Sunday Commentary: Pressure Mounts to Reopen the Economy

There were protests on Friday where large numbers of people pressed for the government to allow the economy to reopen.  More subtly, the Bee reported yesterday that rural California counties are moving to defy Newsom’s shutdown order.

Reports the Bee: “[T]hree rural counties north of Sacramento have declared themselves open for business, putting Gov. Gavin Newsom in a delicate spot as he tries to maintain the state’s COVID-19 stay-at-home order.”

It is one thing for the county of Modoc, in far northeast California to reopen.  People from the rest of the state are unlikely to make the long trek up there.

More interesting could be decisions made in Yuba and Sutter Counties, whose officials indicated “some businesses, including tattoo parlors and hair salons, could open Monday.”

The Bee warns other counties, particularly “rural counties with low rates of COVID-19,” could follow suit.

Paul Smith, vice president for governmental affairs at Rural County Representatives of California, a lobbying organization, said, “People are saying, ‘Why is our economy suffering if we don’t have the caseload?’ ”

Then there is Randy Fletcher, a Yuba County Supervisor, who said officials believe their county along with Sutter can reopen without compromising public safety.

“Big state, very diverse,” Fletcher said. “One policy may not be the answer.”

The danger of a patchwork approach is that these rural counties are not islands onto themselves.  Well—again—Modoc County can probably get away from it.

But Sutter and Yuba, home of Yuba City and Marysville, might want to re-think their approach.  The danger of course is residents from Sacramento, just an hour or so away, might be tiring of being stuck in their homes and may want to drive up to places that have open restaurants as a way to get away.

We already saw the flood of residents who flocked to Marin County beaches a few weeks ago, prompting officials to close those beaches down.

A flood of new people would could lead to a newly triggered outbreak.  That’s the danger that Yolo County faces as well.  On the one hand, the new cases and deaths have fallen way down.  On the other hand, without ways to test for latent cases, opening would run a risk of spreading the virus and creating a new outbreak.

The consequences of opening things up too soon across the board could be catastrophic.  But the consequence of not opening things up could be catastrophic—for the economy.

That is the conclusion from a new analysis from the Penn Wharton Budget Model.

Early this week, the White House maintained that it expected only about 60,000 to die as the result of the outbreak.  That turned out to be remarkably false as the deaths in the US have now passed 65,000.

The Penn Wharton model looks at the impact of policies on loss of life and employment.

The best case scenario from their perspective was not re-opening at all until June 30.  In that scenario, deaths would nearly double to about 117,000—right around where the estimates had them a month ago.

The bad news in that scenario is US GDP would plummet.  By the end of June another 18 million jobs would be lost and the GDP would fall to 11.6 million.  Already, since mid-March, nearly 30 million Americans have filed for unemployment.

Reopen the economy now—that would be the best case scenario for the economy.  About a half million additional jobs would be lost by June 30 and the economy would be down 10 percent.

The bad news there is there would be 233,000 ADDITIONAL deaths by the end of June (that means deaths over and above the most restrictive scenario).  That doesn’t even speak to the rest of the year.

But there is a softer middle ground—residents practice social distancing, states partially reopen but maintain some restrictions, like the prohibition of in-house dining at bars and restaurants.  Under that scenario it would save about 4.4 million jobs but still lose 14 million between May and June 30.

Still, that would leave the death total by June 30 at 162,000.

Any way you look at this we lose.  None of these are really that appealing.

The middle ground probably is most realistic, but even there you are losing people at a rate not much below April over the next two months.  Moreover, you still end up clobbering the economy with 14 million more in the way of job losses which would push the total number to 44 million.

The opening up the economy is the best case scenario for the economy with only another 500,000 job losses.  But the loss of life would be astronomic.  There will be 350,000 Americans dead by the end of June in that scenario.

And frankly, I am far from convinced that it helps the economy as much as the projections indicate.  First of all, hospitals would be overwhelmed.  That would probably force most states to re-close their economy.  Even if economies could stay open under those circumstances, the economic hit would be tremendous—huge sectors of people would continue to shelter voluntarily.  Businesses would be disrupted by widespread illness and sick days.

