COVID-19 Economic and Psychological Pain MUST be Alleviated Now!

By the Curmudgeon




The coronavirus has killed more than 100,000 Americans and brought much of the U.S. (and global) economy to a grinding halt.  In our Perspective on U.S. Economy and the Coronavirus – Suicide is NOT Painless! Victor and I opined that stay at home orders were akin to economic suicide, as many businesses would go bankrupt while millions of jobs would be lost. 


This article expands on the high costs of the “shelter in place” orders, from both an economic and a psychological point of view.  The latter has had a very strong negative effect on mental health of all people, but especially of health care professionals.  It has been under reported and underestimated by all levels of government.  That needs to change—sooner rather than later.


N.Y. Times Survey: Economic Pain with Few COVID-19 Illnesses:


Though all 50 states have begun to reopen against a bitter partisan backdrop, in many parts of the country the dual health and economic calamities are not playing out in a consistent manner.  A New York Times analysis of coronavirus infections, official layoff notices and federal unemployment data highlights the sharp disconnect between extreme economic pain and limited health impact from the pandemic in many parts of the country.


Indeed, many U.S. small business owners and workers have called for reopening as urgently overdue because of their very bad experiences. Many are angry, confused, and even psychologically tormented from staying at home for so long. Others plead for caution. But almost all agree the coronavirus has not posed the local public health threat that so many were expecting, even while acknowledging that cases and death numbers could be worse if all of the economy would reopen without more testing or a vaccine.


The N.Y. Times focused its analysis on 726 counties in 45 states that fall within the lower half of infection rates nationwide. Those counties have had fewer than 140 cases of coronavirus per 100,000 residents and unemployment rates over 12 percent in April, the latest month for which official county data is available. (By contrast, New York City has had 2,483 cases per 100,000 residents.)


Several lockdown impacted people from counties in the states of Colorado, Florida, Texas and Wisconsin are profiled below. Largely out of the spotlight, those counties have not had many deaths, especially in proportion to their populations.  Instead, it’s been an anxious and often nerve-wracking waiting period for their economies to reopen.


Profiles of Pandemic Effected Counties with Low COVID-19 Cases/Deaths:


In early March, things were as busy as ever in Corpus Christi and across Nueces County, TX. But then fears of the coming virus hit and nearly everything came to an abrupt halt. The beaches cleared. The oil rigs idled. The hotels emptied; small businesses shut down. 


In Corpus Christi, Theresa Thompson has been furloughed from her position as a catering and events manager at a Holiday Inn. Brett Oetting, chief executive of the tourism office, has been working with countless businesses struggling to navigate the economic collapse.  None of them knows anyone local who has been sickened by the virus.  Corpus Christi remained something of a ghost town into April, but traffic has picked up since Texas began reopening.


“For a very long time, everyone in the business community was scratching their heads,” said Richard Lomax, whose family operates Water Street Oyster Bar and Executive Surf Club in Corpus Christi. Together they furloughed about 150 of their 200 employees as sales fell by more than 90 percent at those two restaurants his family owns.


“You look around, there is beautiful weather and the beaches are empty and you don’t know anyone who has it,” he said. “That is hard — to keep that disciplined mind-set.  It also seemed “arbitrary” that people were allowed to pile into grocery stores, but not other businesses.  You just want to help and want to not be part of the problem as well.  It is an awkward series of emotions. For us and our friends, it started to get existential.”


Recently, an increase in COVID-19 cases, especially at a meat packing plant, has unsettled some and even raised questions about the wisdom of reopening so quickly.  “It has made a lot of us take a pause and say, ‘What do we do if we are the next outbreak?’” said Mr. Oetting, head of Visit Corpus Christi.




“It’s been a nightmare, to be honest,” said Puneet Kapur, who has managed the Holiday Inn Express & Suites in Palm Bay, FL for 11 years.  The hotel went down to 10 percent occupancy from 95 percent during the peak of spring break, Mr. Kapur said. During the worst of it, he was forced to lay off about two-thirds of his staff.  Puneet has since rehired some of them and says he is staying positive: “Our county is (finally) open for tourists.”


“We are turning guests away simply because there are not enough tables in the dining room,” said Alex Litras, owner of Cafι Margaux, a French seafood and steak restaurant a few blocks from the ocean. Under stay at home restrictions, he can seat up to 50 percent capacity; tables with room for four or more diners often have just two.   “We are far from anywhere we were before. If we were able to add more volume, that opportunity is there.”


