Coronavirus Update 5/19/2020

By Whitney Tilson

Tuesday, May 19, 2020
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Dear readers,

I want to apologize for doing you a disservice. In my desire to not alienate/anger a small segment of my readership, in my dozens of emails and hundreds of pages of writing, I’ve shied away from a gigantic elephant in the room – namely, the political leaders who have let all of us down.

Shame on me, because it makes no sense to discuss this pandemic and how and why the U.S. and my hometown of NYC, in particular, have been hit so hard relative to other places without addressing what our leaders – yes, political leaders, of both parties – did (and didn’t) do to protect us.

Two days ago, I broke my silence when I sent a dedicated email with this ProPublica article, Two Coasts. One Virus. How New York Suffered Nearly 10 Times the Number of Deaths as California., blasting Mayor de Blasio, Gov. Cuomo and President Trump, who, I said, “have completely f**ked us.”

After reading the similar article below, this one in the New Yorker, Seattle’s Leaders Let Scientists Take the Lead. New York’s Did Not, I’m even more certain of this conclusion.

In great detail, it contrasts what the politicians in Seattle did with what de Blasio, Cuomo and Trump did – set their egos and political agendas aside, did what the experts said to do, and let public health officials take the lead in communicating with the public. So every time you see de Blasio, Cuomo and Trump giving a press conference, you should curse these egomaniacs and throw a shoe at the screen. 

Let’s start with the data: as of right now, the U.S. has had 93,533 COVID-19 death, triple any other country in the world. Of course, our population is larger, but even on the basis of deaths per million, at 283, we’re 9th worst in the world, trailing only a handful of countries in Europe (the highest is Belgium at 786, followed by Spain, Italy and the UK at 594, 532 and 521) (data here).

But looking at the entire U.S. is deceiving because our story (so far anyway) has been mostly a story of the NYC area vs. everywhere else. Without even counting the rest of the state or the second-hardest-hit state, New Jersey), there have been 20,887 COVID-19 deaths in New York City alone (data here), 22.3% of the entire U.S. total (and 6.4% of the worldwide total).

Contrast this, as the article below does, with the state of Washington, where the coronavirus first appeared, started to spread, and killed someone. The state has a population of 7.6 million, not far below NYC’s 8.4 million. It has had 1,029 deaths, less than 5% of NYC’s total. Put another way, one of every 7,386 residents of Washington have died vs. one of very 402 residents of my hometown, an 18 times higher fatality rate

And consider South Korea, which had its first confirmed coronavirus cases on the same day as we did (January 20) (confirmed by Snopes). Since then, we have had 93,533 deaths; they’ve had 263. Adjusted for our population being 6.4x larger, our death rate is 56 times higher.

As I noted when I sent out the ProPublica article on Sunday, there are many reasons why NYC would be harder hit than Seattle or San Francisco: perhaps a more virulent strain of the virus, higher population density, a greater percentage of more vulnerable people, a packed subway system that spread the disease, more people flying in from China and Europe, etc.

But NYC having 62 times more deaths per capita than SF and 18 times more than the state of Washington??? 

It’s impossible to explain such enormous differences without looking to what our (and their) political leaders did (and didn’t) do.

Reading the New Yorker article made my blood boil all over again… It echoes the ProPublica article, showing that de Blasio, Cuomo and Trump:

  • Failed to listen to the increasingly desperate warnings from their own highly esteemed health experts;
  • Made themselves the public faces of the government response to the crisis, rather than letting more credible, less political experts do so;
  • Regularly minimized the dangers of the rapidly spreading virus, both publicly and privately;
  • Delayed days, sometimes weeks, in taking actions that proved so effective in many Asian countries, as well as states like WA and CA (a key line from the article: “if New York had started implementing stay-at-home orders ten days earlier than it did, it might have reduced COVID-19 deaths by fifty to eighty per cent”); and
  • Perhaps worst of all, played petty political games, hampering critically needed coordination between federal, state and city officials.

Again, the full article is here: Seattle’s Leaders Let Scientists Take the Lead. New York’s Did Not. Excerpts:

… “To maintain trust, you have to be as honest as possible, and make damn sure that everyone walks the walk,” Besser told me. “If we order people to wear masks, then every C.D.C. official must wear a mask in public. If we order hand washing, then we let the cameras see us washing our hands. We’re trying to do something nearly impossible, which is get people to take an outbreak seriously when, for most Americans, they don’t know anyone who’s sick and, if the plan works, they’ll never meet anyone who’s sick.”

…the primary spokesperson during the pandemic has been not a scientist but President Donald Trump—a politician notoriously hostile to science. Further complicating matters, Trump has highlighted a rotating cast of supporting characters, including Pence; Dr. Anthony Fauci, from the National Institutes of Health; Dr. Deborah Birx, from the State Department; and the President’s son-in-law, Jared Kushner. “When there are so many different figures, it can cause real confusion about whom to listen to, or who’s in charge of what,” Dr. Tom Inglesby, the director of the Center for Health Security, at Johns Hopkins, said. “And, if the response becomes political, it’s a disaster, because people won’t know if you are making recommendations based on science or politics, and so there’s the risk they’ll start to tune out.”

