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The Coming Deadly Covid Winter

Summary:
You don’t have to be the son of a fortune teller, like my former Sumitomo Bank colleague Atsuo Konishi, to sometimes say, “I can see the future. To me, it as if it is already here.” The trajectory of Covid in the US, in combination with the baked-in features of our inept policy responses, means that the general outlines of what will happen over the next few months are close to inevitable. The only element in doubt is the severity of the outcomes. Mind you, nothing below should come as a surprise, yet the press and experts seem reluctant to look at the obvious and see where it leads. Rising infections and hospitalizations, straining and breaking hospitals. If you want proof of leadership/elite failure in the US, you need to look no further than the collective shrug of the shoulders at the

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You don’t have to be the son of a fortune teller, like my former Sumitomo Bank colleague Atsuo Konishi, to sometimes say, “I can see the future. To me, it as if it is already here.” The trajectory of Covid in the US, in combination with the baked-in features of our inept policy responses, means that the general outlines of what will happen over the next few months are close to inevitable. The only element in doubt is the severity of the outcomes.

Mind you, nothing below should come as a surprise, yet the press and experts seem reluctant to look at the obvious and see where it leads.

Rising infections and hospitalizations, straining and breaking hospitals. If you want proof of leadership/elite failure in the US, you need to look no further than the collective shrug of the shoulders at the way Covid hospitalizations are already at or near the point where ICU capacity are under strain in more and more states.

Despite exhortations by officials (not matched by their actions, see Gavin Newsom, Andrew Cuomo, and Nancy Pelosi) even those Americans who curtailing the size of their Thanksgiving gatherings haven’t gotten the memo: festivities outside your daily circle risks spread. The press is full of stories of people who though they’d found a safe way to see friends and relatives by gathering outside, yet they wound up infecting each other because they spent enough time indoors (food prep, bathroom breaks, cleanup). And that’s before you get to indoor celebrations and travel.

So pretty much everyone with an operating brain cell is expecting an increase in infections in the weeks after Thanksgiving. Yet I don’t see any reason to see much of a change of heart or habits for the Christmas/New Year period, which means a further rise in disease levels and deaths by mid-late January. Washington is busy having Biden-gasms rather than go into overdrive to reduce the damage of an ongoing national disaster.

And to complete this sorry picture, Covid out of control means increased health impairment and deaths on other fronts: patients, particularly those in high risk groups like the immunocompromised, putting off medical treatments and avoiding emergency rooms, and even breakdowns in care. The CDC estimated that of the excess deaths from January 26 to October 3, only 2/3 resulted directly from Covid. And this estimate didn’t factor in that reduced road travel due to lockdowns would reduce traffic fatalities. Alabama, for instance, had negative excess deaths in April because Covid hadn’t really arrived yet and car-related deaths fell.

Recall that in New York during the spring peak, emergency room patients were left on gurneys for 30+ hours because there simply weren’t enough doctors and beds. Twitter and Facebook have reports of stress now, before the worst of the current wave has reached shore. For instance:

Once emergency rooms across a state are in crisis, officials will be forced into imposing some version of a lockdown to reduce the load on the medical system and save doctors’ and nurses’ lives. So we’re set to see a repeat of the spring: leaky containment programs that only go far enough to take the pressure off hospitals, as opposed to get infection levels low enough so that contact tracing + quarantines + masking can keep it at a low level.

And that’s before we get to the new public health threats this surge is likely to create, which we’ll address soon.

Lack of will and current capacity to deliver adequate relief to get people at risk to stay home and support containment. The official responses to Covid have been appallingly poor. Yes, we have a big problem in that any big funds distributions have to come from the Feds, but enforcement and emergency measures will be at the state and local level. But even so, once we had sufficient mask capacity, why wasn’t every employer required to provide masks to workers on site? Why weren’t free masks made available, say at City Hall, police and stations, and other government offices? Why wasn’t anyone clever about getting the police on board and offering them ways to impose fines (revenues!) as an enforcement mechanism? How about wrestling a positive lesson from Ferguson? For instance, I briefly had hope for Alabama when during the first weekend of Birmingham’s mask mandate for entering places of business, police were ticketing scofflaws at big box stores. That stopped quickly. But if citizens faced points on their drivers’ license or fines that could lead to impoundment of their vehicle, you’d see a lot less misbehavior.

