Politics the biggest problem in fighting Covid-19; Maine becomes battlefield

Gordon L. Weil

The biggest problem with combating Covid-19 is not the struggle of science to come up with an answer. It's politics.

The coronavirus is now the center of a war by the ideological right, led by the Republican Party, and against efforts, led by many governors of both parties, to let science set the pace of recovery.

The anti-protection forces are composed of three elements, whose apparent purpose is to support reopening the economy, even if that means sweeping aside measures that have worked in limiting the spread of Covid-19.

First, there are believers that personal freedom beats any common interest. They see government action to shut businesses, limit free movement and mandate wearing face coverings as illegal invasions of what should be their unfettered rights.

Second are right-wing opponents of issues from gun control to immigration who seek to exploit an opportunity to strengthen their movements. They may be able to tap into new pools of people who could share their views. And current Covid-19 policies, like shutting down immigration, might help their cause later.

When the list of “essential” businesses that could avoid a shutdown was published, the gun lobby noted the lack of gun shops. After it was belatedly added to the federal list, Maine GOP legislative leaders asked Gov. Mills to do the same. She did.

Third are Trump Republicans, who oppose governors undertaking necessary but unpopular measures, as a way of rebuilding support for President Trump and other Republicans. By making reopening their cause, they hope the economy kicks back into high gear, an essential element of the Trump campaign and helpful to Republicans riding his coattails.

Now Maine Republican leaders want the Legislature to come back and strip Mills of the emergency powers they joined in giving her by voice vote when they left Augusta. Their claim, refuted by the governor, is that she did not consult them sufficiently.

They did not attempt to create a bipartisan group, but made the appeal purely partisan. They apparently figure that opposition to the stay-at-home, wear-a-mask rules will grow to a point that Mainers would line up with the GOP in favor of reopening and re-elect Susan Collins and even Trump.

With their emphasis on economic values over health risks, some opposition groups either inaccurately assert that the overall death rate has not increased or argue that added Covid deaths are the reasonable price for people getting back to work. At the same time as the Trump administration pushes reopening, it openly recognizes there will be a major increase in cases and deaths.

Many governors, ranging from Janet Mills in Maine to Jay Inslee in Washington, emphasize the health of their citizens and follow the warnings of science about the risks arising from an unknown and deadly illness. Their states have produced better health results than others that are more politicized.

Their opponents want to exploit unhappiness with their tough measures. Opposition is also based on a desire to distract attention from the failure of the federal government and some states to be prepared for the crisis or to react to it in a timely and appropriate manner.

The federal government should have been better prepared. Its reserve of medical supplies was supposed to be sufficient to meet emergency national needs. A presidential administration in office for three years cannot blame earlier presidents when it has done nothing, even after having been warned.

Instead, it simply changed the role of the national reserve by stating it was meant only as a backup to the states. The market power of the federal government in buying needed medical supplies was lost, forcing states to compete with one another and other countries with poor results.

In 1951, the Epidemic Intelligence Service was created. It is composed of thousands of trained medical personnel who know a lot about handling a crisis such as the U.S. now faces. It includes “disease detectives.”

Its policies suggest that there should be a single, reliable spokesperson. That person, who must convey bad news and tough rules, should be a scientist, not a politician. By having a single spokesperson, the message can be conveyed clearly. And this person should always show compassion and sympathy.

Maine does well in following E.I.S. practices. Dr. Nirav Shah, the state CDC director, is the spokesperson. Mills does not offer medical opinions but explains what she is doing, using the powers given her by the Legislature. While Shah appears daily, she does not.

Contrast Maine with the daily federal briefing, usually dominated by Trump. There are several spokespersons and they contradict one another. At first, Trump downplayed the threat, hoping, using his word, that he could be the “cheerleader” for an early recovery, helpful to his reelection. He displays ignorance of science and research. Politics matter more than health.