…Federal leaders have given shifting advice—initially, Americans were told that they did not need to wear masks in public, but on April 3rd, at a White House press briefing, masks were recommended—and this has risked undermining public confidence. Trump announced the change by saying, “You don’t have to do it. I’m choosing not to do it.” 

…Trump’s daily briefings, however, are chaotic and contradictory. Within the span of a few days, Trump threatened to quarantine New York City, then reversed himself; soon after declaring that he intended to “reopen” the U.S. economy within two weeks, he called for thirty additional days of social distancing. Such inconstancy from a leader is distracting in the best of times. It is dangerous in a pandemic. 

…Seattle’s leaders moved fast to persuade people to stay home and follow the scientists’ advice; New York’s leaders, despite having a highly esteemed public-health department, moved more slowly, offered more muddied messages, and let politicians’ voices dominate.

New York’s mayor, Bill de Blasio, has long had a fraught relationship with the city’s Department of Health and Mental Hygiene, which, though technically under his control, seeks to function independently and avoid political fights. “There’s always a bit of a split between the political appointees, whose jobs are to make a mayor look good, and public-health professionals, who sometimes have to make unpopular recommendations,” a former head of the Department of Health told me. “But, with the de Blasio people, that antagonism is ten times worse. They are so much more impossible to work with than other administrations.”

…In early March, as Dow Constantine was asking Microsoft to close its offices and putting scientists in front of news cameras, de Blasio and New York’s governor, Andrew Cuomo, were giving speeches that deëmphasized the risks of the pandemic, even as the city was announcing its first official cases. De Blasio initially voiced caution, saying that “no one should take the coronavirus situation lightly,” but soon told residents to keep helping the city’s economy. “Go on with your lives + get out on the town despite Coronavirus,” he tweeted on March 2nd—one day after the first COVID-19 diagnosis in New York. He urged people to see a movie at Lincoln Center. On the day that Seattle schools closed, de Blasio said at a press conference that “if you are not sick, if you are not in the vulnerable category, you should be going about your life.” Cuomo, meanwhile, had told reporters that “we should relax.” He said that most infected people would recover with few problems, adding, “We don’t even think it’s going to be as bad as it was in other countries.”

…As New York City schools, bars, and restaurants remained open, relations between the Department of Health and City Hall devolved. Health supervisors were “very, very angry,” …One City Council member told me that health officials “had been trying to say that publicly for weeks, but this mayor refuses to trust the experts—it’s mind-boggling.”

…At press conferences, Layton and other physicians played minimal roles while de Blasio and Cuomo, longtime rivals, each attempted to take center stage. The two men even began publicly feuding—arguing in the press, and through aides, about who had authority over schools and workplace closures. 

…de Blasio finally acceded to the health officials’ demands. On March 16th, after a compromise was reached with the health-care unions, city schools were closed, and Cuomo ordered all gyms and similar facilities to shut down. The messaging remained jumbled, however. Right before the gym closure was set to take effect, de Blasio asked his driver to take him to the Y.M.C.A. in Park Slope, near his old home, for a final workout. Even de Blasio’s allies were outraged. A former adviser tweeted, “The mayor’s actions today are inexcusable and reckless.” Another former consultant tweeted that the gym visit was “Pathetic. Self-involved. Inexcusable.”

De Blasio and Cuomo kept bickering. On March 17th, de Blasio told residents to “be prepared right now for the possibility of a shelter-in-place order.” The same day, Cuomo told a reporter, “There’s not going to be any ‘you must stay in your house’ rule.” Cuomo’s staff quietly told reporters that de Blasio was acting “psychotic.” Three days later, though, Cuomo announced an executive order putting the state on “pause”—which was essentially indistinguishable from stay-at-home orders issued by cities in Washington State, California, and elsewhere.

…Today, New York City has the same social-distancing policies and business-closure rules as Seattle. But because New York’s recommendations came later than Seattle’s—and because communication was less consistent—it took longer to influence how people behaved. According to data collected by Google from cell phones, nearly a quarter of Seattleites were avoiding their workplaces by March 6th. In New York City, another week passed until an equivalent percentage did the same. Tom Frieden, the former C.D.C. director, has estimated that, if New York had started implementing stay-at-home orders ten days earlier than it did, it might have reduced COVID-19 deaths by fifty to eighty per cent. Another former New York City health commissioner told me that “de Blasio was just horrible,” adding, “Maybe it was unintentional, maybe it was his arrogance. But, if you tell people to stay home and then you go to the gym, you can’t really be surprised when people keep going outside.” [my emphasis added]

Best regards,

Whitney

Whitney Tilson

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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to nearly $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor’s degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

Click here for the full bio.