The Terrifying Next Phase of the Coronavirus Recession

In relative terms, Virginia continues to do well in fighting the Covid-19 pandemic, although numbers of cases have risen in the Hampton Roads area, likely due to people ignoring mask wearing and social distancing mandates over the 4th of July weekend.  I say relative terms, since Virginia's new cases are a small fraction of what is happening in other states, especially Florida and Texas.  Yet compared to western European countries Virginia's numbers are terrible. Why?  Several causes, the most significant being the lack of any rational, science based federal response to the pandemic. The Trump/Pence regime first punted and left the heavy lifting to individual states and now is undermining medical experts  Further exacerbating the situation,  a number of GOP lead states rushed to reopen prematurely.  Then there are those who refuse to abide by mask requirements and eschew social distancing, caring nothing about those they may be infecting and putting their self-centered  sense of "liberty" over the lives of others.  The current result?  An economy that may be facing a second shutdown, especially in sunbelt states - the governor of Georgia incredibly ban cities and localities from implementing mask mandates.  A piece in The Atlantic looks at America's failure and what may be in store economically if the failed response to the pandemic continues.  Here are highlights:

Failed businesses and lost loved ones, empty theme parks and socially distanced funerals, a struggling economy and an unmitigated public-health disaster: This is the worst-of-both-worlds equilibrium the United States finds itself in.

Since the beginning of the coronavirus pandemic, President Donald Trump has railed against shutdowns and shelter-in-place orders, tweeting in all caps that “we cannot let the cure be worse than the problem itself” and pushing for employees to get back to work and businesses to get back to business. But the country has failed to get the virus under control, through masks, contact tracing, mass testing, or any of the other strategies other countries have tried and found successful. That has kneecapped the nascent recovery, and raised the possibility that the unemployment rate, which eased in May and June after nearly reaching 15 percent in April, could spike again later this year.

The economy seized in unprecedented terms this spring as states and cities mandated lockdowns. Hundreds of thousands of businesses closed, and millions of workers were furloughed or laid off. But instead of setting up a national viral-control strategy during this time, as other rich countries did, the United States did close to nothing. . . .  The Trump administration punted responsibility for public-health management to the states, each tipping into a budgetary crisis. After a springtime peak, caseloads declined only modestly. Outbreaks seeded across the country. States reopened, and counts exploded again.

Now the economy is traveling sideways, as business failures mount and the virus continues to maim and kill. New applications for unemployment insurance, for instance, are leveling off at more than 1 million a week—more than double the highest rate reached during the Great Recession, a sign that more job losses are becoming permanent.

The next, terrifying phase of the coronavirus recession is here: a damaged economy, a virus spreading faster than it was in March. The disease itself continues to take a bloody, direct toll on workers, with more than 60,000 Americans testing positive a day and tens of thousands suffering from extended illness. The statistical value of American lives already lost to the disease is something like $675 billion. The current phase of the pandemic is also taking an enormous secondary toll. States with unmitigated outbreaks have been forced to go back into lockdown, or to pause their reopening, killing weakened businesses and roiling the labor market. Where the virus spreads, the economy stops.

That is not just due to government edicts, either. Some consumers have rushed back to bars and restaurants, and resumed shopping and traveling. Young people, who tend to get less sick from the coronavirus than the elderly, appear to be driving today’s pandemic. But millions more are making it clear that they will not risk their life or the life of others in their community to go out. Avoidance of the virus, more so than shutdown orders, seems to be affecting consumer behavior. Places without official lockdowns have seen similar financial collapses to those with them, and a study by University of Chicago economists showed that decreases in economic activity are closely tied to “fears of infection” and are “highly influenced by the number of COVID deaths reported” in a given county.  

The perception of public transit as unsafe, for example, makes it expensive and tough for commuters to get to their jobs. Schools and day-care centers are struggling to figure out how to reopen safely, meaning millions of parents are facing a fall juggling work and child care. This is a disaster. “The lingering uncertainty about whether in-person education will resume isn’t the result of malfeasance, but utter nonfeasance,” the former Department of Homeland Security official Juliette Kayyem has argued in The Atlantic.

