The disaster in public health and the economy caused by the spread of covid-19 is unlike anything we’ve experienced before. In modern times we've never had a new virus emerge and create a pandemic. The resulting economic shock is also unique. All of our recent economic crises started as asset bubbles or liquidity crunches that first affected the financial industry before trickling down to Main St America. The covid-19 economic crisis is going in the opposite direction: it has hit Main Street first as small businesses close to protect the health of themselves and the public. Consumer spending is 70% of the US economy and this shock will trickle up, although “erupt” might be more apt than “trickle”. This systemic shut down is necessary for our public safety, but just as when the human body goes into shock, outside intervention is needed to keep America's diverse economy on life support. In medicine the best practice is to cure the underlying problem while keeping the patient alive as you do it. The “patient” in this crisis is public health and the consumer economy.
Given that this is a unique situation it would be unreasonable to think that the tools of the past would be effective in handling the covid-19 crisis. The Federal Reserve has cut rates to nearly 0. This is a helpful action but it addresses a symptom (anticipated liquidity crunch for large businesses) while ignoring the root problem: a crash in consumer confidence and demand due to a public health emergency for which we are not prepared. To that end Congress should immediately undertake a massive investment in increased covid-19 testing, community health care, and a serious economic stimulus targeted directly at individuals and Main Street.
The United States doesn't have widespread testing available for covid-19. That lack of knowledge leaves us blind and makes it much harder to effectively combat the outbreak. We need to increase the availability of test kits and shrink the turn around time of analyzing them. I don't know how to do that, but hundreds of thousands of lives and the US economy are on the line. In the status quo covid-19 cases seem to double every 6 days. The mortality rate is estimated at .5-2%. That could realistically mean over 600,000 deaths in America without taking into account people who will die from other causes if our health care system is overwhelmed. The threat is so large that speed is far more important than being fiscally frugal in the face of this impending catastrophe. Individuals need fast and direct governmental financial support to pay their bills and make it easier to stay home and flatten the curve of infection. Small businesses need zero interest loans or even just grants to pay bills and keep their heads above water. We know what will happen if we don't take overwhelming drastic action right now. All we have to do is look at northern Italy to have some idea of what will happen in our hospitals and to the small businesses that our communities center around. If there was ever a time to throw money at a problem: this is it. This is bigger than Maine. It's bigger than any one state or even country. We can do what we can in our communities to minimize the spread and help those in need, but we all need to put our voices together and demand stronger action from the Federal Government.
I included these pictures for the sake of pictures so that this would be more visible on social media.
Here's a parking lot at dinner time that should be full of cars....
My friends Ilma and Damian of Chaval and Piccolo. They've had to close their restaurant to dining in. They're smiling because they just made hundreds of meals for school kids that need food assistance. You can see the boxes in the background. But I know that in their heads they're struggling with questions of how to keep paying the mortgage on the building that houses their restaurant and how to support their employees.