“In the first two weeks when they said this was coming, I was like, ‘Let’s all stay in, hunker down, and if we all do this, that can help while we figure out what is going on,’” said Stephanie Anderson, a real estate agent in Satellite Beach (in Brevard County), FL.  But since “places here aren’t producing mass death,” she said, “don’t tell me I can’t open my business in a responsible manner.”  Ms. Anderson said the relatively low number of infections in the area — even as people began to venture out more — gave her confidence that they were on the right track.  She has created a Facebook group focused on the pandemic. It is called “RE-OPEN BREVARD COUNTY!”



Bill Breider, who runs five Y.M.C.A. centers in east central Wisconsin, described having to shutter them for most of March, April, and May as “heartbreaking” and “agonizing.”  About one in five people across the region belongs to the organization, which provides a “second home” for older residents, day care for the children of working parents, and everyday programming like swim lessons and fitness training.  The centers also provide more than 1,500 full- and part-time jobs. 


“We have had to make some gut-wrenching decisions around furloughs and layoffs, coupled with how to keep employees safe,” said Mr. Breider, the chief executive of the Y.M.C.A. of the Fox Cities, which has four of its five centers in Outagamie County.


An organization built on service suddenly could not serve — even as the region experienced relatively few confirmed cases of the coronavirus. The centers reopened with restrictions late last month. Before that, only day care services for children of essential workers had been running.


The virus-versus-economy dynamic created a “tug back and forth as to what is the right thing to do,” Mr. Breider said. “It is a difficult time because I think there is a feeling like we need to open back up, we need a sense of normalcy.”


The Fox Cities, 19 communities along the Fox River in Outagamie and two neighboring counties, have faced a persistent risk that the virus would migrate from Green Bay or Milwaukee, which both have far more cases. But while the number of cases in Outagamie has doubled in recent weeks, the spread remains limited.


Andy Rossmeissl, who serves on the Y.M.C.A. board and has been a member since childhood, said its absence had been much discussed in the community during the lockdown. Residents, by and large, were quite understanding in the first weeks, he said, but then grew restless.


“As it became more and more apparent that the hospitals were not being overrun, and that our support structure in our community was able to keep up, patience began to wear,” he said.


What was particularly difficult, he said, was that the organization had not gotten to decide when or whether to close, but had been required to do so under the governor’s orders, which categorized it as a fitness center.  “In this community, it is so much more,” Mr. Rossmeissl said.



Mesa County in Colorado is known for its stunning flat-topped mountains and abundant outdoor activities. Residents are proud of their record so far on the coronavirus — just 55 known cases, and nearly all have already recovered — but many worry about the huge price the county has paid.


The largest country music festival in Colorado has been canceled. So has the Junior College Baseball World Series. Despite getting state permission to open some businesses ahead of the rest of Colorado, many in the county are struggling and patience is waning.


“Obviously we don’t want to let it get away from us, we don’t want to ruin a good thing, but did it really have to be this level of shutdown?” said Doug Simons, a third-generation owner of Enstrom Candies, which has five retail stores that have remained open as essential businesses.


“There was a real reluctance from our leaders to let things open back up, even though we had practically zero disease in our community,” he said. “I thought: ‘What the heck is going on? We don’t have any cases here and we’re being told to shut down like it’s New York City.’”


Weekends that used to draw thousands and cause hotels to sell out have passed by quietly. Graduation last month from Colorado Mesa University in Grand Junction, Mesa county’s biggest city, was held online.


“It feels a little bit strange here because the weather is nice and everyone can still go out and hike and mountain bike and do all of the naturally socially distanced activities that we love to enjoy,” said Amanda Michelsen, director of sales at the Courtyard and Residence Inn, which had furloughed about three-quarters of its 80-person staff.


Josh Niernberg’s restaurant, Bin 707 Foodbar, was a big success before the pandemic instigated lockdown.  In February, he was a semifinalist for a James Beard award. But with the prohibition of dining in, he has been able to keep paying his employees only by borrowing from the federal Paycheck Protection Program and by shifting some of them to a second restaurant he owns.


“We’ll be able to stay open for now, but we don’t have the customer base we foresee at this time of year and I don’t see it coming any time soon,” he said.


Angela Padalecki, executive director of the Grand Junction Regional Airport, equates the sadness and anger among residents with stages of grief. “We’re grieving the loss of those good times,” she said.



Lockdown Causes Profound Psychological Damage:


Many health experts believe anxiety and depression will become a national crisis following the pandemic. A third of Americans are showing signs of clinical anxiety or depression, Census Bureau data shows, the most definitive and alarming sign yet of the psychological toll exacted by the coronavirus pandemic. The findings suggest a huge jump from before the pandemic. For example, on one question about depressed mood, the percentage reporting such symptoms was double that found in a 2014 national survey. 