Covid-19 can be brought under control, even without a universally effective medicine or a vaccine, by limiting the spread so that its dwindles. That can be done by everyone wearing a face covering. But it takes time, full participation and keeping the effort out of politics for that to work.

Politically, it takes some courage to require compliance. It is more appealing to favor unfettered freedom.

The opponents of fighting the spread have raised the issue. By advocating rapid reopening, they have also raised the stakes. In the end, it's up to each person to decide.

Covid-19 fight will bring inflation, higher taxes

Gordon L. Weil

Fighting the health and economic impacts of Covid-19 costs a lot of money.

The government has pumped out trillions of dollars to support urgent health care and to help people and companies survive the loss of jobs and business activity. Spending and lending at this level has never happened before.

These massive outlays result from the lessons learned in both the Great Depression of the 1930s and the Great Recession, a dozen years ago. Previously, Congress had reacted slowly and with too little financial support for the economy. The Federal Reserve played only a small role, at least at first.

Recovery from the Depression took more than a decade and was ended by massive spending for World War II. Recession recovery dragged on almost as long. In both cases, spending was limited by Republican opposition to increasing the federal debt.

With strong bipartisan support, Congress has passed four rescue bills with a $3 trillion price tag. Aid is supposed to cover some personal and business income losses until the economy opens again. No money was raised to cover its cost.

Before this virus spending, the federal government was on track to run a $1 trillion deficit this year. With the virus outlays, deficit spending could push the federal debt to nearly $22 trillion. That's a new record.

That debt will have to be repaid. Government tax revenues will decline during the crisis, and taxes cannot be raised now, so the added debt will not be offset by revenues. It will keep growing, but must be paid off by future government revenues.

Some critics say we should not be overly worried. Interest rates are close to zero, so the debt will grow only slowly as unpaid interest is added to the debt over time.

They have also come up with an optimistic way of looking at the size of the federal debt. If you measure debt against the size of the economy, it does not look so bad, especially if the economy grows faster than the debt. Future prosperity could pay today's bills.

That was the theory behind the big GOP tax cut in 2017. Of course, it would raise the deficit, the annual budget shortfall and debt, the total amount government owed. But the reduction would encourage growth, which in turn would produce the tax revenues to more than offset the shortfall caused by the cut.

It didn't work. Even before the Covid-19 crisis, new tax revenues did not come close to covering their cost.

The GOP had traditionally accused the Democrats of “tax-and-spend” policies and creating deficits. Once in power, Republicans warmed to increased outlays and adopted “borrow-and-spend” policies. Using debt, they even had room to lower taxes. And most Republicans abandoned their dislike of deficits.

Debt may have reached the point where repaying it out of federal revenues would require impossibly large tax increases. The more likely solution is to make the dollar worth less and repay the debt with cheaper dollars.

The purchasing power of the dollar would be reduced. Prices would increase. Though people might be paid more dollars, their higher incomes would produce higher taxes, used to pay down the debt. Its amount would not have changed, but each dollar used to repay it would be worth less, making it cheaper.

One word explains this process – inflation. Everything would cost more except the debt. Even with more dollars, people would face higher living costs. They would lose purchasing power.

Add to all this the Federal Reserve. Having seen the slowness of action by Congress and unsure about its response, the central bank has moved on Covid-19 with greater force than ever in its history.

Congress spends; the Fed lends. It has created money and loaned trillions, much more than Congress has spent. It buys federal government debt and bank loans to businesses. To pay back those loans, businesses will have to raise prices, fueling inflation.

The Fed supposed will be paid back, but in those future, cheaper dollars. Any defaults by borrowers will be covered by the federal budget.

Then, there are the states. The federal government can deficit finance, but states cannot. In effect, states want to shift their deficits to the federal government.

Eventually, there will have to be tax increases. Add to that inflation and reduced purchasing power. Deficits and debt cannot continue at current levels indefinitely. The combined cost of the existing deficit budget and Covid-19 outlays must be paid and tax increases cannot cover it.