International comparisons are enlightening. Countries that successfully countered the virus seem to have enjoyed better financial recoveries; countries that did not shut down saw major hits to their economy anyway. In Sweden, authorities declined to enact strict public-health measures as the virus took hold. It has seen significantly higher case counts and more deaths than its neighbors, such as Norway, and its economy tanked. Or consider South Korea. With aggressive contact tracing and mass testing, it kept many of its commercial and educational facilities open as it quashed the pandemic. (The country has tallied just 288 deaths from COVID-19, compared with roughly 135,000 in the United States.) The unemployment rate there is 4.2 percent. . . .

In France, one of the hardest-hit countries in Europe, families are back to going on vacation, eating in cafés, and visiting loved ones in hospitals. In the United States, outbreaks are shutting everything down yet again.

The country can still flatten the curve and lower the death toll. Simple, low-cost measures like requiring masks in public would preserve as much as 5 percent of GDP, economists have estimated, as well as preventing thousands from getting sick. The supposed trade-off between public health and the economy doesn’t exist. And right now, the country is choosing not to save either.

Texas and Other States Report Record Covid-19 Infections

Moving into mid-July it is clear that America's response to the Covid-19 pandemic on the national front has been an unmitigated disaster.  There was never a coordinated national response and states are all over the map in their handling of the pandemic. Not surprisingly, leading the nation in the current catastrophe are Florida and Texas whose Republican governors rushed to reopen economic activity at the urging of the foul occupant of the White House who cares nothing about how many will dies, only his reelection chances. Adding to the catastrophe too are those who refuse to wear masks - claiming it infringes on their personal liberty - and care nothing about infecting others. Meanwhile, Americans are not welcomed in Europe, and the USA's neighboring countries.  A piece in the New York Times looks at the latest numbers:

New coronavirus cases reached record highs in states across the country Saturday, even as weekly testing plateaued nationwide, offering more stark evidence that the United States was failing to control new waves of infection and death.

Nine states in nearly every major region of the country reported record new single-day caseloads on Saturday: South Carolina, Texas, Alaska, Arkansas, North Carolina, Idaho, Wisconsin, Oregon and Hawaii. Six of those states, along with 10 others, registered new seven-day average case highs, . . .

Saturday also marked the first time since the beginning of the pandemic that multiple states reported more than 10,000 cases in a day, with Texas tallying a record 10,351 and Florida reporting 10,360.

In total, there were 62,715 new infections on Saturday, an increase of 11,564 from the same day last week. The single-day death toll was 724, compared with 289 a week ago.

Seven-day averages for new coronavirus-related deaths reached record levels in Arizona, California, Florida, South Carolina, Tennessee and Texas, according to The Post’s analysis. And average daily deaths were up more at least 40 percent in more than a third of U.S. states.

Testing, meanwhile, has tapered off nationwide, a sign that the surge in infections was the result of the virus’s accelerating spread in many places.

Trump and Republican Governors: How America Lost the War on Covid-19

Much of America is facing a growing crisis as the Covid-19 pandemic worsens in many states, but particularly states with Republican governors such as Florida, South Carolina, Texas and Arizona.  The a piece in the Washington Post notes the situation as follows:

The pandemic map of the United States burned bright red Monday, with the number of new coronavirus infections during the first six days of July nearing 300,000 as more states and cities moved to reimpose shutdown orders. . . . . The United States is “still knee deep in the first wave” of the pandemic, Anthony S. Fauci, the director of the National Institute of Allergy and Infectious Diseases, said Monday. Fauci noted that while Europe managed to drive infections down — and now is dealing with little blips as it reopens — U.S. communities “never came down to baseline and now are surging back up, . . . .

