In the Wake of COVID-19
It may seem a little premature to be writing an obituary for COVID-19, but in the U.S. there are already signs that the virus may be on its way out even though it’s still wreaking havoc in countries like India, Mexico and Brazil. During April the average daily number of confirmed cases was in excess of 60,000. By contrast, by mid-May the daily average number of confirmed COVID had dropped to approximately 30,000; and in the past two weeks it declined to 20,539. This is not to say that COVID is no longer a threat in this country. The Institute for Health Metrics and Evaluation (“IHME”) is still predicting that the virus will claim another 20,000 American lives in the next three months which is far more U.S. fatalities than were incurred in both the Iraq and Afghanistan wars and roughly seven times the number of Americans who died on 9/11. The good news is that these 20,000 projected additional deaths only represents 3.3% of the number of reported COVID deaths that the U.S. experienced in the past 15 months.
As recently as the beginning of February epidemiologists were warning that the B.1.1.7 variant of the virus (first identified in the U.K.) was far more transmissible than the strains that had previously terrorized the U.S. and had already made its way across the Atlantic. Their expectation was that it would become the dominant strain in this country by the end of March and that a fourth surge of the virus could surpass the 300,000 confirmed cases in one day that the nation had recorded during the third surge that followed the year-end holidays. This ominous prediction not only prompted the CDC’s Dr. Fauci to recommend that the nation adhere to its social distancing guidelines but also that everyone should wear two masks, not just one. At that time, the administration was dispensing one million doses of COVID vaccine per day and President Biden was calling for that rate to be increased to two million doses per day.
What prevented a calamitous fourth surge of the virus was a monumental effort by the Biden administration to vaccinate all Americans. By the end of March, the daily vaccination rate was up to over three million doses per day and by mid-April, the daily vaccination rate had been increased to four million. This program is currently slowing down as many states are now encountering difficulty in finding additional individuals willing to receive the COVID vaccines. Still, President Biden is now calling for 70% of adult Americans be vaccinated by the July 4th holiday. The slow-down in the rate of adult vaccinations is being somewhat offset by the recent emergency approvals permitting the Pfizer vaccine to be administered to children as young as 12 years old. It’s anticipated that a similar approval for the Moderna vaccine will be soon granted.
While the apparent victory in the U.S. over the pandemic represents a monumental achievement, the war against COVID-19 is still far from over. That’s because the virus is continuing to spread in many countries and each time it infects another individual it raises the possibility that a new variant will be created, one that is not only more potent and more transmissible, but one that is not repelled by the current vaccines or cured by the currently developed therapeutics. In fact, there are new variants now coming out of India, Vietnam and Brazil that are reported to be more potent and transmissible than their predecessors. This has already caused the CDC to raise substantially (from 70% of Americans immunized to 80%) its estimate of when the nation will achieve herd immunity. This remains troubling because over 20% of the nation’s population is currently opposed by being vaccinated.
While the coronavirus remains a threat, that threat now is probably no greater than that posed by the various forms of influenza that annually attack U.S. residents as cold weather arrives each fall. Thus, Americans will periodically have to receive COVID booster vaccinations, the nature and timing of which are still yet to be determined. Nor is it known whether the contents of the vaccines will have to be altered, but that seems likely as new variants evolve. Despite these future uncertainties, it seems appropriate to assess what the pandemic has left in its wake.
Each day a handful of organizations track and publish the number of persons who have died from COVID-19. The CDC’s current death count for the U.S stands at 591,265, while the Johns Hopkins website places the number of U. S. COVID deaths at 594,529. The Worldometer website (which I find most helpful) reflects 606,305 U.S. COVID deaths and the IHME places the confirmed U.S. COVID death toll at 578,555. The IHME has also performed an excess death analysis and has calculated that the actual number of U.S. COVID deaths is already 912,345 and projects that it will rise to 930,009 by September 1st. Thus, by any measure the COVID pandemic has resulted in a staggering number of U.S. deaths. This is almost 50% higher than the death toll from the 1918 Spanish flu.
Like most countries around the world, the COVID pandemic has had a material effect on the nation’s economy. Despite the efforts of the Trump administration to minimize the adverse impact of the pandemic on the nation’s economy, the U.S. economy suffered a 2.3% decline during 2020 (as compared to a 4.0% increase in 2019) along with a loss of roughly 8.5 million jobs. Economic growth has resumed this year (6.4% in the first quarter) and the nation’s GDP is now close to its pre-pandemic level. Still, the unemployment rate is 6.3% compared to 3.5% as of the end of 2019 which means that the recovery has not reached all segments of the population. With the passage of the Biden administration’s American Rescue Plan, approximately $1.9 trillion is being poured into the nation’s economy helping to bring about the “V-shaped” recovery that the Trump administration was seeking.
