fortune--2020-03-24--How doctors are using social media to develop coronavirus treatments in real time

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The step-by-step protocols that doctors learn in medical school just weren’t stopping the new coronavirus from killing people.
There is a classic process for treating respiratory problems: First, give the patient an oxygen mask, or slide a small tube into the nose to provide an extra jolt of oxygen. If that’s not enough, use a “Bi-Pap” machine, which pushes air into the lungs more forcefully. If that fails, move to a ventilator, which takes over the patient’s breathing.
But these procedures tend to fail With Covid-19 patients. Physicians found that by the time they reached that last step, it was often too late; the patient was already dying.
In past pandemics like the 2003 global SARS outbreak, doctors sought answers to such mysteries from colleagues in hospital lounges or maybe penned articles for medical journals. It could take weeks or months for news of a breakthrough to reach the broader community.
For Covid-19, a kind of medical hive mind is on the case. By the tens of thousands, doctors are joining specialized social media groups to develop answers in real time. One of them, a Facebook group called the PMG COVID19 Subgroup, has 30,000 members worldwide.
“If you had someone in resp[iratory] failure and you didn’t have help, what would you want to know?” a critical-care doctor wrote in a March 12 posting to the group.
Comments poured in. Italian pulmonary specialists gave video lectures viewed by thousands. Others shared experiences and data from China and other countries already ravaged by the virus. They learned that the best chance of saving a Covid-19 patient is to turn almost immediately to ventilators after intubating the patient.
That was a breakthrough, said Dr. Hala Sabry, 41, who manages the online group. “If someone has respiratory failure, you skip oxygen and go straight to intubation.”
In what may be the first pandemic of the social media age, doctors face a highly contagious virus that has already infected more than 375,000 people and killed more than 16,000 worldwide amid a shortage of needed supplies, including surgical masks and ventilators. Governments and established groups, including the U.S. Centers for Disease Control and Prevention and the World Health Organization have struggled to keep up.
Doctors are trying to fill an information void online. Sabry, an emergency-room doctor in two hospitals outside Los Angeles, found that the 70,000-strong, Physician Moms Group she started five years ago on Facebook was so overwhelmed by coronavirus threads that she created the Covid-19 offshoot. So many doctors tried to join the new subgroup that Facebook’s click-to-join code broke. Some 10,000 doctors waited in line as the social media company’s engineers devised a fix.
Similar groups started by Dr. Nisha Mehta, a 38-year-old radiologist in Charlotte, North Carolina, are also consumed by coronavirus issues. “We have already saved a large number of lives just by sharing information about social distancing, propagating stories from the front lines, helping with diagnosis and treatment and connecting physicians to other sources,” Mehta said.
On Twitter, Brief19, a group formed by three emergency-room doctors, posts a daily roundup of information and policy on the pandemic. Created on March 20, the group already has 2,500 followers. Its Twitter bio, for location, lists: “Everywhere, unfortunately.”
One of the Brief19 doctors, Jeremy Faust of Brigham and Women’s Hospital in Boston, also co-hosts a 6-year-old podcast that focuses on “what’s hot” in emergency medicine. Last week, he and co-host Lauren Westafer, an assistant professor of Emergency Medicine at University of Massachusetts Medical School Baystate, moved to a daily analysis of the flood of nascent data that’s coming online in so-called “pre-print,” or rough-draft, articles from researchers and medical journals about Covid-19 and related topics. Thousands of doctors are tuning in, greeted by this warning:
“We are going to try to bring you daily updates on COVID-19. There is a firehose of information and most of us are too busy to read and digest it all. Note: If you are listening to these more than a few days in the future, please beware that information may have changed and check subsequent episodes.”
“Some of the things that we are talking about, some of the ideas that are being spread, are really smart but aren’t necessarily part of our usual approach to critically ill patients,” Faust said in an interview. “It’s not intuitive or obvious, but it makes sense once you hear it.”
There are downsides to this rapid information-sharing: The accelerated pace can lead to mistakes – and there’s no time for the exhaustive study needed to assure new approaches are as safe as they can be. Medical journals like the New England Journal of Medicine are rushing out novel findings online before they’ve been fully reviewed. But even the most deliberated change in medical thinking can later be debunked, and health care is constantly evolving.
“That’s how medicine works,” Sabry said. “You learn from other people to not make the same mistakes so people won’t die.”
These global doctor’s lounges have grappled with some thorny questions. In the second week of March, Dr. Christina Lang, a 37-year-old emergency-room physician in Modesto, California, was alarmed by some physicians’ online chatter: Some patients appeared to get sicker when taking ibuprofen, a ubiquitous pain and fever-reducing pill taken by millions of people every day. Could patients be hurt just by taking a widely available pill when coronavirus’ fever began to set in?
A research letter published by the medical journal Lancet on March 11 suggested that ibuprofen, which is sold under brand names including Motrin and Advil, had the potential to increase the number of receptors the virus uses to hijack healthy human cells and spread.
That preliminary information, which normally is used to generate ideas for future studies, kick-started deep conversations among doctors on social media. French Health Minister Olivier Veran tweeted that patients should eschew ibuprofen for acetaminophen, a different pain reliever and fever-reducer that’s sold in the U.S. as Tylenol. “This grabbed our interest,” Lang said.
Normal arbiters of medical information were of little help. The World Health Organization issued conflicting reports. The U.S. Food and Drug Administration said it had no evidence that certain pain medicines could worsen an infection, but pointed out that there are other options available. An investigation is underway.
Doctors dug into the question online. Lang, who’s on maternity leave from her hospital job, went to an online group of 1,000 doctors that she helps run and called in infectious-disease and public health specialists. As they evaluated the data, the site’s algorithm opened up the floor to hundreds of additional doctors, and their comments spread across other doctors’ groups online. One thread branched into another, and then another. Debate raged.
“It’s a little bit like the wild west,” Lang noted. “We are turning to these groups to get the latest information. We want to make sure the science is evaluated and you can back it up.”
Groups have taken differing positions. By March 17, the specialists in Lang’s Openxmed group made up their minds: They concluded it wasn’t worth the risk to keep coronavirus patients on ibuprofen. They could just switch to Tylenol. The larger COVID19 group reached a similar conclusion. But the thousands of doctors in Mehta’s group were less convinced, deciding there wasn’t enough evidence to change practice.
“You have to understand that medicine isn’t black or white,” Sabry said. “It’s a whole world of gray.”
On other topics, online discussions – like one at a “hub” for infectious diseases set up by the American College of Emergency Physicians – have had clear, potentially life-saving impacts on how patients are evaluated and treated.
At the Jack D. Weiler Hospital in the Bronx, New York, a 70-year-old woman came in with a mild fever, nausea and vomiting that was causing low blood pressure. Doctors initially thought it might be a typical seasonal illness, said Deborah White, vice chair of emergency medicine at the facility.
Then doctors in Washington, where an outbreak in a nursing home led to the first U.S. hot zone, noted on the ACEP hub that many older Covid-19 patients exhibited mainly gastrointestinal issues like nausea and diarrhea. Back in the Bronx, the 70-year-old patient immediately hit doctors’ radar screen as a potential coronavirus case. The hospital – which helps care for patients of nearby nursing homes – started grouping all elderly patients with gastrointestinal symptoms and low blood pressure together as potential Covid-19 patients, a process called cohorting.
“That became a paramount piece of information for us,” White said, noting that previously such patients were often sent back home or returned to nursing homes with orders of bed rest and a simple diet. Now, however, some of those patients are testing positive. Cohorting, she noted, isn’t traditionally done in such cases, but instant information-sharing allowed a rapid, important change.
“This is what we do, pivoting in the very moment,” White said. “It’s the bread and butter of emergency medicine.”
More coronavirus coverage from Fortune:
—Why the extraordinary dollar surge spells more trouble for the global economy
—Japan finally admits coronavirus might disrupt Tokyo 2020 Olympics
—Which stores are open—and closed—during the coronavirus pandemic in the U.S.?
—What medical experts say about Everlywell’s home coronavirus testing kits
—How to defer your mortgage payment due to coronavirus
—How Emmy season is proceeding, with caution, amid the coronavirus crisis
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-03-24--A first responder spouse talks about planning for when—not if—the virus strikes

