June 26, 2020
Corona virus cases are once again climbing and defying states efforts to control it. It is extending its reach into places that were largely spared at the beginning of the outbreak in mid-March. What to do? Reimpose the lockdowns that crushed the U.S. economy in March and April? Our sense is that neither the business community nor American citizens have any appetite for that option. We desperately need leadership on this issue, but we do not expect that leadership to come from Washington. Neither the president nor the Congress seem up to the task. Instead, it is up to governors and local community leaders in those cities and states where cases are surging to find ways to deal with this health crisis. The good news is that they are not helpless.
Fortunately, nobody believes that re-imposing a national lockdown is the right solution. It may have been the appropriate choice for New York state and New York City in March when emergency rooms were being overrun and when protective gear for health care workers and ventilators were in short supply. But, we believe, it was not the correct solution for other states which were not experiencing a widespread outbreak of the virus. Nevertheless, the president was forced into the lockdown option by a stock market that was in a freefall at that time. He needed to do something to restore confidence. But judging from the likely 50% drop in second quarter GDP, the economic consequences of the national lockdown were devastating. A second round would turn a very severe — but short — recession into a prolonged 1930’s type of depression.
Lacking leadership from Washington, this means it will be up to the governors and local leaders to find solutions. We have all seen the pictures of the beaches in Florida, California, North Carolina, and South Carolina. No masks. No social distancing. We have seen the pictures of the bar scenes in New Orleans, Miami, and Myrtle Beach. Same story. We fully understand why people feel a need to socialize. But the rules have changed and we all need to recognize that, at least for now, we need to behave differently. But how do we make that happen?
In the Charleston, South Carolina area the three local counties have joined forces to develop a comprehensive plan for safely re-opening the local economy. You can check it out here:
https://www.crda.org/news/local_news/one-region-launches-one-region-ready-safety-pledge-program/
Guidelines have been established for how businesses can safely re-open in a wide variety of industries — food and beverage, small businesses, gyms, cosmetology, public swimming pools, athletics, child care, day camps, churches, golf, hospitality, and manufacturing.
The guidelines further suggest how best to safeguard those most vulnerable including individuals over age 65, those residing at senior living facilities, and individuals with underlying medical conditions.
And, perhaps the most innovative measure, businesses are asked to adopt a “One Region Ready” safety pledge. Basically, businesses certify that they are adhering to the One Region Ready guidelines and following best practices to keep their customers and staff safe and healthy. The tenets of the pledge include the use of masks, reduced occupancy, hand washing and sanitation accessibility, contactless solutions for payments and entry, sanitation of high traffic areas, employee safely protocols and adherence to state, federal and One Region Ready guidelines.
By so doing those businesses can then display a sticker on their window for all employees and customers to see. Firms adhering to the pledge will see an increase in confidence. Businesses that choose not to adopt the pledge will have fewer customers and reduced sales. But for it to succeed local government officials must strongly encourage people to do business only with those firms that have adopted the pledge. If they do not have the sticker prominently displayed, go elsewhere. It uses the proverbial carrot rather than a stick to accomplish the goal of safely re-opening the economy.
There is no reason to think this will not work. Countries throughout Asia as well as Europe have brought the virus under control, are re-opening their economies, and dealing with isolated outbreaks on a case-by-case virus. It can happen in the United States as well – as long as we are all willing to play by the rules. We still have a ways to go.
Smart government policy can help but, most important, smart practices by our citizens are required to bring this virus under control.
Stephen Slifer
NumberNomics
Charleston, S.C.
Stephen, I sure hope set of local programs to combat the Corononavirus will work, but I have my doubts as the US has a very mobile population. I know we would not like a federal mandate for the entire country and I hope we will not need one; however, if things get significantly worse, it may be the only way to control the virus. Covid-19 has its own rules which do not bow to our individual reactions. We are in this together.
Thank for your thinking on this extremely serious issue for our country.
Darrel Staat
Hi Darrel,
I am always uncomfortable writing articles about the virus. I have absolutely no expertise. But the only thing that convinces me we will NOT have a nationwide quarantine is the election. If we impose one tomorrow, we have seen that the consequences in July and August will be dire. The bad news will still be coming out at about the time of the election. I don’t think Trump could allow that to happen.
All the best.
Steve
Hi Steve,
I’ve been traveling in New Zealand now for a week having gotten out of the two week government managed quarantine I was placed into on arrival.
A few things have struck me. It’s obviously very relaxing to be able to go about and not have to worry about COVID. Beyond that, are the reasonable precautions I still see in place. Lots of hand sanitizing stations, a population that is focused on continuing to “do the right thing” to keep the virus at bay. No large scale mask wearing, but they still have free COVID testing everywhere and if people come down with almost anything, they go off to get tested for free and isolate themselves for a day or two until they receive the results. As a result they have a single handful of known cases in New Zealand and have exhaustively contact traced each one, and all of their contacts are isolating for 14 days.
It’s reasonable, adult and working. New Zealand at the front of the pack, but almost every other country has done much better than the U.S.
The U.S. is a big diverse country. However, at this point if you’re in public, regardless of where you are, you should wear a mask in public. It’s the adult thing to do given the facts. Individually, it may not help you or your family, as a group it would save us all and get things back on track.
Here’s the problem. Almost every country in the world would say “of course, that’s sensible”, the U.S. will claim exceptionalism and argue and quibble about “facts”. As a result, the pandemic will continue in the U.S. waxing and waning until at least mid spring 2021 assuming a working vaccine is developed and delivered in quantity by January.
In the meantime, the world will go on without America and Americans.
America First has become the playground bully sitting on the bench at recess unable to play with the other kids until he learns to behave.
The American economy will of course improve, but it’s not going to be what it could have been. That would require facts, planning, working together. No amount of tax cuts or judgeships is worth this amount of damage to the country. We have put ourselves in a deep pit that will drag on economic growth for a generation.
Stay healthy,
Chris
Hi Chris,
Well said! I love your analogy about the playground bully sitting on the bench. Also like the quote that the American economy will improve, but it not going to be what it could have been. Perfect way of saying it!
Re: your one comment about the world going on without America and Americans. The only problem I have with that is that the rest of the world does not look that great either. Europe does not seem to be any more together than the U.S. Perhaps Asia is in the “most likely to succeed category.”
Enjoy New Zealand.
Hi Steve,
NZ is being great. I have convinced my two college age kids to remain behind and attend their classes remotely from NZ so that’s a relief. Obliviously a bit over the top, but I’ve found it’s hard to be too paranoid about 2020 so who knows?
I think you’re on target about Asia recovering first. The EU is pulling itself together but it’s so porous It’s going to have issues. Of course all countries, everywhere are going to have issues with restarting business to greater and lesser extents.
Long term for the U.S. I am very concerned that the new businesses opportunities being now created between countries are leaving the U.S. out. These “temporary” arrangements may well become the basis for a “new normal” and without the trade treaties that Trump has been pulling us out of, it’s going to hinder U.S. and the world economy overall. Unlike in the past however, the U.S. isn’t trusted as we were previously. I now get wide eyed looks, and pity from Kiwis when they hear I’m an American. That is *really* going to hurt U.S. international competitiveness. I’ve used my citizenship in the past to build trust and seal deals. Currently I’ve noticed, it’s being a detriment when I try build trust and talk about what I bring to the table. I have enough practice and depth so i can work around it, but it will slow and block deals, maybe even some of mine. I hope this situation is very, very, temporary.
Best,
Chris