San Francisco Chronicle - (Sunday)
Bay Area seeks middle ground in reopening
As America lurches toward reopening after weeks of coronavirusrelated shutdowns that ravaged the economy, some people, including political leaders, frame the situation in binary terms: It’s a choice between lives and livelihoods — grandma’s health or Wall Street’s wealth.
But the realtime, highstakes experiment now under way is far more complex, a calculus with innumerable variables. As politicians, business leaders and individuals weigh the risks, economists and ethicists are seeking ways to balance the competing perspectives.
Some states, counties and cities seem to view the choice as all or nothing, rushing to fling open restaurants, tattoo parlors, barbershops, malls and factories, while protesters, some of them armed, pressure government officials to follow suit.
Many ordinary Americans are more cautious, preferring to stay cloistered for fear of contagion. In the Bay Area, few ventured out in recent days even after stores opened for curbside pickup in San Francisco and restaurants reopened dining rooms in Napa. Still, with millions of people now jobless, the calls to return to work have accelerated, along with fears that businesses — and the jobs they provide — will close for good the longer the shutdown grinds on.
Meanwhile, the recipe followed by California and the Bay Area for slow and gradual reopening, with ample testing and contact tracing — and opportunity to pull back if needed — suggests there is a middle way. The question is how to mitigate the worst effects of both the virus and the measures we undertake to prevent its spread.
“The decision is more nuanced than that draconian, blackorwhite choice,” said Joan Harrington, director of social sector ethics at the Markkula Center for Applied Ethics at Santa Clara University. “We have more information, more data, so a slower, gradual reopening is a possibility.”
She fears the consequences for states that leap ahead without reflection. Weighing what option best serves the common good should be the lodestar, she said. And it may not be the same for all populations.
“You want people to be treated equally so their outcomes are the same,” she said.
That may mean offering support to groups such as minorities and lowerincome workers who are disproportionately affected by the disease. Providing child and elder care and guaranteeing paid sick leave, adequate health care and adequate time off are measures that could reduce their vulnerability to the virus by lessening the economic pressure to risk exposure on the job. Spreading out shifts could support more physical separation at workplaces.
“The allornothing approach of ‘We are completely open or we are still closed’ with no creative thought on how to make it work is just untenable and will lead to continuing polarization and politicization of the issue,” Harrington said.
A utopian expansion of social safety nets could carry an unsustainable price tag, some economists warn.
“The simple fact is: Somebody has to pay for those things,” said Bob Graboyes, senior research fellow and health care scholar at the Mercatus Center at George Mason University and a former economist at the Federal Reserve Bank of Richmond. “The economy is in terrible shape. Federal and state government revenues are shattered right now. I’m opposed to promising things we cannot afford.”
Universal health care, he said, hardly proved a panacea overseas. “Europe is full of countries with universal systems, and they’ve had horrific results — Italy, Spain, the Netherlands,” he said.
The choices seem stark, and none ideal.
Staying shuttered until there’s a vaccine would be the surest way to preserve people’s physical health. But doing so risks economic catastrophe. High unemployment carries its own heavy burdens: malnutrition, homelessness, bankruptcy, depression, domestic abuse and other social ills.
Throwing businesses’ doors open without limits could initially lead to rehiring but then trigger major new waves of infections. Such a scenario could have its own shattering economic consequences.
“If that happens, it’s a whole different economic ballgame,” said Mark Zandi, chief economist at Moody’s Analytics. “It will completely undercut confidence, and that’s very hard to recover from.”
He goes so far as to call that potentially cataclysmic for the economy.
“It’s a very large gamble to open up too quickly,” he said. “But with 50 states doing their own thing, it’s bound to reason that one will do the wrong thing at the wrong time.”
Using a coldblooded financial lens to assess the consequences of not sheltering in place shows that it could have been an expensive choice indeed. Similar calculations apply to the lives lost if reopening triggers a new surge in deadly infections.
