Learning from history is key to success in politics, economics, and public policy.
These past few days, we have seen President Trump play politics with the pandemic. Many of the congressional Republican leaders have joined him, along with his followers and advisors, creating a false choice between the strength of our economy and the inevitable sanitarian measures needed to curtail the spread of the deadly COVID-19.
The climax of this tension happened this week when one of America’s top scientists and experts on this matter, Dr. Anthony Fauci, finally testified in the Senate, after many objections from the White House. Fauci is a man of science at the service of the country, and a public officer during six presidencies. Politics are far from him; policies based on science and medical research is what drives him.
Dr. Fauci was crystal clear; we don’t have a vaccine yet (and it will take time, maybe another year, to get to the point of finding and producing the same massively). Treatment of COVID-19 is also challenging, and the United States has failed to have a massive system of testing in place to detect infected people early and enhance the contention efforts against the virus.
Thus far, there have been more than 1.4 million cases of coronavirus in the U.S., 84 thousand regrettable deaths, and more than a million cases that have yet to recover. Given the high mortality rate of the pandemic in the U.S., Fauci is projecting 140 thousand deaths by August this year. Based on the consensus of sanitarian and health care experts, Dr. Fauci also said that we are not ready to scale back on social distancing and shelter-at-home or confinement measures across the country. He has warned us that accelerating the relaxation of these measures to open up the economy would trigger a second wave, which could hit to our health and the economy more significantly.
While listening to Dr. Fauci, I could not avoid digging in history. Trump’s ambivalence and lack of transparency in communicating with the people reminded me of the reason that contributed to the pandemic known as the “Spanish Flu” in 1918. Then the now-known virus “Influenza” originated in Kansas as a disease transmitted from animals (birds) to humans and spread throughout Europe during the World War I. Political leaders decided to hide the severity of the pandemic to keep the morale high during the war; the consequences were deadly.
It was named the “Spanish Flu” because it was first reported to be a pandemic by a British journalist correspondent in Madrid since Spain was neutral during the war, and no censorship prevented the information from coming to light. If hiding from the truth and science is a lesson to learn from the 1918-1919 Influenza pandemic, moving too fast on going back to normal is another historical lesson to learn. During the “Spanish Flu” pandemic, the world saw a second and the third wave of deadly influenza; the last two were bigger in magnitude than the first. In a world with more densely populated cities, and much more global mobility, as the one we live in, moving fast to back to normal could be even more dangerous.
How do we reconcile the health and life-saving policies of confinement needed, while we find a vaccine, with the economic implications of the pandemic?
Senators Kamala Harris (D-CA), Ed Markey (D-MA), and Bernie Sanders (I-VT) have introduced a bill extending aid to families for $2,000 a month per individual or household earning less than $120 thousand per year while the pandemic demands confinement plus the three following months. While the idea is plausible, the fiscal cost of such a package could be around $500 billion per month. In that line of thought, with a more rationalized budgetary impact, Senator Mark Warner (D-VA) together with Doug Jones (D-AL), Richard Blumenthal (D-CT), also joined by Bernie Sanders (I-VT), have presented an alternative, in which the government could guarantee everyone their pre-crisis wage, paid through their employer.
The Warner package‘s total fiscal cost is probably the same as what Trump and the GOP granted in 1.5 trillion dollars of tax cuts to the wealthiest and biggest corporations in America without hesitation or any economic rationale for it. At the time of the tax cut, we had a perfectly growing economy, with full employment and record corporate profits accumulated during the Obama administration. Now Republicans are concerned that the U.S. has invested almost the same amount to counter a potential economic depression and sustain the efforts to flatten the curve of the spread of this disease while science secures the vaccine against COVID-19.
In the House of Representatives, Congresswoman Jayapal (D-WA), has proposed a credit to cover up to payroll costs up to $100,000 per employee, and Congressman Josh Hawley (R-MO) has floated the suggestion of a similar credit for companies to cover up to 80% of wages. Could bipartisanship come to fruition around these ideas?
One thing is clear. As we have discussed with experts at the Progressive Policy Institute, we need an emergency economic package to fight the recession beyond what has been done. Such a stimulus will cost less than precipitating the economy’s opening without a thoughtful plan to ensure we can defeat the pandemic.