Even though the damage to the nation’s economy left by the COVID pandemic is rapidly being repaired on a national scale, that recovery has also not been felt in all segments of the economy. Approximately 110,000 (or roughly 17%) of the nation’s restaurants have gone out of business. The toll would have been much greater had the federal government not intervened with its Paycheck Protection Program. Retail stores have been similarly devastated with their sales being diverted to on-line marketers. This has resulted in hundreds of thousands of vacant retail stores across the country. Just as shoppers have been making their retail purchases from their homes, many white-collar workers were forced to work from their homes and found that doing so has a number of advantages. Thus, the demand for office space is dropping as office leases expire, adding to the plight of real estate investors.
The arts and entertainment segments of the economy have also suffered and most are only now beginning to resume their operations. While some have been able to continue to operate with video presentations and donations, most will still be forced to operate at less than full capacity and many others may never be able to resume their operations. Travel was also suppressed during the pandemic leaving many hotels and cruise lines in serious financial condition. Although airlines had to drastically cut back their services during the pandemic, so far no major U.S. airline has failed largely as a result of financial assistance provided by the federal government under the March 2020 CARES Act.
Similarly, state and local governments were adversely effected by the pandemic. Their costs rose to confront the healthcare crisis while their revenues dropped. They not only suffered a decrease in income taxes, but revenues from mass transit also plummeted as their residents feared riding in crowded busses and subways. Revenues from sales taxes similarly declined with the drop in local retail and restaurants sales.
Many other businesses were also economic losers. For example, dry cleaners saw their revenues plummet as their customers stopped wearing dress clothes for business social occasions and spent most of their time in their homes wearing warm-up suits and clothes they could simply wash in their washing machines. Even food processors were adversely impacted. That’s because there were two separate food supply chains operating in this country: one that produced food in small and highly attractive packaging for supermarkets and convenience stores and the second which serviced restaurant and institutional kitchens that buy in larger quantities. It took several months for the latter group to reconfigure their operations to fill the growing demand for food to be served in homes.
Not every sector of the economy was adversely affected. On-line retailers experienced dramatic increases in their sales. As Americans spent more time cloistered in their homes, there was also a dramatic increase in home improvement activities. All varieties of home repair vendors experienced an explosion in the demand for their services. Correspondingly, sales at Home Depot increased markedly (19.9% over the prior year and 24.5% in the 4th quarter of 2020) as individuals working from their homes felt the need to enhance their living quarters. Just as the need for enhanced security services dramatically increased following 9/11, a host of delivery services sprung up all across the country. Similarly, as Americans deserted mass transit for fear of contracting the virus, sales of used cars rose along with used-car prices, a factor aggravated by reductions in new car production.
In many respects, the COVID pandemic reshuffled the nation’s economy. Not only was the commercial real estate market affected, the residential real estate market underwent a significant transformation. Inner-city dwellers, discovering that they could more easily work from their homes, fled to the suburbs and sun belt. In Palm Beach Gardens where I reside during the winter, home prices moved up dramatically after having remained fixed for more than a decade. What was largely a community of retirees now has received an influx of younger couples seeking to take advantage of their new-found ability to work remotely.
Much of the changes in the way Americans live have resulted from technological improvements. We fill many of our needs for food and clothing through on-line shopping and delivery services; we work from our homes curtesy of the internet, face-time and Zoom meetings; and our children attend school remotely. Among the side benefits of the pandemic may be a host of improvements in video technology for educational purposes, something which could greatly reduce the costs of higher education and make it more accessible to a population which will have to enhance its skills in order to compete in a closely interconnected world. Once disdained by the medical profession, patient meetings and data are now regularly communicated electronically in what is now dubbed “tele-medicine.” While all of these changes would have eventually been implemented, their advent was accelerated by the pandemic.