Economists at the University of Chicago did the math on the potential cost in lives, using U.S. government figures for the value of a statistical life, a multimilliondollar figure that varies by age.
In their report, “Does social distancing matter?,” Michael Greenstone and Vishan Nigam use estimates from the Imperial College of London on the U.S. death toll if the country failed to intervene to halt the virus’ spread. They project that the shutdowns that began in midMarch saved 1.76 million lives. Of those, 1.13 million would have perished from the coronavirus, and the rest would have died from avoidable causes because hospitals were overwhelmed with COVID19 victims. That could have cost the economy $7.9 trillion, they wrote.
“Overall, the analysis suggests that social distancing initiatives and policies in response to the COVID19 epidemic have substantial economic benefits,” they concluded.
For the initial weeks of shelterinplace, the decision seemed clear.
“We think life is valuable and we’re willing to take a big economic hit to make sure people don’t die” was the thinking, said Manuel Pastor, director of USC’s Program for Environmental and Regional Equity and a member of Gov. Gavin Newsom’s Task Force on Business and Jobs Recovery.
The hit was indeed big, with scenarios rivaling the Great Depression as millions of Americans lost their jobs and people lined up for hours at food banks.
And even with the economic sacrifices, the virus circulated widely. Close to 100,000 Americans have died of COVID19, and at least 1.6 million have been infected.
That is far short of the theoretical 1.76 million number Greenstone and Nigam forecast, because the shutdown did happen. But some have made estimates of the cost of the country’s current middle path. A Wharton study shows that a partial reopening could add about 40,000 deaths on top of the expected amount, exacting a heavy financial toll on top of the moral one.
A forecast by the Institute for Health Metrics and Evaluation at the University of Washington projects nearly 135,000 U.S. deaths by August. That more than doubles an earlier estimate, based on the effects of easing of social distancing.
There is also the question of who bears the brunt of the increased health risks of reopening.
The crisis has exacerbated the yawning divide between people who can work comfortably at home and have a cushion of savings, and those who lack that cushion and whose jobs require them to work in person, putting them at risk of the virus.
“To me the moral dilemma is: Are you putting a risk on someone else that you are willing to accept for yourself ?” Pastor said.
“We’ll see whether the slowwalk approach California is taking will lead to more sustainable recovery over time,” he said.
“It’s not a binary decision,” said Anthony Scriffignano, chief data officer at Dun &
Bradstreet, which is consulting with the Federal Emergency Management Agency on reopening the economy. “There is precedent around the world for, ‘Do a little bit, see what happens, do a little more.’ It’s always possible to back up.”
Projections on some basic realities may also help guide decisionmaking, Scriffignano said.
D&B, which has vast data troves through its work providing business credit reports and other insights for corporations, is helping FEMA by translating reopening scenarios into real numbers. It’s answering questions like these: If a region opens a third of its factories, how many employees will return to work and how many individuals live in their households? How much personal protective equipment and testing resources should be allocated in that area?
“It’s very dangerous to make any of these decisions in isolation,” he said. “You have to look at the entire integrated supply chain around the world.”
No matter what, the restarted economy won’t look much like that from a few months ago.
“Travel, tourism, hotels, restaurants, performing arts, spectator activities will be a shadow of what they were,” Zandi said. “That will wipe out a big part of the infrastructure that supports those industries. In many cases because of shifts in the way we live and work, they may not come back in the way we know them.”
Economic transformation will occur longterm as well.
“The virus and its fallout will reinforce trends already in place: the shift to online retailing, move away from urban center, pullback from globalization/trade/immigration,” Zandi said. “These dynamics were already beginning to unfold, but this event will supercharge them.”
Which shows just how challenging solving for lives and livelihoods is. Far from a simple equation, it’s a knotty reckoning for a world that is not just threatened by a virus, but being transformed by it.
“There is precedent around the world for, ‘Do a little bit, see what happens, do a little more.’ It’s always possible to back up.” Anthony Scriffignano of Dun & Bradstreet, a FEMA consultant on reopening the economy