The obvious question is how did Europe - and even a number of what Americans view as third world countries - get its pandemic under control while much of the United States is an unmitigated disaster?  A column in the New York Times lays blame where it belongs, namely on the failed leadership in the White House and in GOP held governors' mansions across the nation.  Ironically, the column references Donald Trump attacking Virginia and its physician governor and tweeting "liberate Virginia."   Here in Virginia, the infection curve has flattened and the number of cases remains stable or falling, thus suggesting that had other states heeded science and medical experts, America's situation might have been very different.  One can only hope that older voters realize that Trump and the GOP governors gambled with their lives for economic improvement which now will not materialize as states shut down again. They need to punish these failed leaders at the polls in November.  Here are column excerpts:

When did America start losing its war against the coronavirus? How did we find ourselves international pariahs, not even allowed to travel to Europe?

I’d suggest that the turning point was way back on April 17, the day that Donald Trump tweeted “LIBERATE MINNESOTA,” followed by “LIBERATE MICHIGAN” and “LIBERATE VIRGINIA.” In so doing, he effectively declared White House support for protesters demanding an end to the lockdowns governors had instituted to bring Covid-19 under control.

As it happens, the Democratic governors Trump was targeting in those tweets stood firm. But Republican governors in Arizona, Florida, Texas and elsewhere soon lifted stay-at-home orders and ended many restrictions on business operations. They also, following Trump’s lead, refused to require that people wear masks, and Texas and Arizona denied local governments the right to impose such requirements. They waved away warnings from health experts that premature and careless reopening could lead to a new wave of infections.

And the virus came.

But neither Republican politicians nor the Trump administration was willing to heed that lesson [form New York City].  By the second week of June new Covid-19 cases were surging in Arizona and clearly on the rise in Texas. Yet the governors of both states dismissed calls for a pause in reopening, insisting that things were under control.

And on June 16, of course, The Wall Street Journal published an opinion article by Vice President Mike Pence declaring that there wasn’t and wouldn’t be a coronavirus second wave. Given the Trump administration’s track record, this virtually guaranteed that the wave was about to hit. And so it was.

Over the past three weeks things have quickly gotten very grim. Hospitals in Arizona and Texas are in crisis. And, yes, it was premature reopening that did it, both directly and by sending a signal to individuals that the risk was past.

But why did America bungle Covid-19 so badly?

There has been a fair bit of commentary to the effect that our failed pandemic response was deeply rooted in American culture. We are, the argument goes, too libertarian, too distrustful of government, too unwilling to accept even slight inconveniences to protect others.

I don’t think any other advanced country (but are we still an advanced country?) has a comparable number of people who respond with rage when asked to wear a mask in a supermarket. There definitely isn’t any other advanced country where demonstrators against public health measures would wave guns around and invade state capitols. And the Republican Party is more or less unique among major Western political parties in its hostility to science in general.

But what strikes me, when looking at America’s extraordinary pandemic failure, is how top-down it all was.

Those anti-lockdown demonstrations weren’t spontaneous, grass-roots affairs. Many were organized and coordinated by conservative political activists, some with close ties to the Trump campaign, and financed in part by right-wing billionaires.

And the rush to reopen in Sunbelt states was less a response to popular demand than a case of Republican governors following Trump’s lead.

The main driving force behind reopening, as far as I can tell, was the administration’s desire to have big job gains leading into November, so that it could do what it knew how to do — boast about economic success. Actually dealing with the pandemic just wasn’t Trump’s kind of thing.

Trump’s vanity — his belief that wearing a mask would make him look silly, or mess up his makeup, or something — has surely played a role. But it’s also true that masks remind people that we haven’t controlled the coronavirus — and Trump wants people to forget that awkward fact.

The irony is that Trump’s willingness to trade deaths for jobs and political gain has backfired. . . . Trump’s job approval and electoral prospects just kept sliding.

And even in purely economic terms the rush to reopen is probably failing. The last official employment number was a snapshot from the second week of June; a variety of short-term indicators suggest that growth slowed or even went into reverse soon afterward, especially in states where Covid-19 cases are spiking.

In any case, the point is that America’s defeat at the hands of the coronavirus didn’t happen because victory was impossible. Nor was it because we as a nation were incapable of responding. No, we lost because Trump and those around him decided that it was in their political interests to let the virus run wild.