Monday, March 23, 2020

THE NEW NORMAL



It is difficult to write about our new virus driven dystopian life as the reality changes by the hour.  The fear guided daily routine now revolves around staying at home with our families, watching our investments bleed away as the paper loses cascade downward and listening to the media talking heads describe our descent into a social and economic apocalypse. 

There is one undeniable fact.  If we cannot quickly solve the underlying health problem caused by the coronavirus, the prospects for solving the economic problem will spiral out of control.

Optimists are in short supply.  The world economy has shut down and entered a recession.  A depression mirroring the 1930s becomes more likely by the day. 
 As coronavirus testing increases, the news on disease spread gets worse. Millions of retail and food service jobs may not exist on the other side of the crisis. Fear of the unknown has many Americans expecting the most dismal of outcomes.  Toilet paper hording and the purchase of firearms reflect the mood of the country. 

Americans do not do well staying at home for extended periods.  I would not be surprised if the number of fatalities caused by domestic violence, alcohol/drug abuse, and suicide fostered by isolation, greatly exceed the number of coronavirus deaths.

In some respects, these new vicissitudes of life do not differ much from our medieval ancestors faced with the plague.  When there is no cure, human nature, not science, prevails. The wealthy decamp to their country homes to escape infection, not unlike the nobility of Florence and London in the 14th century. The internet is rife with prayer chains and group Hail Marys asking for relief.  The plague doctors of yore and our modern medical staffs place their lives on the line to tend to the sick.  Social interaction comes to a halt, including funerals for the dead.

The role of government in addressing the pandemic will be a much discussed topic. Early indications are that countries that were able to stay ahead of the virus (Singapore, South Korea, Taiwan, Hong Kong) implemented massive testing to identify infected individuals and to quarantine these people in dedicated locations.  Others who were exposed to infected individuals were located by contact tracers, systematically tested and quarantined to prevent further spread.

Unfortunately, America found itself reacting to the outbreak rather than taking a proactive approach and listening to the experts. The New York Times reported on 3/19/20 that the White House was warned last year that it was not prepared to manage an infectious disease outbreak. A Health and Human Services simulation, called “Crimson Contagion” contained a draft report dated October 2019. It drove home just how underfunded, underprepared and uncoordinated the federal government would be for a life-or-death battle with a virus for which no treatment existed.

The initial American response to the pandemic was abysmal. Without explanation, many of the most qualified infectious disease experts in the country were terminated from critical positions in the White House, Homeland Security and the Defense Department when the Trump administration took office.  Moreover, the President was snail like and reactionary in accepting the gravity of the growing crisis.

Without massive testing and isolation at the onset of the pandemic, our government was forced to adopt the Italian response and to propose a countrywide “stay at home” solution.  The problem is that this approach does nothing to shut down the early spread of the disease, does not identify potential hot spots, and causes massive economic and social dislocation.

The Wall Street Journal in its 3/20/20 editorial began to question the efficacy of our national path to defeating the virus.  It concludes: “America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lock-down.” This would no doubt involve moving the country out of the present stay at home mode and back to work in the social distancing mode.  However, the hospitals need to be properly provisioned before this can happen.

The election will be a Trump versus Joe Biden Affair. It will be a one-issue campaign without political rallies or hand shaking.  If the President is able to recover from his gaffes and project any sense of leadership, with the pandemic ending with minimal long-term dislocations, he may win.  Conversely, if we are staying at home come autumn, he will be fortunate to carry one state. 

For those who are willing to look ahead, economic green shoots and positive results will eventually appear. First, the zombie companies surviving on cheap credit will be gone, replaced by well-capitalized enterprises.  Second, for those who had patience and did not sell into the teeth of the financial panic, retirement accounts will be replenished on the other side of a deep but hopefully brief recession.  Third, a valuable lesson has been learned on how not to prepare for a worldwide pandemic and we will be prepared for future outbreaks. Fourth, millennial couples, now forced to stay at home, will not escape their nesting instincts and will begin producing large numbers of coronial children.

Lastly, I am reminded of the excellent epic study, The Great Leveler, written by the historian, Walter Scheidel.  The premise was that over the arc of civilization, catastrophic events have done more to lessen inequality than anything else. While everyone suffers in times of economic collapse, the rich simply have more to lose and the large gap in equality becomes more manageable.  Let us hope that one of the byproducts of this disaster, hastened by actions taken by Congress, is a rebalancing of the economic scales in favor of the less fortunate in our society.





