies are piling up in New York; as Americans we work through that.

      Again, my point is: What is it about COVID-19 that is different? Something is. What?

    • John Prather
      Posted April 10, 2020 at 4:26 pm | Permalink

      Talking about whistling past the graveyard.

      Here is is his new tombstone:

      https://www.dianerussell.net/gatemouth-brown-headstone/

  3. John Prather
    Posted April 10, 2020 at 7:14 am | Permalink

    Jason, I would like to put another idea into the discussion.

    There are a couple of things we know. We will all die and people are hard wired not to think about their own last day. We probably would not get in a car or join the Army if we weren’t or do many of the things we do that are said to make us die sooner.

    So the question really becomes how would you like to die? There of course many ways, COVID-19 being one of them. What would you pay to avoid that particular way? Would you pay more for that one than, say, being shot in the street?

    Today we are paying an awful lot to avoid death by COVID-19 even though our chance of that is actually quite small. US gun related deaths in 2019 were 39,733 according to the CDC. That’s in the COVID-19 ball park. How much are you willing to pay not to die from, say, measles, which killed an estimated 140,000 people worldwide in 2019? You might say you won’t die from the measles but 140,000-plus of our world community did last year.

    Point being, we taxpayers in the US are paying trillions to avoid death by COVID-19. My question again is, why? What is it about COVID-19 that would make us pay that much versus guns and measles or the hundred other ways we could meet our demise? There is something different about COVID-19. What is it?

  4. Toni Borrett
    Posted April 9, 2020 at 10:35 am | Permalink

    Hi Jason, I don’t know the Japan situation so can only comment on the Australian viewpoint. All I can say is, look at New York. Here in Aus we have a very good health system, caters to all. At the moment, we are in Stage 3 lockdown and our numbers are comparatively good. As Chad above said, the current figures represent action taken 2 weeks ago. You said yourself the numbers in Japan are going to rise now. Not because of lockdown, but because of testing? The fact that this virus is often invisible in its infectious stage is the worry. Of course the media catastrophises it but our government is, how do I express it, a typical right wing keep the wheels turning at all cost type, but is now implementing actions that have halted our businesses etc and I don’t believe they would do that in any but the direst circumstances. I hope for all our sakes, we can slow the spread and come out of this sooner rather than later. I have some dry powder, I bought a bit on 1 April, and will add more bit by bit. Stay safe.

  5. Steve
    Posted April 9, 2020 at 6:34 am | Permalink

    Jason,
    As is so often the case, we may not know the correct answer regarding our response to this virus incident until we look at it through a future lens. Hind sight is always 20-20. In the moment we simply cannot know precisely how this will turn out. We can guess, or we can predict but like you have often said, chances are we will be right 50% of the time.

    I do not doubt the science of this Covid virus, nor do I doubt its strong infection potential and virulence. It is a bad actor. Those of us that are older and more susceptible to its effects need to pay attention to this outbreak just as we would any viral outbreak. This includes, but is certainly not limited to, the “common” flu which also kills many each year. Our doctors, scientists and public health officials understand Corona type, + Ribonucleic Acid (RNA) family of agents fairly well. The mechanisms of their infection and regeneration capabilities are generally understood. A vaccine can be made but that takes time. By the time a vaccine does come along, herd immunity is likely to have already defeated the virus. This is simply the life cycle of virus initiated diseases. They come and they go.

    In the end it is what it is. The media has taken over the disease. Election trivia is no longer the eye rolling entertainment of the day. As ratings decline news has to find….well news. Politics, in reaction to media saturation and public outcry, has made this outbreak a world wide Stephen King event. It is not. The stock market is as low as anyone could imagine given the great state of our economy before this event. Don’t sell. As you have said Jason, this is all temporary. I agree. Abe may be right or he may not. Time will tell.

    Some common sense here. Practice physical distancing and good hygiene, avoid large gatherings and public events, exercise, get fresh air, keep the mind active and engaged, eat healthy foods, stay in contact with friends and relatives, avoid getting upset by circumstances beyond our control. Don’t sell. Take media coverage with a grain of salt. Know this condition is temporary.

    Some of my friends are still cross country skiing at higher elevations and latitudes. My eldest daughter is mushing her dogs in interior Alaska. Another is training her rescue horse in Nevada. I am headed out for a walk with my bride. It is spring and we like to follow deer trails in the forest and orchards near our home. The manzanita, daffodil, fruit trees, and tulips are blooming right now. I hope we see cactus blossoms starting today as well but we may have to wait until after the next spring rain to see them in full bloom. It is important to stay connected to the natural world. All is true and normal there.
    Steve

  6. John Prather
    Posted April 9, 2020 at 2:44 am | Permalink

    The question we need to be asking ourselves is why is it Different this time? Just 10 years ago we had an H1N1 outbreak that by all accounts was almost order of magnitude worse than COVID-19 at least in estimated worldwide cases. But, it was not a real media event nor were whole countries locked down nor the economies put on hold. So what is different this time?

