HRPMO Economic Assessment #5 - Where I Think We Are Headed on 04/22/20

It's been two weeks since my last assessment. Developing this edition has been harder and I've learned a few things. For example, did you know that according to the World Health Organization (WHO), in nature influenza viruses circulate continuously among animals - especially birds? The infamous Spanish Flu is still with us - it is the H1N1 influenza virus that re-emerged as a new pandemic threat in 2009. I learned the WHO operates with a system of phases to evaluate pandemic threats. Phase 1 is the stage when the virus exists only in animals and has not caused infections in humans. Phase 2 is when a virus circulating among domesticated or wild animals jumps to humans and has caused infection in humans, for which humans initially have no defenses. Therefore, the new virus poses a potential pandemic threat. According to one of our heroes, Dr. Jane Goodall, “This pandemic was predicted,” Goodall says. “It’s been known for years and years and years. It started because of our disrespect of the natural world and the animals who live there.” Destroying the forests, she explains, crowded animals closer together, allowing viruses to jump between and across species. Animals are pushed into closer conflict with humans [and] then there’s the animal trafficking and exporting. “This all creates the condition where the viruses can crossover from animals to people.” (https://news.yahoo.com/jane-goodall-age-86-won-083838907.html)

So we have known for decades that pandemics are inevitable. But even more than that - we have seen it happen over and over in the past. Yet we grew arrogant and complacent and we allowed conditions to continue that increased our vulnerability while simultaneously ignoring the need to prepare for the inevitability. We thought we were the masters of the universe with our technology and control over the environment. It is exactly that illusion of control that has brought us to today. You see - we humans are fragile, but we forget about our fragility. It fades as we experience more and more power without immediate consequences. We forget that we have vulnerabilities too.

Today, our illusion of control and predictability has been pushed away and we see ourselves on the razor's edge. We are afraid, but what we've forgotten is that we have always been there on the razor's edge and the more we push ourselves out of balance with our environment, the more we increase our risk of falling.

Now we must redirect our attention and our efforts to rebalancing our world. Mother Nature has challenged us. We humans have become so arrogant that the level of rage and tribalism amongst ourselves has become social cannibalism as we seek to destroy any who are not "like us." Mother Nature has stopped us cold - reminding us that we are all alike - fragile. We are all now reduced to our lowest common denominator - we are all human and vulnerable to the virus.

Over the past two weeks, the economic analysts have also moved closer to the side of public health. The majority of voices has begun to absorb the warnings from the healthcare experts that this is a long term impact - a game changer. Initially, almost all economists and Wall Street analysts were talking about reopening the economy, keeping the lockdown short term, getting back to normal - WHAT'S THE DATE IT'S OVER? But over the past 14 days, those voices have shifted. Perhaps because the largest epicenter of the virus is New York City - also the financial epicenter. Business leaders, analysts and economists have begun to express something different - "we don't know" - and the stress of the uncertainty is beginning to bubble up to the surface. Now, their comments include concern over human lives that are being lost, the chaos of the U.S. management of the pandemic crisis, the fear of exposure, the damage to families, and the need to be positive we will survive but realistic about the difficulty of the days ahead. It is beginning to sink in.

For me, the incomprehension of our current state has come closer - my 5-year-old granddaughter may have the coronavirus. Her flu test was negative and her pediatrician said her symptoms were mild so they didn't order a COVID-19 test, but they know its viral and suspect its COVID-19. So all who have come in contact with her are in quarantine. When she first became ill, my daughter told me my granddaughter would want to play, but then she would start to cough and it would became hard for her to catch her breath. It was that phrase "catch her breath" that caught in my heart. I am reminded of the video I saw in the last few weeks by a healthcare worker in NYC. He said "this virus is coming to your neighborhood, it is only a matter of time." And just a few short hours ago today, an article about a 5-year-old victim of COVID-19 (https://news.yahoo.com/skylar-herbert-dies-after-testing-positive-for-covid-19-172258394.html) We don't know where my granddaughter may have been exposed, just as Skylar's parents didn't know. I can count 13 people in my granddaughter's immediate extended family who may have been exposed. Her parents are divorced so two separate households and social sets are involved. Imagine if my granddaughter was in school? So far, my granddaughter is to be doing ok, but we all need to take this seriously.

