Protesters in Huntington Beach, Calif., took to the streets to protest the state’s “shelter in place” order, preventing all but “essential” workers a right to earn a living. Since declaring that 60% or 25.5 million state residents would get the coronavirus AKA SARS CoV-2 or Covid-19 March 19, Newsom insisted that the state must “shelter in place” to slow the spread of the virus. Newsom’s estimates about the severity of the coronvirus pandemic have been all wrong in California, where the nation’s most populous state with 39.51 million residents has per capital, one of the mildest outbreaks of SARS CoV-2 in the nation. Unlike New York that’s been slammed with the most infections and deaths in the nation, California hasn’t come close to fulfilling Newsom’s forecasts. Even New York Governor Andrew Cuomo warned March 24 that what’s happening in New York would happen in California.
Protesters in Huntington Beach and around the country want the government to reopen the country, recognizing that stopping the public from earning a living has far worse consequences than the coronavirus epidemic. While there are difference between Democrats and Republicans on “shelter in place” orders, the vast majority of respondents back “stay at home” orders to slow the virus. Now that people haven’t worked for over a month, working people in the country are starting to get second thoughts. It’s not that protesters don’t believe that there’s still a risk of catching the virus, they’re starting to weigh the pros and cons. When mayors and state officials start to examine their balance sheets, they’ll also get a change of heart. So far, Newsom hasn’t blinked, insisting on “shelter in place” when it’s clear that the state could burn through its $21 billion Rainy Day Fund in a matter of weeks.
Former Calif. Gov. Jerry Brown worked hard to build up the state’s surplus, now threatened not by the coronavirus but by Newsom’s refusal to come to his senses and reopen the state in a measured way. Phasing in various businesses should help defray the deficit spending currently going on at the state, county and local levels. Newsom must stop talking about what “science” tells him, looking carefully at the state’s resources and the amount of economic carnage caused by “shelter in place” orders. When you consider that Democrats and Republicans have any differences on opening up the country, it’s a stark reminder about today’s polarization, in government and out. Strong majorities of Democrats and Republicans prefer to “shelter in place” until there’s more data indicating that the risk of infection has diminished. Most elected officials know that governments can’t survive without tax revenue.
In the case of California with 29,590 total cases, 406 new cases and 1,057 deaths, Newsom shouldn’t demand that the state meet extra conditions beyond federal guidelines before opening up the state’s businesses. Coronavirus won’t go away anytime soon, recognizing the necessity of opening up the state at the earliest possible time. Talk of testing every man, woman and child in the state before opening up is unrealistic and counterproductive. Driving more unemployed workers into homelessness is a far greater threat than the Covid-19 epidemic. If Newsom waits too long to open up California, the state could easily run out of cash, forcing the state to borrow money, risking a credit down grade, repeating what happened after the 2000-2001 Don-Com bubble and resulting recession. All indications point for a recession or possible depression far worse that 2001 or the 2008 Financial crisis.
Getting the state opened for business in a responsible way is not a Democrat or Republcian issue but one designed to help prevent more unemployed workers from being driven into homelessness. Economists know that it takes time for businesses after recessions to develop enough pent-up demand to start rehiring workers. Because the California budget, as former Gov. Jerry Brown has warned, is so dependent on income tax or capital gains revenue, it could take the state much longer than other states to recover financially. Newsom must work on a plan that returns Californians to work before the state burns through its surplus and runs out of cash. More than any other state, California typically leads the nation in unemployment, often the last because of its size to recover economically. Whatever 10 good years the state has enjoyed, it’s time to get people back to work before it’s too late.
Political difference between Democrats and Republicans, liberals and conservatives, should have no bearing on what’s best for California’s economy. Sheltering in place has helped plateau or even reduced the state’s coronavirus epidemic. But Newsom or his advisers are kidding themselves thinking that “shelter in place” is responsible to the current SARS CoV-2 cases or deaths. It’s better for California residents to return to work with masks, social distancing and improved hygiene than to stay “sheltered in place” unemployed. No one knows how long it will take businesses to rehire workers, if at all, forcing millions of unemployed people to fit into other businesses as they become available. It wouldn’t hurt for Trump and Congress to consider a post-coronavirus infrastructure bill to help put people back to work, while businesses retool their employment needs.
