he ongoing global pandemic is an experience that dominates almost every aspect of American daily life. And, for the ordinary citizen it is an emotional duel between fear and hope.
The consequences of Covid-19 are not only disruptive—stay-at-home quarantines, everything remote and six-feet from this and that—but also a source of great distress. And our fears may be more significant than our inconvenience. Because of the tsunami of public conversation—much of which is speculation, hyperventilation, misinformation, and repetition—our minds are centrifuges of unspoken anxiety. Who and what are we to believe? Can I get into a hospital if I’m really sick; what about granny with diabetes; will there be food at the store; why can’t we get paper towels; what if they close McDonald’s; can my kid really graduate if school is closed; what about my job and the overtime that I count on; and is this really the “end of days” and they’re just not telling us the truth?
These are real fears—some spoken, most buried—which are compounded by the fact that the people we look to for answers are not in one location, or speaking with one voice. For many good reasons our Constitution gives great authority to the individual states, so decisions about the road ahead—whatever it might be—could come from many directions. The federal government is a powerful facilitator, but it’s the states and municipalities that have direct authority over how we’re to act on a day-to-day basis. It’s a team effort, which should be comforting but is also anxiety creating because we know there are hundreds of different teams and medical experts doing and saying slightly different things—and who knows who’s right. And mounting fear inevitably leads to only one question: When will this be over?
Psychologists say that fear is best confronted by confident leadership armed with consistent facts, with the result that people begin to imagine a light at the end of the tunnel, and contrary to the cliché, it’s not a train . . . it’s hope. People start to believe that “things will get back to normal,” and understandably (but mistakenly) define “normal” as the way it was. They can gather with their friends, buy any amount of hand sanitizer, go out to dinner, and return to their job in America’s most robust economic moment in half a century. It’s as if Covid-19 was simply a bad breeze that came and went and didn’t disturb a thing. That’s what hope is all about. This is perfectly natural thinking, which helps people survive a frightening moment, but in this case masks the second real dilemma for the country’s leadership at all levels.
The first dilemma, of course, is that which we are living through right now: finding the most effective way to combat this highly contagious virus. But, it’s the second dilemma that holds even greater risk than the disease itself and may prove most vexing: deciding when it’s over. Arriving at this decision is arguably the most critical stage in this saga because it will determine the real condition of the economy when we return to “normal.” This question is already raising a false choice between “saving lives” and “saving businesses” because it presupposes that Covid-19 is a more serious threat to our society than the potential long-term damage of locking-down the entire economy.
“How will we know when it’s over?” and be ready to stimulate and facilitate our economic recovery when it is.
“How will we know when it’s over?” and be ready to stimulate and facilitate our economic recovery when it is.
Economies, no matter how robust, are not like electric lights, which can simply be turned off and on. Economic systems—that matrix of arrangements, which creates jobs and paychecks, provides goods and services, and sustains itself through investment and innovation—are as fragile as human beings themselves and will fail or be severally damaged if injured or otherwise disrupted for extended periods of time. As economists are already pointing out, there is a direct correlation between the length of time the economy is switched off and the extent of systemic damage (failed businesses, broken supply chains, dislocated workers) that will be incurred and, therefore, the time it will take to return to “normal.” In short, the longer the lock-down the longer it will take to rebuild a damaged economy, and the wished-for “V-shaped” recovery will turn into a “U,” or worse still, an “L.”
The difference between the impact of the current virus and the potential legacy effect upon the economy and the American public is enormous. NIH Infectious Disease Director Dr. Anthony Fauci estimates that Covid-19 fatalities could reach 200,000, but it’s also reported that the vast majority of those who get infected will recover in a reasonably short period of time. However, economists from the global financial services company Allianz recently observed that each month of a lockdown could cause a fall of 7 to 10 percent in real gross domestic product (GDP), and thus an extended economic shutdown will cause that many more businesses to fail, job losses to occur, and a recovery period measured in years not months. In other words, the lives of millions of Americans of all ages will be severely harmed—some irreparably—if the economy is not raised from its “self-induced coma” sooner rather than later. Not surprisingly, economists argue every side of the “length of lockdown” question, but an extensive examination by economics professor Emanuel Ornelas suggests that “the optimal level of lockdown is dynamic, changing over time, and eventually becoming more lenient,” but that “the marginal health benefit of a lockdown decreases with its duration.”
We should also be careful to not misunderstand the purpose of the various forms of federal economic assistance as we consider the eventual recovery. It is essential to confront the immediate economic impact of the pandemic in the United States, and the President and Congress are to be applauded for these initiatives. However, these packages are palliative in nature and are intended to “tide everyone over” until we reach the end of the tunnel. These financial injections are in no way a substitute for real economic activity; they are a blunt instrument, which the U.S. is fortunate to be able to wield.
