Connect with us

Business

As Science And Business Go To War With Each Other, President Trump Pours Fuel On The Fire

Published

on

By Abram Brown with Chris Helman

In his corner of the Texas oil patch, Bud Brigham has kept things going as much as he can in the face of the coronavirus pandemic. Most of the employees at Brigham Minerals, which he founded and currently chairs, are working from home. Brigham is also the chairman of Atlas Sand, whose plants are still going “full throttle,” he says, processing the sand that gets sold to frackers.

As the name of that company hints, Brigham is a libertarian, and he once financed a movie trilogy of Ayn Rand’s Atlas Shrugged. “I do wonder, are we overreacting?” he says, doing his best Dagny Taggart imitation. “Is the cure worse than the ailment?”

That sentiment has spread widely in the last 48 hours. Tweets and email chains, many penned by desperate small-business owners, found their way to the Fox News punditry set. “Just as the spread of coronavirus creates a curve of the number of people infected, this economic shutdown is creating a curve of the number of people affected—losing their jobs, their homes, their businesses,” Fox host Steve Hilton said Sunday night, asking viewers if they were familiar with “that famous phrase: ‘The cure is worse than the disease.’ ” It was then only a matter of time before the Tweeter-in-Chief weighed in. “WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM,” President Trump, caps lock on, wrote shortly before midnight Sunday. “AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO.” He doubled down yesterday morning, retweeting those who agreed with him—and finished by retweeting his own late-night tweet.

By yesterday, Trump’s notion had become a mainstream talking point, as prominent observers including Texas Lieutenant Governor Dan Patrick, Fox News’ Laura Ingraham and Brit Hume and Florida Governor Ron DeSantis all insisted that an economic crash will kill more people than the virus, and we should therefore let those who are purportedly less at risk—the young and middle-aged—go back to producing and consuming.

All of which has scientists, doctors and other health-care professionals aghast. Their consensus: Stay home and don’t go within six feet of anyone. “We have to hunker down,” says Vincent Racaniello, who teaches microbiology and immunology at Columbia University. He doesn’t think it’s safe to resume normal life until the country reports no more than 10 new cases in a day. (The U.S. is currently reporting thousands per day.) “Look at all the people dying in huge numbers on a daily basis in Italy,” he adds. “We need to prevent that.” When Dr. Anthony Fauci, the government’s leading expert on infectious diseases, didn’t appear at yesterday’s circus-like press briefing, Trump was asked if Fauci agreed with him on the need to ease social distancing to speed the reopening of the economy. “No, he doesn’t not agree,” the president responded, his use of a double negative only muddying the waters further.

Does this standoff represent yet another culture war, this one with hundreds of thousands of lives and hundreds of billions of dollars on the line? “This is probably unprecedented,” says Greg Wawro, chair of Columbia’s political science department. “It is bleak. It’s bleak.”

Both sides come armed with statistics. The science-first side argues in terms of sickness and mortality, citing a worst-case scenario that projects 160 million to 214 million Americans infected with COVID-19 and a death toll of 200,000 to 1.7 million. These models factor in the past few weeks in Europe—models that in fact seem optimistic given the pathetic state of testing in the U.S. so far, as well as government mandates far less draconian, even in New York and California, than in Italy and Spain.

The business-first side, meanwhile, cites lost dollars. On the “positive” end of things, Bank of America thinks the economy will slide 12% in the second quarter; Deutsche Bank predicts 12.9%. This would represent “collapse,” BofA economists wrote in a recent research report. Goldman Sachs forecasts a 24% drop. “Global recession in 2020 is now our base case,” Morgan Stanley’s chief economist, Chetan Ahya, concluded in a recent report. Those estimates would likely translate to between 5 million and 8 million vaporized jobs. One Federal Reserve official, Mercer Bullard, said yesterday that unemployment could reach 30%, the highest in American history. (During the Great Depression, joblessness peaked at 24.9% in 1933.) These numbers feel like an almost self-inflicted wound given that just four weeks ago, the economy seemed headed to another year of healthy growth amid the longest expansion in American history.

“I would love to see life going back to normal,” says Luciana Borio, a physician who served on Trump’s National Security Council. “However, I do not think that’s going to be by the end of this week.”