Monday, March 16, 2020

CATASTROPHIC EVENTS REQUIRE GLOBAL SOLUTIONS



Despite the rapid expansion of modern science and the new technologies of the information age, our nation remains subject to events that are unpredictable and catastrophic.  These events can destroy decades of economic, political and social advancement with little warning and devastating results.  They can challenge our democratic principles and send us into domestic tribal warfare as we begin to doubt who we are as a people.

 In recent years, such events have led to the rise of populist nationalism. Many in the American middle class have rightfully felt threatened by these unexpected events and betrayed by the solutions advanced by the political elites.  They have come to believe that retrenchment will offer them protection, limit the damage to their economic welfare and improve their social standing.

Paradoxically, turning outward toward international solutions would offer better solutions to these events for the vast majority of Americans than turning inward with an “America first” prospective.  This commentary will explore my thesis.

First consider the attacks of September 11, 2001.  The early days of the George W. Bush presidency were an optimistic time of unprecedented American global growth and influence both militarily and economically. No nation was in a position to challenge our hegemony.  Liberal democracy was on the rise. Protectionism was being replaced by free trade and transnational integrated systems. Then a group of extremists operating from one of the poorest countries in the world successfully hijacked four planes and everything changed.

According to a 2018 report from Brown University the total cost to the United States from 9/11 was at that time $5.93 trillion. The attack also led to the War on Terror, the largest government spending program in U.S. history. In 2020 we continue to feel the economic and emotional effects of the attack as we attempt to negotiate our way out of America’s longest war in Afghanistan.

The next event to challenge the middle class was the great recession of 2008.  Subprime mortgage loans and lack of financial regulation were directly responsible for this destructive economic disaster.   

According to the Department of Labor, roughly 8.7 million jobs (about 7%) were shed from February 2008 to February 2010, and real GDP contracted by 4.2% between Q4 2007 and Q2 2009, making the Great Recession the worst economic downturn since the Great Depression. Unable to obtain financing, major financial institutions either merged or declared bankruptcy.    

The country has rebounded in many ways from the Great Recession, but we are also more unequal, less vibrant, less productive, poorer, and sicker than it would have been had the crisis been less severe. Economists have found its aftermath remains most pronounced on the middle class where jobs were washed away, often by employers using the recession as an opportunity to fire workers and invest in alternatives.

 In recent weeks a third unpredictable event has caused further economic and social pain as we have experienced the worldwide outbreak of the coronavirus.  This epidemiological disaster has shut down large sectors of  the economy, sent us home to shelter in place and placed unprecedented strains on our medical system. For the third time in two decades, the middle class is under pressure from unemployment and loss of retirement savings.

In the face of these three outsized threats: terrorism against the Homeland, economic collapse caused by profit seeking financial institutions and now, a worldwide viral pandemic, it is difficult to blame Americans for supporting more isolation.

Unfortunately, this approach is short sighted and will further cripple the country in the long run. Building a wall at our Southern border will not make our country safer.  Fighting with our Allies over funding against terrorism and withdrawing from international organizations and treaties will not help prevent the next attack.  International cooperation offers the best prospects for homeland security.

On financial matters, it is impossible to ignore the integrated nature of the world economy.  It is a pipe dream to believe that long gone manufacturing and industrial production can be resurrected within our borders to provide domestic employment. Tariffs and trade wars injure middle class consumers and farmers.  Moreover, if Europe or China suffer economic reversals, the American economy will not escape the consequences of financial chaos.

Regarding the coronavirus the first response of our elected leaders to isolate the country from a growing pandemic did not work.  Infectious diseases do not honor national borders and by their very nature demand worldwide cooperation in order to limit their spread. Refusing to accept tests for the virus from the World Health Organization have place our response weeks behind the curve by making it impossible to target break-out areas.

My point in all of this is that the middle class has been harmed by a series of unlucky, “black swan” events. However, the way back is not to be found in attempting to turn America into a self-sufficient economy with closed borders.  When the coronavirus crisis is over, nuclear proliferation, the displacement of millions of people into refugee camps and climate change are but three other issues that require immediate United States involvement on an international scale.

 In the end open-mindedness on world events and leadership in International affairs will best serve the interests of the middle class and all future generations. I am not advocating an over the top globalist prospective that ignores the importance of love of country and the local communities that give our lives meaning. Nevertheless, to face the problems that threaten our way of life, we must also look outward and stay engaged.

In collaborating with other nations to save the world from terrorism, recession and pandemics, we will save America.