Yes, it’s easy to blame this all on Trump, but how late in the game was it that Dem governors and Congresscritters took even to wearing masks in public? Have any of them proposed paying people to quarantine, say a small tax break for the well off and a stipend for everyone else, to wear a prettied up tracking bracelet during their period of confinement so it could be verified that they’d complied? These are modest but viable plans, yet they seem beyond the imagination of Beltway inhabitants. Democrats appear as incapable as the Republicans of dealing with any problem too big to be “solved” via PowerPoint or Excel. The default is “We can’t because it’s hard.”

Mind you, this isn’t to say that any of these ideas would prove to be winners. The real issue is the underwhelming official efforts. In the Great Depression, the Roosevelt Administration engaged in a tremendous amount of experimentation. Some schemes were losers while others stuck….and became important institutions and programs.

The year-end double whammy: end of relief and end of eviction ban. A study by the Century Foundation late last week described how 12 million Americans would lose extended unemployment insurance due to the expiration of two pandemic programs and the expiration of full federal funding for an extended benefits program. While 2.9 million of that 12 million might qualify for extended benefits under state programs, but those coffers look empty. Congress looks unlikely to step up by the drop-dead date. From The Hill:

A slew of expiring emergency programs are setting up an economic “COVID cliff” come 2021, which could see millions of people lose unemployment insurance and get evictions, while a growing wave of small businesses close shop…

Unless a divided Congress can reach a deal to extend the programs, the country’s economic suffering could skyrocket….

The prospects of a deal are dim.

House Speaker Nancy Pelosi (D-Calif.), who is pushing for a $2.2 trillion package, and Senate Majority Leader Mitch McConnell (R-Ky.), who endorses a more limited $500 billion approach, have yet to hold a meeting on the subject. Their staffs have not discussed the matter either…

At the same time, provisions meant to shore up tax benefits for low-income earners, such as the Earned Income Tax Credit and Child Credit, are scheduled to go up in smoke, potentially pulling money out of the paychecks of the poorest people who are still working.

As we found with the CARES Act, unemployment insurance is a fast way to get funds to a lot of people. If these various programs lapse, which looks likely, nothing will even start to happen until the Biden Administration takes office, which means that even in an optimistic scenario, the earliest suffering citizens might see some relief is March.

The Trump eviction ban also expires on January 1. Even though some landlords have already tried to circumvent it, or have simply taken to harassing tenants, the real crisis begins after the stay ends. A November Census survey found that 5.8 million judged themselves to be somewhat or very likely to face eviction in the next two months, which is about 1/3 of the number in arrears. It’s hard to see, in the current environment, how many homeowners and tenants who are behind catch up.

However, one reason the proportion is that low is that some states have put catch-up programs in place with longer moratoriums and generous catch-up provisions. For instance, California:

The Tenant Relief Act is a statewide law that imposes a temporary moratorium between March 1, 2020 and January 31, 2021 on evictions of qualifying residential tenants for failure to pay rent because of financial distress related to COVID-19….

Subject to certain exceptions, if a tenant has experienced COVID-19-related financial distress and has not been able to pay part or all of the rent to their landlord between March 1, 2020, and August 31, 2020, the tenant cannot be evicted for failure to pay rent so long as they sign and return a Declaration of COVID-19-related financial distress (Declaration) to the landlord within 15 days of receiving a Declaration form from the landlord….