To the science side, economic speculation is irrelevant. “The most important thing here is to save people’s lives, and there is no value you can put on a person’s life, right?” says Columbia’s Racaniello. “Especially if it’s someone who means something to you.” Recognizing the potency of this argument, the business-first types have cobbled together dubious estimates of the lives taken by recession and poverty.

They’re also trying to compare potential coronavirus deaths to those from heart disease (650,000 deaths annually), cancer (600,000) or automobile crashes (1.3 million), knowing that no one would advocate shutting the economy to stop such losses. “Negative effects on the economy create lots of misery for people,” says Harvard professor Jeffrey Miron, a former fellow at the libertarian Cato Institute. Adds David Friedman, a retired Santa Clara University professor and son of free-market apostle Milton Friedman: “The government shutting down the economy or freezing the economy or printing $2 trillion to give to people doesn’t make a whole lot of sense.”

But the winning argument, on economic terms, belongs to the scientists. The idea that economy versus lives is a zero-sum game is false. The most vexing potential problem with COVID-19 isn’t the death rate. It’s the risk of a surge that collapses the U.S. health-care system, with most cities already preparing for triage and carnage on a scale never seen in peacetime America. That alone would cripple both the biggest player in the American economy and undermine whatever consumer and corporate confidence could be imbued with a business-as-usual attitude. It’s why even President Trump was imploring everyone to “flatten the curve”—at least until this weekend.

“I would love to see life going back to normal,” says Luciana Borio, a physician and the former chief scientist at the FDA, who served on Trump’s National Security Council, planning for worst-case scenarios like these until she left when the president dismantled the group’s team of health experts. “I think we should try to do everything we can to bring it back to normal as soon as is feasible and responsible to do so. We shouldn’t sit and wait a second longer than it’s needed. However, I do not think that’s going to be by the end of this week.”

Or next Monday. March 30 looms large, as Trump began urging distancing on March 15, for a suggested 15 days. Despite all the friendly PSAs, though, only a handful of states have imposed the kind of stay-at-home mandates that could actually stem this scourge. Most of the country is still congregating, which means most of the country will start getting sick only on or around March 30—when the death counts in places like New York, judging by the experience of Europe, will start to become staggering.

It’s all a false dichotomy. Business and science aren’t zero-sum, the same way that solving climate change should be viewed as an extraordinary investment opportunity rather than a cost. Great science blossoms under entrepreneurial capitalism. Great business is based on reason and data.

Data, or lack thereof, is the biggest culprit behind this catastrophe. America’s inability to amass enough test kits—much less masks and ventilators to protect health-care workers—means we’re flying blind. That’s the biggest difference between the United States and a coronavirus role model like South Korea, which opened 600 testing centers and is now producing 100,000 testing kits per day.

“It might be reasonable to gamble”—and try to restart things—“if you actually understand [the scope of the problem],” says Borio. “We don’t.”

Source link

Business

COVID-19: Ottawa small businesses see revenue dry up

Published

on

By

Ottawa jewelry maker Alyssa Spaxman kids that she’s doing a lot of deep breathing these days.

After all, she needs a means of calming herself, given COVID-19 and the massive hit her business, Strut Jewelry, has taken.

“Carrying the anxiety and fear of losing my income, along with concerns for the health of my friends, family and myself … has been completely draining,” Spaxman says.

The financial impact of the pandemic has been “immeasurable,” says Spaxman, who launched her business in 2009 and has two part-time employees working with her in her studio.

She finds herself in a plight common to many small businesses and product makers who have wares to sell but practically no way now to sell them.

The income streams that Spaxman built up over the years “have all toppled in one week,” she says.

“Events are cancelled, stores that carry my work are all closed. I am down to a trickle of online sales,” says Spaxman.

Many shows and markets Spaxman normally attended — such as the Ottawa Farmers’ Market at Lansdowne Park, which has suspended operations — have been cancelled.

As for the future, Spaxman worries that some shops that stock her work may go out of business or have to scale back their operations, affecting her sales. Furthermore, she fears that “people are losing their jobs and the capacity to spend on non-essential goods like mine.

“The negative effects on my livelihood are direct, far-reaching and will be felt for a very long time,” she says.

