We are all experiencing the severity and long-lasting damage that the COVID-19 coronavirus is having and as of April 28 has caused one million U.S. citizens to have been infected and 58,000 to die as well as the destruction that it has inflicted on our economy. The long-term and future effects can only be pondered and guessed at for we have no track record to be able to rely upon. But just maybe AI (artificial intelligence) will make some determinations about what the long-term results will be. However, the prognosis looks quite dim for the foreseeable future.
It would be very challenging and difficult even to look back at the 1918-19 Spanish influenza pandemic from the H1N1 virus with genes of avian origin. It is estimated that about 500 million people, or one-third of the world’s population, became infected with this virus. The number of deaths was estimated to be at least 50 million worldwide with about 675,000 occurring in the United States (population 103 million) due to the fact that we had no cure or any type of vaccine to combat the outbreaks and infections.
Today, however, you would think that we would be more proactive and ready to effectively combat the coronavirus. But it is very evident that although warned many times over the last 20 years by a multitude of medical professionals and scientists about these types of potential killer viruses, most government officials consistently turned a deaf ear and passed on it.
The Obama-Biden administration set up the White House National Security Council Directorate for Global Health Security and Bio-defense to prepare for future pandemics like COVID-19. According to a March 25, 2019 article from Reuters, the group wasn’t totally eliminated but supposedly streamlined due to inefficiencies and possibly cost overruns. The pandemic response team was disbanded and diluted, but not totally eliminated and some team members were reassigned to roles that included pandemic response. The previous watchdogs specifically set up, designed, specialized, and dedicated in global pandemics and diseases was gone!
The current administration still wasn’t paying attention or listening to all the warnings going back to December 2019. Now that we are in the middle of this most critical pandemic, I am questioning and researching to find out if anyone has any idea or thoughts as to how many businesses and jobs will be lost at the end of this global calamity that will assuredly have an effect on real estate. We have consistently become Monday morning quarterbacks performing at the last minute and doing Band-aid fixes instead of preparing in advance for what needs to be done before the sky falls on us, which is what has happened.
As of April 28, 26 million have applied for unemployment benefits and all
of the $379 billion from the stimulus package (Coronavirus Aid, Relief, and Economic Security (CARES) Act) has been snatched up in a heartbeat by the larger corporations (although some have returned the money) because of the lack of any oversight whatsoever as the president eliminated many of the inspector generals.
An April 1 article in The Economic Policy Institute by David Cooper and Julia Wolfe said: “The latest Goldman Sachs fore-cast predicts a 9% contraction for the first quarter of this year and a 34 percent contraction in the second quarter. This large drop in GDP is consistent with 19.8 million jobs lost by July, bringing unemployment rates across the country into the mid-teens.”
These figures might just be too low and as of today, April 28, I am guessing that millions more will have been furloughed as almost all restaurants, warehouses and even law firms have laid off most of their employees as well as energy sector workers, too. We are currently in a recession and are now heading or are already in a depression based on the sheer numbers of unemployed people. Where is the stimulus bailout for those who live from paycheck to paycheck? Weren’t the stimulus monies designed for those employees of smaller to midsize businesses which represent 50 percent plus of our economy and frontline workers, many of whom keep our food supply chains to continually function and not for the publicly traded conglomerates?
Workers in many food-processing plants work shoulder to shoulder. Tyson Foods’ poultry plant in Georgia had four dead and Smithfield Foods’ pork processing plant in Sioux Falls, S.D. had 500 infections before it was finally shut down. Where were the workers’ protective equipment and why weren’t safety measures in place? More important, of some of the most important people to be infected, healthcare workers had 10-20 percent of the cases.
Now that we are in the midst of this deadly pandemic how will we save the multitude of businesses that will surely fold as well as hundreds of thousands to possibly millions of jobs that will be lost forever?
My professional opinion is that they should have split the stimulus bailout so that 50 percent should have been paid out from the bottom up of lowest-paid workers and small businesses and the other half from the top down to non-publicly traded companies with superior balance sheets and more than adequate cash in the bank to make it through this recession or probable depression.
The 64,000 question is how long will it be until we can determine how many businesses and jobs have failed and who has the wherewithal to purchase and what will the overall demand be for homes, investment and commercial real estate? The future looks bleak and will surely provide us the answers, but we must step up to the plate and solve this existential crisis to survive.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). Just email or snail mail (regular mail) him with your ideas on future columns with your name, email, and cell number and he call or email you back. For a consultation, he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com to answer any of your questions, concerns, or column suggestions and ideas.