Living with Risk Daily Briefing – April 21

Published on April 21, 2020 / Leer en español

Center for a New Economy

Edited by
Sergio M. Marxuach


Five things you should know today

1) A look at the year ahead

Donald G. McNeil, Jr., a science and health reporter for the New York Times, has written a very informative summary of what we can expect about life with the coronavirus in the year ahead. McNeil interviewed more than twenty experts in different fields and this is what he found:

  1. more Americans will die than currently admitted by the Trump administration;
  2. the lockdowns will be lifted, though slowly, and they will be back;
  3. immunity will become a societal advantage, worsening social divides;
  4. the virus can be kept in check, but only with expanded resources;
  5. it will take time to get a vaccine;
  6. antiviral treatments are likely to appear first; and
  7. international cooperation will be absolutely necessary to recover from this pandemic.

In sum, according to McNeil: “exactly how the pandemic will end depends in part on medical advances still to come. It will also depend on how individual Americans behave in the interim. If we scrupulously protect ourselves and our loved ones, more of us will live. If we underestimate the virus, it will find us.

2) Interim relief bill: Close but no cigar (yet)

At the close of his edition, the news from Washington, D.C., was the Democrats and Republicans were “close” to reaching an agreement but some details still needed to be ironed out. According to The Hill, the new interim relief package being negotiated included an additional $300 billion for the Paycheck Protection Program; $75 billion for hospitals; $50 billion for the Economic Injury Disaster Loan program; and $25 billion to support nationwide testing for the coronavirus. Senate Majority Leader, Mitch McConnell, has amended the Senate’s schedule to set up a session as soon as today, in case negotiators reach a deal. We will keep you informed as events develop on the Hill.

3) Gaming the system: Hotels and restaurant chains run PPP fund dry

One of the most persistent arguments against providing social assistance to low-income families and individuals is that they “game the system.” A diplomatic way of saying they twist or bend the rules designed to prevent programmatic fraud and abuse (which is false in more than 95% of the cases). It is interesting then that we don’t hear the same argument when those who “game the system” are well-connected businesses. As has been widely reported, Shake Shack, a “$1.6 billion burger and fries chain based in New York City” just returned $10 million it had borrowed from the Paycheck Protection Program. As reported in the Washington Post, the founder and the CEO had enough residual decency to admit “they had no idea that the program would run out of money so quickly and that they understood the uproar” in a letter announcing they were returning the money. Others, such as the Ruth Chris chain and various regional hotels, however, have had no such scruples. The question is: where are the self-appointed keepers of fiscal virtue now that we know at least 70 publicly traded companies and an undetermined number of firms owned by private equity funds, received loans intended for main-street small businesses?

4) Partisan politics rears its ugly head

As we have stated in this space before, the mainland United States also has its own problems with getting the “blues” and the “reds” to agree on almost anything. Partisan politics seems to have reared its ugly head at the most inconvenient time as protesters in several states demand to be “set free” from lockdowns and shelter in place restrictions. Not to be left behind, President Trump has encouraged this fringe band of brothers by sending messages over Twitter asking for the “liberation” of several states and for citizens to “protect their second amendment rights.”

Some calmer, and wiser, minds, however, are asking people to be cautious. Dr. Anthony Fauci has been particularly clear on this issue: “If you jump the gun and go into a situation where you have a big spike, you’re gonna set yourself back,” he continued. “So as painful as it is to go by the careful guidelines of gradually phasing into a reopening, it’s going to backfire. That’s the problem.”

5) A “smart quarantine” to stop the virus

A recent op-ed written by Harvey V. Fineberg, Jim Yong Kim and Jordan Shlain and published in the New York Times, sets forth a smart strategy to confront the COVID-19 pandemic. According to the authors, “four key measures, on top of treating the ill and maintaining physical distancing, must be in place not just to slow the rise of Covid-19 cases, but also to bend the curve downward. These are: test widely, isolate the infected, trace the contacts of those infected and quarantine appropriately.”

The “smart quarantine” they propose requires that those infected but who are asymptomatic or only report mild symptoms be isolated in special facilities (not hospitals) built for these purposes. Those who have been in contact with them should be quarantined for at least 14 days. After that period, if they test negative at least two times, they would not be subject to any restrictions. Under this tiered system only those who need critical care would be sent to hospitals. The authors admit this system will not be easy to manage, but it is better than the current patchwork of lockdowns and shelter in place restrictions.

Quote of the Day

The safest road to Hell is the gradual one — the gentle slope, soft underfoot, without sudden turnings, without milestones, without signposts.

—C. S. Lewis

Note from the editor

State capacity. Those are the words that are missing from the current debate about lifting lockdown orders and shelter-in-place restrictions. To our knowledge, no one is arguing in favor of leaving those restrictions in place indefinitely; nor is anyone in favor of lifting them without any kind of transition period, well, except perhaps for a few lost souls on the fringes of the Trump movement. Even the guidelines issued by the White House Coronavirus Task Force require three levels of social distancing and recommend members of vulnerable populations stay at home for a while.

For the sake of argument, let’s take those guidelines as a set of minimum requirements for reopening the economy in Puerto Rico. The guidelines require both compliance with three threshold “gating criteria” and certain core preparedness requirements. The gating criteria are:

  • Symptoms: Show a downward trajectory of influenza-like illnesses (ILI) reported within a 14-day period AND a downward trajectory of covid-like syndromic cases reported within a 14-day period;
  • Cases: Show a downward trajectory of documented cases within a 14-day period OR a downward trajectory of positive tests as a percent of total tests within a 14-day period (flat or increasing volume of tests); and
  • Hospitals: Hospitals must have the capacity to treat all patients without resorting to crisis care protocols AND have in place a robust testing program for at-risk healthcare workers, including emerging antibody testing.

In addition, states and territories should also meet certain core preparedness requirements regarding:

  • testing and contact tracing;
  • hospital capacity; and
  • plans to protect certain critical workers and personnel.

The question is: does Puerto Rico satisfy these requirements today? The answer is no. The Department of Health does not even know how many people have tested positive for the virus (due to double-counting and other mistakes). Can Puerto Rico build the capacity to satisfy these criteria? The answer is yes. But it will take time, money, and human resources to do it. We should start working on it now.

Otherwise we could face a scenario where we lift the restrictions prematurely. To be clear, “prematurely” in this context means opening the economy before Puerto Rico has the capacity to:

  1. carry out extensive testing;
  2. isolate the infected;
  3. execute extensive contact tracing;
  4. quarantine those who have been exposed to the virus; and
  5. provide treatment at hospitals without resorting to emergency protocols.

Under this scenario everything will be quiet for two or three weeks. Then people will start missing work because they don’t feel well. Hospital emergency rooms quickly become crowded, as infections grow exponentially. People then stop going to work. Rumors start to fly about who has been infected. People take to their homes out of their own volition. And the economy tanks yet again. That’s what Dr. Fauci means when he says: you’re gonna set yourself back.”

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