COVID-19, Opening Up Business and Facing Facts

Author: David R. Kotok, Post Date: July 2, 2020
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In January 1944, General Eisenhower’s headquarters sent a top secret message to the US military’s weather planning service. It said something like, “We need your long-range weather forecast for June 1–10, 1944, for the coastal regions of Normandy.” The weather service replied with something like, “We can send it to you, but you know that our long-range weather forecast models are notoriously inaccurate; can you say why you need it?” The top secret answer from Eisenhower came back with something like “We need it for planning purposes.”

Market Commentary - Cumberland Advisors - COVID-19, Opening Up Business & Facing Facts

And they did need it, with this caveat: Eisenhower adapted plans right up to the invasion date. He changed course rapidly as events played out. He seized fleeting opportunities. Success would depend on favorable weather and a full moon; and when the weather report wasn’t favorable, D-Day itself, originally planned for June 5, had to wait a day, until the early morning of Tuesday, June 6. Historian and author Anthony Cave Brown concluded, “Of all natural factors, of all the schemes of men, that would unfold to influence the success of the invasion, Allied knowledge and German ignorance of weather conditions on D-Day would prove to be the most important” (“Mission Critical Overlord Weather,”  https://warfarehistorynetwork.com/2016/07/07/mission-critical-overlord-weather/).

In April 2020, Dr. Michael Osterholm, director of the Center of Infectious Disease Research and Policy (CIDRAP) at the University of Minnesota, and colleagues published a report that outlined three scenarios for future development of the COVID-19 pandemic, using influenza pandemics as a model for understanding the virus. Their model and recommendations were used by those who supported “opening up” sooner, after what appeared to be the tailing off of a first wave.

However, on Meet the Press on Sunday June 21, Dr. Osterholm discounted his earlier forecast and stated, “I don’t think this is going to slow down. I’m not sure the influenza analogy applies anymore. I think that wherever there’s wood to burn, this fire is going to burn it. I don’t think we’re going to see one, two, and three waves – I think we’re just going to see one very, very difficult forest fire of cases” (“Health experts challenge Trump’s remarks about virus testing,” New York Times, June 21, 2020, https://www.nytimes.com/2020/06/21/world/coronavirus-updates.html?referringSource=articleShare#link-2aa0acbc).

Back in April, the Trump Administration gave preliminary notice that it would be cutting back on federal support for COVID-19 testing. Perhaps half expecting a summer break from the virus, they wanted to move responsibility for testing to the states. The states had 50 different responses. We cannot review all of them. Here’s one example. A few days ago (June 26), Sarasota TV viewers watched an SNNTV news report that the three local testing sites had exhausted their day’s testing capacity within two hours of opening for business the day before. The report showed the long lines of untested folks and shared the story of two people who ran out of gas waiting in line.

For comparison, a month ago my colleague John Mousseau and his wife got through a testing line in six minutes, and there were no backlogs. Fortunately for them, the tests were negative. So the facts on the ground in Sarasota went from there being no appointment needed, getting a test in six minutes when you drive up, and results returned quickly, to sites running out of testing material, exhausting capacity, and having many cars of people untested. It only took a few weeks for the situation to change dramatically.

After reporting the status of three overwhelmed testing sites, SNNTV disclosed that the Trump Administration was persisting with the withdrawal of some of the federal money that was to support testing (“Testing sites on the Suncoast reach maximum capacity,”  https://www.snntv.com/story/42286126/testing-sites-on-the-suncoast-reach-maximum-capacity). No one seems to understand this policy decision. The White House Coronavirus Task Force itself has encouraged lots more testing. We saw that recommendation reinforced in the last Task Force press conference.

As Ian Hodgson reported in the Tampa Bay Times, “Since June 1, the average number of tests per day in Florida has increased by less than 25 percent. During that same time, the average number of infections per day has nearly quadrupled – from fewer than 1,000 cases per day at the start of this month to more than 4,000 cases every day in the past week (“Florida’s coronavirus spike: 5 things to know,”  https://www.tampabay.com/news/health/2020/06/26/floridas-coronavirus-spike-5-things-to-know/).

The cuts to testing funds that the White House is pursuing are a federal issue, and the April plan needs to change ASAP. Congressman Buchanan, Senator Rubio, and Senator Scott, your Sarasota constituents are sick; some are dying – where are you?

The federal response on antibody testing has been deficient, too. On Sunday, June 28, 60 Minutes reported that Congress is now investigating why the FDA failed to review the antibody tests it allowed to be distributed widely throughout the US (“Federal officials allowed distribution of COVID-19 antibody tests after they knew many were flawed,” 60 Minutes Overtime, https://www.cbsnews.com/news/federal-officials-allowed-flawed-covid-19-antibody-tests-2020-06-25/).

If we are threatened by a viral forest fire and the winds are whipping up, we need more fire trucks and more pumpers and more ambulances, not fewer. The country needs a national, universal, free, and reliable testing apparatus, and it needs the immediate federal funding to support that initiative until the fire is contained. Testing doesn’t cure COVID-19, but it does help us locate and confront this enemy and save many who might fall prey to it. It gets the victim to the best-available treatment protocols, and that saves lives and reduces the spread of the virus to others. And it gets the economy open and not shut down.

Eisenhower changed the allies’ protocols and operating orders right up to Normandy and each day thereafter.

We fought the war with rapid decision-making and massive changes on the ground and in the English Channel. Eisenhower also resolved the political infighting he had to deal with. The same sort of flexible and highly responsive approach is needed right now. The 50 state governors are now leading on the front lines of this forest fire. For us in Sarasota and Manatee and on the Gulf Coast, the leadership in this battle is now in the hands of Governor Ron DeSantis. We need a lot more testing, contact tracing, antibody testing, masking and full PPE, at once. We are facing a raging fire now. The old, more hopeful forecasts mean nothing.

One excellent source of real-time facts on COVID-19 is the “How We Reopen Safely” website run by covidexitstrategy.org, a group of public health and crisis experts with former experience working at the White House, the US Department of Health and Human Services, and on the Ebola epidemic in West Africa. The site offers detailed yet easy-to-track data that is analyzed on a state-by-state basis. (https://www.covidexitstrategy.org/) It’s an excellent COVID-19 weather report suitable for informing our strategy.

On May 20, Sean Hannity, on Fox News, issued a sunny forecast for states’ reopening: “Florida got it right, Texas got it right,” Hannity crowed. “The mob and the media, by the way, you owe Governor DeSantis a huge apology” (video linked in tweet by Madeline Peltz, June 26, 2020, https://twitter.com/peltzmadeline/status/1276665799642681345). Now, the weather has changed.

We hope Governor DeSantis can demonstrate Eisenhower-caliber leadership, and respond to the facts, and wage the battle at hand rather than the battle as originally planned. Success or failure in the fight ahead is largely in his hands. At the same time, we are all boots on the ground in this effort, and we must each do our best. As for Sean Hannity, well, it’s time he walked back his failed forecast and regrouped. Maybe he should forecast the weather?

David R. Kotok
Chairman of the Board & Chief Investment Officer
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