Some thoughts on... Starting Act Two

At the beginning of Act Five of Shakepeare’s Macbeth, Lady Macbeth is washing her hands of imaginary blood to clear her conscious, given the people she has murdered in the previous acts.  “Out, out damn spot” she furiously cries as she walks in her sleep.  As we begin our second act of the Covid-19 pandemic, I began to think which others leaders have blood on their hands?

Gustav Freytag described the classic five act structure as an upside-down “V”.  Act 1 is the introduction of the drama with tension beginning to rise in Act 2.  The third act contains a climax or turning point, after which there is a return to normalcy in Act 4, and finally a resolution in the final act.

Writing the ongoing story of our drama, we ended Act 1 with the end of home quarantine and an opening of the economy.  The surge in cases across the southern states prognosticated the beginning of Act 2 with a rise in tension as several states consider lockdown again in order to stem the upward trajectory. Historically, the flu virus kills abut 30,000 – 40,000 per year in the United States according to the CDC.  The estimates for the US, as stated by Fox News, are that 140,000 people already have died from the disease in the past five months.

The rise in infections could have been better contained.  

At the State level, several governors’ negligence and refusal to institute basic health measures to protect their populations has led to spikes in cases.

• Governor Doug Ducey of Arizona initially avoided mandating wearing masks in public and also prevented local municipalities from instituting their own policies.  He eventually reversed his decision given the rise in cases.
• Governor Greg Abbott of Texas in May allowed several businesses including restaurants, gyms, and bars a to reopen with reduced capacity and banned cities from arresting people that violated virus regulations.   By the end of June he had to pause reopening given the surge in cases. 
• Governor Ron DeSantis of Florida kept beaches opened in the Spring and claimed that Florida had won the battle back against the virus in April/ May; only to be faced with over 10,000 new cases a day by mid-July.
• Governor Brian Kemp of Georgia signed an executive order banning local city councils and counties from mandating that people have to wear a mask when in public, and filed a law suit to prevent Atlanta’s mayor from doing so.

These governors may simply be acting in their own political self-interest rather than the general public interest.  But, their negligence to institute basic public health measures for their states seems hard to justify.  In addition, their push to prevent local governments from instituting policies seems pure hubris. 

The defunding and erosion of the public health system in the US has occurred for a decade now, leading to a frail support framework.  By delaying Federal guidelines, the Administration has effectively delegated management of the virus to State governors.  Unfortunately, the actions of these State officials along with the relative inaction of the Executive Office means that they all have blood on their hands for the negligence that they have demonstrated.  

The climax (Act Three) of our collective play may be coming in November.  Let’s hope that we have a voice to reflect how we think leadership has been handling the crisis.

Please do forward any interesting articles you are reading.

Some thoughts on... Fiddling with Fire

From 5^th grade, I remember a history lesson about Emperor Nero playing his beloved fiddle while the Great Fire of Romeburned through the country in 64 CE.  I recall thinking to myself why would anyone not want to help if their nation was burning?

 

In my Principles of Economics class, we discuss a basic trade-off in economic decision-making – between efficiency and equity.  Efficiency is when all goods are allocated to their most valuable use minimizing waste. An efficient allocation could be where one individual holds all the wealth of a country and everyone else has a dollar.  Open markets are very good at creating an efficient outcome.  Equity (different from equality) is a concept of fairness.  Society, via government, has the responsibility to sometimes re-allocate an efficient outcome to create more equity. 

 

The basic social contract of western democracies, especially in the US, inherently incorporates both efficiency and equity.  If individuals work and study hard, they can pull themselves up to the upper-echelons of society.  Hard-working individuals will prosper and everyone should have a shot at the American Dream.

 

Since the 1980’s, policies have tilted economic rules towards greater efficiency – for example deregulating industries, lowering trade barriers – creating greater wealth so that more people could achieve the dream.  Through global movements of products and finance, we now manufacture shirts cheaper in Bangladesh, gather rare- Earth minerals from Sierra Leone and make investments in Mongolia.  As a global society we now are the richest we have ever been, but this has come at three major costs.

 

First, Thomas Piketty has described how income inequity in capitalist democracies has increased over the past half century and is reaching levels similar to the 1800’s in France and England. Comparable to historic periods, the people not benefiting from global progress are asking that the social contract be re-written indicating this level of income inequity as unsustainable.

 

Second, different from past eras, even those who have benefited from the systemic inequity, are unhappy as well.  Although beneficiaries of the system have merited their earnings according to the social contract, they are also working harder in terms of brute hours than the middle class on average, and are receiving most of their income by working. This is in stark contrast to the elites of bygone eras who were part of the “leisure class” and gathered more of their income as inheritance. Daniel Markovits at Yale has called this a meritocracy trap. 

 

Finally, even though the nation overall is wealthier, it is harder to move from becoming poor to rich.  The American Dream is becoming unattainable in the US.   As several economic studies indicate the US is 27^th in the world for social mobility, the US is at the lowest level of social mobility for the past 150 years, and children’s chances of earning more than their parents has been declining.

The social contract that we have carefully constructed over 250 years is being consumed by inequity, while Covid-19 and unemployment are feeding the flames. 

 

Even if Federal leadership may ignore the blaze, what is our personal responsibility in putting out the fire?  I am a) rethinking what companies to support – do I really need to save $5 by buying products produced more cheaply b) which non-profit organizations I am supporting, and c) which candidates we are endorsing.  Mala’s colleagues at the IMF collected these free or low-cost resources describing how to discuss inequity with children.

 

To address this situation of inequity, leadership matters.  When we allow the social contract to be burned – we lose tolerance, forgiveness, charity, community.  But even more important we may actually lose the democracy the contract is built on.

 

Please do forward any interesting articles you are reading.

Some thoughts on... Seeing the Horizon

As we approach graduation week for many students, I was speaking with a Columbia colleague about her family.  She was worried about her father who was working in a hospital.  But because of the reduced pollution, while he was driving to work these days he could actually see the horizon.

Covid-19 has forced us to isolate and to be more alone, and to be more reflective.  But could it also take a pandemic to make us notice the expansive, beauty of the world around us?

Individually, we all have moments of personal introspection – when we fall sick, when a family members dies, when we accomplish a life goal.  At these points, we are more open to possibilities.  We reconsider life decisions.  We rouse to see a world of opportunity outside of the narrow lanes in which we live.  Sometimes we act on this promising set of alternatives – exercise more, spend time with loved ones, change careers.  Sometimes we don’t.

These moments of global rousing are less common and happen every few decades -  the moon landing, 9/11. We could view them as an opportunity to rethink our societal options.  Similar to personal introspection, we can’t reverse the course of what is happening, i.e., turn back the clock on the virus.  Instead we can commit to making changes. 

Perhaps this bout of global rousing will provide collective clarity on our options going forward.  Here are three thorny issues I am thinking about – feeding hungry people despite a glut in food production, ensuring people are allowed to vote in the upcoming US elections, protecting economically vulnerable communities. 

Usually it’s darkest right before the dawn – and at that point you can see the horizon most clearly.

Please do forward any interesting articles you are reading.