The most realistic route is going to be painful—it would be some sort of modified reopening with social distancing, prohibitions on large crowds, and places like bars and restaurants serving take-out only.  Even that scenario produces a bad hit on the economy.

The best case scenario is that the government steps up to cushion the economy more than it has—otherwise we face both an economic and human catastrophe.

—David M. Greenwald reporting


Enter the maximum amount you want to pay each month
$USD
Sign up for

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

Related posts

50 Comments

  1. Tia Will

    “Why is our economy suffering if we don’t have the caseload?”

    The answer to this question is very straight forward. No location had a caseload until their first case was diagnosed. Managing a pandemic is about finding and preventing that first individual from passing it on to others. Prevention is the key. The virus cannot travel by itself. It takes humans to carry it from host to host. No host contact, no viral spread.

    So what about variability between counties. Sure, rural counties already do have a natural form of distancing and so already have some protection. Their best chance of remaining untouched is to stick with and enhance their social distancing until anyone coming in from adjacent counties is unlikely to find a host.

    The open now and middle grounders are missing one very important point. Their concern is clearly not untimely loss of life. So let me take this from the economic side. As their workers  & suppliers become ill, as they become ill, as the first responders, clinic, and hospital staff become ill, we could face not just the economic devastation we have now, but a cataclysmic medical event such as Italy and Spain experienced combined with a more complete shut down of the economy. Are we really ready to accept that consequence?

     

    1. Jeff Boone

      Sweden is shooting holes in your fear based prognostications.  I suspect that Sweden will continue to be attacked by the mainstream western media as being on the wrong side of righteous and virtuous politics.

      But I think this nails it pretty well:

      https://fee.org/articles/reopen-society-now

      This is THE point that transcends this issue.  It is the point for almost everything related to government policy, actions and lack of action.

      “A fundamental flaw of government is its inability to properly analyze tradeoffs.”

      Relying on only medical scientists as the rulers of policy design during a pandemic is like allowing only economic scientists to rule policy design during a depression.  The focus is in one professional lane even though the professional discipline stakeholders are diverse and optimized outcomes warrant a comprehensive and inclusive assessment and plan.

      Sweden got it right.  We got it wrong.  And the consequences of getting it wrong are going to cause more Americans to suffer lasting pain.

      1. Robb Davis

        Sweden’s per capital death rate is greater than the US’s and they are still climbing (US appears to be at a plateau).  In addition, the Swedish government itself has said its approach is one of degree of requirement rather than not expecting social distancing.  The Swedish foreign minister acknowledged that the number of deaths is going to grow rapidly in the days to come.  They still take an economic hit.

        The narrative that Sweden basically used a complete laissez-faire approach and ALSO kept their infections and deaths at or below other nations are both myths.

      2. Richard McCann

        Jeff

        You tried to post this misinterpretation of facts before on Facebook a week ago, and I went through and refuted your points. I included a number of references to questions inside Sweden and across Scandinavia. I also pointed out important differences between Sweden and America by various commentators, including the very strong sense of personal responsibility in Sweden that is lacking in the U.S., and the communitarian perspective in Sweden in which they try to leave no behind, whereas that thought is too often disregarded in the U.S.

        That you AGAIN tried to post this misinformation, with no modification for what I told you a week ago shows an inability to learn and modify your position. That does not make for a useful conversation. Your position seems to be a demand for complete capitulation to whatever perspective you state. Please reconsider how you engage in conversations on public sites.

        1. Jeff Boone

          That you AGAIN tried to post this misinformation, with no modification for what I told you a week ago shows an inability to learn and modify your position.

          Apparently you see yourself as my teacher.  You have it backwards young man.

          Did you read the article above, or just ignore it because it conflicts with your strongly held political beliefs?

          Let’s try this.  Let’s drop it for now and revisit it in about 6-8 weeks.  Then we will look at the outcome in Sweden and other places that have adopted your more extreme economy-killing measures.

          If there is a lesson I can learn from you at that point I will accept it.  I doubt you will do the same, but we will see.

          But before I go, please note that Sweden’s economy is not destroyed by their response.

