GP Insights # 345, 2 May 2020
In mid-April, United States President Donald Trump rolled out a plan to reopen the country titled 'Opening up America Again' that focused on ramping up testing nationwide and opening the country in a phased manner. On 2 May, at least 31 states have been working on allowing businesses, restaurants, construction, and manufacturing to open but with strict social distancing measures.
What is the background?
Six weeks back, stay at home orders were announced in the country amid the pandemic panic that has caused more than a million cases and 65,000 deaths. Hundreds of counties and all 50 states have confirmed Coronavirus cases are still on a rise. Since these orders were passed, there have been clashes across the country, at times divided into partisan lines.
While the Democrat states have tended to be more proactive, declaring emergencies, closing schools, and non-essential businesses, and imposing limits on bars and restaurants, several Republican governors have downplayed the crisis. There has also been a raft of lawsuits nationwide from businesses.
What does it mean?
Due to the lockdown, the US economy has been brought to a standstill and has cost 26 million jobs. With millions of Americans out of work and restrictions on travel, pressure has been building in several parts to reopen the society. However, opening America is not only a political decision, but Corporate America will have a large say on this.
Many feel that opening the country at this juncture is unrealistic considering that the virus' toll remained devastating. Big business might not be in a hurry to open doors in a post-Covid world. The nature of the work-life is changing with many looking at remote working as an option in the future. With safety being the topmost priority, the reopening process is bound to be slow and gradual. Community activities of subway travel and crowding into bars will take months if not years to get back like before.
The partial opening of the economy that is so interlocked will not work even if one cog in the supply chain is missing. There is also a public health threat. Another wave of the virus will have dire consequences for both safety and economy. Therefore, it is important to build up health-care capacity before plunging into normalcy. In the absence of this, there is little evidence if the public will be ready for the reopening, despite scattered protests in the past month.
Most surveys have shown little appetite for returning to normalcy. Moreover, the government's role will not stop announcing new policies. The businesses, the states, and individuals are going to require the help of the federal government to deal with reduced sales, tax revenues, and unemployment. The administration needs to plan, prepare, assess, and communicate the next steps transparently.