Poster for French language edition of the 1966 film “The Good, the Bad and the Ugly”
As we approach the weekend of one of the most challenging seven days in recent American history, we thought it would be helpful to review where we are in our collective fight against the COVID-19 outbreak.
The Good
On Wednesday, the Republican-controlled US Senate overwhelmingly passed a massive $2 trillion relief package that Washington hopes will soften the economic impact of the COVID-19 pandemic for American workers and businesses.
The Senate approved the nearly 1,000-page bill in a unanimous 96-0 vote (several senators were unable to vote, as they are self-quarantining). The unprecedented package would provide billions of dollars in credit for struggling industries, a boost to unemployment insurance and direct cash payments to most Americans.
Under the plan, people making up to $75,000 a year are expected to receive checks for $1,200. Couples making up to $150,000 would receive $2,400, with an additional $500 per child. The new agreement removed the phased-in provision that would have excluded lower-income Americans from receiving the full benefit.
The payments would decrease for those making more than $75,000, with an income cap of $99,000 per individual or $198,000 for couples.
The bill is also expected to include roughly $100 billion in assistance for hospitals; $350 billion in assistance to small businesses; $500 billion in aid for corporations, including airline companies and cruise lines, that have been hurt by the outbreak; and about $150 billion for state and local stimulus funds.
The Democrat-controlled House of Representatives is expected to vote on the bill today, Friday, to allow the majority some time to review the proposed legislation, whose final language was not released until very late Wednesday. It is expected that the bill will receive broad bipartisan support.
The stock market has responded positively to the action in Washington. The Dow Jones index has risen about 20% in just three trading sessions, and closed Thursday at above 22,500, having traded as low as 18,200 earlier in the week.
The Bad
New data released on Thursday showed the depth of America’s economic struggle. Just a few hours after the Senate vote, it was revealed that nearly 3.3 million workers filed for unemployment last week. This massive rise in new jobless claims reflects the impact of the lockdowns that have been implemented to slow the spread of the pandemic.
As the coronavirus pandemic has spread, public health experts around the world have been urging people – especially young people, many of whom may not show symptoms, and unknowingly spread the virus – to limit their physical contacts with others through “social distancing”. But in the US, Australia, and parts of Europe, these restrictions are relatively more difficult enforce, because of democratic norms and a stronger sense of individual freedom.
In recent weeks, people flocked to beaches around the world, from Oregon to Florida to Bondi Beach in Australia. “If I get corona, I get corona,” one spring breaker told Reuters. In Washington, DC, Metro officials practically begged riders not to visit the city’s iconic cherry blossoms, which they did anyway, in huge numbers. One American woman used Twitter to announce her trip to a crowded Red Robin restaurant. “It was delicious,” she tweeted, “and I took my sweet time eating my meal. Because this is America. And I’ll do what I want.”
The Ugly
The Trump administration over the past few days has been touting the fact that we have now done more tests than any other country. Yesterday, during the daily Presidential Briefing, the President stated that “We’ve now done more tests in 8 days than South Korea did in 8 weeks”. But this intentionally obfuscates the fact that per capita, our testing rate is much lower than South Korea and many other countries.
Because we have done relatively little testing, we really don’t know what the true infection rate is. Some epidemiologists think an infection rate of 40-80% of the population is a realistic possibility. This would mean over 150 million Americans are or will become infected with this novel coronavirus. Based on data coming from China, South Korea and Italy, we have a good sense of what percentage of those infected will need hospitalization, and of those hospitalized, what percentage will need to be put on a ventilator. This is the data that Dr. Fauci and Governors Cuomo and Newsom, among others, are familiar with, and it is why they are pleading with the Administration to begin producing massive numbers of ventilators as soon as possible.
If we look objectively at the data, the worst of the pandemic is still ahead of us. Dr. Fauci has acknowledged this. As we test more, and as more people who are symptomatic enter the already strained health care system, we’re seeing that the infection rate is still increasing at an accelerating rate. This means that we’ve not reached the point at which the rate of infection is slowing, much less where the “curve” truly begins to flatten. In such an environment, loosening the restrictions on travel, and debating whether we should open up certain parts of the economy or certain regions of the country, seems like lunacy.
Final Thoughts
This pandemic is a test of our collective resolve. Are we willing to do what is necessary to protect the most vulnerable among us? The next few weeks will reveal the answer.
We remain available to speak with you at any time.
Keep the faith, be safe and stay healthy.
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