The price of today's massive debt will most a major tax increase, but most if it will take the form of a reduced standard of living.

People, not Trump or Mills, will decide on opening as Covid-19 lessens

Maine faces major challenge in restarting business

Gordon L. Weil

Who will decide when to begin to open the economy as Covid-19 fades?

President Trump? After a false start, that's clearly out. State governors? Legally, but not likely.

Government has mandated limits on individuals and businesses. People are often told to stay at home except for venturing out for essential purposes. All but essential businesses, often broadly defined, must be closed to the public.

From the outset of the arrival of the virus, the country reacted as if the crisis would be brief. Aid to businesses and workers would tide them over while the coronavirus was brought under control. Almost unprecedented protective measures were imposed, but in the belief they could soon be lifted.

In effect, government action was grounded in remarkable faith in science to come up with an effective treatment in a matter of months or rapidly to develop a vaccine.

Until science triumphs, government patches and protects. The patch is the massive action by the Federal Reserve and Congress, pouring funds into the economy to maintain some personal and business income. The protection is “stay-at-home” and lock-downs.

Discovery of cures is usually slow and uncertain, not a recipe for quick recovery. But the economy cannot be put on hold for an endless period. Governors must come up with policies for “opening” their states. That is proving to be difficult.

Gov. Janet Mills faces an almost impossible challenge. Oxford Economics, a research firm, finds that Maine will be the hardest hit state by the Covid crisis. Its older population and dependence on tourism

plus a retail economy with many small business and self-employed people combine to make recovery unusually difficult.

Seniors must continue to be protected, but Maine needs an influx of people to its lodgings and restaurants and to occupy their second homes. The obvious problem is that they may bring the virus with them, even if they are unaware of it.

Federal guidelines focus on the stabilization and decline of virus cases. Much depends on testing, but, right now, it is overrated. There are insufficient testing supplies, and their effectiveness is questionable. So the date remains elusive when all are tested and those cleared can go to work.

Maine's progress has been good, though it is not yet evident that the state has reached its peak in new cases. It may benefit from its relative isolation with the Canadian border effectively closed and self-quarantine regulations and shuttered accommodations discouraging the flow from elsewhere.

While there is general recognition that science, not government, calls the shots, the economy cannot wait for months or even a year with current cutbacks. Many people will resist being kept at home. Governors will have to allow for gradual opening.

In Georgia, the governor began opening his state last week. But many people and businesses did not change their protective stance. One mayor there received requests for guidance. She said she responded: “Don’t look to government to tell you what to do. If you want to go and get your hair done, that’s on you.”

That's the kind of advice Mills and other governors may have to give as the economy reopens. Not the president, not the governor, but the individual will decide.

It's possible that a vaccine will become available this year, which could reduce the risks of reopening. But behavior may have been changed by the initial Covid-19 experience, especially for the most vulnerable. Even with a vaccine, reopening would be cautious and and decided by each individual.

The state role may be to allow people to take whatever risks they want, provided they don't increase the risk for others. And it can issue mandates that would enhance the freedom of the most threatened.

Stay-at-home and business closings will eventually be relaxed, but wearing masks, which prevent taking in the virus, or face coverings, which prevent spreading it to others, may be mandatory for the long-term. Similarly, social distancing could be maintained, though it would undercut dining out or attending large events.

The result of a policy combining state safeguards and individual decisions could be a self-segregated society. Many people, either because of scientific gains or indifference to risk, may decide to live as freely as possible. Others, including the most vulnerable – seniors and those with illnesses, might stay home.

Whether this course of action would work is unclear. If Covid-19 brings even more serious health problems like blood clots or opening society without an effective vaccine causes the resurgence of the virus, even greater changes in our lives and the economy may be inevitable. Right now, uncertainty reigns.

The most obvious challenge for federal and state governments and individuals struggling with Covid-19 is its menacing mystery.