Apologies to Noel Coward, but it works on so many levels. The tropics are quiet, and there haven’t been any major earthquakes. It would be great to discuss the “La Nina Watch” that long range forecasters have put out as well as some other climate research. There is cat business to report as well. But the US is increasingly in crisis, and a rant about Georgia’s response to the pandemic is required. Long time readers will realize this isn’t political: to be clear, both dominant parties in the US utterly disgust me. Both are acting irresponsibly with respect to the COVID-19 response. Of course individual politicians on both sides care. They aren’t stupid. Partisans on both sides using inflammatory language to describe the other aren’t helping the situation. But Politicians are so focused on proving the other side wrong, and not being wrong themselves, they can’t see through to doing the right thing. And as a long time student of how societies function in response to stress and disasters (or, more often, don’t function), I’m increasingly concerned they are setting up American society for a major catastrophe.
To try to boil it down to the essentials, the US financial system is on the verge of collapse. Forget the casino (aka Stock Market) – that has been disconnected from the real economy for a long time. Small businesses, especially service type businesses, are defaulting on leases and mortgages at historical rates. Economic activity is crashing, and the underfunded, short term band-aids like PPP are running out. And money flow through the economy is declining. Take one small indicator: the rate of approval of small business loans. Institutional lenders were approving 66.5% of loan applications in February. By April that was down to 18.1% – and the number of applications was a fraction of the amount two months earlier. Banks are setting up huge reserves to prepare for loan defaults. It’s an insidious catch-22: banks are reluctant to loan money that can keep a business going and recover because they are afraid that existing loans are going to default. This is part of the circular firing squad is in play in the property markets: businesses can’t pay rent to property “owners” who really don’t own those properties; they need the rental income to pay their mortgages to the banks. Who used those assets and and income in further complex financial instruments within the capital markets. This is called leveraging. So that small business going under and defaulting on $1000 of rent has the potential to unravel millions of dollars of related financial activity. Throw in the social unrest and move to address some long ignored social fault lines, it’s a toxic mix. People are scared. They should be.
On top of all that, there is no doubt the spread of the virus is out of control.
What does that have to do with Georgia? Everything. We have a politically inspired catch-22 in play. Republicans are focused on getting the economy back in operation, and demonstrating they are properly running their states (and via Trump the country). Democrats are focused on the public health aspects, and demonstrating the Republicans are incompetent and should be replaced. Each are playing power games and trying undermining the other, and are so focused on their own agendas they are ignoring the correct (in context) concerns of the other.
Enter the Governor of Georgia. Yesterday Kemp issued an executive order that is one of the more irrational pieces of stupidity to come out of this episode – and that’s saying a lot. The key bit of insanity is on page 32 that overrides any requirement for face masks put in place by cities and counties. We’ve learned a lot about how the SARS-COV-2 virus that causes COVID-19 spreads. The initial fears about surface spread, airborne transmission, and so forth, have proved overblown. It is fairly clear now that the vast majority of spread is by droplets expelled during breathing/talking/sneezing/coughing. Masks – even simple cloth masks – work. Period. In this report (link) …
In May, two hairstylists at a Missouri salon who had COVID-19 but wore face masks cut the hair of 139 masked customers for roughly a week, and did not infect a single client. They also did not infect any of the clients’ contacts or any of the other stylists in the salon, researchers report.
Yes, the order “encourages” the use of masks, but elsewhere it does a lot to undercut that message. If Kemp really wants to get Georgia back to work and school, it’s simple: require everyone leaving their home to wear a mask. Undermining that concept is irresponsible.
In the “equal time equal stupidity” department, some states such as California are putting “shelter in place” restrictions and shutting down businesses again. This, too, is irresponsible. In the first place lockdowns won’t work at this point. The California Republic doesn’t live in a vacuum. As soon as the orders are lifted, the virus lurking in neighboring states will come back and they will be right back where they started. In a viral outbreak, you use a lockdown to stop the immediate spread, and use the time to put in to place the public health measures to control it – things like contact tracing, testing, research to figure out how to deal with it when you reopen. Shutdowns only work if a) everybody does it, and b) you use the time wisely. In the US neither happened. So doing it again just won’t work and, now we just can’t afford it. Another wide shutdown risks collapsing the economy (and its going to be damn hard to prevent that anyway).
During the Revolutionary War, Ben Franklin famously said “We must, indeed, all hang together or, most assuredly, we shall all hang separately.” To hang together in this crisis we all have to wear masks (to stop the virus), and we have to restart business and school (to save the economy). Doing the first allows the second. Doing one or the other in isolation won’t work – and will make things worse.