Living with Risk Daily Briefing – April 9

Published on April 9, 2020 / Leer en español

Center for a New Economy

Edited by
Sergio M. Marxuach


Five things you should know today

1) CNE letter to congressional leadership

Analysis by Rosanna Torres, Director of CNE’s office in Washington, D.C.

As the U.S. confronted its deadliest day due to the COVID-19 pandemic, Capitol Hill was working on the programs and the amount of additional relief funding that should be included in a future economic package – the fourth to date (see point 3 below for details). As a U.S. territory, Puerto Rico lacks the power and influence of a congressional delegation to advocate for its needs.

In light of this, yesterday the Center for a New Economy sent a letter to House Speaker Nancy Pelosi, House Republican Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell, and Senate Democratic Leader Chuck Schumer. The letter urges Congressional leaders to address the structural deficiencies that impede Puerto Rico from overcoming its socioeconomic challenges, particularly during these difficult times.

For decades, Puerto Rico has been deprived of access to federal programs specifically designed to provide a safety net, break persistent poverty cycles and jumpstart the economy. There is no doubt that years of federal neglect have put Puerto Rico at a disadvantage to confront this new crisis. At a minimum, Congress must provide Puerto Rico equitable access to key social programs meant to help those hardest hit by this epidemic: the poor, the sick and the elderly. In sum, traditional funding limitations perpetuate long-standing inequities and deny Puerto Rico the federal help it needs.

Read our letter and share with your networks by retweeting CNE.

More information: COVID-19 may strain Puerto Rico’s Medicaid, nutrition programs – National Journal

2) The continuing relevance of think tanks

Analysis by Malu Blázquez Arsuaga, Executive Director of ReImagina Puerto Rico, a CNE initiative that works to achieve a coordinated post-disaster reconstruction process.

CNE recently participated in a Global Think Tank Town Hall virtual meeting entitled “Saving Lives and Livelihoods” that convened over 185 think tanks from over 60 countries. The purpose of the meeting was to bring together think tanks around the globe to share concrete strategies and proposals on how to respond to the COVID-19 pandemic and deal with the challenges we face. It became evident that think tanks are more relevant than ever and should focus on developing public policy recommendations for improving health services, the economy, security, and social services, as well as finding solutions that produce more resilient and sustainable regional and global communities.

The pandemic has shown the precariousness of health systems, and the situation has become even more difficult given the competition over critical medical supplies. Other issues and problems highlighted include:

  • The pandemic has exacerbated already existing problems, exposing widespread structural and systemic inequalities within and between countries.
  • The need for greater data and transparency in governance and the need to keep free and fair trade markets.
  • Widespread insecurity due to unemployment and uncertainty about the duration of shelter in place requirements.
  • There is a great deal of informal workers throughout the world, including farm workers, that cannot afford to stay at home.
  • Large amounts of people will not be able to pay the rent on their homes, which may create a homelessness problem like we have never seen before.
  • The pandemic has increased domestic and gender violence and highlighted other security issues in various nations (including the need for greater cybersecurity).
  • There is a great deal of misinformation and fake news, some of it disseminated with malicious intention.

Many participants agreed that think tanks need to connect, communicate and cooperate. Several think tank leaders expressed the need to create a Global Coronavirus Recovery Commission of Think Tanks to accelerate multilateral research, as well as share proposals and recommendations. During this crisis, think tanks need to adapt what they do, how they do it, and what they focus on to properly reach policymakers and civil society.  Also, they must seek to continue with their mission and responsibility to provide the general public with reliable information and analysis.

3) Congress may take up interim relief bill as soon as today

The Trump administration will be asking Congress to increase the funding available for the Paycheck Protection Program by $250 billion. The Democrats for their part want to include:

  • an additional $100 billion to provide assistance to hospitals;
  • another $150 billion to support state and local governments; and
  • an increase of 15% to the maximum benefit available under the Supplemental Nutrition Assistance Program (SNAP).

If Mitch McConnell, the Senate Majority leader, agrees to these terms, the Small Business Plus package, as the Democrats are calling it, may be approved before the end of this week. In addition, the Democrats are already talking about taking up a fourth coronavirus relief bill “to provide transformational relief as the American people weather this assault on their lives and livelihoods,” after April 20.

4) The United States has no plan for the end of the pandemic

Recently Singapore and South Korea, two nations that received high marks for their handling of the coronavirus pandemic, have announced the reinstatement of at least some restrictions to prevent a second or third wave (in the case of Singapore) of the disease from spreading. All of which leads to the question: What is the U.S. plan, or “exit strategy”, for ending shelter in place restrictions and social distancing mandates? Unfortunately, we have not heard much from the Trump administration in this respect, beyond a tweet stating that “there is light at the end of the tunnel,” which in addition to being a trite cliché, is a terrible metaphor, given its grim association with the Vietnam War. The unnerving feeling that there is really no plan is confirmed by David Wallace Wells in this piece for New York Magazine. While John Cassidy confirms in the New Yorker that “Trump’s light at the end of the tunnel is a delusion,” just like it was during the days of Robert McNamara and General Westmoreland.

5) Time to rethink the standard business model?

Since the late 1970s the prevailing business model for large companies has been based on keeping little cash on hand (shareholders presumably know how to use it better); issuing high amounts of debt (as interest payments lower taxable income); working with just-in-time inventory systems (to lower operating costs); and implementing global supply chains (to minimize production costs). However, as Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, writes in the Financial Times, the coronavirus pandemic may force CEOs to rethink the way many multinational companies operate, as the current crisis has exposed hitherto undetected risks and firms will “think harder about diversifying their supplier base to hedge against disruptions to a particular producer, geographic region or changes in trade policy.”

Quote of the Day

“Lead, Kindly Light, amid the encircling gloom,
Lead Thou me on!
The night is dark, and I am far from home —
Lead Thou me on!
Keep Thou my feet; I do not ask to see
The distant scene, — one step enough for me.”

—Cardinal John Henry Newman

Note from the editor

It was T.S. Eliot who wrote “April is the cruelest month, breeding/Lilacs out of the dead land, mixing/Memory and desire, stirring/Dull roots with spring rain.” I cannot dare to affirm this April has been the cruelest ever, but it certainly has been the most poignant in recent years, as we fear for our loved ones, mourn our dead, worry about friends in faraway places, yearn for a warm embrace, feel that strange mix of memory and desire take root in the desolate soil of our soul. Difficult, complex times.

In times like these, we do well to heed the numinous words of another great writer, William Faulkner, who in his Nobel Prize acceptance speech stated that: “I believe that man will not merely endure: he will prevail. He is immortal, not because he alone among creatures has an inexhaustible voice, but because he has a soul, a spirit capable of compassion and sacrifice and endurance. The poet’s, the writer’s, duty is to write about these things. It is his privilege to help man endure by lifting his heart, by reminding him of the courage and honor and hope and pride and compassion and pity and sacrifice which have been the glory of his past.” But Faulkner got one thing wrong. It is not only the writers, but really all of us who are called upon to take on these duties. Especially in times like these.

This is the end of today’s briefing.
Stay safe and well informed!