    There are other viruses we have no vaccinations for. HIV would be one that comes to mind. Obola might be another one. So what is different about COVID-19 that some want to say that we can never return to “normal” without a vaccine?

    What is it different this time and why does it appear we are treating this one differently?

    • Chad
      Posted April 9, 2020 at 5:23 am | Permalink

      Hi John,

      One important thing to consider when comparing the aftermath of H1N1 with the current COVID-19 situation is that most of the world is only 2 months into COVID-19. At this stage, any comparison based purely on today’s overall fatalities is very much apples to oranges. H1N1 had a fatality rate of 0.01-0.03% which is on par to the seasonal flu and this would explain why it was more so reacted to with a similar fanfare. The overall COVD-19 fatality rate is estimated to be 1.4% (University of Minnesota) and is even higher than this in older adults. H1N1’s impact was actually felt more heavily on the younger population. There is data that suggested older adults had more immunity to H1N1 compared to the younger population due to more exposure to flu vaccines over their lifetime.
      https://www.cidrap.umn.edu/news-perspective/2020/03/global-covid-19-total-passes-850000-study-shows-14-fatality-rate

      HIV naturally poses little risk of transmission within a crowd full of people in a work environment or social gathering where sexual activity or needle/syringe use is not occurring. It never threatened the mechanics of a functioning economy.

      Ebola’s very high death rate (~50%) actually worked as a benefit to society. You didn’t have relatively healthy people going to work and getting on subways while spreading the virus unknowingly to others like you do with COVID-19.

      SARS also had a comparably higher death rate (>10%) to COVID-19. SARS made its impact felt much earlier and announced itself to its occupant first before spreading elsewhere. COVID-19 is much stealthier, first inhabiting its victim, then spreading to others and finally announcing to the original occupant that it was there in the first place. With SARS note that it wasn’t defeated with the development of a vaccine. The virus was quarantined out of existence. The asymptomatic nature of COVID-19 makes a robust containment pre vaccine much, more challenging.

      I found the following thread on viruses interesting. I will grant you, it is Twitter, so he may or may not know what the heck he is talking about.
      https://twitter.com/PeterKolchinsky/status/1246975275021348865

      • John Prather
        Posted April 10, 2020 at 4:13 am | Permalink

        Hi Chad

        We have no vaccines for normal flu. We have flu shots which are not a vaccine as you need to take them every year and many who have them still get the flu. A vaccine is like the one for polio or smallpox or measles. Once and done for life. Waiting for a vaccine for COVID-19 is not a viable alternative.

        On the social distancing California started two days before New York and can not explain the difference between New York and California. As Stanford doctors are saying today it is much more likely that California peaked before testing began and without media hype the peak passed unnoticed. They say the virus was likely in California as early as October.

        As someone else said we won’t know much in terms how this event actually played out until much later this year or next. We already know that Politicians will claim credit for working wonders against the bogus modeling targets that have been constantly revised downward. We are also learning the real power of Social Media to shutdown the world.

  7. John Prather
    Posted April 9, 2020 at 1:45 am | Permalink

    In my work life we had a lot of “crises” . In the heat of an unusually serious one a phrase was coined. “If you are not doing something stupid, you are just not doing enough!” Yes, it was a bit cynical but it caused some reflection that kept people from over reacting. In this day of virtue signaling people do do stupid things to prove they are on the “right” side on an issue real or imagined and this definitely includes our political class. That’s sad and costs us all a lot of needless frustration and anxiety. Let’s hope we can come back to reality on the whole virus issue and what we have learned over the years about viruses and how they run their course with pretty much with little attention to our efforts.

  8. Chad
    Posted April 9, 2020 at 12:51 am | Permalink

    I feel that I may be on opposite side of the consensus of the letter on this. The great challenge with this virus is its incredibly long fuse. I agree that it isn’t necessary to test a person only to appease their worry, but I feel large scale testing is necessary to have a better sense of how the virus is spreading through a society. This virus doesn’t give the luxury of merely reacting to today’s death numbers and changing course if necessary. Today’s death numbers are only an evaluation of the success of the mitigation strategies two and three weeks back and not how well those strategies are working today. Even if most people develop little to no symptoms and spread to another group, the majority of which also develop little to no symptoms there will still be a minority in this group who develop very significant symptoms. Even if this minority is a very small percentage, a small percentage within the population density of Tokyo and other areas is still a very large number of people. Jason you clearly have a better pulse on the situation in Japan, but my hunch is that the government reacted to additional indicators beyond the pole and this resulted in their change in approach. Let’s hope it’s a false alarm. I think even in the aftermath of this virus the success of each strategy will be difficult to evaluate. For areas that took an early, aggressive approach; California being one, some may look back and consider it a success while others an overreaction.