          And what happened to the original justification for closing almost half of the economy and causing economic devastation to millions of people to flatten the curve so that hospitals would not be overwhelmed?   Did that morph into flattening the economy so certain older political candidates would not be overwhelmed?   Because the hospitals are all doing just fine… except for laying off their workers for lack of work.

          1. David Greenwald

            “But before I go, please note that Sweden’s economy is not destroyed by their response.”

            Actually it is. It is in just as bad a shape as their neighbors who have sheltered and avoided the death toll of Sweden.

            CNC reported on Thursday, “Data released from the country’s central bank and a leading Swedish think tank show that the economy will be just as badly hit as its European neighbors.” Moreover, “Sweden’s central bank, the Riksbank, gave two possible scenarios for the economic outlook in 2020, both are bleak.”

        2. Jeff Boone

          Frankly, it looks like Florida got it right.  Florida has about twice the population as Sweden.  What Florida did was to lock down the senior care facilities.  Most of Sweden’s COVID-19 deaths have been in their senior care facilities.  It appears that Sweden failed to take that action early, but it appears that they have since locked down their senior facilities.

          Again, time will tell who got it right.  And there are two domains of consideration: COVID-19 deaths and economic destruction.

    2. Richard McCann

      Tia

      Well said. The short sightedness of the “open now” crowd reflects a bigger problem of an inability to understand the complexity and dynamism of the world around them that comes through in promoting reactionary policies. There are few simple solutions to societal problems, and there’s always tradeoffs.

  2. Jeff Boone

    A friend of mine just notified me that the CDC basically halved their COVID-19 death counts… from around 65,000 to 37,000.  I see this reported on the CDC site, but find it breathtaking and am concerned I am missing something.  If I am NOT missing something, I think this is going to create a political firestorm for all the politicians that have gone extreme in economic shutdown.

    1. David Greenwald

      The problem is if you look at the deaths over average data, it doesn’t square with the downgraded accounts of the deaths attributed to COVID.

    2. Robb Davis

      There are two distinct CDC sites.  One keeps a tally of running counts from the states.  It is this one:

      https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html

      It’s at 65,735 today

      The other is a vital statistics reporting site here: https://www.cdc.gov/nchs/nvss/vsrr/covid19/index.htm

      If you read the methodology deaths are only reported here after confirmation via death certificate. Therefore, there is a significant lag (Connecticut, I believe, has almost no COVID-19 related deaths because of reporting issues at that site.

      These sites serve completely different functions and are not comparable. There is no political firestorm in the offing here.  This is how initial tracking of disease reporting versus final death-certificate verified counts are done in the US.

      1. Jeff Boone

        Thanks.  Got the same explanation from others by now.  This makes sense in explaining the difference between these two reporting bases.  However, I question the veracity of the 65k number as the CDC seems to be scrubbing the numbers down by the time the actual cause of death is reported.

        The supporters of these extreme mitigation measures will always have the benefit of the impossibility of proving a postmortem negative; but from my perspective we over-reacted given the likely TRUE mortality rate… especially the mortality rate per the TRUE rate of infection.

        I think in the end we will have to accept the fact that we make millions of people broke, caused hundreds of thousands of small businesses to fail, and all for a fear of an overblown risk.

        I hope I am wrong.

        1. Robb Davis

          You are wrong.  Saying the CDC is “scrubbing” numbers down is irresponsible because it is a baseless assertion.  You, of course, can make any assertion you want but it does not make it a truthful or evidence-based statement.

          “Proving a post-mortem negative…” I have no idea what that means.

          Thanks for your perspective.  It is uninformed…  there is such a thing as a case fatality rate and a separate thing known as an infection mortality rate.  It is the RARE disease for which we know the absolute truth about either.  In fact, given the complexity of illness and cause of death for all diseases, including infectious ones, we are unlikely to have some “TRUE” rate available to us.  I know you will demand it.  You will not get the “TRUTH.”  And then, of course you will use that to question any result that does not fit your narrative.

          The point is, you will never accept any rate—no mater how it is estimated—if it does not fit your predetermined narrative that these are “extreme measures” (they are not).

          The good news is, scientists—including epidemiologists and virologists who actually believe in the importance of evidence and integrity of process—will provide the best estimates we can hope for.  They will most likely show a CFR 10x that of the common flu and and IFR that is, of course, lower, but still devastating in its implications.

