Say 'goodbye' to handshake; post-Covid-19 'next economy' won't be the same

Gordon L. Weil

Everybody looks forward to life after Covid-19.

The combination of strong protective measures and slowed economic activity cannot go on indefinitely. Even with Covid-19 as a threat, the economy cannot be suspended for many months.

Scientists warn about the threat of more Covid-19 outbreaks if “opening” moves too fast. Some supporters of President Trump say the scientists are lying, even about the current death rate. Economists wonder if the country can afford to wait indefinitely.

Some aspects of what is already called “the next economy” become increasingly clear. Here is what is likely:

New health restrictions will become a part of daily life.

More people will work from home.

Travel, from commuting to visiting clients, will be reduced.

The U.S. will depend less on imports for essential products.

Say “good-bye” to the handshake.

Without a “cure,” a two-tier society will be created.

Even before this crisis, remote work was known to yield greater productivity, less employer cost, more free time for employees and significant environmental improvement. Covid-19 has given more people the chance to learn about these advantages.

Some question whether the exchange of ideas would suffer from the lack of face-to-face contact. Others argue, however, that a lot of productive time was wasted in such contact.

Just as Amazon has reshaped shopping and Facebook has affected contact among people, Zoom or something like it may transform the remote work experience. When people can organize visual contact from a home computer, remote work may become far more routine.

Similarly, business travel will be reduced. Formerly, personal contact was seen as essential to making sales or closing deals. But managers have been learning that, forced to use remote contact, customers and clients accept it. The experience may now be extended even without the crisis.

One result should be fewer cars on the road. That automotive American revolution could improve both air quality and personal finances. Major insurers are now rebating some premiums as the number of accidents has decreased. Gasoline prices have tumbled with drivers purchasing less.

Though the future of air travel is less clear, it, too, will be transformed. Less business travel is likely. Perhaps airlines will be required to provide more space between passengers, boosting fares.

The U.S. will probably become less dependent on imports to meet essential needs. Vital medical supplies and other goods like computers cannot come primarily from countries who are America's adversaries or competitors. The relationship with China will change.

People have learned about the “supply chain” in which a product passes through several manufacturers, some of them abroad. The need to improve security will require shortening the chain, though it may mean forgoing some low-wage countries. Still, this is a form of national defense, which people generally support.

Domestic production should grow, though prices may rise somewhat. Security of supply has a cost. But achieving it may do more for the negative trade balance than today's tariff wars with the rest of the world. Slightly higher prices paid for local goods may end up costing customers less than increased tariffs.

The economy will almost certainly reflect a greater use of personal protection and more social distancing as a regular part of life. In Tokyo and elsewhere in Asia, people wear face masks for reasons of health, hygiene and social preference. That may become the way of the world.

Unless a successful vaccine is found, the virus will have emphasized that some people need special protection and cannot engage fully in life. Millions of older people and those with existing illnesses will need to accept less direct, personal contact and an almost certain dependence on face masks.

Governments may have to impose directives that meet their special needs. Separate hours for seniors at supermarkets and in other public places may become a legal requirement. People serving them may be required to wear face coverings. This could become a permanent part of life.

From these changes may arise a two-tier economy. With safeguards, most people may be able to take part fully in the new economic life of the country, even if that entails some degree of risk. As their involvement increases, the economy will revive. Such change will not take place at the same time all across the country but will reflect local factors and personal acceptance of risk.

The second group will be those who need or want a higher level of protection from Covid-19. For them, protective measures may be imposed on businesses and public services.

Of course, the elimination of the coronavirus as a massive health threat by a vaccine could restore full social contact. That could take years. Whatever the scientific outcome, the legacy of Covid-19 will survive and, life will never be the same.

Advocates of Maine 'opening' belittle virus threat, but it could harm thousands

Maine CDC should provide better information

Gordon L. Weil 

The main argument of a legal case against Gov. Janet Mills' directives to protect Maine people is that the Covid-19 situation is not bad enough to warrant her actions. The economy should be “opened.”

The complaint misses four key points:

● Older Mainers are especially hard hit by Covid-19.

● Cumberland County, an economic center, has double the average virus impact.

● Maine's curve is not flattening.

● Some people may remain cautious, not boosting the economy, even if rules are relaxed.

According to the complaint, only a small percentage of the population is dying, so the state should be open. This theory is based on ignorance of the impact of Covid-19 in Maine, partly due to insufficient data and testing, plus back-of-the-envelope calculations.