Subject to certain exceptions, if a tenant has experienced COVID-19-related financial distress and has not been able to pay part or all of the rent to their landlord between September 1, 2020, and January 31, 2021, the tenant cannot be evicted for failure to pay rent so long as they sign and return a Declaration of COVID-19-related financial distress (Declaration) to the landlord within 15 days of receiving a Declaration form from the landlord, AND, on or before January 31, 2021, the tenant pays at least 25% of each rental payment that was due, or will be due, between September 1, 2020, and January 31, 2021.

Mind you, tenants can still be sued for the rent they didn’t pay during these time periods, but they can’t be evicted if they’ve gone through the hoops.

On top of that, as Lambert described in Water Cooler yesterday, tenants who have been evicted find it well nigh impossible to secure a new rental; landlords won’t forgive this black mark.

Landlord could already have completed the first step of eviction, the notice of eviction, which in most states gives the tenant a short period of time to reply. But evictions have to go through a court, and they are already backed up and will be more so if cities go into soft or hard lockdowns in the new year. Some landlords have tried using public health as a pretext for eviction, depicting tenants who have contracted Covid or mask refusniks as hazards to fellow renters.

That is a long-winded way of saying it’s hard to judge how quickly the evictions will occur, but they typically take two weeks to two months in most states in normal times. But the flip side is that being evicted is so damaging from a credit report/rent record perspective that some, and perhaps many, tenants will vacate just before the landlord is set to file in court.

The reason that California is being so aggressive about keeping tenants housed is it already has a homeless crisis, including third-world diseases like Hepatitis A, typhus, and cholera. Even with the upcoming eviction wave, most of the dispossessed will find a way to stay off the street: crashing with friends and relatives or living in their car. But some will wind up in homeless camps with no running water. From REB Research:

Most of the US homeless do not live in camps or on the streets. The better off US homelessness find it is a temporary situation. They survive living in hotels or homeless shelters, or they “couch-serf,” with family or friends. They tend to take part time jobs, or collect unemployment, and they eventually find a permanent residence. For the chronic homeless things are a lot grimmer, especially in California. The chronic unemployed do not get unemployment insurance, and California’s work rules tend to mean there are no part time jobs, and there is not even a viable can and bottle return system in California, so the homeless are denied even this source of income*. There is welfare and SSI, but you have to be somewhat stable to sign up and collect. The result is that California’s chronic homeless tend to live in squalor strewn tent cities, supported by food handouts.

Californians provide generous food handouts, but there is inadequate sewage, or trash collection, and limited access to clean water. Many of the chronic homeless are drug-dependent or mentally ill, and though they might benefit from religion-based missions, Los Angeles has pushed the missions to the edges of the cities, away from the homeless. The excess food and lack of trash collection tends to breed rats and disease, and as in the middle ages, the rats help spread the diseases.

In other words, the end of relief programs and eviction freezes won’t just lead to even more Covid, but also tuberculosis, typhoid fever, staph…a banquet of horrors. And we Americans fancy that we are civilized. Our nation-breaking hasn’t disabused us of this flattering view. Maybe seeing the cost of our incompetence and lack of altruism will.

And please don’t fall back on another American predilection, the last minute save, which here are the undue hopes pinned on vaccines. Even if they offer lasting immunity, it would not be possible to get the needed 70+% of the population treated in 2021. That’s before we get to the wee problem that fewer than 60% were willing to take the treatment as of peak hype, early November, before word is out about how unpleasant the side effects of the mRNA vaccines are. A lot of people are not willing or able to lose a day or two of work as a result of getting Covid-like symptoms, and others quite reasonably want to see the vaccine in use for at least six months before they give it a go. Given the perceived urgency of getting people to take the shot, expect many employers and schools to require it. Northern Arizona University locked students out of its online system if they hadn’t taken a required Covid test; this practice can just as easily be used to force vaccinations.

And as we pointed out, the vaccination process could make Covid worse as the recipients quit wearing masks, which will reduce the tendency of the unvaccinated to protect themselves.

In other words, the hard Covid winter won’t lead to a bright spring. The disease will be with us for 2021.

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