Local broadcasting is ‘essential infrastructure’ amid COVID-19 pandemic
Armstrong Williams | 4/2/2020, midnight
Among the entrepreneurs I’ve been speaking with over the past week, there seems to be a growing sense of alarm about the future of their businesses and the state of the American economy. Despite initially attempting to downplay the significance of the COVID-19 epidemic, many entrepreneurs have come to view the evolving circumstances surrounding the public health response as deeply concerning, to say the least. At first it seemed that the fallout from the virus might be contained to the entertainment and travel industries, but it has had widespread dampening effects on almost every economic sector in the United States.
One of our corporate clients called recently to discuss how the situation was impacting his customer base and exclaimed, “This thing has become a total sh-- show! Guys are desperate. They’re scared this whole thing is going to get out-of-control and it’s going to destroy them and their business.” Others, including the president, have sounded the alarm that the public health system’s response might be too draconian. The president exclaimed on Twitter that “we can’t let the cure be worse than the problem itself,” in terms of its potential for widespread economic devastation.
But for many business owners that sense of desperation has already set in. Entrepreneurs concentrated in real estate are already seeing signs that the massive layoffs of service workers due to mandated business closures is putting pressure on rents and mortgages. Understandably, people who are out of work would rather pay for food and medication than rent with their remaining savings. Landlords and long-term lessees who sublease to businesses that have been forced to close are also facing similar pressures.
And the fact is, things could get worse before they get better. Congress appears to be on the verge of passing a relief package that would provide emergency loans to small businesses affected by the COVID-19 pandemic, but that relief would only cover businesses that have not closed or laid off employees. However, with mandatory closures of “non-essential” businesses already in place across the country, the federal government’s small business relief may not be enough to stave off the economic contagion. Also, some state and local governments have put in place short-term moratoriums on evictions and foreclosures, but there has been no national, federal relief contemplated.
Most alarmingly from a business perspective, James Bullard, president of the St. Louis Federal Reserve Bank, which tracks U.S. economic data, predicted (in an interview with Bloomberg last Sunday) that the unemployment rate could reach 30% in the second quarter of 2020, and gross domestic product might fall by as much as 50%. To put this in perspective, at the lowest depth of the Great Recession in 2009, U.S. unemployment only reached 10%.
Facing a situation that seems to be not only worse than originally predicted, but potentially worse than anyone could have ever imagined a month ago… how do we as a society work our way through this so that we don’t destroy the country and how do we put ourselves in a position to pick up the pieces and rebuild together when this is over?