The complaint amounts to saying that, if crime is low, police are not needed. No thought need be given to the role of the police in keeping crime down just as protective measures get little credit for limiting Covid-19 cases.

An unknown factor is the percentage of the population that has the illness without being aware of it. To be sure, they may be able to go about their business. But they are also able to spread Covid-19 to others who may not be so minimally affected.

The Maine CDC provides a daily scorecard on the illness. But its reports lack vital context. For example, as of last weekend, Maine CDC reported that 11.7 percent of the known cases involved people in their 80s. These people are only 4.9 percent of the state's population.

In short, Mainers in their 80s are 2.4 times above average in their likelihood getting Covid-19. Here is the table for all of the age groups used by the Maine CDC.

Age     Cases     Population     Proportion

<20        2.4%        21.0%           0.1

20s       10.9%       11.5%            0.9

30s       11.3%       12.0%            0.9

40s       15.4%       11.8%            1.3

50s       19.7%       15.0%            1.3

60s       16.2%       15.0%            1.1

70s       12.3%         8.7%            1.4

80s       11.7%         4.9%            2.4

The table shows that people in their 20s, 30s and 60s are just about as likely to contract Covid-19 as the average person. People under 20 are far less likely and people 70 and older are more likely. The data confirms that the older you are, the more vulnerable you are.

While those complaining about Mills' policies want the court to believe that only a tiny number of people would be affected, a calculation using the state's total population (population x share of 80s in population x share of 80s with Covid-19), shows that 7,641 Maine people in their 80s can be expected to contract the illness.

Older people succumb to the illness at a higher rate than others. According to the U.S. CDC, 59 percent of deaths from Covid-19 occur among people 75 and older.

In short, the case against Maine's efforts at protection, alleging a low incidence of death, targets seniors. The opponents implicitly accept that economic recovery is worth human lives, especially several hundred older Mainers. (Disclosure: I am an older Mainer.)

In an attempt to minimize the Covid-19 impact, critics suggest that the total state death rate has not increased very much. In other words, if there's little increase in the number of people dying, why worry about Covid-19?

This argument is false science. Its proponents have no idea about what drives the general death rate and how it has varied, under a wide range of influences, over the years. It's like saying a little snow a few days ago proves that the climate has not been growing warmer over decades.

Maine CDC reports the number of new cases each day and the cumulative number. To see the trend line of new cases over time, the best source is the New York Times. It shows the famous curve that needs to flattened so that health care is not over-stressed. Because Maine's curve is rising, it is not as encouraging as the lawsuit would make it seem.

While Maine CDC reports cases by county, similarly to the age question it does not determine how hard hit counties may be. By last week, Cumberland County had 48.7 percent of the known cases, but only 21.8 percent of the population. People there were 2.2 times more likely to contract the illness than the state average.

Daily reports may have led people to shrug off the Cumberland County numbers as being normal for the state's most populous county. Obviously, it was far from “normal.” Only two other countries joined Cumberland as being especially vulnerable – York (1.2 times) and Waldo (1.2 times). The discussion of the virus' impact never mentions this fact.

Mills relaxed rules in all but four counties, which had community spread. Along with Waldo, Kennebec saw requirements eased , though it had more cases than Androscoggin, still under higher protection. Presumably, the heavy loads in Waldo and Kennebec were due to effects at single sites.

The governor's order, which splits the state into two zones, contains a border problem. People in one county, living close to a relaxed rule county, can drive a short distance and go shopping relatively freely in stores that would be closed in their home county.

The border problem is obscured by the failure of the Maine CDC to provide Covid-19 impact information by municipality. Unlike other states, it declines to issue this information, making it seem that it is inappropriately trying to manage the public. This information could both aid local officials in supporting state efforts and warn residents where greatest caution is needed.

Asked about the stay-at-home rule, Mills seemed to say that it was still in effect. If a non-essential business could open but people could only leave home for essential purposes, there would be no use in opening non-essential businesses. This conflict needs to be resolved along with the border problem. Obviously, the stay-at-home rule will be honored in the breach.

It's possible that only truly isolated areas can have different rules. Maybe that's why Maine can relax its rules faster than other New England states. Relatively isolated, it is the only state bordering on only one other state and Mills' 14-day quarantine for new arrivals discourages the flow from elsewhere in the U.S. The border with New Brunswick and Quebec is effectively closed.

