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