          The good news is that we have wonderful social experiments occurring across the US right now and in about 2-4 weeks we will have data on the results.

      1. David Greenwald

        This is why you’re wrong.

        The problem you have is the deaths are way over the norm. The only explanation for that is COVID. The limitation that you’re seeing is our ability to affirmatively identify the cause of death. But the macro level data kills your point.

        1. Keith Olsen

          Yes there are more deaths now because of COVID, but not as many as being reported that was admitted to by the Illinois Director Illinois Department of Public Health.

          1. David Greenwald

            The macro level data on deaths suggest otherwise. In fact, last week, when the article came out, there was about 10,000 more deaths than accounted for in the COVID data. I would caution you to be very careful on how you read these numbers because again, we are not testing everyone who dies and thus the numbers are going to go up and down. If you simply look at the death data and normalize it to the typical year, it will provide a much clearer picture at this point.

    3. Richard McCann

      The pace of the daily mortality rate has been at about 2,000 per day for the last several weeks. That would put us on an annual mortality rate of over 700,000. The leading cause of death is heart disease, which is about 650,000 per year.

      1. Bill Marshall

        Not doubting, but can you cite your source(s) for the #’s?

        There are problems (another poster nailed this) with ’cause of death’ vs. is there presence of “X”… I know of two recent deaths that were caused by one thing… it wasn’t covid, but if they tested positive, that’s what the record may ‘show’…  Dad died of pancreatic cancer… his death certificate said ‘cardiac arrest’… he did not die of heart disease…

        There is a ‘confirmation bias’ in medical reports of cause of death, particularly when a pandemic is in play…

        I have reason to believe that the incidences of infection are grossly under-stated… too few tests, and the tests given are when folk are already showing significant symptoms… skews the infection rates… I also have reason to believe that the # of deaths, due to covid are overstated… skews the mortality rates…

        But if someone about to die soon due to, say congestive heart failure, happens to test covid-positive @ death, well, perhaps covid hastened that death by “a bit”, but was not the underlying cause… note the mortality rates for those who were seriously compromised in health…

        “Figures don’t lie, but…”

  3. Alan Miller

    Talking to a very smart friend who has been warning about this pandemic since before it hit the shores, we need to lockdown the country for 4-5 weeks.  Not panzy-lock-down the country, but like ‘everyone stockpile 4-5 weeks of food and don’t go anywhere’ lockdown – deliveries of course but no store visits.  Then we open everything back up.

    His point is the virus has a life cycle of no more than about four weeks.  If nobody goes outside their immediate circle, and they take this seriously, the virus will die in place.  Then we control any breakouts by geographically locking those down.

    But this is America, land of the fractured and stupid.  We can’t do this.

     

    1. Bill Marshall

      Not panzy-lock-down the country, but like ‘everyone stockpile 4-5 weeks of food and don’t go anywhere’ lockdown – deliveries of course but no store visits. 

      A true “lock down” would include no deliveries (think supply lines, exposures every step of the way), no medical/attendant care for folk hospitalized, or in assisted living/convalescent facilities, etc… THAT would be a true lock-down… 

      Perhaps you could define what you meant by “panzy” type?

       

      1. Alan Miller

        Perhaps you could define what you meant by “panzy” type?

        I don’t have to define it.  We are living it.

        And of course there would be deliveries.  Even in China where the locked people into their apartments, they had deliveries.  People had to eat.

        1. Bill Marshall

          So, it wasn’t a ‘lock-down’… it was a partial ‘lock-down’… and those who produced the food, packaged the food, delivered the food, were exposed… potentially spreading the virus…

          For those healthy, going to the stores to get groceries, are ‘delivery people’… I see no substantive difference as to risk…

    1. Ron Oertel

      Also, I was just talking with a customer service representative in Texas, who unexpectedly mentioned how they’re opening up things, there.  He also brought up the “melee” at the beach in Southern California.

      There was no indication of whether or not he was a “conservative”, or “liberal”.  But, there certainly seems to be a cultural difference between California and Texas, for example. Reflected in decisions regarding the coronavirus, as well.

      Also – I’m getting the feeling that they don’t read the Davis Vanguard in Texas.