Spaxman is doing her best to adapt to the new COVID-19 normal, promoting sales through her website, offering discounted gift cards, pick-ups from her porch and free shipping for orders of more than $100.

But she says: “I don’t want to overwhelm my customers, as so many of them are overwhelmed themselves and grappling with this new reality we are all faced with.

“I’m hoping that our government will offer something to help,” Spaxman said in an interview Thursday.

On Friday, in an effort to help small- and medium-sized businesses stay afloat, Prime Minister Justin Trudeau announced the federal government will cover 75 per cent of wages for qualifying small- and medium-sized businesses, backdated to March 15.

 STAY INFORMED: CLICK HERE TO SUBSCRIBE TO OUR NEW DAILY COVID-19 NEWSLETTER FOR ALL THE LATEST UPDATES

Source link

Continue Reading

Business

French Laundry restaurateur Thomas Keller sues for coronavirus insurance coverage

Published

on

By

Keller’s attorney says the suit against insurer Hartford Fire Insurance Company — and other similar challenges filed by restaurant owners — is intended to establish legal precedent so that businesses facing mandated coronavirus closures are covered by their business interruption insurance policies.

Matthew Sturdevant, a spokesperson for The Hartford, declined to comment on the lawsuit. The suit was brought by French Laundry Partners, LP and Keller’s restaurant group.

Keller is one of America’s most-decorated chefs, and his restaurants have received numerous awards and accolades. He’s the first American-born chef with two restaurants simultaneously achieving three-star ratings from the Michelin Guide.

Keller’s group has about a dozen restaurants in New York, Las Vegas, Miami and Yountville, Calif.

His is not the only challenge by a restaurant regarding coronavirus-related insurance coverage. New Orleans seafood restaurant Oceana Grill made a similar move earlier this month in asking a Louisiana court to make a declaratory judgment that its insurance policy with Lloyd’s of London covers civil authority-ordered closures.
Chef Thomas Keller

The American Property Casualty Insurance Association this week said it believes that most insurance policies — including those with business interruption coverage — do not cover viruses such as Covid-19 and that to “retroactively rewrite existing insurance policies” could put the insurance industry at risk.

One estimate by the association found that small business’ potential continuity losses could total $220 billion to $383 billion per month, which would quickly consume the estimated $800 billion surplus US insurers have for payouts.

“If policymakers force insurers to pay for losses that are not covered under existing insurance policies, the stability of the sector could be impacted and that could affect the ability of consumers to address everyday risks that are covered by the property casualty industry,” David A. Sampson, president and CEO of the association, said in a statement.

John Houghtaling, the attorney representing both Keller and Oceana Grill, told CNN Business that “It’s become clear the insurance companies were not going to honor these policies.”

Houghtaling, managing partner of Gauthier, Houghtaling LLP, referenced a posting made earlier this month by a catastrophe litigation attorney with Zelle LLP, a boutique law firm that focuses on insurance-related matters. The attorney wrote that unless policies specifically outline non-physical damage coverage, businesses “are unlikely to find relief within the four corners of their policies.”

Houghtaling disagreed with the assessment.

“They’re wrongfully denying us, which is going to cripple millions of people and their livelihoods,” he said.

Source link

Continue Reading

Business

Feds increase wage help for business amid COVID-19 pandemic | paNOW | Prince Albert, Saskatchewan

Published

on

By

(The Canadian Press)

By Glenn Hicks

Wage Help

Mar 27, 2020

The Prince Albert and District Chamber of Commerce is applauding the latest federal government move to keep businesses afloat amid the COVID-19 pandemic.

Ottawa will now offer a 75 per cent wage subsidy to qualifying small and medium-sized enterprises (SMEs) who have been affected by the pandemic. Previously it had announced a 10 per cent wage subsidy. It is backdated to March 15. Also, an emergency account will offer loans up to $40,000 interest free for one year, $10,000 of which may be forgivable to qualifying businesses.

“Anybody who still has employees who are working, I would imagine this will come as a relief,” CEO of the local chamber Elise Hildebrandt told paNOW. But she added the details of the package were still scarce, including which businesses would qualify. She was hoping to get an update soon from federal officials and post the details to the chamber website.

Hildebrandt said the $40,000 loans would be a benefit for local firms.



Source link

Continue Reading

Trending