Delta is downgraded to the ‘ junk ’ pile—and may soon have lots of company

Good morning, Broadsheet readers! Sen. Amy Klobuchar’s husband is diagnosed with coronavirus, Fortune talks to Helena Foulkes following her departure from Hudson’s Bay Company, and we learn about what it’s like to be a first responder family in the midst of a pandemic. Have a socially distant Tuesday.
– First responder families. Yesterday, Emma wrote about the women on the frontlines of the coronavirus fight.
Today, I’d like to highlight those in a related position: spouses or family members of health care workers and first responders. These people—many of them women—too, play an essential role in facing the virus and keeping our society running. And while they may not be out in the field themselves, they’re in the difficult and stressful position of supporting a loved one who is putting him or herself in harm’s way every day.
Last week, we spoke with Margaret Arakawa, CMO of Seattle-based tech startup Outreach. Arakawa’s husband Brad Schmidt is a firefighter and paramedic in Everett, Wash.—the town that saw the first U.S. hospitalization for coronavirus.
The family lives with their 12-year-old son Logan in Kirkland, 10 minutes away from the nursing home where about two-thirds of residents have contracted the virus. Arakawa’s 80-year-old mother, who has heart issues and diabetes, lives next door.
Given the realities of her husband’s work, Arakawa told us via email:
“We just had a talk as a family about what happens *when* my husband gets exposed and *when* he comes down with coronavirus. We’ve come up with a plan. It’s not a great plan, but it’s a plan nonetheless. When my husband gets exposed, my son and I will move to my mom’s house and my mom will move into my sister’s apartment. Then we’ll all stay put for 14 days until hopefully we’re all cleared and reunited.
If my husband gets really sick, I’ll take care of him and we’ll keep away from my mom and son. We figure this could last weeks or maybe months. And I think to myself that this is nothing compared to all the men and women whose brave relatives, spouses, and significant others are in the military. They can go for over a year without seeing their loved ones when they are deployed. So, I feel quite lucky. We can climb a tree in the backyard and say hi to each other. We can maybe eat dinner together with us sitting on the back porch and my husband sitting behind glass inside. We’ll figure it out.”
The family’s plan is designed to prioritize protecting Arakawa’s mother and, hopefully, allowing her to still see her grandson. “My son is the engine for my mom’s happiness—I can’t have her isolated from us,” Margaret told Emma in a follow-up conversation by phone.
The couple have also had to have difficult conversations with their son about what the future may hold. “He’s had some questions: ‘If we isolate ourselves, how are we going to see Papa? Will we have picnics or dinners separated by glass or FaceTime from next door?’ No more hugs, no more check-ins. We talked about the sacrifices that families of first responders and military families make. He totally understands it.”
Read our full Q+A with Arakawa here.
Certainly, first responder families aren’t the only ones creating these kinds of plans and having tough conversations these days. But for those of us who are currently working from home it’s a good reminder to be grateful for our ability to do so—and for the people on the front lines trying to help us stay safe.
Finally, a reminder that we’re still collecting your tips for staying productive and focused while working at home. Send your best ones to broadsheet@fortune.com and they may be featured in a future edition of the newsletter.
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was produced by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Exit interview. Fortune's Phil Wahba talks to Helena Foulkes, the now-former CEO of Hudson's Bay Company. "We made a lot of bold moves really fast," Foulkes says of her two years in the company's top job. Plus: "I loved being a CEO, and I’d do it again." Fortune
- Get well soon. Sen. Amy Klobuchar shared yesterday that her husband, John Bessler, has been diagnosed with COVID-19 and is in the hospital. "Not being able to be by his side is one of the hardest things about this disease," Klobuchar said, noting that she has not been in the same place as Bessler for the past two weeks. Another Minnesota official, Lieutenant Governor Peggy Flanagan, shared that her brother Ron died after contracting coronavirus. Star Tribune
- Good sports. With the 2020 Tokyo Olympics officially postponed, beach volleyball player and gold medalist Kerri Walsh Jennings shares in Elle how she'll be affected by the changes to the Games, which were supposed to be her last. Women's sports as a whole have been hit hard by the pandemic, losing some of the momentum they had earned this year.
- Yum, catering. Yum China, the Fortune 500 company that operates KFC and Pizza Hut, is trying catering and delivery of raw food for home cooking to make it through the coronavirus pandemic. "The traffic is recovering but it still takes some time," CEO Joey Wat says of demand in China, which seems to be through the worst of its crisis. Bloomberg
IN CASE YOU MISSED IT
- CEO setup. In the New York Times' Corner Office column, CEOs share how they've been working from home. Nasdaq CEO Adena Friedman is at home in Maryland with her husband and two sons in their 20s—all also working from home—monitoring the decline of the markets. Beautycounter CEO Gregg Renfrew is working to keep the company going from her Pacific Palisades apartment for the network of 50,000 consultants who sell Beautycounter products as part of their own livelihoods. New York Times
- Accessible abortion. As Texas joins Ohio in attempting to put a hold on surgical abortions because of the coronavirus pandemic, the U.K. is taking steps to make medical abortion more accessible. Women will now be allowed to take pills for early medical abortion at home, instead of visiting a hospital or clinic first. Bustle
- Goodbye, Alfred? Hello Alfred, the startup co-founded by Marcela Sapone and Jessica Beck, employs W2 workers who run errands, do housekeeping tasks, and provide other services inside the homes of a largely wealthy clientele. But the startup is now facing unrest as it continues to operate amid the coronavirus pandemic, reports The Daily Beast. "I just do not see how we can classify ourselves as an essential service during a pandemic," one anonymous worker said. But Sapone, the company's CEO, says: "We are delivering food, medication, cleaning products, baby and personal care products that families need." The Daily Beast
- Lasting legacy. Airickca Gordon-Taylor spent her life educating others about the legacy of Emmett Till, the 14-year-old who was killed by lynching in 1955. Gordon-Taylor was Till's cousin, born after his death; she recently advocated for an anti-lynching bill in Till's honor. She died at 50 on Saturday. Time
ON MY RADAR
New from Lena Dunham: A serial novel, Verified Strangers, for Vogue.com Vogue
An oral history of a socially distanced wedding The Cut
How Marie Kondo declutters during a pandemic New York Times
PARTING WORDS
"In a lot of ways, I’ve been preparing for this moment with my yoga practice my whole life; to be able to make the hard decision, to be able to do the right thing—no matter the consequences."
-Bec Gathmann-Landini, the owner of two Long Island yoga studios, on closing because of the coronavirus pandemic


fortune--2020-03-24--Self-quarantined over coronavirus, digital parties are filling the socially distant void

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For the past two Saturday nights, DJ Dayna Solomon spun a mix of family-friendly jams from her home studio in Columbus and streamed it live on Facebook. Anyone could log on to the 30-minute set for a digital dance party, meaning you could groove in your pajamas, wherever you were at the moment.
Solomon is one of many people who has been taking the party online, literally. As social distancing has prevented us from gathering in person, our social lives have gone digital. From Shabbat dinners to weddings, and workout groups to game nights, people everywhere are embracing the virtual party. If you can’t meet face-to-face, you can still connect thanks to the Internet, with social media like Facebook Live and Instagram TV as well as videoconferencing software such as Zoom and Google Hangouts.
“In the midst of a storm of feelings and emotions filled with sadness, panic, fear, anxiety, and the unknown, we all need an outlet to release and find ways to be uplifted and spark joy,” Solomon says. “Music and dancing do that for me, and I know it does for so many others. It’s truly a universal language, even digitally.”
For Solomon, the aha moment came when several of her live gigs, such as weddings and corporate events, were canceled or postponed. For others, it is simply a way to stay in touch with friends. Countless companies have employees working from home. It’s a seamless switch to transition the videoconference from an end-of-day meeting to a casual happy hour, where coworkers can toast via the computer screen. Annie Jackson, a director at Small Girls PR in New York City, is having her team take a 30-minute crafting break in the middle of the day to build morale, and Kim Riordan, also in New York City, spent Sunday night as part of a digital potluck with her after-work crew, a fitness group called November Project: Everyone cooked something “green” that starts with “L” and shared the results via a Zoom call.
The social calendar is still booked, just with a video link. Courtesy of Zoom
Birthdays have also made a play in the digital sphere. Meryl Cooper shifted her 50th birthday celebration online. She shared with her guest list signature cocktail recipes, a karaoke playlist she’d made, and downloadable photo-booth props. Similarly, Marnie Nathanson says she refused to let the COVID-19 lockdown derail her 35th birthday party plans. She had bottles of Señor Sangria dropped off at her friends’ houses, and they all logged on to a Zoom call with glasses in hand. “It’s a big birthday for me, and I still wanted to see my friends,” says Nathanson, who is based in New Jersey. “It was the most grounded and simple birthday yet! It was a great change for all of us, and so great to see familiar faces.”
Weddings, Shabbat dinners, double dates, and baby showers have all taken up the digital get-together strategy, but there’s more than just yoga pants involved. Some virtual gatherings have instituted dress codes, requiring formal gowns, sequins, cocktail attire, and more to liven up the mood. Sarah Tracey, a sommelier and founder of lifestyle blog The Lush Life, is hosting a Ballgown Social Hour, where the whole point is to don a fancy outfit. “We are encouraging people to dress in what makes them feel good,” Tracey says. “Part of my normal routine as a social New Yorker is to get dressed up and be creative with hair and makeup. No reason that has to stop, even if we can’t socialize in person.”
Kids aren’t left out of the mix either. Meghan Ely’s son’s first-grade class hosts a “mystery reader” each week. Since schools are now closed where she lives in Virginia, she got inventive: The kids all log on to a Zoom call daily to hear a story from a mystery reader. The first reading brought together 75 children. “The best part was the end when we unmuted, and the kids all started saying hi to one another,” Ely says. “A few even remembered it was another kid’s birthday and made sure to say it. I was completely choked up.”
In Dallas, Nate Nelson, a DJ and director of talent and development at LeForce Entertainment, decided to hold “recess” for his two daughters and their classmates: a short set of kid-friendly jams so the children could let out pent-up energy in the afternoon. On the first day, he got a “huge response,” he says, with 781 kids logged on to the live-stream and another 1,500 views in the first 24 hours. He’s now offering it daily on school days at 4 p.m.
There is a virtual gathering for just about anything that interests you. Chris Jespersen of Cleveland was so enamored with the idea of digital parties that he launched a website, virtualdanceparties.com, where people can watch past dance parties or sign up for a live one. New City Players, a theater group in Fort Lauderdale, offers an online lab where writers can prepare a short play or scene on a particular theme and share it with the group. Mimi Imfurst performed in a virtual drag show and cabaret, and watch parties sprouted up where you can “tip your queens” via Venmo. Caterers and food companies have launched digital cooking classes—you just pay for the ingredients to be dropped off. Kaleigh Wiese, founder of paper goods company Méldeen, hosted a virtual networking event for those in the events industry. Everyone’s kids, dogs, and even a pet pig made a cameo.
Game nights have also become a draw. Rosemary Ostmann kept it simple: She invited her 80-year-old mother-in-law, who lives alone, to play a board game via FaceTime. Cherish Conklin and her husband, Lindsey, typically get together with their friends in Temecula, Calif., for a game night each week. For this past one, they moved online with digital games. “We ended up talking, drinking, and laughing for over three hours,” Conklin says. “It was so nice to bring even a little sense of normalcy to our lives.”
That’s how Sara Swiger-Howard of Huntington Beach, Calif., is approaching her regular workout group. She’s leading a fitness routine that involves no weights or props so all the women can join via video. Another friend is guiding a 10-minute stretch to cool down. She says it’s exactly like the workouts they do in person but with a surprising upside: “More girls are able to join since it’s so easy to log in digitally and not have to commute to various parks and areas around L.A.,” she says.
Last weekend, my wine club met via Google Hangouts, with each of us showing off what we were drinking. We typically pick a theme and each of us brings a bottle along with tasting notes to present to the group. We’re now planning to order the same bottlings for the next meeting to taste through a lineup as we normally do—we’ll just say “cheers” through the computer screen. As one member of the group mentioned of our gathering, “You basically drink wine, sans pants.”
More coronavirus coverage from Fortune:
—How to get a refund on your Broadway tickets after the coronavirus shutdown
—The oil sector takes its next hit: The coronavirus on offshore rigs
—Some of the most extreme ways companies are combating the coronavirus
—How luxury designers in Italy’s fashion heartland are facing the coronavirus
—Amazon tells employees to work from home if they can. Warehouse workers can’t
—Why Dollar General thinks the coronavirus can help business
—The coronavirus may not be all bad for tech. Consider these “stay at home” stocks
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-24--What it’s like to be a first responder family living in a coronavirus hotspot