So, the double dilemma for policy makers and government executives at all levels is complex: how to defeat the epidemic in a fashion that eliminates fear and instills hope, and do so in as short a period of time as possible so as to limit economic damage and allow the business community to re-start its engines and create a “new normal” going forward. None of this is easy and some solutions are not yet known, but the ultimate resolution of this double dilemma must be considered simultaneously. While we’re attacking the pandemic on a multiple of fronts—spread control, quarantines, expedited research, regulatory relaxation, and temporary financial assistance—we must also be deciding “how we will know when it’s over.” This will prove to be the hardest question to answer because there may be more than one answer and first-movers risk being accused of “heartless decision making” by those who do not appreciate that saving segments of the economy—be it a state, a region, or a sector—will provide the greatest near-term and long-term benefits to the greatest number of people.
The President has suggested that in parallel with the White House medical task force the federal government should immediately establish an “Economic Recovery Task Force” of talented men and women from business, finance, academia, and government to consider (and ultimately recommend to the President, governors, and others) when, where, and how the economy could be most quickly and effectively put back into operation. It will likely be on a rolling basis, when some combination of antibody testing and infectious spread data support a determination that a state or a region is “well enough” to go back to work. But the “well enough” decision will likely be the hardest and should be immediately followed by the implementation of a range of sophisticated solutions, probably region-specific and designed to jump-start those sectors with extended supply chains so that the broadest economic momentum can be initiated and achieved.
Some will argue that now is not the time to think about the economy as we have not yet won the battle against Covid-19. But, now is the perfect time for one simple reason: readiness. It may be difficult to anticipate a pandemic, but is certainly feasible to prepare for an economic recovery. We must not only be positioned to swiftly move smart solutions into place once the disease is on the decline, but also understand the economic consequences of the medical decisions we are taking right now. We cannot inadvertently adopt the flawed Vietnam War logic that “We must destroy the village to save it.” This is not a struggle between medicine and money. Fighting the virus and saving the economy—although very different in nature—are inseparable activities . . . because they are both about saving lives. In fact, there is a body of pre-pandemic research which shows that employment—the existence of jobs—correlates to the health outcomes of entire communities.
We cannot beat the virus but lose the economy any more than we can save the economy but lose too many lives. Now is the time to move from blunt instruments to surgical techniques, and the challenge facing America today cries out for the public-private partnership to which the President often refers. When put to a task the U.S. business community is unrivaled for its innovation, agility, market creativity, and speed—and the amazing research work of the pharmaceutical industry is front and center today. It’s time to bring the private sector into the game to team with our most talented federal and state officials so together they can help answer the question “How will we know when it’s over?” and be ready to stimulate and facilitate our economic recovery when it is.
a global affairs media network
How Will We Know When It’s Over?
April 8, 2020
T
he ongoing global pandemic is an experience that dominates almost every aspect of American daily life. And, for the ordinary citizen it is an emotional duel between fear and hope.
The consequences of Covid-19 are not only disruptive—stay-at-home quarantines, everything remote and six-feet from this and that—but also a source of great distress. And our fears may be more significant than our inconvenience. Because of the tsunami of public conversation—much of which is speculation, hyperventilation, misinformation, and repetition—our minds are centrifuges of unspoken anxiety. Who and what are we to believe? Can I get into a hospital if I’m really sick; what about granny with diabetes; will there be food at the store; why can’t we get paper towels; what if they close McDonald’s; can my kid really graduate if school is closed; what about my job and the overtime that I count on; and is this really the “end of days” and they’re just not telling us the truth?
These are real fears—some spoken, most buried—which are compounded by the fact that the people we look to for answers are not in one location, or speaking with one voice. For many good reasons our Constitution gives great authority to the individual states, so decisions about the road ahead—whatever it might be—could come from many directions. The federal government is a powerful facilitator, but it’s the states and municipalities that have direct authority over how we’re to act on a day-to-day basis. It’s a team effort, which should be comforting but is also anxiety creating because we know there are hundreds of different teams and medical experts doing and saying slightly different things—and who knows who’s right. And mounting fear inevitably leads to only one question: When will this be over?
Psychologists say that fear is best confronted by confident leadership armed with consistent facts, with the result that people begin to imagine a light at the end of the tunnel, and contrary to the cliché, it’s not a train . . . it’s hope. People start to believe that “things will get back to normal,” and understandably (but mistakenly) define “normal” as the way it was. They can gather with their friends, buy any amount of hand sanitizer, go out to dinner, and return to their job in America’s most robust economic moment in half a century. It’s as if Covid-19 was simply a bad breeze that came and went and didn’t disturb a thing. That’s what hope is all about. This is perfectly natural thinking, which helps people survive a frightening moment, but in this case masks the second real dilemma for the country’s leadership at all levels.
The first dilemma, of course, is that which we are living through right now: finding the most effective way to combat this highly contagious virus. But, it’s the second dilemma that holds even greater risk than the disease itself and may prove most vexing: deciding when it’s over. Arriving at this decision is arguably the most critical stage in this saga because it will determine the real condition of the economy when we return to “normal.” This question is already raising a false choice between “saving lives” and “saving businesses” because it presupposes that Covid-19 is a more serious threat to our society than the potential long-term damage of locking-down the entire economy.
