Living with Risk Daily Briefing – May 4

Published on May 4, 2020 / Leer en español

Center for a New Economy

Edited by
Sergio M. Marxuach


Five things you should know today

1) Protection Project: Community and Organizations with a Social and Economic Impact

Analysis by Malu Blázquez, Executive Director of ReImagina Puerto Rico

Recently, a group of 40 representative entities from the nonprofit sector in Puerto Rico collaborated in the development of the Protection Project: Community and Organizations with a Social and Economic Impact. This project, endorsed by more than 140 organizations, seeks to gain access to $334 million from the CARES Act to minimize the impact of COVID-19 on the nonprofit sector while articulating an integrated response with the government to protect services to the most vulnerable populations. Within the nonprofit sector, this proposal focuses on the subsector of community organizations with a social and economic impact. After the disasters of the past few years, this subsector was one of the first to respond and still continues to assist the community.

It became evident after hurricane Maria and the more recent earthquakes that there is a lot that the third sector can contribute in the context of the COVID-19 pandemic. Furthermore, given the repercussions of the pandemic on health, the social welfare of citizens, and the economy, there will be greater demand for the services that this sector provides. An analysis carried out by Estudios Técnicos suggests that the subsector of community organizations with a social and economic impact could face a decrease in their income of between $241 million to $483 million, which will limit their ability to provide services.

The project focuses on seven community impact areas including: physical and mental health, food security, safety, housing, employment protection, and assistance for displaced people, education, and protection of the social sector.

In summary, this project aims to:

  1. Develop an integrated collaboration response with the Government of Puerto Rico aimed at addressing some of the most pressing areas of need that are emerging during this emergency.
  2. Have employment protection mechanisms in the nonprofit sector and ensure that it continues to provide services to a population that has already been highly affected by the social and economic situation facing Puerto Rico.
  3. Provide recommendations and mechanisms that allow assistance to reach the population quickly and directly.

2) Small businesses face tough decisions as states reopen

As states begin lifting shelter-in-place orders and social distancing restrictions, many small business owners face a wrenching decision: to open up their businesses and perhaps contribute to a new outbreak or remain closed and face potential bankruptcy. As reported in The Hill, “the gradual loosening of social distancing guidelines will give some struggling businesses a chance to stay afloat amid the deepest economic downturn since the Great Depression.” But, “public health officials warned that a premature break from social distancing could fuel a surge of new cases and force the country into a deeper lockdown.”

As Rebecca Fischer, an assistant professor of epidemiology at the Texas A&M School of Public Health, stated: “there’s going to need to be a lot of effort made by individual establishments to make sure they’re helping their customers and patrons be safe, and it may be tough at some times.”

Indeed, there is no guarantee that customers will return in the same numbers, even after the implementation of increased safety measures by small businesses. Keep in mind that “even the most optimistic projections from economists warn of meager economic activity until a vaccine gives workers confidence to gather in close quarters.”

Owners and workers are, in essence, being asked to choose between going back to work at this uncertain time or losing their jobs and livelihoods. It need not have to come to this, but partisan politics, a fragmented federal response, and economic hardship have combined to produce this unfortunate situation.

3) The race for a vaccine is on

According to the New York Times, “four months after a mysterious new virus began its deadly march around the globe, the search for a vaccine has taken on an intensity never before seen in medical research, with huge implications for public health, the world economy and politics.” Indeed, by some counts, there are at least 102 vaccine candidates in development worldwide. So far, “eight of those have already entered early clinical trials in people [and] at least two have protected a small number of monkeys from infection with the novel coronavirus, SARS-CoV-2, that causes COVID-19.”

These teams are working on different approaches to develop a vaccine. As shown in the graphic below, “some are based on designs used for generations. Others use genetic-based strategies that are so new they have yet to lead to an approved vaccine.”

Source/Fuente: Nature

It is probably a good thing that so many different teams are working on so many platforms to design the vaccine because, in addition to testing for safety and efficacy, it will be necessary to ramp-up production on a global basis. According to the Times, “it is one thing to design a vaccine in record time. It is an entirely different challenge to manufacture and distribute one on a scale never before attempted — billions of doses, specially packaged and transported at below-zero temperatures, to nearly every corner of the world.”

That is why having more than one vaccine option is good, since it could help avoid production bottlenecks as different manufacturers specialize in producing different versions of a vaccine.

4) FDA grants emergency authorization for the use of remdesivir

The Food and Drug Administration (FDA) has granted permission for the use of remdesivir, a drug originally designed to treat Ebola patients, on certain COVID-19 patients. The drug has shown “modest” success “in a federally funded clinical trial, slowing the progression of the disease, but without significantly reducing fatality rates.”

Some scientists, though, have shown concern about how the announcement was made. As reported in the New York Times, “the disclosure of trial results in a political setting, before peer review or publication, is very unusual, said Dr. Steven Nissen, a cardiologist at the Cleveland Clinic who has conducted dozens of clinical trials.” Furthermore, other studies, including one published in The Lancet, a prestigious medical journal, found the use of remdesivir on COVID-19 patients “was not associated with statistically significant clinical benefits.”

Nonetheless, we can expect greater use of remdesivir for the treatment of COVID-19, because, as the FDA stated in its press release, given “there are no adequate, approved, or available alternative treatments, the known and potential benefits to treat this serious or life-threatening virus currently outweigh the known and potential risks of the drug’s use.”

So, while by no means a silver bullet, remdesivir may offer a slight glimmer of hope to at least some COVID-19 positive patients.

5) State budget deficits explode

Recent press reports from Colorado, Connecticut, and Minnesota, indicate that states are already facing fiscal stress as a consequence of the COVID-19 pandemic. Shelter-in-place orders and lockdowns have put the country, in the words of Paul Krugman, in the economic equivalent of a “medically-induced coma.” The drastic slowdown in economic activity has decreased state revenues, while COVID-19-related expenditures have sky-rocketed. The problem is that most states are forced by their constitutions to balance their budgets, so in the absence of additional help from Washington, we can expect new tax increases, drastic spending cuts, and layoffs of state employees. This will only intensify the current economic depression.

Nancy Pelosi, Speaker of the U.S. House of Representatives, has floated the idea of enacting a $1 trillion relief package for state and local governments. While Senator Mitch McConnell, the Senate Majority Leader, has been relatively cool to the idea. McConnell, however, has stated that Republicans could be receptive “to considering more help for states but signaled it would need to be tied to providing additional liability protections for employers who may soon start trying to reopen their businesses.”

Thus, as with many other issues in Washington, it may come down to a tradeoff between two completely unrelated policy issues: state support in exchange for liability protection for employers from COVID-19 related claims. Yes, it is not a pretty process. But that’s the way democracies work.

Quote of the Day

Fanaticism consists in redoubling your effort when you have forgotten your aim.

—George Santayana

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