As I consider the next installment of HRPMO's Economic Assessment - Vol. 5 - it has come to my neighborhood. Here's where I think we are headed:

• As some states are taking their cue from the President and considering relaxing the lockdown to restart their economy, healthcare and epidemiologists caution us that relaxation of social distancing will likely lead to an increase in COVID-19 cases. And we are not prepared for that. According to Dr. Jennifer Ashton, "After flattening the curve, phase 2 is "raising the line" - increasing the resources and capacity of the healthcare system. Raising the line prepares the healthcare system for any spikes occurring as social distancing is relaxed." These steps include ramping up your healthcare resources and implementing massive testing so you can identify a surge very quickly and move quickly to contain it, preventing another massive infection rate. Simultaneously, you begin to plan for long term mitigation through development of treatment plans or a vaccine. According to Bill Gates, when interviewed on SquawkBox on 4/17/20, opening the economy must be mitigated by key performance indicators - testing capacity, reduction of fear, effective surveillance to mitigate any risk of outbreaks or escalation in virus cases. "…flattening the curve is not the time to open. We must have mitigation and preparation in place, " Mr. Gates advised. And the majority of American people - between 77-81%, in spite of what the protestors may make you think, know America is not ready (https://www.huffpost.com/entry/poll-coronavirus-stay-home-reopen-protests_n_5e9e1803c5b63c5b58734c96). People are deciding for themselves to believe the healthcare professionals and the experts and practice the steps they recommend to stay safe and healthy and protect themselves and their families. For those employers that force a choice between self-protection and a job, there will be a backlash in loss of talent, increased litigation, and whistleblowers.
• Every first responder, healthcare professional and participant in the fight against COVID-19 is street fighting to survive and do their job. You can see the fatigue and frustration on the faces of the healthcare professionals. They are tired of telling us over and over that they need supplies, they are tired of fighting the tide of sick and dying patients, they are tired of working long hours under extreme stress day after day that also endangers their own families, and they are tired of losing their colleagues to the virus while government fights and squabbles. We will see a huge ramping up of our healthcare system because we will need more healthcare professionals, but also because those who have worked and survived through this pandemic may choose to leave and many may suffer from Post Traumatic Stress Syndrome (PTSD).
• Lawsuits are starting to bubble up in multiple areas of our society - employee vs. employer, patient vs. caregiver, patient vs. healthcare system, citizen vs. government and - I wonder if - Local vs. State vs. Federal Government. Economic analysts often talk of pent up economic demand after a recession or depression - but we will see pent up anger emerge first. Anger at actions taken and actions not taken - saying no one has ever been through this before will not be a sufficient defense because pandemics have happened before and local, state and federal organizations have had a playbook and practice runs. It may not have been the breadth of this crisis, but playing dumb won't excuse poor leadership; actions taken will be the only defense.
• There is also no control or oversight over who receives funding and we are seeing repeats of favoritism and abuse similar to the Great Recession. With a minimum loan size of $1 million, the majority of small businesses that create jobs in our economy were ineligible for loans from the first stimulus - hence the 2nd stimulus package just signed into effect today to support small business - again! The problem - big businesses and publicly traded firms gobbling up the initial stimulus dollars, leaving none for smaller businesses. According to the Associated Press, publicly traded firms received $365 million in small-business loans from the stimulus (https://news.yahoo.com/ap-publicly-traded-firms-300m-044100951.htmL). This is also benefiting private equity firms because many have portions of public pension funds for teachers and governments. In fact, though there has been much news covering the Democrats' win of excluding President Trump's companies from benefiting from the bill, there is fine print in the bill that allows companies owned by Jared Kushner to benefit as well as benefits that are industry specific - such as the real estate industry - that stand to benefit Trump hotels and the Trump Foundation according to the New York Times (https://www.nytimes.com/2020/03/25/us/politics/virus-fineprint-stimulus-bill.html). The handling of the stimulus money will re-ignite the anger against capitalism, big business and Wall Street leading to another Occupy Wall Street movement once the fear from the virus starts to subside.
• Employer lawsuits for wrongful deaths are already beginning. As earlier reported, Walmart was first and now you see Walmart's response by taking the temperature of every employee who reports to work, having employees wear masks, and now limiting the number of people who can enter a store to ensure social distancing. Allegedly, Amazon also has a suit pending - though I cannot give you a link to the story I read on 4/18/20 because it has been removed and scrubbed from the Internet. But the headline read something like "Amazon Sued for Wrongful Death; Has Fired Whistleblowers" and was by a New York media source. These lawsuits are the tip of the iceberg for suits against employers who force employees to work in conditions exposing them and their families to COVID-19. Another brewing lawsuit is with Smithfield Foods in South Dakota. After ignoring and mismanaging the challenges to keep their workers safe, their processing plant in Sioux Falls has emerged as the largest single source hotspot in the U.S. with 518+ employees testing positive in a workforce of 3,600 or almost 15% (https://www.thedailybeast.com/smithfield-foods-in-sioux-falls-south-dakota-becomes-worst-coronavirus-cluster-in-the-country).
• As with any crisis, people who suffer will be angry and the results will fuel shouts for changes to our society, many of which will be resurrections of previous times. Unions may come back strong as employees witness their safety and the safety of their families being secondary to their employers' needs. In fact, you may see some of the biggest unions emerge in healthcare where front line workers have been denied basic protective equipment in a pandemic due to mismanagement. Stronger support for centralized management of healthcare and FEMA that is apolitical would be a logical outcome to attempt to remove politics as much as possible from crisis and emergency situations, allowing experts to mobilize and execute as quickly as they see fit based on data and evidence.
• Legislation that requires greater transparency across multiple areas will emerge threatening our democratic version of society with its emphasis on data privacy. However, in the face of tracking and containing COVID-19, fear will be the boss and people will acquiesce in spite of their concerns in order to save lives.
• On Meet the Press, Dr. David Nabarro, WHO Specialist Envoy sees the future this way: "Virus won't likely come in waves but will stalk the human race until we have a vaccine. Not like flu, there will be small outbreaks that emerge sporadically and they will break through our defenses. So the key is every community has a kind of defensive shield and can pick up cases as soon as they appear, isolate them and stop outbreaks from developing. It's going to be necessary for every single country to have that capacity so we are actually encouraging countries to put that in place now and that will facilitate releasing lockdowns and preventing further massive outbreaks. " But the vast majority of humans are moving to scale too slowly and this is true for every country, except perhaps China. China has experienced several of these epidemics and has an infrastructure in place, plus a government structure, that supports control down to the community level. Unfortunately with respect to containing COVID-19, most other countries do not have this level of control; while China begins to thrive, many other countries will continue to struggle with the virus and its impacts on human lives, public policy and its economy - including the United States.
• Ruchir Sharma, Chief Global Economist, Morgan Stanley, stated in an interview "When we get back to work, the leaders will be different and - though America has had a great decade - and America typically outperforms the rest of the world, they are still at a 100-year high. Coming out, I think America will do fine, but the rest of the world will possibly do better. In the next 3-5 years, emerging markets will outperform America." China and India are the two largest emerging markets with a combined population of 36% of the world population. However, differences are stark in their management of the pandemic. China is organized and quick to contain, while India is chaotic. It, therefore, is logical that - given the rise of China over the past few decades - that China will become the dominant economy in the next 3-5 years outpacing all other emerging markets as well as America. America's dependence on China's integration in our supply chain and the tensions the Trump Administration raised with China may prove a disadvantage for the U.S. in the future.
• After a recession or depression, pent up demand does emerge. But per Bill Gates, "People need to know they are safe to move about. There has been a big shock to both the demand and the supply side of our economy. For demand to return, we have to reduce the fear of infection and loss of income. And entire industries will be operating at a much lower level. … Likely, manufacturing can be reopened - construction - and hopefully education. But it won't be normal, not like before until we have a vaccine. The U.S. isn't uniform and there are lots of exponential increases still to come in communities. Reopening is probably at the earliest the end of May, but its about which activities are important. It will be risk vs. public health. It will be longer than we want it, but governments are going to have to create a new regime for how well its working until we have quick prioritized testing with a quick turnaround." Prioritization should be for our first responders - he said - and testing that doesn't deliver results within 24 hours is pretty useless. The President's position that we have all the testing we need is about to be - well - tested.

