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:
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.