Mar 25, 2020 5 min read Economics

Trump’s Failure, Cuomo’s Power Move, and Everyone Else

With no good choices, Governor Cuomo of New York made what will turn out to be a great strategic decision.

The original sin of the US fight against COVID was Trump's decision to allow a decentralized, free-for-all structure. This forced states to compete against each other for vital resources during a global pandemic.

With no good choices, Governor Cuomo of New York made what will turn out to be a great strategic decision: he volunteered his home state to be the epicenter of COVID in the US.

Cuomo

Cuomo was the first governor to understand two realities about COVID in the US. First, no one would escape this virus. It would eventually overwhelm every American state. Second, the US did not have adequate resources to deal with a pandemic, so, in a free-for-all environment, immediate areas of greatest need would monopolize the country's scarce resources.

By volunteering to go first, NY went on offense against COVID.

It all started with testing.

COVID Testing

One of the shocking, unanswered questions is why weeks into a pandemic, most states are not widely testing for it.

The answer cannot be based on science. Some states simply do not have access to an adequate number of tests; other states lack the political will.

Either way, the virus is coming them. The numbers do not lie.

New York has conducted 91,000+ COVID tests
Washington State, the first hit, has conducted roughly one-third that number
Florida, a state with more residents than NY, has only conducted 16,000+ COVID tests
Texas, the second-most populous state, has only conducted 13,000+ tests

Other large states – like Ohio, Maryland, and Pennsylvania – have such low levels of testing that it begs the question: why?

Perhaps governors think their people are healthy or immune, but that's not how COVID works. As Governor Cuomo said: "The more tests you take, the more positives you find."

Confirmed Cases

Weeks of widespread testing have caused the number of confirmed cases in New York to skyrocket. Cuomo announced yesterday that the virus is accelerating in a state that now accounts for ~5% of total confirmed cases worldwide:

NY has 25,000+ confirmed cases
Neighboring NJ has the next highest number of confirmed cases at 2,800+
North Carolina, another big state, has 398 confirmed cases
Minnesota has just 287

Testing is not determinative. People either have COVID or not. Testing finds out. Lack of testing allows the virus to spread silently.

The decision to dramatically boost testing did three things for New York. First, it gave decision-makers a clear sense of the size and scope of the problem. Second, it shocked tens of thousands of the state's residents, so they were more likely to follow social distancing orders. And third, in a zero-sum fight for resources, it established a clear, compelling need for more tests, protective gear, and equipment.

By using expanded testing to confirm tens of thousands of cases – nearly 10x more than any other state – New York became the equivalent of a sole bidder on massive contracts for all the federal government's limited resources.

Resource Allocation

President Trump has downplayed, misled, and brushed off the COVID threat for months.

But the American president has unique power. He can decide where, when, and how to allocate a mind-boggling level of resources. Those resources – equipment, funding, logistics, expertise – are now flowing in the direction of the Empire State.

New York has been declared a major disaster zone; this frees up billions of dollars of resources not available to non-disaster zone states
New York received nearly $40 million from CDC in early March (Florida, a larger state, received less money)
New York was one of the first states to get FDA approval for testing in private labs
New York has significant logistical support from the National Guard and, best of all, the Trump administration is footing the bill
New York has received FEMA resources to establish 1000-plus person testing centers throughout the state
New York has received the most personal protective equipment (PPE) than any state in the country, including 339,000+ N-95 masks

Several weeks into the pandemic, Cuomo has received the largest allocation of federal funding, logistical support, and personal protective equipment (PPE).

But, because of Trump's free-for-all approach, here's the critical catch: current resources, including PPE, are scarce and zero-sum. Gear cannot go to two states at once. New York's caseload continues to grow faster than other states. Increasing levels of resources will follow.

Other states will lose on relative terms. They already are. Most states are not receiving adequate federal assistance, but cannot buy basic PPE on the open market. The results are dire.

States unable to buy or secure PPE put their frontline providers at-risk. In ERs around the country, nurses, nurse practitioners, and doctors are fighting a pandemic without masks, eye protection, gowns, or other basics.

While other states are just getting started, New York has been stockpiling its protection resources for months. It is now working on scaling its treatment resources.

The most urgent need for treatment is a dramatic increase in ventilators. Here too Cuomo is winning. After public pressure from Cuomo, the Trump administration announced thousands of ventilators are heading to New York. As country-wide demand skyrockets and supply lags, government agencies will feel unrelenting public pressure to accelerate the production of desperately needed equipment.

Where will it go? Imagine this scenario.

The federal government produces or purchases 10,000 ventilators in April. Then someone has to decide where they are allocated. Are they going to Ohio or Florida? Of course not. They will go to the area of greatest need. They will head to New York.

Ventilators are essential to COVID-like critical care, but they are expensive, technical, and have long production cycles. They are scarce and take time to replace. The Trump administration will not have a reserve when other states come calling.

This cycle – Cuomo on offense, others slow to act – won't end with ventilators. It will expand to resources needed for medium and long term care. Over the next, say, six months, Cuomo could end up controlling a majority of the resource market needed to fight COVID.

From Here

COVID is a global tragedy. It should have at least country-level responses. The Trump administration decided differently. People will feel more pain, for longer, as a result.

New York will feel the pain first. They volunteered for it. But they will fight COVID using scarce resources from the federal government.

Other states will feel the pain, too, but with far less support. Each state's needs will go up at the moment when demand-competition is highest, and supply is lowest. It did not have to be this way. Those states could have recognized that they were being forced into a free-for-all market, went on offense, and gotten ahead of the curve. They decided against it.

Pandemics don't last forever. Because of its early decision, New York will emerge from COVID earlier, healthier, and stronger.

Other states will not. They will come back devastated, eventually, pointing fingers and attempting to deflect responsibility for shattered lives and economic ruin.

They should blame Washington now and learn from New York moving forward.