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We all know first responders—including EMTs, paramedics, firefighters, and police—are on the front lines of the fight against the coronavirus. Their jobs regularly require them to put themselves at risk to help those in need—and when that risk involves a contagious virus, it can spill over into their home lives as well.
Last week, Fortune spoke with Margaret Arakawa, CMO of Seattle-based tech startup Outreach. Arakawa’s husband, Brad Schmidt, is a firefighter and paramedic in Everett, Wash.—the town that saw the first U.S. hospitalization for COVID-19.
The family lives with their 12-year-old son, Logan, in Kirkland, 10 minutes away from the nursing home where about two-thirds of residents have contracted the virus. Arakawa’s 80-year-old mother, who has heart issues and diabetes, lives next door. As of last week, 27 Kirkland firefighters and three police officers were in quarantine, with 12 showing flu-like symptoms.
We spoke to Arakawa about what the past few weeks have been like for her family and how they’re thinking about the future. Fortune initially corresponded with her over email, then followed up by phone. The following is an edited version of those exchanges.
Fortune: How have the past few weeks been for you?
Arakawa: In January, when the news broke that the first novel coronavirus patient in America was in a hospital in Everett, Washington, I was scared. In February, when nursing home residents in Kirkland, Washington, were diagnosed with the coronavirus and families had to deal with the loss of their loved ones who were living there, I got even more scared.
Typically national news doesn’t make me scared. But this news was not national for me. It’s very, very local.
How is the family coping with your husband’s job as a firefighter and EMT?
We just had a talk as a family about what happens when my husband gets exposed and when he comes down with the coronavirus. We’ve come up with a plan. It’s not a great plan, but it’s a plan nonetheless. When my husband gets exposed, my son and I will move to my mom’s house, and my mom will move into my sister’s apartment. Then we’ll all stay put for 14 days until, hopefully, we’re all cleared and reunited.
If my husband gets really sick, I’ll take care of him, and we’ll keep away from my mom and son. We figure this could last weeks or maybe months. And I think to myself that this is nothing compared to all the men and women whose brave relatives, spouses, and significant others are in the military. They can go for over a year without seeing their loved ones when they are deployed. So I feel quite lucky. We can climb a tree in the backyard and say hi to each other. We can maybe eat dinner together with us sitting on the back porch and my husband sitting behind glass inside. We’ll figure it out.
How have you talked to your son about your plans?
He’s had some questions: “If we isolate ourselves, how are we going to see Papa? Will we have picnics or dinners separated by glass or FaceTime from next door?” No more hugs, no more check-ins. We talked about the sacrifices that families of first responders and military families make. He totally understands it.
Did you consider a more extreme plan, like isolating in advance of your husband showing any symptoms?
I did consider it. The most drastic thing we’ve done is my husband’s not allowed to see my mom at all.
How are you tackling homeschooling while you’re working from home and your husband’s at work?
Unfortunately, the teachers didn’t have enough time to create a complete distance-learning curriculum [before the school was closed]. I think by this week though there will be more materials available online and more structure for Logan.
In the meantime, we’ve been letting Logan “choose his own adventure,” and then we talk about what he’s learned. Since he has online textbooks and suggestions for what to read or watch, he has been picking the chapters and subjects that interest him the most.
My son is also reading books that pique his interest. And we have “PE time,” which is basically just running or biking outside, or if it’s raining exercising for 30 minutes on an indoor bike.
I’m not going to lie. I struggle with allowing my son to play Xbox during the day. During a typical school day, kids don’t play video games or have their phones turned on. But how will our kids socialize if they don’t get access to devices during the day? So, we’re letting my son schedule times with his friends for “recess.”
With the current situation, [her employer, Outreach] is offering $100 per week to employees [that] they can use to purchase materials, classes, educational supplies, or additional childcare to support everyone working remotely while our kids are home.
More coronavirus coverage from Fortune:
—Why the extraordinary dollar surge spells more trouble for the global economy
—Japan finally admits the coronavirus might disrupt the Tokyo 2020 Olympics
—Which stores are open—and closed—during the coronavirus pandemic in the U.S.?
—What medical experts say about Everlywell’s home coronavirus testing kits
—How to defer your mortgage payments due to the coronavirus
—How Emmy season is proceeding, with caution, amid the coronavirus crisis
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.


fortune--2020-03-24--Book tours are key to promoting new releases, but authors have been left stranded amid coronavirus p

Book tours are key to promoting new releases, but authors have been left stranded amid coronavirus pandemic

This article is part of a Fortune Special Report: Business in the Coronavirus Economy—a look at the impact of the pandemic on more than 50 industries.
A few days before total confinement took effect in Paris, where I live, four hefty boxes arrived at my front door. Tightly packed inside were the author copies of my forthcoming second book, The New Parisienne: The Women & Ideas Shaping Paris, a project that has dominated my life and tested my emotional bandwidth for the last two years.
With the rights, representation, and lives of women all the more firmly anchored in today’s public discourse, my book, as I had imagined it, would add to the discussion. In it I break down the dangerous and reductive archetype of the Parisian woman and highlight 40 women from a range of industries and backgrounds who are influencing the fabric of the city. Their stories (and struggles) will continue to be relevant and timely for years to come, but in this moment, nothing is timelier than the universality of the coronavirus threat. That is both reassuring and heartbreaking as my release date approaches.
There is very little about writing and publishing a book that isn’t fraught with unknowns. Even after overcoming the occasional bout of crippling self-doubt—am I telling this story the right way? Am I producing my best work? Will anyone care? There is more uncertainty waiting on the other end of a completed manuscript.
The cover art for “The New Parisienne: The Women & Ideas Shaping Paris.” Courtesy of Abrams Books
Since authors become so engrossed in our work, we easily lose sight of the fact that the world continues moving and stumbling around us. Rationally, we know that any number of events can throw a book, both the writing and releasing, off course. (I was still writing my first book, The New Paris, during the November 13, 2015, terrorist attacks, and Paris tourism only really began rebounding in 2017.) Nevertheless, we expect the conditions to be as stable and linear as possible to allow us to pursue a craft that is, and has always been, eminently unpredictable.
A global pandemic rewrites all of the rules. The slow drip of hysteria, and the even slower path to containment measures, stoked a gradual realization that everything I had been planning—launch events in Paris and a multicity tour in the U.S.—would be impossible. The process to accepting that any attempts to exert control over the situation were futile was swift: I felt the profound disappointment and wild anxiety but knew that it wouldn’t change the circumstances. I decided with my publisher to postpone the release of the book to summer.
Amid this uncertainty, a few new realities are becoming clear. The marketing strategies and press outreach for books emerging now don’t only need to be readjusted but entirely rethought in a context in which books may not keep getting ordered or even delivered—and in which it feels at once devastating to let a new book languish and unsavory to promote it. Any artist who has worked for years on a project would feel the devastation of bringing it to life in a climate of anxiety and economic inertia.
But the reality is that book promotion still happens primarily through public events, either in bookstores, specialty shops, or literary festivals. With booksellers closing their doors (and unsure of reopening) and festivals indefinitely postponed, the social element of books vanishes, transferring all efforts to a saturated digital space. We need a new way forward.
David Lebovitz, whose previous work includes the cookbook “My Paris Kitchen,” just published a new book about French cocktails. Courtesy of Ten Speed Press
The encouraging outcome of all of this has been an outpouring of empathy. Beginning in early March, the literary community began sharing messages across social platforms to drive support for fellow authors embarking blindly on this journey.
“I can’t help feeling worried about writers whose books are publishing now. Book releasing is fraught in the best of times; this is not the best of times,” tweeted bestselling novelist R.O. Kwon, opening a call for signal boosting.
That goodwill has been refreshing and widespread from prominent figures. Actor-author Amber Tamblyn offered to share upcoming book releases to her audience of more than 120,000 Twitter followers, while libraries and bookstores still operating have pushed to create conversation around authors facing uncertain futures.
Ultimately, within a rapidly evolving crisis, where normal distribution and consumption patterns are severely disrupted, there is no single “right” strategy for self-promotion.
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.
David Lebovitz, the prolific cookbook author, released his latest book Drinking French on March 3, just as concerns over travel were reaching a fever pitch. Although his book tour was postponed, he doesn’t feel overly concerned about his book’s life span. “I’ve been focusing on single subject cookbooks over the last few years, which seems to have a longer shelf life than other types of cookbooks, and my bestselling book on ice cream has been a strong seller since 2007,” he explains. “Initial sales may take a hit, but I hope to write books that have lasting value to readers.”
The idea that books can (and should) have a long life is keeping author and university professor Matthew Fraser optimistic. His latest book, In Truth: A History of Lies From Ancient Rome to Modern America, is slated for release on April 27, which could be the peak of the outbreak. “My approach is to carry on and keep engaged. My advice to authors coming out with books this spring is to look at the long term,” he says.
Igor Josifovic and Judith de Graaff coauthored “Plant Tribe,” a new book about advice for using plants to increase energy and creativity, and improve your overall well-being. Courtesy of Abrams Books
Others, such as Igor Josifovic and Judith de Graaff, the coauthors of the recently released Plant Tribe, echoed my own fluctuating emotions. “Our feelings have gone from uncertainty to disappointment, doubt and concern,” Josifovic says. “But we also just started thinking of new opportunities to transfer experiences online.”
Given the conceit of their book—how living in a home brimming with plants can improve well-being, boost creativity, and increase energy—the timing may work in their favor, provided distributors are able to continue making deliveries uninterrupted. As the situation improves, the duo intend to go out on the road and meet their readers. “Gathering offline is important not only for book sales but for stronger connections to our Urban Jungle community,” says de Graaff.
Will isolation mean more time for reading and discovering new authors? Perhaps. (Though that may not extend to purchases: Publishers Weekly reports a 10% decline in print unit sales.) But with traditional avenues of promotion and selling off the table, it also means the future of publishing will require greater agility and even reinvention. “Demand will fall and supply will be hesitant as caution hits the market,” writes Jonny Geller, chairman of Curtis Brown literary agency, in a statement. “We will, doubtless, learn new patterns of reading and selling books, but this is a disruption, not an existential threat.”
On behalf of authors everywhere, I hope he is right.
More coronavirus coverage from Fortune:
—How to get a refund on your Broadway tickets after coronavirus shut down
—The oil sector takes its next hit: Coronavirus on offshore rigs
—Some of the most extreme ways companies are combating coronavirus
—How luxury designers in Italy’s fashion heartland are facing coronavirus
—Amazon tells employees to work from home if they can. Warehouse workers can’t
—Why Dollar General thinks coronavirus can help business
—Coronavirus may not be all bad for tech. Consider the “stay at home” stocks
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-25--Uber and Airbnb are lobbying Congress to bail out idled gig workers

