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Unsanitized: The COVID-19 Report for Oct. 13, 2020

The Case for COVID Optimism

Plus, the entertainment giants lock up distribution

 

Students at a magnet high school in Miami, Florida. Masks have become
ubiquitous in America despite no history of mask use until months ago.
(Lynne Sladky/AP Photo)

First Response

**** It's hard to find someone more
knowledgeable about epidemics and virology than Donald J. McNeil Jr.,
the longtime science writer for the New York Times. For months it was
hard to find someone more pessimistic about the trajectory of the
coronavirus pandemic. But today, he pronounced himself optimistic

about the state of play, arguing in informed fashion that we are about
nine months away from returning to normal.

It's certainly depressing that nine months is the benchmark for
optimism at this point. But McNeil is a serious guy, so I want to go
through why he's looking up and thinking we're at about the halfway
point of the disease. Much of what he puts forward relates to what
we've been saying at Unsanitized.

McNeil starts by giving credit for slowing the spread to the public at
large. We focus so much on a few yahoos walking around without masks
that we don't marvel at the situation that Americans had no history
with masking and considered it a foreign concept, and now has adopted
masking near-universally, up to 90 percent

in some polls. And we have in general sworn off large indoor gatherings.
These actions have saved lives, but it can't get us all the way there.
McNeil's optimism comes from how pharmaceutical actions are
progressing.

Operation Warp Speed has succeeded in dramatically reducing the timeline

for a domestic vaccine. We did learn yesterday that Johnson & Johnson
has paused its study

because of one sickness, but that's more an indicator of responsible
development than anything. It's likely that we'll have a vaccine by
early next year.

It's important to point out, however, that this still will put the
U.S. behind the rest of the world. China has joined almost every other
nation on Earth

in the 183-country COVAX Initiative, which has invested in vaccine
development with shared access, bulk manufacturing, and low-cost
distribution of 2 billion doses or more. Only the U.S., Russia,
Malaysia, Belarus, Kazakhstan, and a handful of small island countries
aren't part of COVAX.

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**** China is on track to beat the U.S. to a
vaccine by a matter of months, and the lack of open-source collaboration

has caused needless delay when the pandemic really invited the world to
come together. All of that said, the combination of public measures and
the acceleration of a vaccine means that the U.S. will likely avoid the
675,000 deaths from the Spanish flu, which would be 2 million in an
equivalent population to today. (Considering we have 100 years of
medical technology to build on, I'd call that a low bar.)

While we just learned of a reinfection
in the
U.S., McNeil argues this is unlikely to be replicated in large numbers,
and as a vaccine is distributed, we can break the chain of spread.
McNeil also doesn't buy polling that shows half of all people will
reject the vaccine, saying that the chance to eat in restaurants and hug
loved ones will be too much of a pull as people report success in
vaccination.

Like we've been saying, mortality rates have dropped. Nursing homes
are protecting their residents to a greater degree, and doctors are
learning how to handle sick patients rapidly. Increases in flu shot
takeup (I'm getting mine tomorrow) and a nearly non-existent flu
season in the Southern Hemisphere has weakened prospects of a
"twindemic." Monoclonal antibodies, of the kind that President Trump
has been hawking

after he presupposed that they helped him, could prove an excellent
bridge therapy before a vaccine, though the logistics of distribution
are seriously difficult
.
McNeil posits that the antibodies could be given to contacts of a known
case, what he calls "ring vaccination."

If the whole world gets covered, if vaccine skepticism wanes, if
antibodies and other therapies hold strong, we could get a return to
normal life by next summer. McNeil says that this extends to the
economy, with pent-up demand enabling a rapid recovery. Here he sounds
more like a science writer than an economic analyst. Counting on mass
bank lending to restart businesses and a private-sector comeback without
federal help is dim, and the federal help, and in what form, is a ways
off.

But it's refreshing to see someone who has been largely dour about the
state of the world brighten. It's just unfortunate that a 9-month
timeline is now what passes for optimism.

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Wall Street Landlord Redux

Disney is as close as you get in the entertainment industry to a
monopoly. At one point in 2019, nearly 40 percent of all movie ticket
sales
came out of the House of Mouse. The decisions of this one company has
significant ramifications for a large sector of the economy.

At the risk of disagreeing with Don McNeil, what Disney stated yesterday
should make people extremely pessimistic in the near term. The company
is reorganizing its media division to focus on streaming. The pandemic
has tipped the market and "accelerated the rate at which we made this
transition," CEO Bob Chapek told CNBC.

The market loved it, because it means cutting overhead by beaming into
homes directly. Activist investors had called for focusing on Disney+
and even cutting the dividend to acquire more capital to buy content.
But the effect of a direct-to-consumer approach will lead to no ticket
taker, no usher, no popcorn salesperson, no rent paid on the theater, no
property taxes, and so on. The largest theater chain in America, AMC,
will run out of money by the end of the year
.
Disney is cutting out the middleman entirely, which is efficient, but in
a pandemic-induced economic crash has a "kick them while they're
down" quality.

If Disney is moving in this direction, you can plausibly say that the
rest of the entertainment business will. Controlling content and the
means of distribution was deemed illegal in the 1940s with the Paramount
decision, and Disney and its counterparts have found a loophole, by
controlling distribution virtually. Prices for streaming, a narrow
market with a handful of major players, will rise as other options
dissipate.

Progress should not be halted to protect legacy jobs. But the timing of
this is such that a lot of temporary layoffs will shift to permanent.
The transition costs will be high, and given the state of Washington, I
don't anticipate much in the way of transition adjustment. That's
entertainment.

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Today I Learned

* Best Western's CEO "fears for his industry's future
"
and Delta thinks it'll be two years

before airlines recover. Trying to be optimistic, but it's not easy!
(CNBC)

* Restaurants turning to GoFundMe

to survive. (Vox)

* Where the pandemic meets surprise billing in a $52,000 helicopter ride
.
(New York Times)

* Amazon now competing with funeral homes
,
as the pandemic boosts cremation-on-demand. (Wall Street Journal)

* Mitch McConnell's demeanor

is not of someone who feels at all pressured to act on coronavirus
relief. (HuffPost)

* This unofficial drop box scandal

in California is something. (Orange County Register)

* Unemployment should be federalized and the fraud vulnerability

in leaky state-based systems offers another data point. (Politico)

* The pandemic-induced clean energy revolution
.
(Wall Street Journal)

* Foggy glasses from masks leading to a boom in Lasik surgery
.
(Bloomberg)

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