Morning Consult, a national polling organization, has added one more piece of data – consumer confidence by state. It plummeted in all states in mid-March when the impact of Covid-19 became well known.

Since then, some states have eased restrictions. Yet, in no state, notably those that have lifted tough rules or never imposed them, has consumer confidence in the economy recovered appreciably. Maine has gone from a March 1 rating of 111.3 to 74.9 on May 1, third lowest in the country.

The clear message is that governments may relax protection in an effort to restore the economy, but the real decision will be made by the people. They need to feel more comfortable about threats to their health before they will take advantage of all economic opportunity.

To help them make their decisions, people need more information. Maine CDC can do better.

Leaders, including Biden and Trump, challenged as women gain power

Gordon L. Weil

The final field exercise in Marine Corps basic training was the one time men and women recruits trained together. The task was to carry heavy ammo cans across a rope bridge.

A young man was in charge. A young woman trainee suggested to him how to move the cans without a person having to bear the full weight. The men were strong enough to do it, he said, and rejected her idea.

When the men struggled, she grabbed a can and showed them how to do it. They followed and the cans were moved in time, according to the New York Times story. Later, the designated leader told her, with what the reporter called “a tinge of humor,” that “the females can sometimes think.”

Congress had passed a law ending gender-segregated Marine basic training. But Marine generals still interpret the law to allow dual systems.

The story teaches a couple of lessons. First, there is a “dark state” in which unelected government officials pursue their own agendas. Critics may worry about anonymous liberal bureaucrats, but it turns out some of them are Marine generals.

The second and more important story is that women must be recognized. This case was a simply matter of brains over brawn. In a broader sense, the historic domination by men has to give way to the equality of the sexes.

This is the major change that society in many parts of the world is undergoing. Canada, the U.K., Germany, Australia, New Zealand, Liberia, Chile, India, Israel, Denmark, Norway, Finland, Iceland, Ireland and Belgium have all had women leaders.

But not the U.S. Some criticize Joe Biden, the presumed Democratic nominee, for narrowing his vice presidential choice by vowing to select a woman. He may see picking a woman as the best way to be sure that his successor will be the first woman president.

But Biden faces his own problem relating to women. Public opinion demands close scrutiny of the hidden history of some men using their power to sexually exploit women. Tara Reade, a former member of his Senate staff, now accuses Biden of sexual harassment in 1993.

Like many other such cases, it is probably impossible to verify the charges by direct evidence. Instead, information about the behavior of both the accuser and the accused may influence judgments about the truth. Each person applies her or his criteria or opinions in evaluating the available information.

When he testified on his nomination to the U.S. Supreme Court, Brett Kavanaugh faced a charge made by Christine Blasey Ford about his alleged abuse of her. He heatedly denied the charge, and it was left to each senator to make a judgment. The Republican Senate confirmed the nominee of a Republican president.

Direct evidence was lacking. Not lacking was the clear evidence of Kavanaugh's angry and undisciplined reply. Senators might have opposed his appointment, not because of the Ford charge, but because of his intemperate response, displaying demeanor far below what is expected on the Supreme Court.

Biden's response also raises concern, though for the exact opposite reason. After Reade made her charge, Biden did not immediately provide a personal response and or make all his records available. He did not subject himself to any questioning. His slow reaction allowed suspicions to be raised. Does this say anything about his conduct as president in a crisis?

Should Biden get a pass because he is running against Donald Trump, against whom there is evidence of sexual abuse? After all, it might be argued, we need urgently to defeat Trump and Biden is nowhere nearly in the same league.

That is the kind of judgment people will have to make. The truth about Reade's claim may never be known, but Biden could have helped himself and shown more respect for women, if he had been prompt and forthright in his response.

The media is also implicated. Trump's exploitation of women was revealed during the 2016 campaign and since he has been in office. But he never conceded any charge and forgave himself for his own words.

The media recognizes that Trump was elected despite his record with women, They have allowed the election to let the issues fade. Meanwhile, they demand that Biden come completely clean about any possible charges Reade may have filed 27 years ago.

Fair enough on Biden. But this is a new presidential campaign. Every time the media makes demands of Democratic candidate Biden, it should be making the same demands of GOP candidate Trump. The new campaign should not mean he gets a free pass just because he is president.

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.