Global markets soar after the Senate and While House reach a mammoth stimulus deal

Isolated with his family at home in San Francisco, Uber Chief Executive Officer Dara Khosrowshahi has been making pleading phone calls to members of Congress. Khosrowshahi is asking for a bailout—not for his company, which has told investors it should have at least $4 billion in cash by the end of the year—but for its idle drivers.
Uber Technologies Inc. and Airbnb Inc., the leaders of the so-called sharing economy, are suffering during the Covid-19 shutdown, but not in the same way as traditional travel companies like airlines or hotel chains. They’ve built their business models on offloading as many costs and as much risk as possible to their suppliers. Uber doesn’t have to pay salaries for drivers with little or nothing to do. Now it’s those Uber drivers, as well as Airbnb’s hosts, who have to worry about paying for cars and houses that are not generating income as they depreciate in value.
The companies are hardly immune to the fallout from the pandemic. Uber has lost 35% of its market value since Feb. 21, and Airbnb’s board considered revising its plan to go public at a recent meeting. But executives from both companies have focused on drivers and hosts when working the phones to secure some government relief. Uber also sent a letter to the White House and congressional leadership. Airbnb penned a letter of its own advocating for hosts.
The massive bailout bill Congress is working on may extend unemployment benefits to independent contractors and sole proprietorships, bringing relief even to workers for platforms that haven’t been paying for unemployment insurance.
Khosrowshahi has spoken to at least 10 members of Congress in the past week, according to two people familiar with the matter who asked not to be named discussing private matters. Perhaps his most fruitful call came with Senate Minority Leader Chuck Schumer, where the senator seemed to indicate support for protecting independent contractors, the two people said. A spokesman for the minority leader did not return a request for comment.
As he makes the rounds, Khosrowshahi has been reminded that being the chief executive of a $45.5 billion company doesn’t automatically make someone a power player in Washington. When he attempted to bend the ear of Senate Majority Leader Mitch McConnell, for instance, Khosrowshahi was shunted off onto a staffer. “He’s not even demanding to talk to the principals,” said Justin Kintz, Uber’s head of policy. “He’s willing to speak to anyone on the Hill who is willing to listen.”
Similarly, Airbnb’s three co-founders have spoken with more than a dozen members of Congress, making sure that U.S. hosts— who often file their taxes as sole proprietors—benefit from the bailout package, according to two people familiar with the matter who asked not to be named discussing private matters. They’ve also enlisted thousands of hosts to urge lawmakers to include people who earn income by renting property on Airbnb in their unemployment protections. Airbnb also wants to make sure hosts are eligible for Small Business Administration emergency loans.
While both companies are familiar with controversy, they believe they have a winning political issue. “To put it in a really fine perspective, 14% of our hosts are from households that include teachers,” said Chris Lehane, a long-time Democratic operative who runs Airbnb’s policy shop.
Uber is the leader of a larger group of companies who have pushed the boundaries of traditional employment that also includes Lyft Inc., Postmates Inc., and DoorDash Inc. All of them consider their workers to be independent contractors, and don’t provide benefits like health insurance. Airbnb hosts aren’t independent contractors, but are taking on financial risk in much the same way that ride-hail or delivery drivers do.
Critics of sharing economy companies have long argued their business models were creating circumstances that would make workers vulnerable during a downturn. By offloading risk onto workers, they’re also putting pressure on the governments to whom it will inevitably fall to support them. For its part, Uber has been arguing that states or the federal government create a new status of worker that is neither totally an employee or an independent contractor. “The company has been pushing for a third way for seven years,” said Lane Kasselman, a former Uber executive who advises startups. The vulnerability of workers now, he said, is “proof of what they’ve been saying all along.”
Patricia Smith, who was solicitor of labor under President Barack Obama, said Uber was “taking advantage of a crisis” by pushing for a new legal status of work, predicting such a move would inspire other companies to push employees into situations with fewer benefits. “All you’re going to do is open the door to even more misclassification,” she said.
While Uber is eager to advocate for its workers, it has not moved to use the $10 billion it had in cash as of the end of February to provide relief itself. Doing so could increase the likelihood the company would be compelled to continue paying out those benefits going forward, the company says.
Uber’s turn towards driver advocacy hasn’t gone unnoticed. “A little ironic, right? Uber has spent so much time and money fighting reclassification,” said Bradley Tusk, a startup advisor who previously worked with Uber but sold his shares. “Now there’s all of a sudden an upside of people being treated as employees and they want it.”
More must-read stories from Fortune:
—Why the extraordinary dollar surge spells more trouble for the global economy
—The Supreme Court has shunned technology. Could coronavirus change that?
—10 questions about the 2020 election during the coronavirus pandemic, answered
—The workers the U.S. government deems “essential” amid the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: U.S. tax deadline moved from April 15 to July 15
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-03-25--Global markets soar after the Senate and While House reach a mammoth stimulus deal