    • John Prather
      Posted April 9, 2020 at 5:24 am | Permalink

      The aggressive approaches taken by state governments like California are only about two weeks old and the virus has been here since December. I think a lot of credit is being taken for “aggressive” actions without much if any facts to support that they have been effective. Deaths have certainly risen in the wake of such actions and will continue to do util the virus runs its course “aggressive” actions or no. The argument will be of course “it would have been much worse if we did not do this”. A perfect response since it can’t be proved or disproved. The modelers need this argument when their estimates of deaths in the US have steadily fallen from 2.2M a few weeks ago to ~60,000 this morning on their way to probably 20,000 (pretty much normal flu like) and about the same as the ~18,000 US from H1N1 in 2009-10. This mitigation argument will be held at all costs as it covers the completely wrong stories/estimates put out by the zval experts and tv pundits to get this panic rolling.

      So what is different from H1N1 cases and deaths? Something!

      • Chad
        Posted April 9, 2020 at 7:00 am | Permalink

        Hi John,

        One important thing to consider when comparing the aftermath of H1N1 with the current COVID-19 situation is that most of the world is only 2 months into COVID-19. At this stage, any comparison based purely on today’s overall fatalities is very much apples to oranges. H1N1 had a fatality rate of 0.01-0.03% which is on par to the seasonal flu and this would explain why it was more so reacted to with a similar fanfare. The overall COVD-19 fatality rate is estimated to be 1.4% (University of Minnesota) and is even higher than this in older adults. H1N1’s impact was actually felt more heavily on the younger population. There is data that suggested older adults had more immunity to H1N1 compared to the younger population due to more exposure to flu vaccines over their lifetime.

        HIV naturally poses little risk of transmission within a crowd full of people in a work environment or social gathering where sexual activity or needle/syringe use is not occurring. It never threatened the mechanics of a functioning economy.

        Ebola’s very high death rate (~50%) actually worked as a benefit to society. You didn’t have relatively healthy people going to work and getting on subways while spreading the virus unknowingly to others like you do with COVID-19.

        SARS also had a comparably higher death rate (>10%) to COVID-19. SARS made its impact felt much earlier and announced itself to its occupant first before spreading elsewhere. COVID-19 is much stealthier, first inhabiting its victim, then spreading to others and finally announcing to the original occupant that it was there in the first place. With SARS note that it wasn’t defeated with the development of a vaccine. The virus was quarantined out of existence. The asymptomatic nature of COVID-19 makes a robust containment pre vaccine much, more challenging.

        I’m optimistic we can find some functional economic strategy pre vaccine to get people back to work and still control the spread. I’m an engineer at Intel where I see first hand our attempts to keep factories running in the middle of this pandemic. they continue to run. I’m optimistic we can continue doing so, but I think doing so requires people to give the virus and its threat proper recognition.

  9. Holly
    Posted April 8, 2020 at 11:42 pm | Permalink

    I agree completely. It makes me angry and sad that this virus has become a political issue and that so many people have bought into the fearmongering by the media. Jason, it does seem striking that Japan’s death rate is so low. Do you know what the treatment protocol is? Do you believe the low death rate is purely due to mitigation, or is it because the doctors there are using therapeutics such as hydroxychloroquine or other drugs? You also have to consider that in general, Japan’s population is probably healthier than here in the United States where an enormous percentage of our population suffers from heart problems, hypertension, obesity, asthma and other conditions that make the virus much more dangerous. Then again, Japan’s population is much older isn’t it? It’s surprising that the number of deaths are so low, compared to other countries.

  10. K. Lacey
    Posted April 8, 2020 at 8:11 pm | Permalink

    Jason,

    I have been thinking and saying the same thing here in the States. The shut down of most industry and the large money giveaways by the government will do more harm than the flu. We have overreacted and instilled fear into the people.

    However, it would take a brave man with great insight and confidence to have taken the more difficult road. It is not an easy call, and not something politicians are trained to do. Bottom line is, this was what it was (it is what it is) and we now have to live with it, and with the consequences.

    Hopefully most traders have some dry powder left to begin again.

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