Door of a bankrupt business locked with chain and padlock. Global recession due to coronavirus lockdown by Ivan Radic is licensed under CC BY 2.0
Indications of damage caused by the shutdown are getting stronger. First articles are appearing to describe the harm to health from the shutdown.
Comments today:
- Estimated 35 deaths from not getting cardiac care in Ontario, Canada
- Indications people are not seeing doctors and not getting meds they need
- Harsh impact on Jewish owned businesses
- New vehicle sales collapsing
- Temp layoffs transition to permanent
- More students suing more universities, now claiming discount on tuition for missing out on the on-campus experience
Damage to health from shutdown
5/5/20 – Daily Wire – Dozens Dead After Lockdown Measures Delayed Their Heart Surgeries; Health Official: “Certainly Was Not Intended” – Count this as the first in what I predict will be an exquisitely long list of unintended consequences from putting the economy into an induced coma. The sad part is these unintended consequences were predictable and expected.
Thousands upon thousands of needed health procedures were canceled in Ontario, Canada in order to make room for the massive surge of coronavirus patients which never arrived.
New study in Ontario estimates that 35 people are dead because their heart surgeries were postponed. There were 12,200 surgeries and other procedures postponed each week.
We are certainly going to see more of this kind of report. Eventually we may see a tally of the deaths caused by the shutdown. At some point we will compare that death count with the number who died from the actual virus.
5/5/20 – Wall Street Journal – CVS Warns of Surge in Non-Coronavirus Health Problems – Huge pharmacy reports their pharmaceutical fulfillment data shows lower number of new prescriptions, low number of new treatments, and reduced doctor’s visit.
This suggests people are postponing health treatment for routine and chronic conditions. To the extent there are people with diabetes or heart disease included in that data there will be increased cost, increased health damage, and increased deaths in the future.
At some point there need to be answers to the question of how many people died because of the shutdown of the economy and closing of doctors offices.
The CVS subsidiary Aetna reports and overall drop of 30% in April for utilization of health-care services in general. This again indicates people are not getting healthcare, primarily because of supposedly nonessential services being canceled.
Spreading economic devastation
4/30/20 – Forward – Letter from Los Angeles: The death of small business is a tragedy for Jewish community and democracy – If you are concerned about increasing concentration of economic power and concerned about reduced opportunity for immigrants and minorities to gain access to wealth, then what the pandemic is doing to small business should be of concern to you.
4/30/20 – Edmunds – New Vehicle Sales Continue Downward Slide in April, Edmunds Forecasts – Analyst for the company are estimating sales in April 2020 will be down 53% from the prior year and down 37% from March 2020. Sales are collapsing for both individuals and for fleet sales, which makes sense. Who is going to be buying a new car in the midst of a lockdown and economic contraction? With travel collapsing what car rental company wants to bring on new vehicles?
Sales drops from the prior year by manufacturer range from a decline of 44% up to 63%. Month over month drop by manufacturer ranges from climbing 26% up to a collapse of 55%.
5/6/20 – Bloomberg / Quint – Layoffs Start Turning From Temporary to Permanent Across America – Citing outlook for a variety of companies in a variety of industries, article perceives a trend of the temporary layoffs extending for longer than previously expected. As previously mentioned on this blog, Boeing expects three years for recovery of sales. Alcoa is cutting production by 50%, which points to a slow recovery.
Heavy industries, steel for example will be hard-hit with the companies with more efficient minimills doing better than the older style blast furnaces. As example of the former, Nucor expects to be profitable by the second half of 2020. For examples of the latter, US Steel, ArcelorMittal, and Cleveland-Cliffs have closed 10 or more blast furnaces between them.
Forecasts of new car sales have dropped from 16 million for the year down to something in the range of 11 or 12 million. That something around a 25% drop in production which will work its way from new car dealerships all the way back through the entire supply chain all the way to mining.
I will quote one specific line because it tells the story of the current economy better than anything else. The story of one particular small company closing its doors after having been around for 140 years is
“… a warning for those trying to figure out if and when the US economy can stage a full recovery from an induced coma.”
5/4/20 – Bloomberg MSN News – Angry Undergrads Are Suing Colleges for Billions in Refunds – Demands against universities are growing beyond a mere proportionate refunds of room and board into refunds of tuition. Article asserts litigation is already in place against at least 50 universities. Some of those claims are requesting class-action status.
Students are requesting refunds for the difference between the value of distance education compared to the on-campus experience. One student mentions losing out on the libraries, study rooms, and computer labs.
Article says that many universities have not yet figured out whether they will be giving refunds for a fraction of the spring semester room and board charges.
Article also says there will probably be a lot more suits on the way, with one attorney calling it a “tsunami.” Range of claims will include breach of contract, unjust enrichment, or diminution of value.
Here is a simple, easy guess: if university campuses don’t open in the fall, the volume of litigation will expand even more.
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