The pandemic induced lockdown has stripped away most of the routines and mechanisms needed to manage mental health conditions.  People have not been able to visit their friends or family (the Curmudgeon dearly misses his granddaughter who lives in the adjacent county), attend religious services or functions, have in-person therapy sessions or other mental-health appointments, go to groups or classes, or even leave their home as many times a day as they would like to do [1.].


Note 1.  In Santa Clara, CA (Curmudgeon’s home for last 50+ years), people are allowed to leave home ONLY for essential services and activities.  Playgrounds, park restrooms and water fountains, libraries, senior center, international swim center remain closed.  Sweet Tomatoes, one of my favorite salad bar restaurants of all time, closed all their restaurants permanently last month due to the indefinite duration ban on buffet restaurants.


A new Santa Clara County order went into effect June 5th, but little has changed.  For example, that new order permits restaurants to re-open, but ONLY for outdoor service, limited to 25 patrons, tables spaced at least 6 feet apart, masks worn at all times, new cleaning rules, etc. 


Do you think restaurants can make a profit with these restrictions?  And where will they put their tables- in the parking lot or sidewalk?  Will patrons sit outside in 90+ degree weather or stay home and eat in their air-conditioned homes? 


-->Result was that very few restaurants have opened and most for lunch only.



Regular routines, a critical part of well-being, have been disrupted and replaced with an anxious and uncertain future. Many folks attending classes, religious services and even Dr. visits via video conferencing are ZOOMED-out.  Count the Curmudgeon as one of those!


Other aspects of the coronavirus crisis are putting huge pressure on mental health. Loss of livelihood and fears about money and where their next meal is coming from are hitting vulnerable families very hard.  From a recently published paper titled,  Psychosocial impact of COVID-19 (bold font added for emphasis):


Disease itself multitude by forced quarantine to combat COVID-19 applied by nationwide lockdowns can produce acute panic, anxiety, obsessive behaviors, hoarding, paranoia, and depression, and post-traumatic stress disorder (PTSD) in the long run. These have been fueled by an “infodemic” spread via different platforms social media. Outbursts of racism, stigmatization, and xenophobia against particular communities are also being widely reported.


Nevertheless, front line healthcare workers are at higher-risk of contracting the disease as well as experiencing adverse psychological outcomes in form of burnout, anxiety, fear of transmitting infection, feeling of incompatibility, depression, increased substance-dependence, and PTSD. Community-based mitigation programs to combat COVID-19 will disrupt children's usual lifestyle and may cause florid mental distress. The psychosocial aspects of older people, their caregivers, psychiatric patients, and marginalized communities are affected by this pandemic in different ways and need special attention.                    


Perhaps, those most in danger of pandemic induced stress overload are health care workers cited above.  The Scientific American said that many experts believe health care workers as a group could develop high rates of anxiety, depression, substance use issues, acute stress and, eventually, post-traumatic stress as a result of what they are experiencing on the pandemic front lines. Because this event is unprecedented, the psychological damages may be enormous.


One survey of 1,257 physicians and nurses during the height of the COVID-19 pandemic in China found that about 50 percent of respondents reported symptoms of depression, 44 percent reported symptoms of anxiety and 34 percent reported insomnia.




Governments worldwide need to recognize the severe economic damage the lockdowns have caused and take action to reopen all aspects of everyday life.  This should be done on a basis that paces openings to the percent of COVID-19 cases and deaths in each region. 


An accelerated effort to step up testing and make it widely available is urgently needed along with more personal protective equipment (PPE).  Healthcare facilities are having difficulty accessing the needed PPE and are having to identify alternate ways to provide patient care.  A solution to these two issues is urgently needed now.  Development and approval of a vaccine is of course important, but that will take time and is an orthogonal effort to more testing and PPE.


The emerging COVID-19 inspired mental health crisis must be addressed by our political and health care leaders.  In the absence of strong measures that alleviate fears, financial stresses will inevitably become mental health issues, and vice versa. Mental ill health will cost the U.S. and other countries dearly in the future if it is not treated and managed during lockdown.  The U.S. and state governments must realize this and make this issue a top priority.


In conclusion, we think that MORE lives are at stake from the lockdown then from new COVID-19 cases that might result from business and recreational facility openings.



Stay healthy, be well, stay calm and till next time…………………………….


The Curmudgeon

Follow the Curmudgeon on Twitter @ajwdct247

Curmudgeon is a retired investment professional.  He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996.  He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.

Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever changing and arcane world of markets, economies and government policies.  Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.

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