Stock markets took a hit yesterday as the Delta variant of Covid-19 raised concerns of more lockdowns. On Wall Street, the Dow Jones Industrial Average lost 725 points, its biggest reverse since last October. The market decline is especially hurting “meme stocks” the social-media driven shares favoured by ignorant punters. The WSJ’s Editorial Board comments in today’s newspaper (see below), the panic is being caused by misunderstanding and it pleads to the political class to avoid the lockdown mistake. While the Delta variant is clearly highly contagious, vaccines are working – and although they won’t prevent us getting infected, they substantially reduce the symptoms and mortality risks. – Alec Hogg
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We’ll Always Have Covid
The Delta variant spooks markets, but the vaccines work even if the virus won’t go away.
July 19, 2021 6:43 pm ET
Will the pandemic ever end? That’s what investors asked Monday as they sold off stocks and rushed into bonds on fears that Covid-19’s Delta variant will slow the economic recovery or lead to more lockdowns. Let’s hope the political class has learned some lessons from the last 18 months—namely, that Covid will always be with us, and that we have to live with it without shutting down the economy.
New Covid uncertainty and political angst explains the 2.1% drop in the Dow Jones Industrial Average. Value stocks tied to the reopening such as airlines, hospitality and energy companies took the biggest hits. Companies that have benefited from lockdowns were less affected. Etsy, which has made a niche market selling hand-made masks, rose 3.2%.
The Delta variant is estimated to be more than twice as transmissible as the original Covid strain that emerged from Wuhan. Australia reports that several people were infected after “fleeting” contacts in a shopping mall. U.S. Covid cases have tripled in a month, as states lifted restrictions and travel rebounded. In the U.K., which has among the highest vaccination rates in the world, cases are approaching their winter peak.
Previously infected individuals appear to be more susceptible to re-infection by the Delta variant, which could explain some of the rising cases. The Pfizer vaccine is also estimated to be 10% to 30% less effective at preventing symptomatic illness, which means more infections among the vaccinated. Chinese vaccines appear to be less effective, and many developing countries that took the Chinese shots are administering booster shots by Western manufacturers.
But none of this is cause for Covid panic or more lockdowns. Vaccines are still highly effective at preventing severe illness, which is why hospitalizations in the U.K. have increased much less than cases. Some 99% of hospitalized Americans now are among the unvaccinated. Most vaccinated people with new infections—such as the five Texas Democratic state lawmakers who fled to Washington, D.C., last week—experience cold-like symptoms.
But Covid was always destined to become endemic. As with other viruses, the hope is that as it mutates it will become less deadly even if it becomes more contagious. The policy goal all along has been to minimize Covid’s impact on society and the healthcare system with vaccines and testing—not to eradicate it. Covid cases will flare up here and there, but they are manageable.
Prime Minister Boris Johnson was right to resist political pressure to delay the U.K.’s reopening Monday, though some in his government are wobbling. The U.K.’s chief medical officer warns that “we could get into trouble again surprisingly fast.” The National Health Service app last week ordered half a million people to self-isolate after potential Covid exposure, no matter if they are vaccinated.
Continuing quarantine mandates on non-symptomatic vaccinated people will prevent a return to normalcy. So will re-imposing mask mandates, as Los Angeles County did this weekend while warning more restrictions could be in the offing. “Anything is on the table if things continue to get worse, which is why we want to take action now,” the county’s health officer said.
Personal prudence is fine, and people can calibrate their own risk tolerance. But politicians should take lockdowns—the biggest mistake of the pandemic—off the table. Nearly 80% of those over 65—those at highest risk—and 60% of all adults are fully vaccinated.
The Biden Administration made the early mistake of promising miracles in defeating Covid, and now it is worried that outbreaks will linger and return. They’re blaming tech companies (see nearby) and Republican-run states, but that won’t persuade the vaccine doubters. Some honest realism about Covid persistence might.
Appeared in the July 20, 2021, print edition.