Uber and Airbnb are lobbying Congress to bail out idled gig workers

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. The rally is on. And you can thank your senators for that.
Here’s what’s moving markets.
Markets update
Asia took off on the news that Senate and White House had agreed to a $2 trillion relief bill after midnight in Washington, D.C. The benchmark MSCI Asia Pacific Index is up nearly 5% on Wednesday, its best day since 2008.
Europe too got a lift from the news at the open. Germany’s DAX is now up 15% since the March 18 low. A further boost could come once Euro area finance ministers agree to a coronavirus recovery bill of their own. That’s as Italy and Spain reported new surges in COVID-19 deaths in the past 24 hours.
***
The Dow, S&P 500 and Nasdaq are all set to open higher again this morning now that there’s some semblance of an agreement in place. The Dow’s 11.3% gain yesterday equated to the best trading session for bluechips since the FDR Administration, way back in 1933. Along the way, we passed Dow 20,000!
Yesterday’s big winners were those that stand to gain the most from a multi-trillion-dollar aid deal. The battered cruise industry and airlines both took off as a deal inched closer. Norwegian Cruise Lines climbed more than 40%, the best performer on the S&P 500 yesterday. American Airlines took off nearly 30% while Delta, United Airlines and Boeing soared more than 20%.
***
The deal in D.C. has pushed the dollar lower and has sent Brent crude slightly higher. From commodities to FX to Treasurys, we’re not seeing the huge swings of a week ago, a sign that volatility is improving.
***
Details of the U.S. aid package are still trickling in, but it appears to have most of the goodies that both Republicans and Democrats wanted. There’s likely to be billions for hospitals and airlines, plus aid for those out of work. Adults could get direct payments of $1,200, and $500 for children. The Democrats won a key stipulation: any company that draws on government-backed loans to stabilize its business will be barred from buying back shares.
Here’s how it compares in magnitude to some of other packages that have been proposed (or passed) around the world.
***
How big is your bazooka?
“Whatever it takes” doesn’t come cheap. The second biggest package noted here is the German measure, which comes out to 750 billion euros ($810 billion).
It should be noted, the chart above hardly captures the entirety of what the world’s biggest economies will spend to jumpstart a completely shuttered global economy. Central banks are buying sovereign and corporate debt at a historic clip and governments are pondering aid packages to keep businesses from going under and to keep individuals in their homes.
Thus far, more than $4 trillion has been committed in the hopes of keeping the global economy from sinking into another depression.
How we will pay for all of this is a question for another day.
Postscript
My neighbors and I may be barred from entering city parks, but that doesn’t mean these urban green spaces are empty. There’s been a surge in wildlife spotted in recent weeks in the leafier urban fringes of lockdown Italy. Hares have returned to Milan’s parks. Fish are teeming in Venice’s suddenly pristine waters. And I’ve seen majestic birds of prey sweeping across the sky near my apartment; we’re just a few hundred meters from the Tiber.
I’m particularly curious to see research and news stories in the coming months looking into the environmental impact of this historic economic shutdown. My colleague Katherine Dunn yesterday dove into the climate impact on London. The decline in air pollution, she reports, “was ‘much more significant’ than the trend for the previous three years.”
If you’re allowed to venture outside, take a deep breath. The price of clean air = priceless.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
Looking for more detail on coronavirus? Fortune has a new pop-up newsletter. The aptly named Outbreak will keep you up to date on the latest news surrounding the coronavirus outbreak and its impact on business and commerce globally. Sign up here.
And, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Time to buy? All downturns yield fresh opportunities to invest, or re-invest. If you believe that, and you have the spare cash, there's no time like the present to get back into the market. That's because stocks are nearing "fair value" as defined by the Shiller price/earnings ratio, Fortune's Shawn Tully explains.
Mutual funds relief. With the markets in freefall in recent weeks, investors have been pulling out billions from various funds, putting the squeeze on the $19 trillion mutual-fund industry. In response, the Securities and Exchange Commission announced a new set of tools to help mutual funds meet the surge in redemptions, the Wall Street Journal reports.
Fallen angels. Delta Air Lines is the latest American giant to get downgraded into "junk" territory—the beleaguered airline has had to borrow billions in recent weeks with business travel grinds to a halt. As Rey Mashayekhi reports in Fortune, "the airlines are not alone in their current credit squeeze. S&P has already attributed more than 100 credit rating downgrades to the coronavirus, with industries like real estate and energy also falling victim."
Market candy
Quote of the day
“One of the things to be careful about is thinking this will be the panacea, or that this fiscal response will be sufficient.”
That's the warning from Eric Freedman, chief investment officer at U.S. Bank Wealth Management yesterday after the U.S. markets soared on hopes—later realized—of a whopper of a coronavirus stimulus package coming out of Washington. We won't have to wait very long to see how his words pan out.


fortune--2020-03-25--As coronavirus changes behavior, time to check your A.I. algorithms

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
We’ve been writing in this newsletter about how ill-suited markets are to deal with a pandemic like Covid-19. Normal supply and demand signals simply can’t respond to such a jarring shock to the system…at least not quickly enough to matter. Turns out, the same can be said about A.I. These modern day “prediction machines” are often based on data drawn from past behavior. They aren’t prepared to deal with massive shifts in behavior—for instance, when people inexplicably start hoarding toilet paper.
Fortune’s Jeremy Kahn tells the story of Ocado, the popular online grocery business in the U.K., which has seen its website traffic spike 4X because of the pandemic. The company says its cybersecurity software concluded such a spike could only be the result of a denial-of-service attack, and moved to block the new transactions. Fortunately, human beings were standing by to correct the mistake. Kahn provides some advice companies can use to check their A.I. algorithms and avoid such errors.
Separately, Moody’s tells Fortune its models are estimating that 5 to 6 million people could be added to the unemployment lines in March—the biggest one-month job loss in recorded history, and seven times the 800,000 jobs lost in March 2009. “This is cataclysmic,” says Moody’s Mark Zandi. “I can’t think of a darker word.”
But there are people hiring out there. Chris Morris looks at 17 companies that have put out “Help Wanted” signs. Top of the list: Amazon and Walmart.
And Shawn Tully provides an optimistic view of the stock market. Prices have fallen so low, he says, that the Shiller Price/Earnings ratio is finally flirting with its long-term average. That could be a sign that the market is, for the first time in a while, a good buy.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Rescue package
The Trump administration and Senate leaders have finally agreed on an emergency relief package worth nearly $2 trillion. Senate Majority Leader Mitch McConnell: "In effect, this is a wartime level of investment into our nation." Senate Minority Leader Chuck Schumer: "This bill is far from perfect, but we believe the language has been improved significantly to warrant its quick passage." The Democrats' wins include oversight of the funds' disbursement by an inspector general and congressional panel, stock buyback bans, and beefed-up unemployment insurance. Fortune
Markets surge
After yesterday's stellar performance (Dow up 11.4% in its best day since 1933; Dax up 11%), the markets look set for another good day. The Nikkei 225 is up 8% and the Hang Seng 3.8%. The Stoxx Europe 600 rose more than 4% at the start of the European day, and U.S. futures again look rosy too. Financial Times
Indian lockdown
Of all the national lockdowns, this is the biggest: India has ordered all its 1.3 billion people to stay home for at least three weeks, with only essential services remaining operational. Prime Minister Narendra Modi: "What the experts are saying is that social distancing is the only option to combat coronavirus. That is to remain apart from each other and stay confined to within your homes. There is no other way to remain safe from coronavirus. If we have to stop the spread, we have to break the cycle of infection." Meanwhile, French President Emmanuel Macron's scientific advisors are recommending that France's week-old lockdown should be extended from 15 days to six weeks. CNN
Occidental pay
Occidental Petroleum will reportedly cut the salaries of its regular U.S. employees by up to 30%, and those of its executives by an average of 68%—CEO Vicki Hollub is taking an 81% pay cut. Employee bonuses and perks will also end. The moves come after a steep decline in oil prices, and a badly timed $38 billion takeover of Anadarko Petroleum that left Occidental saddled with a lot of debt. Wall Street Journal
AROUND THE WATER COOLER
Infection rates
A group of University of Oxford researchers has estimated that up to half the U.K. population may have already been infected by coronavirus. If this is true (and it's far from being confirmed) then that would mean far lower rates of hospitalization and death than currently assumed—it's a very different take to the scary Imperial College modelling that is informing lockdown policy in the U.K. and elsewhere. Who's right? We need large-scale antibody testing to find out, as this would indicate how many people have already had the virus. If it's a lot, perhaps restrictions can be lifted sooner rather than later. Financial Times
Mutation news
More potential good news: researchers examining the SARS-CoV-2 virus are not seeing significant mutations as it passes through the population. That suggests a long-term vaccine could be viable, as opposed to short-term vaccines that have to be redesigned every year, as with the flu vaccine. See also: the hope that warm and humid weather could slow the virus's spread. Washington Post
Airline bailouts
The British government is sounding cool on the idea of bailing out the country's big airlines. Chancellor Rishi Sunak wrote to airline bosses (including those of British Airways, easyJet and Virgin Atlantic) that they should tap recently-announced aid schemes like other companies are doing. Further bailouts "would only be possible if all commercial avenues have been fully explored, including raising further capital from existing investors and discussing arrangements with financial stakeholders," he wrote. Sky News
Food hoarding
Kazakhstan and Serbia have banned some food exports in order to ensure domestic supplies continue during the pandemic; Russia is considering doing the same. Bloomberg asks whether this could be the "start of a wave of food nationalism that will further disrupt supply chains and trade flows". Bloomberg
This edition of CEO Daily was edited by David Meyer.


fortune--2020-03-25--Trump and Senate agree on $2 trillion rescue deal that includes cash handouts and stock buyback ban

Career advice from some of the best chefs in the U.S .

