The Context
There are two urgent challenges that must move forward hand-in-hand if we are to successfully manage our way through the pandemic. The first is a public health/medical challenge and the second is an economic challenge—and the two are closely interrelated. We find ourselves in uncharted waters. At least at this point in our understanding of the virus, it appears that the majority of Americans will not contract it and the majority of those who do contract it will recover. Ironically, then, for the vast majority of Oregonians, the most serious and immediate impact of the pandemic is not from being infected by the virus but from the very necessary actions being taken to prevent people from becoming infected. That is why the public health/medical challenge and the economic challenge must be addressed together.
Addressing the public health/medical challenge
The first priority is to slow the community spread of COVID 19. Given the lack of an effective vaccine or the capacity for widespread testing, statewide orders to “shelter at home” and the enforcement of social distancing offers the most aggressive intervention action available to prevent, or at least delay, hospital overload. The one common conclusion from virtually all the modeling that has been done on the spread of COVID 19 is that you have to hit it hard and you have to hit it early because of its exponential growth curve and because there will inevitably be a lag time (likely two weeks) between the issuance of the order and the beginning of its impact on hospitalizations.
Every day of delay significantly increases the likelihood that we will exceed our hospital capacity sooner, run out of critical supplies sooner and put more Americans at dire risk. Furthermore, dramatically slowing down the spread of the disease will give testing capacity time to catch up with demand, giving us another invaluable tool to help manage our response to the pandemic through some form of the more targeted “test and trace” approach being deployed in South Korea. That is why I believe that dramatically ramping up our ability to test offers us the best and quickest path to address the economic consequences of this crisis, which are directly related to our efforts to slow the spread of COVID 19.
The most direct impact of statewide social distancing policies is economic—the cancellation of large gatherings, conventions and sports events and the closing of restaurants, for example, has had a disproportionate impact on lower wage workers, many of whom have no paid sick leave; school closures have created significant child care issues for working parents; the list goes on. In short, our immediate response to the public health/medical challenge has put tens of thousands of Oregonians and millions of people out of work and hundreds of thousands of small, medium and large businesses at risk of failure.
Addressing the Economic Challenge
Therefore, the other urgent priority is to provide some financial stability to the millions of Americans who have suddenly lost their jobs because of the steps being taken to slow the spread of the coronavirus. Their numbers will continue to swell as more states issue shelter at home orders and more rigorously enforce social distancing. Within a few weeks, this situation will unmask the stark contours of an economy bifurcated between the “haves” and the “have nots.” On one side are those who have the capacity to work from home. On the other side are primarily hourly wage workers and those in the gig economy, whose jobs cannot be done from home. Many of these people are ineligible for unemployment insurance, lack paid sick leave and some have no health insurance coverage.
Unless we can get financial support to these people in the very short term, we will begin to see the loss of social cohesiveness and the disintegration of communities— both of which will undermine our best efforts to contain the spread of COVID 19. I clearly remember working in the emergency room in Douglas County during the recession of the early 1980s, when interest rates skyrocketed and the bottom dropped out of the housing industry. In my timber dependent community of Roseburg, unemployment approached 19%. In the ER, I saw firsthand the consequences when proud hard-working people who—through no fault of their own—were suddenly unable to pay the rent or put food on the table: stress and uncertainty leading to substance abuse, domestic violence and the unraveling of families.
We are looking at the very real potential for that to happen on a massive scale unless we can provide these struggling people some financial security, a way to meet basic needs and some hope for the future. We need to be acting on this right now. I have been watching the congressional debate over the relief package and the reality is that a one-time direct cash payment is simply not enough. To maintain social cohesiveness Oregonians, and all Americans, need some sense of financial certainty that they can meet their basic needs over the next 12 to 18 months—or at least until we reach some degree of steady-state suppression of the viral spread and can begin to put people back to work, a day that will be hastened by the availability of adequate testing capacity.
In addition to the steps that have already been taken to ensure the liquidity of our financial markets, we will need loan guarantees and direct financial assistance for small and medium-size businesses as well as for large corporations.
I recognize that there are complicated and turbulent politics surrounding both direct payment to individuals and efforts to stabilize our business community – particularly large corporations. Many Republicans oppose the concept of moving beyond a one-time payment to actually providing some financial certainty to unemployed individuals over the next several months. At the same time, many Democrats oppose giving open-ended financing to profitable corporations without a quid pro quo such as higher wages and preventing stock buybacks.
While there may be merit on both sides of this controversy, this is not the time or place to have the debate. If we are to arrest our descent into an ever-deepening recession and maintain social cohesiveness and the integrity of our communities—we must do both: support struggling Americans with some degree of financial certainty and support small and medium businesses as well as large corporations. This also means that ultimately, the stimulus package will have to be much larger than it currently is.
There will be a time when we can and, indeed must, have the debate about both income inequality and which corporations should or should not receive long-term public support. That time is not now. We need to first stabilize the situation from both a public health/medical standpoint and from an economic standpoint to gain the breathing room necessary to put in place thoughtful medium and long-term strategies. And even today, there is a real question as to whether this can happen fast enough to avoid some of the potentially dark social consequences of panic, blame, and desperation that haunts those who cannot meet their most basic needs and see no hope for tomorrow.
As with containing the spread of COVID 19, time is also of the essence in addressing the economic side of this crisis. If we fail to come together to adequately address the immediate financial needs of unemployed Americans and stabilize our business community, our economy won’t have the opportunity to recover; and our ability to develop a vaccine or manage the virus itself will become irrelevant.
