Stop the Machismo: We’re Begging for a Lockdown

Small businesses are in vertical free fall and the CARES Act is a band-aid. Wild economic uncertainty is roiling our markets, demand, and production. It's time for the federal government to get to work.

dpVUE .images / Shutterstock
dpVUE .images / Shutterstock

As a small business owner, I get a dozen daily emails from associations, the restaurant industry, and legislators saying the same thing – socially distance, wash hands, be safe, and “we are with you.” Repetitive repackaged updates add up to frustratingly little. We don’t need more palliative platitudes. We do need decisive action and concrete help, some of which is coming legislatively, much of which is still being fought for.

Three intertwined levels – the business, human, and macro implications – impact all of us during this crisis.

Diners in my industry are being exhorted to buy gift cards and takeout as a mark of support. Many retail businesses are offering “slimmed down” services – shorter hours, pared offerings, pick up and delivery. For most, the fractional revenue does not economically justify staying open. More importantly, the moral hazard of staffing employees who use public transportation, are subject to exposure, and then perpetuate their microcosms of contagion is absurd. No amount of sanitization can overcome a virus that survives three days on hard surfaces, and hours on packaging and suspension in the air. Staying open is false bravado and dangerous. So is the disturbing national message to return to business as usual.

On a small business level, most of us don’t have the cash flow to survive months of closure when all fixed costs remain. Only funding grants that cover lost revenues or a waiver of costs (rent, utilities, permits, and taxes) will help our businesses to come out of this crisis to sustain long-run employment. Deferment of payments or loans creates debt-burdens that make survival infeasible. Payroll tax exemption is meaningless when you’re closed; training and legal counsel are band-aids for a gushing wound. Our costly insurance is swiftly turning its back on business interruption coverage, an abdication of its fundamental role. The CARES Act has passed $350 billion in “forgivable” loans capped at 2.5 times payroll, as long as we sustain payroll. This is virtually impossible to do when the recession is well upon us in unknown months of closure, mounting losses, and clenched spending ahead for well over a year.

On a human level, our hourly and contract employees – the bulk of our workforce and the entire fulfillment supply chain backing us – are the first to be dispensed with and have no source of income. The promised expanded unemployment support for full-time, part-time, contract, and “gig” employees is invaluable. Unfortunately, the truly lowest income and hardest working labor, those illegally under the radar and a large core, are left to fend for themselves. Government support of low-income families with some combination of unemployment benefits, $1200 direct payments, and payroll coverage of business loans will help. The question is how fast, for how long, and for how many?

The uncertainty and inaction around the root cause is killing us. The longer this pandemic rages unchecked, the longer we treat only the symptoms, the steeper we all fall.

On a macro level, the only meaningful action in the US is by a patchwork of governors and mayors who have shut down cities and states with “shelter in place” advisories.  However, no one state or city is an island, nor is early April a timeframe that corresponds to any realm of reality. I’m proactively closing my business through April and planning for May. No amount of paid sick leave or free testing can stem this. Payroll relief or loans to stay open will only aggravate spread.

We have the lessons of Taiwan, S. Korea, Singapore, and Hong Kong to learn from. Spain, Italy, France, Belgium, India, S. Africa have enforced confinement. Even Britain, mocked for its lax libertarian policy, has shut down. The world has learned that persuasion does not work and perpetuates irresponsibility. The US is now predicted to be the next epicenter by W.H.O.

So what are we waiting for?

I’ve spoken to many who claim the machismo of robust immunity, “I never get the flu!” They’re ignorant or impervious to the scientific reality of silent incubation, of being carriers, and exponential spread. Current statistics understate the unknown by magnitudes of 5-10. I can understand machismo on the spring break revelry of the beaches of Florida, but to have this on a federal policy level is inexplicable.

Only a federally mandated and enforced nationwide lockdown with monitored borders can work. Grasping some semblance of control is vital, while we rapidly shore up. Invoke DPA aggressively for federally managed PPE, testing capability, ventilators, and hospital capacity. Quantified and publicly accountable federal targets on these will be a fitting measure of wartime leadership.

The certainty of federal leadership and cohesive action will stem the wild economic uncertainty that’s roiling our markets, demand, and production.  The alternative is what we’re doing today – limping along with our economy at fractional capacity and inviting a disaster of colossal proportions. Keeping the lights open now is not worth being in two months where Italy is today.  Promises of an Easter nationwide reopening is ludicrously irresponsible.

To our Federal government – get out the National Guard, Police, Army, and FEMA to enforce quarantine while building essential health capacities and supplies at “warp” speed. Our only resource is time. Let’s get over the machismo of ignorance, denial, and inaction. Get to work. We’re begging you.

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