The Trump administration struck a deal with Senate Democrats and Republicans on an historic rescue package that tees up more than $2 trillion in spending and tax breaks to bolster the hobbled U.S. economy and fund a nationwide effort to stem the coronavirus.
“At last we have a deal,” Senate Majority Leader Mitch McConnell said early Wednesday on the chamber’s floor. “I’m thrilled that we’re finally going to deliver to the country.”
Senate Democratic leader Chuck Schumer called it an “outstanding agreement.”
The legislation was still being drafted but McConnell said the Senate would vote on it Wednesday. It would still have to pass in the House before it gets to President Donald Trump’s desk. House Speaker Nancy Pelosi had consulted with Schumer throughout his negotiations with Treasury Secretary Steven Mnuchin.
The plan includes about $500 billion that can be used to back loans and assistance to companies, including $50 billion for loans to U.S. airlines, as well as state and local governments. It also has more than $350 billion to aid small businesses. Then there is $150 billion for hospitals and other health-care providers for equipment and supplies.
Direct payments
For individuals the package provides direct payments to lower- and middle-income Americans of $1,200 for each adult, as well as $500 for each child. Unemployment insurance would be extended to four months, the benefits would be bolstered by $600 weekly and eligibility would be expanded to cover more workers.
Democrats demanded and won a series of restraints on corporations that would benefit from loans or investments from the Treasury Department, as well as an oversight mechanism for who gets money.
Any company receiving a government loan would be subject to a ban on stock buybacks through the term of the loan plus one additional year. They also would have to limit executive bonuses and take steps to protect workers. The Treasury Department would have to disclose the terms of loans or other aid to companies and a new Treasury inspector general would oversee the lending program.
Notably, Democrats won language that would bar any business owned by Trump or his family from getting loans from Treasury. Businesses owned by members of Congress, heads of executive departments and Vice President Mike Pence also would be blocked.
With the prospect that Congress was closing in on a deal Tuesday, the Dow Jones Industrial Average rose more than 11% in its biggest advance since 1933, and the S&P 500 rebounded with the biggest one-day gain since October 2008 after starting the week with a rout. In Asia markets, U.S. futures pared early losses after news of the deal.
In a letter to his fellow Democrats, Schumer highlighted a series of transparency measures that would prevent keeping loans secret and create a new inspector general to oversee the program.
Schumer also said that hundreds of billions would be spent on Democratic priorities, including the expansion of unemployment benefits, money for hospitals as well as more funding for cities and transportation.
Democrats also rejected the $3 billion sought by the Trump administration to buy oil to fill the Strategic Petroleum Reserve.
Pelosi said on Tuesday that the House could quickly approve a Senate-passed coronavirus stimulus with a voice vote that doesn’t require members to travel to Washington — as long as the bill does not have any “poison pills” Democrats object to.
That would also require the unanimous consent of all House Republicans. The second-ranking House Republican, Representative Steve Scalise of Louisiana, told his vote-counting team during a conference call Tuesday night that the best option is to accept a Senate-passed economic stimulus bill, according to Scalise spokeswoman Lauren Fine.
Eric Ueland, the White House legislative affairs director, said after the agreement was reached that the “the president and his team look forward to swift action for urgently needed assistance to the American people and powerful aid to the nation’s economy as we work through this crisis.”
The size of the stimulus package is unprecedented, dwarfing the approximately $800 billion Obama stimulus that passed five months after the 2008 financial crash.
Together with Fed intervention, the proposed legislation amounted to a $6 trillion stimulus, according to White House economic adviser Larry Kudlow, or about 30% of annual GDP.
The package will likely more than double a U.S budget deficit that was already set to hit $1 trillion this year before the outbreak. It also may not be the last infusion of government spending in response to the spread of the virus.
Lawmakers universally expressed a sense of urgency as the nation’s economy deteriorates and the health outlook grows more dire. The World Health Organization said the U.S. has the potential to become the new epicenter of the global pandemic as the number of known infections soars.
The proposal is the third — and biggest — plan by Congress to confront the coronavirus crisis as the disease spreads.
An initial $8 billion plan passed by Congress March 5 is funding emergency health care needs stemming from the coronavirus, and a second plan enacted last week will provide many Americans with paid sick leave, food assistance and free coronavirus testing. It also will send tens of billions in fresh aid to states.
More must-read stories from Fortune:
—Why the extraordinary dollar surge spells more trouble for the global economy
—The Supreme Court has shunned technology. Could coronavirus change that?
—10 questions about the 2020 election during the coronavirus pandemic, answered
—The workers the U.S. government deems “essential” amid the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: U.S. tax deadline moved from April 15 to July 15
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-03-25--India bans export of malaria drug Trump touted as coronavirus treatment

India banned exports of a malaria drug backed by U.S. President Donald Trump amid a run on supplies globally, even as preliminary findings emerge that the medication isn’t better than regular care in the treatment of the coronavirus.
Exports of hydroxychloroquine will be limited to fulfilling existing contracts, while certain shipments on humanitarian grounds may also be allowed on a case-by-case basis, according to a statement issued Wednesday by the Directorate General of Foreign Trade. The ban also does not apply to factories in its special export zones.
India has some of the world’s largest manufacturers of the finished drug as well as its component ingredients and the move is likely to crimp global supply at a time when the medication is receiving unprecedented global attention.
Hospitals and consumers in the U.S. are stockpiling the drug after Trump called it a “game changer” in the treatment of the coronavirus and vowed to make it widely available. China, Europe and South Korea recommend it as one of several treatments for Covid-19 patients, while India itself advocates health-care workers take the drug regularly as a preventive measure.
But there is no conclusive scientific evidence that hydroxychloroquine can treat the infection from the novel pathogen. Indeed, a small study published in the Journal of Zhejiang University in China showed that patients who got the medicine didn’t fight off the new coronavirus more often than those who did not get the medicine.
Top scientists, including White House coronavirus task force member Anthony Fauci, have called reports that hydroxychloroquine might work anecdotal, and said they need further study before the pill’s use is encouraged.
As the outbreak spreads around the world and shuts down large parts of the global economy, hundreds of clinical trials are being launched to study the effectiveness of everything from anti-flu drugs and antibody-containing plasma from recovered patients, to traditional Chinese herbal medicine. More than 420,000 people have been infected worldwide and almost 20,000 killed in the widening pandemic.
While the verdict is still out on the treatment’s effectiveness, pharmaceutical companies have been racing to increase production of the cheap and decades-old medicine. Cadila Healthcare Ltd., the Indian company which is world’s largest maker of the drug, has said it plans to boost capacity more than 10-fold to meet the surging global demand.
Malaria, Lupus Drug
Hydroxychloroquine, particularly when given with the antibiotic azithromycin, was put in the spotlight following a controversial, small study of about 40 patients hospitalized with Covid-19 in France. In that study, the drug appeared to help clear the virus from their bodies, based on samples taken from nasal swabs. Experts have criticized the design of the study, calling it interesting but far from definitive.
Hydroxychloroquine and the more-toxic drug it is derived from, chloroquine, are also commonly used to treat rheumatoid arthritis and lupus. Neither drug has been approved by the U.S. Food and Drug Administration to treat Covid-19.
In the Chinese study, one patient treated with the malaria drug progressed to severe disease. Four patients given the medicine developed diarrhea and signs of potential liver damage, compared with three getting conventional treatment.
The researchers concluded that additional studies using larger numbers of patients are needed to fully investigate the drug’s risks and benefits.
More coronavirus coverage from Fortune:
—All the moves the Fed is making to bolster the economy
—2020 Tokyo Olympics will be delayed by about one year due to coronavirus
—Which stores are open—and closed—during the coronavirus pandemic in the U.S.?
—As the U.K. goes into lockdown, London faces isolation—and clear skies
—17 companies that are hiring during the coronavirus crisis
—President of the Tenement Museum on what we can learn from previous pandemics
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-03-25--How Nike is defying the coronavirus downturn

Nike Inc. soared in late trading after online-order growth helped sales vault past Wall Street estimates, laying out a blueprint for how the sportswear giant could cope with the coronavirus pandemic worldwide.
The company posted revenue of $10.1 billion for the three months ended Feb. 29, a period that included shutdowns across China, one of its key markets. Analyst had projected of $9.6 billion. Earnings amounted to 53 cents a share, matching estimates.
Since the end of the quarter, hundreds of millions in Europe and the U.S. are now living under various forms of lockdowns, and Nike may have an opportunity to accelerate its conversion of customers from brick-and-mortar shopping to digital. E-commerce sales, already a major priority for Nike, were up 35% last year to $3.8 billion. In the latest quarter, they rose even faster, at 36%.
“Amidst unprecedented conditions across the globe, we are staying focused on not simply managing through this situation, but taking the actions that will allow us to emerge from it even stronger than before,” Chief Executive Officer John Donahoe said on an earnings call. “We know it won’t be easy, but Nike is better prepared than anyone else to regain that momentum, extend our brand leadership and reshape the future marketplace.”
Nike’s shares rose as much as 10% to $79.85 in after hours, adding to gains in regular trading Tuesday fueled by a broader market rally. As of Monday, the stock had been down 38% this year, a steeper decline than the S&P 500 Index’s 31% drop.
Nike’s latest results don’t give a full picture of the pandemic’s impact, since its fiscal third quarter only ran through February. But it’s one of the first big U.S. companies to deliver earnings after the Covid-19 virus hobbled economies around the world, shuttering factories and offices.
No Forecast
Like a number of other companies recently, Nike opted not to provide guidance for its current quarter due to uncertainty around the virus. The company had previously said it expected full-year percent growth in the low double digits, but those projections came before the virus reached Europe and North America, where Nike has closed a majority of its stores.
The company’s coronavirus playbook anticipates that each geographical region will go through four phases, Donahoe said. In the first stage, which Nike calls containment, a country partially shuts down and stores close to stem the spread of the virus, leaving brands like Nike to rely heavily on digital sales.
Second is recovery, when brick-and-mortar stores slowly begin to reopen. That’s followed by a return to normalcy, when store traffic and in-person shopping hits pre-virus levels. And the last phase is a return to full growth for Nike.
In China, for example, containment lasted five to six weeks, and at one point 75% of stores selling Nike products were closed. The country is now through recovery and beginning its return to normalcy, Donahoe said. He expects the company’s China sales to be flat next quarter, then return to growth in early next year.
“In the U.S., we’re earlier in the cycle,” he said.
More coronavirus coverage from Fortune:
—All the moves the Fed is making to bolster the economy
—2020 Tokyo Olympics will be delayed by about one year due to coronavirus
—Which stores are open—and closed—during the coronavirus pandemic in the U.S.?
—As the U.K. goes into lockdown, London faces isolation—and clear skies
—17 companies that are hiring during the coronavirus crisis
—President of the Tenement Museum on what we can learn from previous pandemics
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-03-25--India locks down in the midst of coronavirus

