The fact that 52 million doses of COVID vaccines are languishing unused, about to expire, is a national embarrassment for Americans, a failure in government in some states, and a global tragedy. As Americans don’t use the vaccines, elsewhere in the world thousands die and millions are sickened because they don’t have a vaccine available (“States are sitting on millions of surplus COVID-19 vaccine doses as expiration dates approach,” https://www.statnews.com/2021/07/20/states-are-sitting-on-millions-of-surplus-COVID-19-vaccine-doses-as-expiration-dates-approach/).
Having those shots in arms rather than in vials with looming expiration dates would save lives and significantly better economic outcomes. In Georgia, for instance, doses have actually gone to waste: “More than 110,000 COVID-19 vaccine doses have been destroyed in Georgia since December,” https://www.cnn.com/2021/07/19/us/georgia-COVID-vaccine-destroyed/index.html.
We’re not picking on Georgia as if it’s the only place where this might have happened, although that state’s track record on COVID mitigation offers a sad commentary on government placement of politics ahead of public health. Readers may want to examine how their state is doing.
States where vaccination rates are low remain at very high risk from Delta. Texas is an example. Here are the details about COVID deaths in that state since January: “Texas has seen nearly 9,000 COVID-19 deaths since February. All but 43 were unvaccinated people,” https://www.texastribune.org/2021/07/21/coronavirus-texas-vaccinated-deaths/. And here’s the latest policy of Texas’ governor, who continues to override any local mitigation, including mask mandates in schools: “Gov. Greg Abbott says he won't impose new mask mandate despite increasing COVID-19 cases,” https://abc13.com/texas-mask-mandate-abbott-facemasks-required-do-schools-require-masks/10901453/.
Here are two ways to see the states and their vaccination rates. Becker’s Hospital Review ranks the states: “States ranked by percentage of population fully vaccinated,” https://www.beckershospitalreview.com/public-health/states-ranked-by-percentage-of-population-vaccinated-march-15.html. The CDC’s COVID Data Tracker offers a map along with information for each state so that it’s easier to see what’s happening by region: https://COVID.cdc.gov/COVID-data-tracker/#vaccinations.
Three factors might chip away at vaccine hesitancy and resistance. First, the Delta variant itself will make an impression as people fall ill, and some will see reason to reevaluate the risks associated with vaccination (there are some) relative to the much greater risk posed by facing Delta unvaccinated. Delta is accelerating nationwide and triggering increased hospitalizations and deaths.
Second, influencers who have dismissed the threat of the virus and simultaneously overhyped risks associated with the vaccine could change their tune in hopes of saving lives and mitigating economic damage. Some are. Fox News’ Sean Hannity has endorsed vaccination (https://www.foxnews.com/media/hannity-science-vaccination); Congressman Steve Scalise got his first Pfizer jab (https://www.nola.com/news/coronavirus/article_f569bf58-e970-11eb-8456-7ba1aef698cd.html); Kentucky Senator Mitch McConnell advocated vaccination (https://thehill.com/changing-america/well-being/prevention-cures/564238-mitch-mcconnell-warns-of-a-COVID-19-wave-like-we). If politicians decide public health comes first, we may just get beyond some of the disinformation spread by the dirty dozen and their ilk (“The Disinformation Dozen,” https://www.documentcloud.org/documents/21011322-disinfo-dozen).
Third, the CDC could double down on working through its vaccine approval process rather than running out the entire six months it normally gives itself to complete that bureaucratic process once applications have been submitted. Pressure is mounting for that to happen, since we now have a huge track record for the vaccines, given the millions of doses administered. (https://www.politico.com/news/2021/07/08/calls-for-fda-endorse-COVID-vaccine-delta-498886) If we achieve formal permanent approval rather than emergency use approval, an impediment is removed.
A final thought. The politicians who grasp that in a pandemic public health is the paramount issue are likely to succeed, be they Democrats or Republicans. Those who obfuscate or deny the seriousness of the public health threat that Delta poses will face a blistering attack for their failure to protect their constituents from disease and death.
The Federal Reserve study of 19 pandemics (“Longer-Run Economic Consequences of Pandemics,” https://www.frbsf.org/economic-research/files/wp2020-09.pdf) demonstrates that pandemics bring about huge political changes and trigger large economic shocks. In our view, the politician who advocates for business economics over public health ends up with success on neither front. History shows that such politicians get thrown out if they are operating in democratic regimes. In dictatorships the political leaders either bring about mass death and disease or are themselves murdered.
Financial market agents who grasp the implications of the COVID shock will avoid the trap of assuming a quick, easy return to cyclical “business as usual” and will instead opt for a more robust strategy of relying on a careful analysis of public health data and trends.
We thank our readers for their many messages of support and compliments on our speech text and slides offered at the Global Interdependence Center’s Rocky Mountain Economic Summit. For those who missed it, here’s the link: https://www.cumber.com/market-commentary/david-r-kotoks-remarks-rocky-mountain-economic-summit.
We also want to recommend Niall Ferguson’s new book (Doom: The Politics of Catastrophe, https://www.amazon.com/dp/B08JKM9VK3/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1). Niall drills deep into why pandemics and other disasters so often find us unprepared, even if there’s a plan gathering dust on a shelf somewhere. In the area of preparedness, consider that even now, more than a year into this pandemic, the US lacks surveillance adequate to track the spread of new variants of SARS-CoV-2 (“More Variants Are Coming, and the U.S. Isn’t Ready to Track Them,” https://www.bloomberg.com/news/features/2021-07-21/us-isn-t-prepared-to-track-COVID-variants-as-delta-mutation-spreads).
Read chapter 7 and consider how the Asian flu pandemic of 1957–58 led to a massive political shift (13 Senate seats, many House seats). Note how the pandemic lowered the approval rating of a national hero president. Eisenhower’s pre-pandemic favorable rating was 80%. Readers will find the rest of the history in the book.
Please stay safe. COVID won’t be over until it burns through the unprotected. Even Hannity is starting to realize this. I guess the polite closing for today’s missive is “better late than never.”
David R. Kotok
Chairman of the Board & Chief Investment Officer
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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.
