Death Knell to Small Business

It’s fascinating how Europe bests us at every turn when it comes to the coronavirus. With universal healthcare, nobody worries about falling between the cracks when it comes to treatment and a vaccine (when available). Medical bankruptcies do not exist. Childcare is readily available under government aegis, so folks do not need to look to risky public schools as a substitute for childcare. Employees who have been laid off or lost their jobs have legions of pre-planned and pre-funded wage and salary guarantees. Most Europeans also do not have to wait for their respective parliaments to battle out whether or not to create safety nets for those out-of-work… rates far higher and of longer duration than US unemployment benefits. Which leaves governments more leeway to support industries, small businesses, the arts, and educational institutions.

The picture in the United States is a tad more bleak, particularly in red states that opted out of Medicaid expansion under Affordable Care Act. Lots of furloughed or discharged employees have lost employer healthcare coverage, and openings in local healthcare exchanges are often closed. In some red states, where Medicaid exists at some level, recipients face “work rule” requirements to qualify.  Just one tiny catch. Even assuming they are able-bodied, exactly where are they going to find any work, part-time or otherwise, as pandemic numbers skyrocket and businesses are shutting down again? Delivery openings? Even if they don’t have a vehicle?  Not to mention that any state that reopened too quickly is facing horrific new COVID-19 infection and mortality rates that Europe saw in March and has since brought under control.

Given the dramatic absence of central leadership and a bevy of red state lock-step governors who cannot make decisions without precisely following the orders of their fearless GOP leader, the permanence of the economic damage premature reopening caused is settling in. The headline from The Washington Post (July 23^rd): If a business is still closed at this point in the crisis, it’s probably permanent. Mostly small businesses, of course.

“[With] bailout money running dry, a new report from the online review site Yelp shows that, as the healthiest businesses have reopened and the ranks of permanent casualties have swelled, it’s now more likely than not that a closed business is gone for good.

“As of mid-July, 55 percent of the 132,500 pandemic-era closures on Yelp are now permanent. The online review site’s database includes hundreds of consumer-facing industries, from ax throwing and wine tasting to cabinetry and boat dealers, and only counts closures that have been confirmed by Yelp’s user operations team or reported directly by the business’ owner…

“The nascent recovery has entered a crucial period. Over the coming months, expiring leases will force many more businesses to make existential decisions, said Harvard University postdoctoral researcher Michael Stepner, who has extensively tracked business performance in the coronavirus era.

“‘Businesses are needing to decide, ‘Do I renew my lease on my space for another year?’ It is really hard to make a one-year commitment to paying rent when businesses are closing down for the second time and there’s no end in sight to this virus,’ Stepner said… ‘The longer these temporary closings go on, the more of them will turn permanent,’ he added.

“Permanent losses are highest in the restaurant sector, both overall and also relative to temporary closures, Yelp’s data science team found. Retail accounts for another huge swath of the damage, as do smaller but hard-hit sectors, such as beauty, nightlife and fitness…

“The wave of permanent closures helps explain why, five months into the crisis, the number of Americans filing new unemployment claims remains stratospherically high by historical terms. Jobless claims had been slowly declining from their peak in late March, but in the past week [third week in July], they reversed course and rose by 109,000 to 1,416,000. Similarly, separate data shows that permanent job losers continues to climb even as the headline unemployment rate falls.

“‘This data suggests that economic damage continues to accumulate,’ said Adam Ozimek, chief economist at Upwork. ‘They were hidden by a wave of workers returning from temporary layoffs in the last two months, but if you look beyond the headline numbers, it’s clear we are not out of the woods yet.’” The Post What makes this particularly hard to take is how much of it is and was preventable. If protecting the economy was truly the goal, Trump dramatically decimated that most essential part of the economy: people. The US economy is over 70% consumer based.

The list of errors is impressive: Ignoring and suppressing facts, distorting government reports from experts, and engaging in wholesale denials of science and hard medical facts. Engaging in mass denial, excoriating any serious and credible organization or individual with a contrary view. Preventing proactive prevention methods or delaying them until we passed a point of no return. Disabling institutions, defunding experts and preparedness. Firing, demoting or suppressing experienced and educated government professionals, literally keeping them from doing their jobs. Fostering fake cures. Making false promises. Taking bona fide statistics, doctoring them to conform with the “leader’s expectations” and releasing those distortions to justify politically desirable decisions that would ultimately just make matters worse. Engaging in activities (e.g., political rallies) to create maximum contagious exposure. Politicizing common sense medical applications that worked in Asia and Europe – wearing masks, limiting gatherings and safe distancing – so that those who followed “doctor’s orders” would be viewed as disloyal political turncoats.

Trump’s begrudging acceptance of masks, no longer suggesting that wearing them represented challenging loyalty to him, has not moved the needle much. Not only is he not wearing a mask much at, but he has engendered a notion among his followers that they have individual rights to refuse to follow state and municipal directives (even with fines and other sanctions) to wear masks, not gather in larger groups and safe-distance. Even some red state governors have refused to issue such orders, and one (Brian Kemp in Georgia) even countermanded city mayors with horrific spiking infection rates who ordered such practices within their jurisdictions.

The needle also didn’t move on July 23^rd when he finally cancelled the GOP convention in Jacksonville and suggested that some school districts might be delay in opening in-person instruction for a “few weeks” at the discretion of the respective governors. Trump’s minions were already too committed to their earlier paths of resistance and denial.

The President pretty much did everything wrong. In July, he finally figured out that he could no longer avoid dealing with the Tyrannosaurus Rex in the room. A nasty accelerating virus. So, he resumed his daily coronavirus press briefings, told the world masks are good, and pre-purchased 100 million units of a vaccine that doesn’t even exist yet. He just might claim an imminent vaccine-induced end to COVID-19 with no real evidence that timely completion, testing and deployment is guaranteed. Keep everything open! Open what’s closed! Open all schools for in-person learning against the advice so many doctors who have guidelines that are hard to meet! The virus is mostly just another flu! Mild to most! Really?

The President got some “lie with statistics” experts to create some highly erroneous and misleading charts to “prove” he is right. He wasn’t. But whatever he does, even if these efforts finally begin to turn the tide, the vast majority of the massive damage – the well-over 140,000 dead Americans, more with permanent health impairments, business closures and job losses, and an exceptionally long projected economic recovery – caused directly and immediately by Trump’s failures is already done and will probably continue. Can he erase his mistakes by November? Depends on which funeral home you ask.

            I’m Peter Dekom, and listening to Trump supporters praise the President’s efforts, his support of the economy, in the face of a tsunami of hard data to the contrary, continues to stun me.