Bulls, Bears, Swines, Elephants, Donkeys And Shrubs, Oh My!

Wall Street futures have contracted Swine Flu this morning, and are off nearly 2 percent. On top of everything else, a major global flu pandemic would certainly wreck any chance of recovery in 2009 and could in fact make things significantly worse.

The World Health Organization said the outbreak was a "public health emergency of international concern" that could become a pandemic, or global outbreak of serious disease.

The World Bank estimated in 2008 that a flu pandemic could cost $3 trillion and result in a nearly 5 percent drop in world gross domestic product, damaging prospects of recovery in a world economy deep in financial crisis.

The SARS outbreak, which disrupted travel, trade and the workplace in 2003, cost the Asia Pacific region an estimated $40 billion.

It lasted six months and killed 775 of the 8,000 people it infected in 25 countries.

"A nasty chill will run through the market with swine flu as people think back to the SARS virus," said Justin Urquhart Stewart, investment director at Seven Investment Management.

"The threat of the pandemic will add further weakness to global trade — we saw with SARS tangible percentage points knocked off the index and that was in a buoyant time. Put that in a weaker time and it is likely to be more unpleasant."

Airline stocks were hit by fears the outbreak would hurt travel but drugmakers were higher on vaccine hopes against the virus.

Shares in Swiss drugmaker Roche Holding rose. The company said it was working on increasing production of Tamiflu, a drug shown to work against the new flu strain.

But a company spokeswoman said the production lead time for the drug from synthesis of the product to packaging was eight months.

"We've always made it clear that this cannot happen overnight which is why it is so important that countries are prepared before the pandemic breaks out," she said.

I honestly can't think of a worse time for a major global pandemic to hit the world, especially the US. Right now the country is reeling, but if a big flu scare keeps Americans at home and away from work, school, and other public places, it could be a disaster for tourism and retail that will only accelerate the problem. It could be good for internet retailers like Amazon, but it will be bad, bad news for the already crippled commercial real estate sector and the shops, offices, and hotels that sector represents.

But there's a political angle here on that preparedness front. Remember, President Bush repeatedly slashed the budget of the CDC despite the warnings that a major epidemic or pandemic was long overdue. And when House Democrats led by David Obey tried to get hundreds of millions in funding for pandemic preparation put in the stimulus bill, it was the Senate Republicans, led by Susan Collins, who stripped the funding out, calling it (ironically) wasteful pork. Doesn't seem like preparing for Swine Flu is "pork" anymore, does it?

It was only the Omnibus Spending Bill passed a few months ago and Obama's new budget that restored some of the cuts Bush made, and even then Republicans continue to complain about science funding increases.

So yes, should Swine Flu knock America's economy for a loop and should you judge the administration's response to the possible pandemic as slow, you can thank Dubya's science funding slashing and Republican obstructionism for that. We still have no HHS Secretary, Surgeon General, or permanent CDC director to coordinate our response and inform the public thanks to the GOP. Our response could have been better with more resources, and should the outbreak reach the pandemic stage when it could have been contained better and earlier, consider it another lesson learned for the anti-science crowd.

Now there will most likely be an economic damage component to the Swine Flu story too. The only question is how much this bug will sicken the global economy and how long it will take to pass. It might end up costing the US billions in lost productivity, sales, and additional health care costs that could have been prevented with additional preparedness funding.

Thanks again, GOP! Glad to see you're looking out for America.

[UPDATE] It's been pointed out to me that Democrats in the Senate agreed with Collins and stripped these measures out of the stimulus bill as well, starting with Chuck Schumer.

So apparently once again we have a bi-partisan stupidity problem.