Two weeks ago, President Donald Trump tweeted, “Once we OPEN UP OUR GREAT COUNTRY…our Economy will BOOM, perhaps like never before!!!”
Unfortunately for all of us, this prediction is unlikely to come true.
Since the President made those remarks, 28,000 additional Americans have died of Covid-19, and that total is rising by an average of 2,000 per day. Current White House modeling puts the low estimate of pandemic deaths in the United States at 100,000 and the high estimate at 240,000 souls.
I read an interview with a noted epidemiologist this morning in which he projected a death toll of 800,000 Americans if a second wave of the virus occurs in the Fall. That’s pretty scary.
Our President blames this misfortune on everyone but himself, and believes that it is overblown, in any case.
Epidemiologists feel that Covid-19 will continue to plague America until a viable vaccine or therapeutic drugs are developed. Those medical breakthroughs are not expected for many months, probably not until 2021. Thus, “stay at home” and “social distancing” measures are expected to continue for the foreseeable future.
One can only imagine the carnage had these restrictions, both official and voluntary, not been followed during the past thirty days. Joe Citizen and his family deserve medals for their patriotism. Great job!!!
The Covid-19 coronavirus is extremely contagious, and each infected person, who may be asymptomatic, transmits the virus to an average of 2.5 people. Without social quarantining, that means that one person’s infection can transmit to 640 infected people within ten days.
That explains the catastrophe in crowded New York City: by the time the City realized it was in jeopardy, the public health problem was nearly insurmountable. Almost 11,000 people have died there in the past forty days from Covid-19.
(That is three times the number of lives lost in the 9/11 attack. Americans were outraged at that loss of life.)
Sobering statistic: Today or tomorrow the Covid-19 death toll in our country since February will surpass the number of American soldiers lost in the Vietnam War over a 7-year period.
Thus, it seems inconceivable, given the degree of contagiousness of this virus, that any public official would recommend lifting societal restrictions until the coronavirus is either extinguished by vaccine or can be treated effectively by a drug.
Yet, the President of the United States is actively encouraging states to disregard his own Administration’s Covid-19 recommendations.
Not surprisingly, the Governors of a number of “Red” states, many in the Trump-friendly South, are making plans to lift the public health protection measures before the end of April. Their constituents have cabin fever, infection totals have been lower in their rural states, and they want the economy to re-start ASAP. They’re hoping for that “Boom” that Uncle Donald has been promising.
Besides, as Texas Lt. Governor Dan Patrick said this week, “There are more important things than living”.
This supposed patriot may think that, but innocent folks who become infected by “liberated” Texans and other Southerners might not agree. I wonder what Lt. Governor Patrick’s position would be if his wife contracted the virus: “I love you Honey, but keeping the economy going is my top priority. I’ll donate your clothes to Goodwill.”
The economy that Lt. Governor Patrick, President Trump, and the Red state “liberators” intend to re-ignite this Spring is going to look a lot different than the muscular one they remember from February. The “ON” switch that they think they’ll be throwing to resume speed will be much more like… a dimmer toggle.
Many businesses that were on “life support” before the pandemic will not survive. That includes big businesses and small. Lots of stores in malls were already suffering from Amazon-it is, and now, when the malls re-open, there will likely be much-reduced foot traffic. Most anchor tenants, like Sears, Neiman Marcus, Kohls, JC Penney, and Macys were barely hanging on pre-pandemic.
Some businesses which traditionally crowd patrons together, like beauty salons, bars, night clubs, restaurants, arenas, convention centers, casinos, sports arenas and stadiums, concert halls, theaters, theme parks, cruise ships and such will have to surmount public skepticism about health safety in those venues. It may take many months, if not years, for people to feel comfortable in crowds.
Many of the above businesses rely on low-paid labor to thrive. Lots of these folks are on “unemployment” now, and they are making more receiving those benefits than when they were working. It may take awhile for those critical workers to return to their former jobs. Some can’t get back into the U.S. because of border closures.
Those same businesses are “leisure” in nature; they are wants, not needs. Twenty-five million Americans area now out of work, so there is a lot less discretionary income in the economy. Something like a trillion dollars vaporized in March and April; it’s gone, off the table, not in circulation, etc. People will be eating more meals at home, taking a lunch bag to work, and drinking alcohol by themselves in front of their TV set.