We have faced pandemics and pathogens before - and survived. Not without great costs, but survived none the less. We humans can be incredibly arrogant, but we are also incredibly adaptable, resilient and innovative. We live on the razor's edge, but we survive because we take chances in spite of risk and probability and in spite of our fragility. 

"…Through me speaks the spirit of a new age, and that spirit has the following to say. Yes, there is danger, and that alone enables me to speak the way I’m going to speak: in resistance. So listen to my Dramatic Poem. You’re right to stop living in a daze, but don’t go waking each other like a pack of barking dogs. No one among you is to blame, and precisely in your fits of despair you may have realized that you’re not really in despair. If you were in despair, you’d be dead already. So don’t act as if you’re all alone. True, your story offers no comfort you can rely on. But stop brooding over to-be-or-not-to-be: being is, and will continue to be, conceivable, and not-being isn’t conceivable. Recognize how alike you are; recognize that you’re alike. It’s just me saying that. But I’m not merely me. “I” in these two guises can be the most flimsy and ephemeral thing on earth, and at the same time the most all-encompassing—the most disarming. “I!” am the only hero…Yes, that “I” is the essence of human nature that keeps us human! " Excerpt from Peter Handke's acceptance speech for the Nobel Prize in Literature, 2019. <https://www.nobelprize.org/prizes/literature/2019/handke/105008-lecture-english/> (end)