“How will we know when it’s over?” and be ready to stimulate and facilitate our economic recovery when it is.
“How will we know when it’s over?” and be ready to stimulate and facilitate our economic recovery when it is.
Economies, no matter how robust, are not like electric lights, which can simply be turned off and on. Economic systems—that matrix of arrangements, which creates jobs and paychecks, provides goods and services, and sustains itself through investment and innovation—are as fragile as human beings themselves and will fail or be severally damaged if injured or otherwise disrupted for extended periods of time. As economists are already pointing out, there is a direct correlation between the length of time the economy is switched off and the extent of systemic damage (failed businesses, broken supply chains, dislocated workers) that will be incurred and, therefore, the time it will take to return to “normal.” In short, the longer the lock-down the longer it will take to rebuild a damaged economy, and the wished-for “V-shaped” recovery will turn into a “U,” or worse still, an “L.”
The difference between the impact of the current virus and the potential legacy effect upon the economy and the American public is enormous. NIH Infectious Disease Director Dr. Anthony Fauci estimates that Covid-19 fatalities could reach 200,000, but it’s also reported that the vast majority of those who get infected will recover in a reasonably short period of time. However, economists from the global financial services company Allianz recently observed that each month of a lockdown could cause a fall of 7 to 10 percent in real gross domestic product (GDP), and thus an extended economic shutdown will cause that many more businesses to fail, job losses to occur, and a recovery period measured in years not months. In other words, the lives of millions of Americans of all ages will be severely harmed—some irreparably—if the economy is not raised from its “self-induced coma” sooner rather than later. Not surprisingly, economists argue every side of the “length of lockdown” question, but an extensive examination by economics professor Emanuel Ornelas suggests that “the optimal level of lockdown is dynamic, changing over time, and eventually becoming more lenient,” but that “the marginal health benefit of a lockdown decreases with its duration.”
We should also be careful to not misunderstand the purpose of the various forms of federal economic assistance as we consider the eventual recovery. It is essential to confront the immediate economic impact of the pandemic in the United States, and the President and Congress are to be applauded for these initiatives. However, these packages are palliative in nature and are intended to “tide everyone over” until we reach the end of the tunnel. These financial injections are in no way a substitute for real economic activity; they are a blunt instrument, which the U.S. is fortunate to be able to wield.
So, the double dilemma for policy makers and government executives at all levels is complex: how to defeat the epidemic in a fashion that eliminates fear and instills hope, and do so in as short a period of time as possible so as to limit economic damage and allow the business community to re-start its engines and create a “new normal” going forward. None of this is easy and some solutions are not yet known, but the ultimate resolution of this double dilemma must be considered simultaneously. While we’re attacking the pandemic on a multiple of fronts—spread control, quarantines, expedited research, regulatory relaxation, and temporary financial assistance—we must also be deciding “how we will know when it’s over.” This will prove to be the hardest question to answer because there may be more than one answer and first-movers risk being accused of “heartless decision making” by those who do not appreciate that saving segments of the economy—be it a state, a region, or a sector—will provide the greatest near-term and long-term benefits to the greatest number of people.
The President has suggested that in parallel with the White House medical task force the federal government should immediately establish an “Economic Recovery Task Force” of talented men and women from business, finance, academia, and government to consider (and ultimately recommend to the President, governors, and others) when, where, and how the economy could be most quickly and effectively put back into operation. It will likely be on a rolling basis, when some combination of antibody testing and infectious spread data support a determination that a state or a region is “well enough” to go back to work. But the “well enough” decision will likely be the hardest and should be immediately followed by the implementation of a range of sophisticated solutions, probably region-specific and designed to jump-start those sectors with extended supply chains so that the broadest economic momentum can be initiated and achieved.
Some will argue that now is not the time to think about the economy as we have not yet won the battle against Covid-19. But, now is the perfect time for one simple reason: readiness. It may be difficult to anticipate a pandemic, but is certainly feasible to prepare for an economic recovery. We must not only be positioned to swiftly move smart solutions into place once the disease is on the decline, but also understand the economic consequences of the medical decisions we are taking right now. We cannot inadvertently adopt the flawed Vietnam War logic that “We must destroy the village to save it.” This is not a struggle between medicine and money. Fighting the virus and saving the economy—although very different in nature—are inseparable activities . . . because they are both about saving lives. In fact, there is a body of pre-pandemic research which shows that employment—the existence of jobs—correlates to the health outcomes of entire communities.
We cannot beat the virus but lose the economy any more than we can save the economy but lose too many lives. Now is the time to move from blunt instruments to surgical techniques, and the challenge facing America today cries out for the public-private partnership to which the President often refers. When put to a task the U.S. business community is unrivaled for its innovation, agility, market creativity, and speed—and the amazing research work of the pharmaceutical industry is front and center today. It’s time to bring the private sector into the game to team with our most talented federal and state officials so together they can help answer the question “How will we know when it’s over?” and be ready to stimulate and facilitate our economic recovery when it is.
