We who bet only occasionally on a horse race are fascinated by true gamblers: those who frequent not only casinos and stock markets, but also the pages of history. We normal folk tend to think of two types of gambler. There is Dostoevsky’s compulsive gambler, who cannot resist the lure of the roulette wheel — who ruins himself by betting and betting.
Then there is the gambler as master speculator: Dickens’s Merdle, Trollope’s Melmotte — both loosely based on Nathan Rothschild — or our own age’s George Soros. This kind of gambler calculates the odds of each bet very carefully. He scales each wager according to the strength of his conviction and the ratio of reward to risk. The speculator doesn’t always win, but he wins much more often than he loses, and sometimes he wins big.
Yet there is a third kind of gambler, who lies between these two extremes. This gambler neither ruins himself nor becomes as rich as Croesus. He wins some; he loses some. He does not gamble to become a billionaire. He gambles for the sheer love of gambling.
The risk-lover does not calculate as Soros does. He bets every day on the basis of his intuition — his gut. To him, the bet is an act of will, intended as much to dominate the counterparty as to make money. The bravado is the point, regardless of the size of the bet. I’ll bet you I win this round of golf. I’ll bet I can make this casino more profitable if you lend me the money to buy it. I’ll bet I can become president of the United States. I’ll bet this coronavirus is nothing bigger than the regular flu.
Donald Trump, as you will have guessed, is a Type 3 Gambler. He did not blow the money he inherited from his father; nor did he turn it into a mega-fortune. He has made many a disastrous business bet, as his creditors have learned the hard way. Yet Trump has gambled his way from real estate to reality television to real power. And now he is making the biggest bet of his entire life. He is betting that the number of Americans who die of COVID-19 will be around 40,000 — in other words, around the number who die of influenza each winter. (That was the number cited by one of his Wall Street friends last week, after a call with the president, as a “worst-case scenario.”)
Very obviously, Trump’s chances of reelection now hinge on how severely the global pandemic hits America. Natural disasters, if they seem to be mishandled, can be political disasters, too. And recessions reliably spell doom for incumbents.
The United States is now in a pandemic-induced recession. The stock market, despite last week’s remarkable rally, is still more than 20 percent below its February high, effacing most of the gains investors have made since Trump’s election. The combination of public panic, rational social distancing, and a smattering of state-level orders to “shelter in place” has thrown the US economy off a cliff. Initial jobless claims soared last week to nearly 3.3 million, the biggest jump — by a factor of nearly five — since records began.
The president’s bet is not as crazy as you might think. It is, as I wrote last week, unlikely that the United States as a whole will have as disastrous an encounter with COVID-19 in terms of lives lost as Italy. Americans are less crowded together, use less public transport, and kiss one another less than Italians.
It is also possible that the virus will claim many more victims in the big Democratic-voting states of the American coasts — New York and California — than in the smaller Republican-voting states of the heartland. Thus far, only 19 percent of COVID-19 deaths are in counties Trump won in 2016.
Those writing the obituaries of this presidency have written them many times before and been wrong. They must have read with incredulity the results of last week’s Gallup poll, which showed that a majority of voters, and in particular a majority (60 percent) of registered Independents, approve of Trump’s handling of the pandemic.
The problem is that this time Trump is gambling with people’s lives on the basis not of calculated risk but of complete uncertainty. We simply do not know enough about the virus SARS-CoV-2 to have any conviction about how many Americans it will kill. In the absence of adequate testing around the world, we still don’t quite know how many people may already have caught the coronavirus and will be just fine. We don’t know just how infectious it is. And we can only guess at how lethal it is, on the basis of widely divergent case fatality rates from around the world.
COVID-19 could kill 40,000 Americans. But if the virus spreads as far as H1N1 did in 2009, so that 20 percent of us get it, and we have the (very low) German case fatality rate of 0.88 percent, we could have 500,000 dead. As my near-namesake Neil Ferguson demonstrated last week, small changes to the variables in an epidemiological model can produce mortality projections that differ by an order of magnitude.
All we can say with any certainty is that most of East Asia and most of Europe have taken much more drastic steps to contain COVID-19 than the United States has yet taken. And the president wants to see even those restrictions lifted a month from now.
Such is Donald Trump’s gamble with American lives. The one thing to be said in his defense is that, like his British counterpart — who very nearly gambled on a strategy of herd immunity and has now tested positive — he has skin in the game. Trump too will be at risk if this gamble goes wrong. In Italy, the case fatality rate for the president’s age group is 1 in 20.
Niall Ferguson is the Milbank Family Senior Fellow at the Hoover Institution, Stanford University.
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