The further to the left or the right you move, the more your lens on life distorts.

Saturday, March 21, 2020

Risk Management

Risk management is a topic that most Americans understand intuitively—understand the risks you face, whether they're likely to affect you, and then decide whether they're worthy of concern, and how you'll respond to them. Yet, technical risk management is not taught in most curricula. We leave it to "experts" who, given current events, aren't doing a particularly good job with it. Stated simply, technical risk management involves accurately stating each risk, defining the statistical probability that the risk would occur, identifying the "cost" if the risk should occur, and then for those risks that are considered important, identifying a mitigation strategy, if one exists.

David Zaruk writes:
Two decades of the precautionary principle as the key policy tool for managing uncertainties has neutered risk management capacities by offering, as the only approach, the systematic removal of any exposure to any hazard. As the risk-averse precautionary mindset cements itself, more and more of us have become passive docilians waiting to be nannied. We no longer trust and are no longer trusted with risk-benefit choices as we are channelled down over-engineered preventative paths. While it is important to reduce exposure to risks, our excessively-protective risk managers have, in their zeal, removed our capacity to manage risks ourselves. Precaution over information, safety over autonomy, dictation over accountability.
As we spiral into a massive over-reaction to COVID-19, we keep hearing the phrase "an abundance of caution" while political leaders do a calculus that devolves into CYA. Shutting down a state economy (e.g., CA) because ... precautionary principle. Closing schools because ... precautionary principle. Limiting local movement because ... precautionary principle.

There's only one problem. There's another major risk associated with the mitigation efforts for the COVID-19—doing significant and lasting damage to our economy and in so doing, ruining the lives (at least for a time) of tens of millions of people. And that RISK isn't being discussed with the same level of intensity as the COVID-19 risk. It should be.

Zaruk continues:
Precaution’s answer to COVID-19 is to quarantine the outbreak to try to minimise exposures to the virus. Given the incubation period can be as long as 14 days, this is like locking the doors after everyone has left the room. As that measure will inevitably fail, the next step is to shut everything down. Economies will suffer much longer than our fear of COVID-19 uncertainty, with the undesired public healthcare funding effects, but precautionistas have never been much bothered with lost benefits or dire consequences.

So rather than letting schools manage risks, they are closing them down. Couldn’t teachers use this opportunity to reinforce hygiene skills and expand the use of disinfectants? (Or did the schools ban the use of effective chemicals in the last precautionary wave?) Rather than promoting the immunity benefits of fitness and well-being, organisers in Tokyo, Rome and Paris have cancelled this year’s marathon races. Couldn’t these cities use the opportunity to stress fitness and healthy living as a good prevention to diseases. Rather than using the COVID-19 pause in the West to educate the public on immunity-building measures, the regulators are wasting time reassuring their populations bad things won’t happen to them. Rather than trusting the public to self-isolate when potential COVID-19 symptoms arrive (what is basically done with every other flu outbreak), our authorities have created mass panic in the supermarkets, economic recession and further public trust declines ....

People do get sick, people do die – that’s life! Nature is such that strong people recover from diseases and viruses like COVID-19 (and often get stronger) while we need science and humanity to protect the weak. The objective of risk management should always be to reduce vulnerability.

Risk managers should have done the obvious with limited hazard reduction means: allocate all resources and energy towards building firewalls to protect the vulnerable in hospitals and nursing homes while leaving the rest of society to manage the risks of the present outbreak via self-isolation and according to their situations, capacities and resourcefulness. Instead everyone is mixed into the same viral soup. The strong (but nervous) are clogging up the hospital emergency waiting rooms while the elderly and at risk ride the buses. And where there are quarantines, the strong and the infirm share the same air. The Yokohama-quarantined Diamond Princess cruise ship debacle will serve as a good case study where, in a stumbling precautionary world, the risk management profession was non-existent.
Are David Zaruk's comments extreme? Possibly, but to use the politically correct terminology—his position deserves a serious "conversation." And that isn't happening.

Otherwise rational people have been driven into a panic by a completely irresponsible media that reports edge cases as if they are representative of COVID-19's reality (they are NOT) and presents projected extreme worst-case scenarios as if they are a dead lock to actually happen. They will NOT.

For those who are approaching panic, I would strongly recommend reading one of the best treatments of the COVID-19 facts as we currently know them. The author, Aaron Ginn, has developed an extremely detailed analysis of the global impact of COVID_19 with specific emphasis on the United States. Ginn provides reassuring hard data-based evidence that the virus is NOT "unprecedented." It is NOT nearly as communicable as some in the media would have us believe, and it is NOT nearly as fatal as the current media bellweather—Italy—would indicate.

He writes:
The following article is a systematic overview of COVID-19 driven by data from medical professionals and academic articles that will help you understand what is going on (sources include CDC, WHO, NIH, NHS, University of Oxford, Stanford, Harvard, NEJM, JAMA, and several others). I’m quite experienced at understanding virality, how things grow, and data. In my vocation, I’m most known for popularizing the “growth hacking movement” in Silicon Valley that specializes in driving rapid and viral adoption of technology products. Data is data. Our focus here isn’t treatments but numbers. You don’t need a special degree to understand what the data says and doesn’t say. Numbers are universal.
I hope you walk away with a more informed perspective on how you can help and fight back against the hysteria that is driving our country into a dark place. You can help us focus our scarce resources on those who are most vulnerable, who need our help.
The article is long on facts and statistics and short on narrative-driven hysteria. Read the whole thing if you want to better understand COVID-19.


As one of dozens of examples of really bad government decision-making grounded in the precautionary principle, the PA Department of Transportation shut down all trunk stops and rest areas "to stop the spread of the virus." There's only one small problem, trucking companies and the truckers who enable the critical supply chain for food and medical equipment need those areas. My god, these so-called decision-makers really have lost their minds! One can only hope that other states don't follow suit.


To its credit, a source of much fear-mongering and continuous criticism of the federal response to COVID-19, The New York Times, published an op-ed entitled: "Is Our Fight Against Coronavirus Worse Than the Disease?" that begins the "conversation" I referred to at the conclusion of my post.