Monday, March 2, 2020

WASHINGTON COUNTY SHOULD RECONSIDER HOME RULE



In 1968 a new local government article to the Pennsylvania Constitution guaranteed the right of all Pennsylvania counties and municipalities to adopt home rule charters and exercise home rule powers. The constitutional change was hailed as a watershed in the history of local government in Pennsylvania.  The basic concept of home rule was straightforward. The power to act in municipal affairs was transferred from state law, as set forth by the General Assembly, to a local charter, adopted and amended by local voters.  

 Change is never easy and in fifty years, only six Pennsylvania counties have adopted home rule as their form of government. In 2002 Washington County voters approved a commission to adopt a proposed home rule charter. Unfortunately, the work went for naught when the referendum to approve the draft charter was defeated in a subsequent election. Many believe the effort was doomed to fail because Washington County was not ready for major revisions in government structure.  For a variety of reasons now is the time to revisit home rule in Washington County.

I can hear the doubters as I put pen to paper: “We tried that already and Washington County turned down home rule.” “This is sour grapes after Democrats lost county wide elections in Washington County.” “Give the new Commissioners a chance to govern.” “Home Rule is about raising taxes.”

Washington County was a much different place at the turn of the century when home rule was first considered. We have now evolved from a rural farming district into one of the most unique local areas in the country. An urban bedroom community in the north, with a large industrial park, close to an international airport. A county with a destination entertainment complex at the intersection of two interstate highways, with a casino, race track and discount shopping mall. It is a modern industrial county at the center of the Marcellus Shale fracking industry. Our southern border blends into Appalachia, an area where the dying coal industry and years of neglect is still marked by poverty.  Clearly, the cookie cutter model for county government, mandated by Harrisburg, does not fit Washington County’s changing profile.

My position is not based on the recent changes in party leadership of the commissioners’ or row offices.  Had the Democrats retained control of county government it would still be time to revisit home rule. 

 The argument that home rule is only about officials seeking to raise taxes is not true for Pennsylvania counties that have adopted this form of government. According to a study conducted by Penn State: “the residents of home rule counties enjoy a greater level of government services yet do not pay higher taxes than the residents of non-home rule counties.”  I have no doubt that our fiscally responsible county officials can be trusted with broad based home rule taxing authority to fashion creative solutions for our citizens.

What is to be gained by adopting home rule in Washington County? First, the county row offices could be eliminated and replaced by a non-elected, modern Department of Court Records.  The small patronage-driven offices for civil filings (Prothonotary), criminal filings (Clerk of Courts), real estate filings (Recorder of Deeds) and wills and estates (Register of Wills) could be combined into one court-based administrative operation.

The new Department of Court Records would be organized in accordance with best record keeping practices and would save money by eliminating overlapping expenditures in each of the existing operations.  The small elected row office fiefdoms are anything but efficient.  Appropriate audit controls would eliminate fiascoes like the recent unexplained missing large deposits in the Clerk of Court’s office.

Second, Washington County could replace the elected office of Coroner with an appointed Medical Examiner who would be an experienced pathologist. At a minimum, Medical Examiners have completed an anatomic pathology residency and a forensic pathology fellowship.

Third, a county home rule charter would provide the opportunity to replace the three-commissioner system authorized by state law with a single elected chief executive.  Under this model, adopted by Allegheny County and others, a county-wide counsel would also be elected to work with the executive in conducting county business.  The executive would be a single voice and the counsel would reflect the very different needs and priorities of Washington County’s diverse voters.

The Romans taught us in 60 BC that a three party triumvirate, similar to our commissioners, was no way to run a Republic.  There was little that Caesar, Pompey and Crassus could agree on and much finger pointing when things did not go according to plan.  The experiment degenerated into a dictatorship.

When our forefathers considered how to organize the federal executive branch in the Constitution, Alexander Hamilton carried the day in Federalist No.70 “The Executive Department Further Considered.”  He wrote: “Energy arises from the proceedings of a single person characterized by decision, activity, secrecy and dispatch, while safety arises from the unitary executive’s unconcealed accountability to the people.”  Washington County voters are entitled to vote for a single executive who alone is answerable for his/her actions.

 In addition to the above, home rule would make Washington County less dependent on state government in other respects. We would have greater control in addressing:  a) economic development needs; b) the demands on county government for local services; and c) such control would permit rapid response to address unique problems without waiting for Harrisburg to take action.

The Pennsylvania counties that have adopted home rule have taken local control of their futures.  It is time for Washington County to join them.