Hello, readers.
A nation with 1.3 billion people has now ordered a lockdown over the coronavirus outbreak.
Indian Prime Minister Narendra Modi is mandating a three-week (at minimum) national lockdown after several Indian states had already implemented such measures. In a press conference, he played up the importance of social distancing, especially in a country with such heavy population density.
“You have seen the worldwide situations arising from the coronavirus pandemic in the news. You have also seen how the most powerful nations have become helpless in the face of this pandemic,” Modi said on Tuesday, according to CNN, warning that “many families will be destroyed forever” if drastic measures aren’t enacted.
Those measures resemble what some states and cities in the U.S. have enacted, including encouraging people to limit their contact with the outside world other than essential utility, grocery, and medical services.
So there you have it—the second most populous country in the world, is shutting down.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
A.I. struggles under the weight of coronavirus. My colleague Jeremy Kahn explains, eloquently, how the coronavirus crisis "is providing a real-world test of how robust many companies’ new-fangled A.I. systems really are." This is one of those moments where the rubber meets the road. And the artificial intelligence "rubber" really only came onto the scene in the past five years. That has implications for everything from predicting financial trends to the intricacies of the food supply chain. (Fortune)
INDICATIONS
Novartis gets some good news on its spinal muscular dystrophy drug. Novartis' landmark spinal muscular dystrophy drug Zolgensma is (according to the company, anyways) still racking up positive clinical trial results even though those very studies are on hold. Zolgensma is a bit of a controversial therapy (for more on that, head over here) but has the distinction of being the first gene therapy ever approved in the U.S. Novartis is trying to expand the treatment's reach into other forms of the degenerative, inherited disorder.
THE BIG PICTURE
The specter of a looming recession. Just how bad might the economic repercussions of coronavirus be? According to data Moody's Analytics provided to Fortune, there could five to six million job losses in March alone. “This is cataclysmic. I can’t think of a darker word. It’s Armageddon if lawmakers don’t come up with support [for businesses and households] in the next couple days,” Mark Zandi, chief economist of Moody’s Analytics, told Fortune. (Fortune)
REQUIRED READING
A first responder spouse on when, not if, the coronavirus strikes, by Kristen Bellstrom
Yale's most popular class is now available online for free, by Ellen McGirt
17 companies that are hiring during the coronavirus crisis, by Chris Morris
Sign up for other Fortune newsletters.


fortune--2020-03-24--Countries are sending texts to warn about Covid. Should President Trump do the same?

Citizens across the United Kingdom received the text message below on Tuesday, telling them to stay home and protect the country’s health service:
The UK is not the only country to turn to text messages to warn citizens about the danger of the coronavirus. In South Korea, news reports suggest text alerts by the government have been an integral part of that nation’s success in limiting the spread in the virus.
The U.S. government, meanwhile, has yet to send such a text despite a new system designed to contact nearly every Americans’ cell phone. The system, known as WEA for Wireless Emergency Alert, went live in 2018, but the White House has only sent one text, which read “Presidential Alert” and explained the message was just a test.
When it launched, the new texting tool provoked concern that a tweet-happy President may use it for political messaging or other non-critical information. Federal Emergency Management Agency officials, however, provided reassurance at the time that the WEA process included guardrails that required a genuine emergency such as “a natural disaster, act of terrorism, or … threat to public safety.”
The deadly coronavirus, which is quickly spreading across the U.S., may qualify as such an emergency. And a nationwide text from the federal government could help drive home the message for social distancing, which medical experts universally say is essential to slowing the crisis.
The White House declined to comment publicly about whether it would deploy the WEA system to warn American’s about coronavirus. The federal government has sent Americans a postcard-sized advisory about the virus, labeled “President Trump’s Coronavirus Guidelines for America.
In fact, the President initially downplayed the scope of pandemic and has since shifted to voicing support for a return to some semblance of normal despite the risk.
A spokesperson from FEMA, which helps coordinate the alerts, said nearly 40 local authorities—including states, counties and cities—have already sent Covid-related text alerts.
“Local authorities know best when emergency information is needed in their area and how best to communicate to people their jurisdiction. FEMA supports state and local officials providing assistance to help their messages appear as intended on cell phones, TV, and radio,” said the spokesperson.
As the coronavirus crisis deepens—New York State alone had 25,665 cases as of Tuesday with the rate doubling every few days—it appears likely people’s cell phones will light up with new alerts.
More must-read stories from Fortune:
—The Supreme Court has shunned technology. Could coronavirus change that?
—What medical experts say about Everlywell’s home coronavirus testing kits
—TikTok’s newest viral influencers? Personal finance stars
—Privacy could be the next victim of the coronavirus
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-25--Everything you need to know about the coronavirus stimulus checks

The podcast everyone in business should be listening to during the coronavirus pandemic

UPDATE: When are stimulus checks coming? It could take months for some
Help is finally on the way.
On Friday, President Trump signed into law a $2.2 trillion coronavirus stimulus package that will provide direct payments to lower- and middle-income Americans, as well as hundreds of billions of dollars in assistance to corporations, small businesses, and hospitals and health care providers.
Unsurprisingly, the direct payments portion of the package has garnered the most attention. The coronavirus outbreak has devastated the U.S. economy, and with millions of Americans losing their jobs and hurting financially, all eyes had been on Washington to see how lawmakers would help alleviate the burden.
Here’s what we know about the coronavirus stimulus checks and how they will work.
Who qualifies for stimulus checks?
Virtually all tax-filing American adults earning up to $99,000 annually will be eligible for some form of direct assistance from the government. Married couples and joint filers who earn up to $198,000 are also eligible, as are heads of household who earn up to $136,500.
How much will the stimulus checks be worth?
Individuals who make up to $75,000 per year and heads of household who earn up to $112,500 will receive a $1,200 rebate from the federal government, while couples who earn up to $150,000 annually will receive $2,400. For those who exceed those income levels, the benefits are gradually reduced at a rate of $5 for every $100 of additional income, and are eventually capped at $99,000 for individuals, $136,500 for heads of household, and $198,000 for couples. Additionally, parents are eligible for a $500 rebate per child.
When will the stimulus checks be sent out?
This is where it gets tricky. Treasury Secretary Steven Mnuchin has said that he’d like to see Americans start receiving direct assistance in as little as two or three weeks after the stimulus package is signed into law—but that seems exceedingly optimistic. As Erica York of the Tax Foundation think tank notes, the quickest time frame in which the federal government has previously been able to issue stimulus checks has been six weeks.
“Historical precedent, plus the unprecedented crisis we’re in, leads me to believe May is the earliest the [Internal Revenue Service] would be able to start sending any checks,” York says.
How will I get my stimulus check? Will it be delivered through direct deposit?
For the roughly 70 million Americans who have already provided their direct-deposit bank account information to the IRS, rebates should be pouring into those accounts within weeks of the bill’s passage, Senate aides told the New York Times on Wednesday. But those who haven’t provided such information may have to wait up to four months for their checks to arrive—a time frame that surely works against the bill’s intention of providing financial assistance to struggling Americans as soon as possible.
Is the stimulus check a loan—and will I have to pay it back?
No. As a direct payment designed to assist Americans through difficult economic times, the stimulus checks are yours to keep.
Are the stimulus checks taxable?
No. However, for Americans who have yet to file their 2019 income taxes, the rebates will need to be based on their 2018 income levels. That means that they could be subject to adjustment once people finally file 2019 taxes that indicate their most recent income levels.
Will retirees and Social Security beneficiaries get stimulus checks?
Yes. The bill allows Americans receiving Social Security—many of whom are retired and don’t file taxes—to obtain direct financial assistance through the coronavirus stimulus package. In such cases, the government would access their data through the Social Security Administration to determine their rebate.
Update, March 27, 2020: This article has been updated to reflect the passage of the CARES Act into law.
More must-read stories from Fortune:
—Millions of Americans won’t be able to pay their bills this month. What financial experts advise
—You can now take money out of your 401(k) without penalties, but should you?
—What to know about unemployment benefits in the stimulus package
—Winners and losers in the $2 trillion coronavirus rescue package
—Coronavirus stimulus package would dramatically change gig worker benefits. Here’s how
—How small-business owners and the self-employed can take advantage of the coronavirus stimulus package
—These traders are making the most of the wild swings in the stock market
—States aren’t ready for the record 3.3 million unemployment claims that were just filed
—How does the U.S. pay for a $2 trillion relief bill? With two shiny coins, this lawmaker argues
—17 companies that are hiring during the coronavirus crisis
—The quickest way to boost the economy isn’t even being considered. Why?
—What to do if you’re worried about getting laid off
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The U.S. tax deadline has been moved from April 15 to July 15
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-25--Gilead made a remarkable request of the FDA in regard to its coronavirus drug

