Uncertainty is gripping the nation and its financial markets. Economies are shutting down: life as we know it is grinding to a halt. “Americans should be prepared…to have to hunker down significantly more than we as a country are doing,” says Dr. Fauci, Director of the National Institute of Allergy and Infectious Diseases.
To slow the spread of COVID-19 virus, Dr. Oz recommends the following: “… washing your hands alone is probably a 50% reduction in virus transmission…it’s a DIY vaccine…it’s that powerful…But, the most important thing is social distancing.”
We have confronted SARS, Avian Flu and Ebola.
Why is this time different?
Dr. Lipsitch, Harvard’s Director of Center for Communicable Disease, explains: “New viruses have a temporary but important advantage—few or no individuals in the population are immune to them. Old viruses, which have been in the population longer, operate on a thinner margin—most individuals are immune, and they…transmit among the few who aren’t.”
The concern is that over 80% of those who contract the virus may have little or no symptoms, making it easier to spread, and difficult to identify and contain. This has not only overwhelmed medical systems, but can hurt patients with serious underlying conditions.
States are closing school systems; restaurants, retailers, hotels, airlines, cruise lines, travel agencies, malls, museums, concert halls, movie theaters, amusement parks, barbers, beauty salons and dry cleaners, along with many other businesses are particularly hard hit.
Large businesses are implementing work from home policies. Work arounds are being employed. Zoom, Cisco Webex and other teleconferencing sites make distance working and learning possible. Small customer facing businesses do not have that luxury.
The havoc in our everyday lives as the impact of this virus continues to unfold, and the uncertainty of its duration leaves our financial systems scrambling to adapt and adjust.
The one thing financial markets do not like is uncertainty. Wall Street temporarily suspends trading, as 2000 point swings become commonplace. The Federal Reserve cuts rates to a target of 0 to .25%, and will buy bonds to pump money into the economy.
What can state governments do? As the pandemic evolves and until there are medical breakthroughs, state leaders should pull out all the stops. These times call for drastic measures. This is not the time for politics as usual. Any previously enacted legislation that hurt residents and businesses as they fight to overcome the multifaceted and interconnected challenges this new healthcare tsunami presents must be immediately assessed.
Years of anti-growth policies and unfunded liabilities have placed Connecticut in a precarious financial situation and may quickly drain the Rainy-Day fund.
The administration should bring state unions back to the table. Their lavish benefits can no longer be supported given this crisis and the massive private sector losses. Connecticut’s unfunded pensions needed to be restructured even before the market collapse.
The legislature should consider:
• Taking off the table tolls, grocery taxes, new payroll taxes and other anti-consumer legislation.
• Suspending sales taxes for a period.
• Removing state fees on utility, electricity, gas and phone bills.
• Providing free or low interest business loans.
• Rescinding or delaying implementation of minimum wage increase.
• Extending state income tax payment deadlines.
• Waiving state permit and agency fees.
• Extending unemployment insurance.
• Rescinding the 10% corporate profit tax.
The private sector needs government support, not takeovers. Businesses are deeply concerned that the full impact of the infectious disease is just beginning to be felt. They will need all the help they can get to stay viable and keep the economy afloat. The state government should stop creating government run pensions, insurance and healthcare that would further disrupt the private sector.
One possible exception could be the creation of state business continuity insurance fund for small businesses like restaurants that are being forced to shut down by the state much like flood or fire. The state should also require all private business interruption insurance policies to treat this period as a covered event.
Americans are helpful, generous and compassionate people. They always come through when needed. We thank our truckers delivering critical goods, manufacturers producing much needed products, first responders, and the medical community who are on the front lines delivering vital services.
Politics has no place here. We are all in this together, and together we will overcome this and be stronger for it.