The COVID pandemic also brought to the fore a number of developments in healthcare. The mRNA technology which forms the basis of the highly successful Pfizer and Moderna vaccines had been under development for over a decade, but it took the pandemic and a multi-billion-dollar investment by the federal government to convert that technology into an effective vehicle for delivering vaccines. Prior to the pandemic, it generally took a minimum of four years to develop a viable vaccine to ward off a new pathogen. Pfizer and Moderna not only reduced that time frame down to nine months, but produced vaccines with 95% efficacy. By any measurement, this was an astounding achievement which will help offset the growing threat from newly created pathogens as human interactions with wild animals are accelerated.
The pandemic hopefully also taught our nation an important lesson regarding healthcare. Since its inception our nation has been married to the notion that healthcare is an individual responsibility. Every individual has his or her own doctor or doctors and is personally responsible for compensating those medical practitioners. That notion became slightly modified during World War II when wages were frozen and companies sought to attract and retain workers by offering them health insurance. In the 1960s, the government stepped in to fill an important hole in the healthcare system by creating Medicare and Medicaid which enable certain unemployed segments of the population to be able to pay for healthcare services. Those individuals not covered by private health insurance or these two programs generally went without medical attention frequently showing up in hospital emergency rooms when their medical conditions became unbearable. In 2010, the Affordable Care Act was enacted to help alleviate this problem.
Still, it took a pandemic to reveal the utter inadequacy of an essentially private healthcare system as opposed to public healthcare systems utilized by most developed counties, long derided in this country as “socialized medicine.” As devastating as the pandemic has been, it would have been far worse had the federal government not stepped in to alleviate some of the inadequacies of our private healthcare system. It wasn’t just the monies expended to speed the creation of the new vaccines, but also coordinating the purchase and dissemination of personal protective equipment for healthcare workers, organizing the rollout of the highly successful vaccination program and providing guidance to individuals, businesses and institutions for minimizing the impact of the virus. The profit motive imbedded in a private healthcare system surely facilitates advances in medical care, but that system must be balanced with a strong public health system that makes medical care available to all of the nations’ residents and is there to supplement the private healthcare systems during healthcare emergencies.
Maybe the most important change brought about by the pandemic is that it seemingly derailed (at least temporarily) the transformation of our system of government from a democracy to a plutocracy. As I detailed in “Partisan Politics,” for the past 60 years the Republican Party has been engaged in a campaign to ensconce itself in permanent control of our nation’s government. This was to be achieved by making political contributions the primary determinant of who wins political elections and creating a symbiotic relationship with corporations and wealthy individuals willing to fund their political campaigns in return for tax cuts and reductions in governmental regulations. Their intention was to enable the party and its wealthy donors to control the government much in the same way that the Russian government operates. That plan was working well and had enabled the Republicans to win three of the last five national elections even though they had only succeeded in winning the popular vote in one of them.
The election of Donald Trump in 2016 as the nation’s 45th president placed the nation’s government on an even more autocratic path as Trump defied accepted norms of governance and thwarted efforts to subject his actions to oversight by either the Congress or watchdogs established within the federal bureaucracy. He had even appointed roughly 30% of the federal judiciary, including a third of the Justices on the Supreme Court, casting doubt as to whether his actions would even be constrained by the courts. Thus, in January 2020, after surviving an impeachment effort, Trump seemed well on his way to a second term riding a strong national economy and a stock market reaching all-time highs on an almost daily basis.
Then the nation was confronted by the COVID pandemic which revealed Trump to be a man focused only on himself, with little desire or ability to govern and a strong penchant for denying his mistakes and getting those around him to conceal his errors and misdeeds. While most national leaders were able to successfully address the challenges posed by the pandemic, Trump chose to simply wish them away. The result was that the nation with the world’s strongest economy and most advanced medical technology suffered more COVID infections and fatalities than any other nation. The results were Biblical in both the size and nature, reminiscent of the plagues that caused Pharaoh to release the Israelites from bondage or the flood that wiped mankind from the earth save only Noah and those he invited to come aboard his ark. Thus, in the 2020 election, the American electorate rejected Trump by a margin of over seven million votes. Just as the pandemic revealed Trump’s unfitness for office, the election revealed that the Republican Party, which chose not to adopt a political platform, was no longer interested in governing but only in maintaining its control of the government.
While this twist of fate has given the nation a temporary reprieve from following the path set by Turkey, the Philippines and Hungary, from democracy to authoritarianism, its effect may not be any more lasting than the damage inflicted upon the nation’s economy by the pandemic. This is because the Republicans have now embarked on a further campaign to change the rules by which elections are conducted which may require another act of God to prevent them completing their destruction of our democratic system.