Happy Wednesday, readers.
Remdesivir, the experimental COVID-19 treatment from Gilead, has been one of the drugs thought to have the most potential to treat the novel coronavirus. It’s already been deployed in the U.S. and multiple other countries as this pandemic spreads.
During, say, any other time in the history of the biotech industry, that’s an advantage a corporation would likely hold onto. Clearly, these aren’t normal times. More on that in a second.
Under Food and Drug Administration (FDA) guidelines, therapies that haven’t been officially approved can still be used to treat sick patients on an emergency or “compassionate use” basis, especially for those with the highest risk of death.
That was the case for remdesivir until earlier this week when the rapidly-growing number of COVID-19 patients pushed demand so far that it exceeded how much Gilead could produce, and the company said it had to stop supplying it.
But then came another twist—the FDA granted remdesivir an “orphan drug” designation.
This is some nuanced stuff, but in essence: it’s a designation usually given for experimental drugs that treat rare disorders (which are defined as diseases which affect 200,000 people or less). But there are some weird exceptions.
For instance, even if a disease is new and thought likely to eventually affect a much bigger swath of the population than 200,000 people, a company can still get an orphan drug designation. (Spoiler alert: More than 200,000 people will probably be affected by coronavirus.)
Such a designation, if Gilead were to use it, would be a financial boon to the firm, granting all sorts of advantages, like seven years of market exclusivity and major tax credits.
But Gilead made a voluntary request to pull the designation. It’s a remarkable move for the company.
“Gilead recognizes the urgent public health needs posed by the COVID-19 pandemic. The company is working to advance the development of remdesivir as quickly as possible, and will provide updates as they become available,” the company said in a statement.
I’m following up with Gilead to figure out the thinking behind all of this. The biotech’s statement emphasized that it was confident remdesivir would speed its way to the market regardless of whether or not it had such a designation. But I don’t think I’ve ever seen this happen before. My guess is the firm wouldn’t want to be blamed for what would seem like a profiteering move during a crisis—still, it’s pretty intriguing.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
A band of health IT giants get in on the COVID-19 fight. Companies ranging from electronic health record (EHR) vendors such as Epic and Athenahealth are teaming up with the likes of Microsoft, Amazon Web Services, and major health systems such as the Mayo Clinic and Intermountain Healthcare (among multiple other organizations) to tackle coronavirus. The firms describe it as "a collaborative industry response to the novel coronavirus" aimed at aggregating all sorts of data—including available hospital beds and bottlenecks for respirators, clinical data about how the virus spreads, and host of other information.
INDICATIONS
Vir Biotechnology plans to advance its own COVID-19 treatments. Vir Biotechnology, a startup headed up by former Biogen chief George Scangos (who has also been enlisted to lead the biotech industry's coronavirus efforts by the sector's largest trade group) announced on Wednesday that it has identified several potential drug candidates to treat COVID-19. What makes Vir's approach interesting is that it relies on "monoclonal antibodies" (for a more precise definition of exactly what those are, and why they're so important in medicine, I'd encourage you to re-visit my feature about Humira). "Stopping this disease will take a combination of prevention and treatment approaches," said Scangos in a statement. What he means is that a mix of antivirals, antibodies, and other therapies will be critical to stemming the tide of this disease as firms work on a lasting vaccine.
THE BIG PICTURE
The federal government is ramping up Medicaid waivers in the wake of coronavirus. It's no secret that the U.S. health system is fragmented. So in a time of public health crisis, it shouldn't come as much of a surprise that such a system presents a lot of uncertainty during a global pandemic—especially for the poorest people in the country. That may require ad hoc responses. As ModernHealthcare reports, the Centers for Medicare & Medicaid Services (CMS) have granted seven more states (Indiana, Iowa, Kansas, Kentucky, Missouri, Oregon, and Rhode Island) waivers that would allow Medicaid beneficiaries to seek care at facilities not traditionally authorized to accept those on Medicaid. It goes to show how an influx of COVID-19 patients could very well overwhelm the health system. (ModernHealthcare)
REQUIRED READING
How America pays for a $2 trillion stimulus, by Robert Hackett
The Great Secession vs. the Great Recession, by Shawn Tully
How musicians are upending the usual narrative surrounding addiction, by Eric R. Danton
Sign up for other Fortune newsletters.


fortune--2020-03-25--The quickest way to boost the economy isn’t even being considered. Why?

Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.
At a time when Congress is hotly debating a bailout package that could cost taxpayers several trillion with a tall “T,” it’s remarkable that policymakers are ignoring a powerful stimulus that can be deployed cost-free to blunt the coronavirus crisis: eliminating all tariffs on foreign imports and persuading our global trading partners to drop their duties on U.S. goods. Tariffs are taxes, and lifting them, even temporarily, would substantially lower prices to consumers on everything from washing machines to sneakers, boost the efficiency of U.S. manufacturers, and swell our exports—think of recharging our soybeans sales to China, swelling farmers’ incomes without adding a nickel to the mountainous federal debt.
Though the zero-tariff option is getting no traction in Washington, the idea wins a ringing endorsement from the economists I’ve spoken to in assessing the looming damage from the pandemic. Two of them began advocating the policy weeks ago. “It can be done instantaneously without congressional support,” says Jared Franz, an economist at asset management colossus Capital Group. “These desperate times call for cutting global tariffs to zero, with the U.S. leading the way.”
Weijian Shan, a Ph.D. economist who heads PAG, the largest private equity firm in Asia, lauds the idea as an essential counterweight to coming contraction. “Tariffs take a chunk out of the economy, which is less felt in a booming economy but which will further dampen demand and cost customers at a time when they are stretched,” he says. Shan recommends that the U.S. eliminate all duties and request reciprocal treatment from our trading partners, in a reversal of the tit-for-tat tariff hikes that have so damaged our economy over the past two years.
A wide swath of American business is calling for action. While industries such as steel and aluminum prize high tariffs because they curb competition from low-cost imports, most sectors benefit from free trade, and say so. As the steepest economic slide in decades quickens, they’re requesting trade relief from Washington. In early March, more than 100 business groups representing industries as varied as lighting, juices, and recreational vehicles wrote to President Trump and other officials requesting the elimination of the duties that the administration imposed on imports of Chinese goods, as well as steel imported from around the world. Trump trade adviser Peter Navarro waved off their plea, telling the Wall Street Journal, “To eliminate or lower the China tariffs would amount to a bailout for the China economy at the expense of even more American jobs and growth.”
How much of a boost would scotching tariffs provide? Currently, $360 billion in Chinese imports are covered by Trump-imposed duties that average 19.3%. In addition, he’s hit over $30 billion in global steel and aluminum imports with heavy tariffs. The price these taxes exact consists mainly of what economists call “deadweight costs.” When U.S. companies keep buying machine tools or textiles from China in spite of the higher duties, the U.S. collects tax revenue that offsets the higher prices to manufacturers and consumers. For example, the U.S. is channeling that revenue to furnish several billion dollars a year in subsidies to farmers whose revenues got hit by the barriers China raised in retaliation. Hence, the tariff revenue compensates for higher prices, so for the most part, the exchange is a wash to our economy.
But the higher tariffs rise, the more U.S. producers stop buying from China and source from suppliers in other countries that charge more than the Chinese used to. Say an automaker was buying a part from China that cost $100 last year. Tacking on the new tariffs is forcing the Chinese producer to raise its price to $120. So the U.S. manufacturer shifts orders to a Malaysian supplier that charges $110. The U.S. gets no tariff revenue from that sale. But the carmaker is paying $10 or 10% more, strictly because the duties prevent it from sourcing from the world’s most efficient producers in China. When those differences are multiplied by hundreds of thousands of products, U.S. consumers end up paying a lot more for much of what they buy than they did in the pre-Trump-tariff era.
That extra cost—the $10 in our example—is the deadweight burden. Every dollar in deadweight cost reduces national income by the same amount and is a direct hit to our economy.
In a paper published last May for a New York Federal Reserve website, economists from Columbia, Princeton, and the N.Y. Fed calculated the deadweight costs of Trump tariffs then covering around $350 billion in Chinese products. They put the annual burden at $620 per U.S. household, or a total of $80 billion. Keep in mind that Trump also hit over $30 billion in steel and aluminum imports with heavy duties. All told, a reasonable estimate of the deadweight costs on almost $400 billion in exports is around $90 billion. The trade war’s toll doesn’t stop there. Trump’s offensive prompted China to fire back with high tariffs on $110 billion in U.S. exports, chiefly agricultural commodities and steel. Those big taxes have hammered our sales to China. By Fortune’s estimate, the retaliatory duties are subtracting another $20 billion a year from the U.S. economy.
If the administration erased tariffs only on Chinese and global steel and aluminum imports, and China responded by erasing duties on our exports, our economy would swell by roughly $110 billion a year. That’s the $90 billion from eliminating deadweight costs on Chinese goods plus steel and aluminum, plus $20 billion from boosting our farm and steel sales to China. On last year’s GDP of around $21 trillion, the extra $110 billion would add 0.5 points to growth.
But if Trump managed to eliminate the additional tariffs we impose on other nations, mainly for textiles and farm products, and those nations returned the favor by dropping duties on the goods they buy from us, the zero-tariff policy would likely add another tenth of a point or two, adding, say, 0.7% of GDP to our future rate of growth.
That may not sound like much in a year when most banks and research firms predict that national income will plummet by 5% or even more. But it’s a big number. Adding 0.7% to the widespread forecast of 2% that prevailed before the virus struck would have lifted growth by 35%. That cushion could offset one-seventh of a 5% downturn. Or more. The greatest gift to U.S. industry: the signal that Trump is switching from trade warrior to peacemaker. It was the ratcheting up in tariffs during 2018 that took the spark out of the Trump economy. Assurances that protectionism is no longer a core policy could unleash animal spirits that went dormant even before the virus hit.
Of course, Trump is unlikely to reverse a signature policy that has so far proved popular with his base. But who knows? He’s already shown flexibility on the issue. In 2018, he reversed course by removing duties on steel and aluminum imports from Canada that he’d previously imposed. In January, he signed the Phase One deal that lowered tariffs on $112 billion in consumer goods from China and put threatened tariffs on another $160 billion in its exports to the U.S. on hold. Phase One cheered the markets and helped lift the nation’s growth prospects at the start of 2020.
Trump is a maverick who often veers in new directions and dumps once-trusted advisers. “Trump is a dealmaker,” says Franz. “He can show global leadership on trade.” That Trump will do it is a long shot. But going even part way would pay off bigly.
More must-read stories from Fortune:
—Why the extraordinary dollar surge spells more trouble for the global economy
—These estimates of how much COVID-19 will hurt the economy are terrifying
—The NYSE is closed because of the coronavirus. What that means for investors
—How thinking like a golfer can help you ride out market mayhem
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: U.S. tax deadline moved from April 15 to July 15
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.