E-letter: Time to survive

As usual, the media are walking in a row like ducks, delivering the same message. It’s a good message: wash hands, social distance, stay home. I guess it’s good to hear it 60 or 80 times. However, most of you own small businesses, and its not enough that your employees get a cheque and the government will guarantee a loan. Loans has to be paid, and that takes revenue, which leads in a circle. 

Kerry Knudsen

A situation such as this does not have a prescription – no pat answers from tired, afternoon editorial meetings on what to “teach” an audience. A situation such as this requires thought, so I’ll share what I’m thinking. You don’t have to agree. In fact, please don’t. It is in discussion that new ideas emerge. You need to think for yourself. 

Here’s what I think – an assemblage of facts followed by an opinion or two. 

First, this is untrodden territory. Nobody knows what’s next. We see journalists on every news show demanding to know what date this will end, how many will die, what the final cost will be, when a vaccine will be available, etc. To me, this seems a waste of time, unless somehow they believe information is available and is being withheld. 

The leaders – in our case, Trudeau and Trump. – are desperate to decide. As I pointed out in an earlier note, a government cannot create an economy any more than a tick cannot create a deer. It needs an economy to tax, and shutting down the economy is to set the timer on a bomb. There is no Santa Claus. 

Right now, the U.S. is reporting 550,000 cases of coronavirus, with 22,000 deaths. That yields a four percent death rate for reported cases. I will use U.S. figures, since I believe the U.S. has and will have the best testing regimen for the near future, and as testing increases the numbers of positives will doubtless go up, while the numbers of deaths will remain as reported, since people don’t fail to find dead bodies. This means as the testing increases the mortality rate will likely decrease. For us in Canada, we can simply use the 10x multiplier in lieu of anything better. 

For the sake of argument, let’s assume the mortality figures comprise the entire set of corona-linked deaths since the beginning, and the beginning was February 16, so we are dealing with a two-month window. 

Also, it appears for now that no numbers from China can be deemed reliable – not in the disease’s appearance date, its numbers of infected, its numbers of deceased or its mortality rate. 

For context, the National Institute on Alcohol Abuse and Alcoholism in the U.S. says approximately 88,000 people die from alcohol-related disease annually. That means over 14,600 people die from directly alcohol-related disease every two months, not including traffic accidents, suicide, falling, etc. 

Tobacco is alleged to kill 480,000 people in the U.S. annually, or 80,000 every two months.  

This is not to make light of the threat of Covid-19, but rather to show by context that world leaders have decided elsewhere to accept a certain level of mortality as the cost of keeping a balance of some sort, and many other, similarly damaging (sometimes voluntary) causes have not caused a shutdown of the economy. 

Broadening the perspective, the Toronto Star reports that deaths in Canada may reach as many as 700 by April 16The population of Canada is estimated to be 37 million, so the mortality rate as of April 16 may be about .00002, or 2/1000 of one percent of the entire, not the infected, population. Conversely, 99.998 percent of the population is being economically, socially, spiritually and familiallyaffected by a disease they will not die from by April 16. 

Total deaths attributed to Covid-19 in the U.S. are just over 22,000. The population of the U.S. is about 330 million. Using the same math, the death rate in the States is currently standing at about 0.00007, or 7/1,000 of one percent. 

Current projections of total deaths in the U.S. are 60,000. Recall that this is down from 2.2 million at one point, then 100,000 to 220,000.  

Please note: Dr. Deborah Birxcoordinator for the White House of its Coronavirus Task Forcehas said that all deaths reported with coronavirus are being reported as deaths from coronavirus. This could affect the numbers in cases where somebody with high blood pressure, diabetes, coronary artery disease or some other risk factor gets coronavirus and dies, where the victim may have succumbed whether or not coronavirus was a factor. 

All these facts argue nothing. You can change the variables as you wish. However, it leads me to the opinion I mentioned.  

U.S. President Trump has said publicly and repeatedly he is facing the toughest decision of his life. To me, that indicates he is weighing the costs and benefits, the risks and rewards, of opening or not opening the country, and the methods and modes of doing so. 

My guess is that he will reflect on the decisions of other presidents, such as whether to risk nuclear annihilation as Kennedy did in Cuba, or any other decision of major, fatal consequences by any other president, and he will choose to take the medical risks and send the country back to work. 

I also think that Trudeau, while he disdains Trump and will make a big show of having a better plan, will not be able to watch the States waking up from hibernation alone, and be content to wait. We can’t afford it. So I think Canada will follow the States at some social distance. 

 

The big question that remains is whether, by making us all avoid exposure and remain pathogenically naïve, we will all be susceptible to infection en masse when the country starts to move. That’s a scary one, and it’s the subject of debates all around. You are welcome to your own take. 

My concern for small businesses is that the employees are being taken care of, the big businesses are being taken care of, the medical community is being taken care of, and the seniors are being taken care of. And you get a loan. If you need me to ask the obvious: “who is going to pay?,” you need to slow down and think. It is you. And you’re going to pay for a long time. Maybe forever, since I doubt the bureaucrats will quickly release the new-found controls they now have in their grasp. 

Which leads, of course, to the “irk” factor. We know of a few small businesses that consulted with their lawyers, were counselled that the “critical service” language was overbroad, and they would be OK. They weren’t, with at least one getting fine of $50,000. 

Moving on, it seems small-business owners need to review a new landscape that may appear very soon – a landscape in which it is possible some of your employees have been lulled into believing all will be as it was, but it won’t be. It can’t.  

Just as a f’rinstance, many (most?) of our readers make their living from selling home, commercial or institutional improvements. Do you see your customer base as hearing an “all clear” from Trudeau and calling for a bathroom floor, reception area or gymn, or do you see a future of restaurant auctions? If they don’t come up with orders, what happens to staff? 

My guess is that many of you are using this eye of the hurricane to puzzle out how to decrease employee costs, decrease benefits, reduce inventories, cut utilities and prospect new business. 

 

One last point. I think that across North America we will see an imperative that we reduce the size, cost and influence of unions. As far as I can tell, not a single public-service employee is set to take a cut in ANYTHING as the result of the surgery the rest of us are undergoing, yet we will no longer be able to pay, let alone afford.  

One major clue I see for this idea is that we have not heard a word from the unions during this debacle. Not a word. And I am certain if they had one, we would know. The handwriting is there on the wall. As the Canadian Union of Public Employees declares in the first line on its pension page, “Every Canadian deserves to retire in dignity with a decent retirement income.” Don’t business owners qualify as one of “every Canadian?” A tick cannot create a deer, and a parasite that kills its host is a candidate for extinction. We are not their vassals. 

Like Trump, small business is facing possibly the hardest decision of its life. My money is on the decision to survive. 

Comments

  1. Deborah DAnniels-French says

    Love your articles. I hope you are right about unions – they are past their sell by date.

Speak Your Mind

*

CAPTCHA Image

*