      Why do I keep thinking of the fictional mayor in “Jaws”? (What a great movie, by the way.)

  4. Jeff Boone

    There was another deadly flu epidemic in the United States. The flu spread from Hong Kong to the United States, arriving December 1968 and peaking a year later. It ultimately killed 100,000 people in the U.S., mostly over the age of 65, and one million worldwide.

    But we never shut down the economy.

    In fact, it appears that Woodstock was held during that pandemic.

    Maybe we were made of tougher and less-fearful stuff back then.

    Maybe the administrative state was less powerful, and the media more concerned about publishing real news instead of promoting sensationalized click-bait.

    Maybe our political differences were different back then.

    Maybe were were more accepting of the risk of death to preserve our freedoms.

    Can someone explain to the restaurant owner that just lost her business why we didn’t shut down restaurants back then, but do so today?

    1. David Greenwald

      For one thing this has the potential to kill way more than 100,000 people.

      Can you explain to my wife why the restaurant owner’s business is more important than her brother’s life? Not to mention her life and the lives of her customers.

      1. Jeff Boone

        As a social justice warrior that has made a good name for himself advocating for low income people of color, have you considered the human cost to the black urban communities resulting from the Great Recession?

        There are trade-offs for every decision in life.  There are no absolutes unless you are talking about faith… the religious type.

        We sent hundreds of thousands of young men to risk injury and death to fight to preserve our freedom.   And now we are saying that the cost of a single life is too high to justify not banning freedom.

        I wonder what the children of Woodstock would have done had the administrative state at that told them they could not attend?  Ironically, they are the administrative state today.

        1. Bill Marshall

          The blacks(sic) communities have been disproportionately decimated by COVID.

          True story… we know not why… but as reparations, we should kill off whites, less affected minorities, to compensate, as reparation, or “social justice”?

        2. Jeff Boone

          The blacks communities have been disproportionately decimated by COVID.

          I had not heard that.  I also have not heard that it is a big risk to young people… the primary concern for the low income urban areas.  I have heard that smokers tend to have milder symptoms.

          But I accept, if factual, that it is a valid trade-off to consider.  Not the only factor.

           

      2. Bill Marshall

        We all have choices… “pro-choice”, right?

        The restaurant owner has a choice as to opening up… your brother-in-law has a choice as to work in the restaurant… or are you saying that your B-I-L has a right to pay, benefits, etc., at the expense of the business owner, who is paying for those, with no business to generate revenue?

        Please clarify your question to Jeff…

        Can you explain to my wife why the restaurant owner’s business is more important than her brother’s life? Not to mention her life and the lives of her customers.

        Your question borders on “snotty”, absent clarification… we all take (hopefully, informed, measured) risks… at the end of the day, life is fatal, no matter what…

        1. Bill Marshall

          Well, “pro-choice abortions” have a 100% mortality rate for the one aborted…

          You have added another “snotty comment”… ‘Russian Roulette’ has about a 17 % chance of being fatal… for the US, that would be 55.6 MILLION in the US, alone… are you asserting that as the risk?  Really?  I call BS!

          The current #’s are about 0.0013 of that!

          Please avoid the “henny penny” mind-set… and do your math!

           

           

        2. Jeff Boone

          The restaurant owner has a choice as to opening up

          You are right.

          But after opening up, she has the right to not have her constitutional rights to operate trampled on by the self-anointed administrative rulers of all things right and relevant.

           

        3. David Greenwald

          Under current law – she doesn’t.  The government is authorized to take such steps and the courts have upheld that right.  So while you may think she has the constitutional right, the courts have disagreed.

    2. Bill Marshall

      Yeah Jeff, but by many accounts there were ‘joints’ that might have protected the Woodstock participants… for “medicinal purposes only”, of course…

  5. Bill Marshall

    An interesting fact would be to see total # of deaths, all causes, in the US, with a breakdown of primary factors/causes… let’s say a 5-year period…

    Just might be an interesting and informative set of data… a source of ‘perspective’…

Leave a Reply

X Close

Newsletter Sign-Up

X Close

Monthly Subscriber Sign-Up

Enter the maximum amount you want to pay each month
$ USD
Sign up for