A Forgotten Report: The Federal Reserve Predicted the Coronavirus Impact in 2007


In studying the economic impact of the 1918 Flu Epidemic I came upon a largely forgotten report: “Was There an Economic Collapse Caused by the Flu Epidemic of 1918? It was written in 2007, during the George W. Bush administration by Thomas A. Garrett, Assistant Vice President and Economist for Federal Reserve Bank of St. Louis. 

As I read it, I gradually realized that Mr. Garrett was accurately predicting, thirteen years ago, what is happening right now. The report considered what would happen if a pandemic, similar to the 1918 Flu, were to hit the world now. It must have seemed pretty remote at the time.  Mr. Garrett was eerily prophetic. Here are some excerpts.

Given the positive correlation between population density and influenza mortalities, cities are likely to have greater mortality rates than rural areas.

Nonwhite groups as a whole have a greater chance of death because roughly 90 percent of all nonwhites live in urban areas. This correlates with lower-income individuals being more likely to die.

Health care is irrelevant unless there are systems in place to ensure that an influenza pandemic will not knock out health-care provision and prevent the rapid disposal of the dead in the cities.

Local quarantines would likely hurt businesses in the short run. Employees would likely be laid off. Families with no contact to the influenza may too experience financial hardships. To prevent spread, quarantines would have to be complete.

Some businesses could suffer revenue losses in excess of 50 percent.

Mitigating a pandemic will require cooperation and planning by all levels of government and the private sector. Unfortunately, a 2005 report suggests that the United States is not prepared for an influenza pandemic.

Can we rely on local, state, and federal governments to help in the case of a modern-day pandemic? Government has shown its inability to handle disasters in the past.

Reading this now makes you wonder why the world’s leaders were not better prepared for Coronavirus. It’s not like we weren’t warned. 

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