Remote, Day Twelve - Be Prepared

It is in times of security that the spirit should be preparing itself to deal with difficult times; while fortune is bestowing favors on it then is the time for it to be strengthened against her rebuffs. - Seneca

Be prepared. It’s a simple principle. As life frequently teaches us, simple isn’t easy. I learned it at an early age thanks to time in the Boy Scouts and an upbringing that favored self-direction. It seems like more of us should have learned the value of preparedness somewhere along the way. For a country that prides itself on self-reliance, we are certainly failing on a number of fronts right now.

The world is an interconnected system. One that is not immune to the vagaries of history just because we have some measure of scientific advancement. Pandemics have never been a question of if but when. Who could have foreseen it? Anyone with a measure of imagination and the barest understanding of how disease and civilization have interacted for centuries1. The shortages we see in the healthcare system for the most essential equipment is a testament to favoring blind optimism over reality. This only considers the simple things like masks and gloves, nevermind technological marvels like ventilators. We had warning signs that this would happen. SARS, MERS, or whatever influenza you care to pick, any of those should have given us pause and and a reminder to be ready.

Most Americans can scarcely withstand an emergency of a thousand dollars. And yet we expect most individuals to pay their taxes and save for the impacts of financial uncertainty. Corporations, however, can conduct all sorts of financial and legal magic to avoid paying taxes while simultaneously not maintaining a surplus for harder times. There are going to be shocks to the system. If you’re a massive company that comes looking for a bailout the moment the tide turns (and it will always turn), then you are just as fiscally irresponsible as that low-wage worker that spends their money on lottery tickets. Worse, you are expecting the tax-payer to backstop your mismanagement. This is one of the many second-order effects of enshrining ‘shareholder value’ as the ultimate goal.

I’m not saying that there should never be bailouts. But our continued insistence that the shareholders should get all the upside while taxpayers deal with the inevitable downside is not a sustainable arrangement. In any such bailout, the government should recoup the money (with interest). And until said money is paid back to the taxpayer, there should be no bonuses for the C-suite or stock buybacks or any such nonsense.

Our institutions need to be more resilient and capable than they have shown themselves to be. We should expect that for ourselves and for the constructs of government that we build to serve us. Right now, we are counting on some of the lowest paid individuals in our economy to get us through - nurses, truck drivers, warehouse and grocery store employees, cooks, and gig workers delivering takeout. Many of them are without benefits themselves. I hope when all is said and done we understand that civilization is a bottom-up arrangement and that we must do this better.

We’ve managed to enact a massive stimulus package that benefits people and corporations, at least in theory. Our world is going to be challenging for a time and we need to help each other where we can. Ultimately, this is a public health crisis that has massive economic ramifications. That we were unprepared means the only solutions we have left are those based on speed and innovation. Medical supplies need to be manufactured and distributed. Testing needs to be improved by several orders of magnitude. We need to focus on the essentials to manage the pandemic and accept that there will be time for full financial recovery when fewer of us are at risk of dying. And maybe next time (and there will be a next time), we’ll be more prepared.

  1. Fun fact (apropos of the limits of our imagination). Every year banks are required to conduct stress tests as a sort of financial wargame to assert their viability. This year’s numbers that they used for their simulation are better than our actual circumstances.