Fewer consumers are going to be able to afford big ticket purchases like cars and homes. Auto dealerships, new home builders, and construction contractors are going to suffer a significant decline in revenue. The decline in these industries will ripple through the entire economy.
Agriculture got hit hard by this economic collapse. Much of the consumer demand from those leisure businesses fell off, and the pandemic public health restrictions kept crops from being harvested. This double-whammy leaves farmers in jeopardy of going bust, or, if they survive, not knowing how much planting they should do.
The airline industry has bottomed out; hardly anyone is flying right now. Orders for new planes are “on hold”. Consumers will take far fewer vacations this year. Hotels and resorts will suffer big declines in patronage.
Fuel needs for the airlines and automobile travel are dramatically reduced in America and throughout the world. Accordingly, there is an oversupply of oil, which has dropped the price like a stone. The economy of Texas, the Nation’s largest supplier of crude oil, is in tatters. With the price of crude dropping to all-time lows, energies derived from shale oil and coal are cost prohibitive, and those industries may fail.
Large manufacturing industries will be wary of re-opening or ramping up production until they are sure that workers believe that they will be safe from the coronavirus. And, then, they much guess how much consumer demand there will be, given the depth of the economic recession and the prospect that the coronavirus could re-emerge in the Fall.
The Nation’s largest banks are bracing for a deluge of loan defaults. JPMorgan Chase has set aside $6.8 billion worth of reserves to insulate itself from such defaults, and are estimating that the bank’s profits will be down 69 percent this year. Wells Fargo has similarly set aside $4 billion for potential losses, estimating that their net income will drop 90 percent this year.
All of these factors will, sorry to say, result in a slow re-start to the economy.
Plus, the major population centers of the country, which are the most susceptible to a re-emergence of Covid-19 infections, will be cautious in their approach to re-booting their economic engines.
The Governors of New York and California, in particular, will take baby steps based upon facts, not Presidential rhetoric. New York City is the financial capitol of the world, and California’s economy is the world’s fifth largest. Their cautious response to the pandemic will drive the train, not Mr. Trump, his task forces, and his press conference pep talks.
Speaking of our over-anxious Chief Executive, the miracle cure that he has been touting for the past month or so (hydroxychloroquine) has not turned out to be the “game changer” that he promised. Another study surfaced yesterday, the largest to date, which suggests that the drug, at best, has no beneficial effect on Covid-19, and, at worst, may harm infected patients. Other small studies have come to the same conclusion.
In other news, horror stories about the dispensing of Small Business Administration bailout funds are filling the airways. Ruth’s Chris Steakhouses got $10 million, Shake Shack got $10 million, and Harvard University, which has an endowment of $40 billion, got $8 million to help out struggling geniuses and trust fund kids.
Meanwhile, actual small businesses have struggled to get any money from the pot.
Class action lawsuits have been filed against the nation’s largest banks alleging that they “shuffled” SBA applications (which were supposed to be “first come, first served”) to give priority to bigger customers, hence larger loans, hence larger loan origination fees. Accordingly, the original SBA pot of $320 billion was exhausted in a couple of days.
Congress is about to re-infuse the SBA bailout pot with another $350 billion, but who knows where that funding will go. As of today, the Trump Organization is angling for some of the money to support its hotels. I wonder if they’ll get some?
And, so, we’re not out of the woods with Covid-19, medical experts’ advise is being thrown to the wind by the President and his supporters, and the largest Federal bailout of the economy is beginning to look like another Republican pork barrel project for rich Americans.
Our President spends his day watching Fox News propaganda, eating cheeseburgers, Tweeting, and practicing his afternoon press conference cheerleading routines: “Sis Boom Bah, Rah Rah Rah!”
(Which reminds me of Johnny Carson’s epic gag as Carnac the Magnificent. One night, Ed McMahon handed Carnac the sealed envelope, Carnac put it to his head, and answered, “Sis Boom Bah”. He then proceeded to open the envelope and read the question: “Describe the sound made when a sheep explodes.”)
President Trump and his followers in the Red states had better hope and pray that a second wave of Covid-19 doesn’t erupt while they are recklessly re-opening the economy.
It would be a “boom” of unimaginable consequences.
