John H. Fitzhugh: A plan for America to reopen for business

Ironically, New York might be one of the first places to reopen for business in the COVID-19 pandemic.

President Trump has been widely criticized for expressing a desire that Americans return to work by Easter. He later modified his remarks to say that reopening of businesses would depend on such local factors as population density and infection rates for the COVID-19 virus.

I am a “Never Trumper” but in this case applaud the president for raising two critical issues: one, how we decide when to return to work, and two, the importance of work.

The current strategy of fighting this virus, based on current medical advice, is to distance ourselves from each other, thus “flattening the curve” of infection to better use our limited medical resources, such as hospital beds and ventilators. This approach, we are told, will lengthen the period during which people are at risk for infection but save innumerable lives.

Some areas of the country have been better at this than others or, because of population density, are simply already “socially distanced.” New York City, unfortunately, is not, it being one of the most densely populated cities in America. Its attack rate (ratio of those infected to those tested) is very high, which means that the infection period will be shorter but potentially more deadly than elsewhere in the U.S.

Ironically, this also means that New York City may be one of the first places that could reopen for business because most residents will have been infected and either recovered or unfortunately passed away.

But now let’s turn to the importance of resuming business, and how we decide to do so.

American business is, with some notable exceptions, closed for business. It is dead in the water, to use a nautical expression. Critical industries are still functioning, either with limited staffs or on-line, but most are idle. This is especially true of small businesses, retail shops and many service industries. My guess is that the gross domestic product (GDP) overall is not 20 percent of what it should be, or was before the virus shutdown.

Congress has passed legislation directing some $2 trillion to offset this shutdown. The Federal Reserve has made an additional $4 trillion available. This is the largest financial bailout ever and,  it is said, will help for maybe “a few months.” In my opinion, already one crucial month has passed.  Now, I’m not an economist, but I don’t think that even the federal government has the wherewithal to do such a recovery effort a second time. If it tried to do so, I believe, it would lead to hyper-inflation, a drastically lower stock market, and even violent social protest. Thus we have one opportunity to get this right before a much greater catastrophe engulfs us.

The bottom line is that to sustain America the way we know it, or knew it before March 1, Americans must get back to work, the quicker the better. 

So then, how do we decide when that is, or even, who decides? Is it the president, Congress, state legislators, governors? Health officials, business owners? The people themselves? And what are the criteria?

One thing to me is clear. We can’t wait until everyone has been infected or until the last person with the infection has died. That would be months into the future. We must accept the risk, in fact the likelihood, that some persons will sicken and die after we resume working. That is certainly unfortunate, but the economic consequences of not resuming work are even more dire to our society.

Here are my suggestions, but they should be examined by statisticians and epidemiologists because these decisions are largely data driven:

First, employers must decide individually the risk to their enterprise, employees and customers from reopening. What are the COVID-19 trends in the community in which they operate? How well have they been able to function on line? How has the virus affected their market? (For example, if your business model depends on a large crowd of people gathering, it may take months for people to feel comfortable doing it.)

Second, how well have the local hospitals been handling those who need treatment? If they are overwhelmed, and people are dying from lack of care rather than from the virus itself, it’s hard to support a general reopening of business that runs the risk of increasing the number of patients.

Clearly one size does not fit all. It may be prudent to reopen business in Nebraska or Texas, for example, but not in New York or Los Angeles. Then again, if the infection rate is soaring in New Hampshire but the worst is over in New York, it might make sense to resume operations in New York but not New Hampshire.

When it comes to government oversight,  our 50 governors have a better handle on local COVID-19 conditions than our national government. Working with the local businesses, I think that governors using their emergency public-health powers can individually decide when and who should reopen. This power could extend, as it does now, to in-state operations of large multi-state or international enterprises. Governors can give a go-ahead but it will be up to each business how to respond.

The federal government can provide resources and coordination. The president can use his bully pulpit to set the general direction ( as he has done by broaching the subject of return to work). What would  help a lot is a computer model that considers for each enterprise the risks to itself and its customers and community of reopening its business. Certainly mathematicians and economists now have time and reason to build such models. Governors or private groups could then set markers for when resumption of business is prudent.

John H. (“Josh”) Fitzhugh is chairman of Montpelier, Vt.-based Union Mutual Insurance Co. as well as journalist and farmer. He was founding editor of the National Law Journal and was legal counsel to former Vermont Governors Howard Dean and Richard Snelling.