The COVID Conundrum Facing Local and State Governments

Yesterday (and many other times), I’ve noted there are several economic policies–which have to be federal policies–needed to allow us to enact the public health policies needed to ‘crush the curve’ and drive down the prevalence of COVID-19. As a review, here’s what we need in broad outline:

  1. Rent and mortgage suspension, for businesses and residents.
  2. Temporary universal healthcare coverage, including for those who lost their jobs.
  3. Some kind of significant income supplements for households.
  4. Mandatory sick leave, so essential workers wouldn’t feel obligated to work when they are symptomatic.

…the overall goal was to use massive federal spending to place significant swathes of the U.S. economy into what multiple commentators, including Paul Krugman, referred to as a ‘medically induced coma.’ And not for a month either, but for as long as it took.

For a variety of reasons, most of which have to do with Republicans, we’re not getting those policies anytime soon. Unfortunately, that puts local and state governments in a bind. Without the financial resources the federal government can create by fiat (note the word financial, which is to say, money), governments that choose to rollback and close businesses know they will be wiping out businesses and their employees.

For example, in D.C., Mayor Bowser knows COVID-19 isn’t where it should be in the district (unlike many governors, who either are deluded or pretending to not understand). But if she shuts businesses down (closing bars & indoor dining, closing many stores), they’ll go bust.

So we’re left with second-best options (and second-best is being charitable), such as exhortations to wear masks and hoping contract tracing helps (it really hasn’t so far in D.C.). This means most* kids won’t be returning to schools anytime soon–there’s no reason to believe things will improve**. The reason kids aren’t returning to schools while bars remain open is because states and local governments desperately need revenue: it’s certainly not a public health measure. We need a four to six week period of serious physical distancing, and we just aren’t willing to do that.

And, no, short of a change in federal government, I have no solutions as to how to fix this. So vote like your life depends on it. Because it does.

*I’ve heard of allowing some students with special needs back to school, but that is just rumor.

**I’m not sure winter, at least in D.C., will be the disaster everyone thinks it will be. Cooler weather means people will wear masks, and then cold, crappy weather means people will stay home. Never underestimate the ability of Americans to watch hours of TV. Just guessing though.

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3 Responses to The COVID Conundrum Facing Local and State Governments

  1. Pingback: Links 9/18/2020 | naked capitalism

  2. reality to mike says:

    no income. no means with which to pay rent, bills, or to purchase food/clothing. ‘the ability of americans to watch hours of tv’?! what planet are you living on?…

  3. ElHongo says:

    As an update from Germany, today Munich hit the magic 50 incidence. This is the first German metropolis to do so. Germany is notable because unlike elsewhere in Central/Western Europe, no major (>1 mio) population centers have been hit hard. (This may explain a whole lot of why the German stats stand out by comparison to UK, France, Italy, Spain etc)
    Cologne almost got it right at the start, during Mardi Gras, but was spared by 36 hours due to this virus’ incubation period being as long as it is.

    The Munich municipal government is traditionally to the left of the State gov’t, which traditionally is one of the most right-wing in Germany (as Strauß famously said, and he wasn’t joking: “to the right of my party, there’s only a wall”). Since recently, Munich has a Green-led coalition with the SocDems, and the State governor (“President-Minister” but what the heck) Söder is a smarmy shyster if there ever was one and brownnoses whomever he needs to to run a thoroughly corrupt, hard-assed Christian Conservative realpolitik. (He has been dissing the SocDem-Green-Socialist State govt of Berlin whenever cases went up there; now, the blunt fact is that Berlin is together with Hamburg about the Covid-safest metropolis in all of Germany, if you avoid certain hoods; the Berlin State govt may in fact run one of the best Covid policies in Europe, on par with Norway maybe)

    It will be interesting to see what happens now. Theoretically, someone should institute more severe restrictions, and quickly so. But Munich is a hotspot of Covid denialism – and these people may be the straw that broke its back, given they actively reject even the most basic preventive measures as a threat to their civic liberties and had a huge rally in Berlin, after which local case figures started to grow significantly faster, precisely when they would be expected to. Their war chests are brimming (and Putin is still evaluating whether they are worthy of additional funding) and they have a horde of lawyers which are mostly second- or third-rate but know enough legal bureaucracy to have infection prevention measures delayed for (critical) days. And German courts have in their Covid-related decisions not exactly been guided by scientific evidence so far.
    So whatever whoever wants to implement, it is about certain that it will be heavily challenged in court.

    I am glad I am not anywhere near this place. Contrary to anything written in the news, this is the first actual test how well Germany holds together: the first outbreak in a densely-packed host population, at present not in any way contained or controlled. It will be contained, if not controlled, eventually, but not within the next 1-2 weeks.

    We’ll see how far the virus will get. And we’ll see if Söder – who desperately wants to succeed Merkel next year – finally has to face up to ther fact that despite all his rhetorics, he has by far the worst pandemic performance of any top-level German politician.

    Oh, and because Munich wouldn’t be Munich without Oktoberfest, which should have started this Saturday, there is a multi-week “Wirtshaus-Wiesn” in place of the real thing. As per the Municipal Marketing Association: “In 2020, you’ll find the unique, homely and *griabig* (laid-back snuggly comfy) Wiesn feeling in Munich’s beer halls”.

    As they say over here: “Na dann – prost!”

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