• Investing Insights & Exclusive Offers → Get Our FREE “Market Brief”
    Sign-up for our free weekly newsletter. Get unparalleled investing insights and exclusive Summer Sale discounts on Hedgeye research.

    Disclaimer: By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. Use of Hedgeye and any other products available through hedgeye.com are subject to our Terms Of Service and Privacy Policy

Editor's Note: This is a complimentary research note published by Healthcare Policy analyst Emily Evans. CLICK HERE to get daily COVID-19 analysis and alerts from our research team and access our related webcasts.

Politics, Policy and Power | The Outlook In The Time Of COVID-19 - 6 2 2020 9 31 40 AM

Politics 

Note: Memorial Day is the unofficial start of fall political campaigns. This cycle promises to one like no other and so we have devised these regular updates to stay on top of the themes that are going to inform the next few months and possibly four years.

We had written off Medicare for All when Joe Biden became the nominee and COVID-19 hit hospitals hard. Now we aren't so sure.

Biden is the presumptive nominee for the simple reason that he had the support of the establishment. Establishment support, of course, being a pre-requisite for beating Donald Trump.

Now it is a liability.

It is becoming increasingly obvious that younger voters, especially younger African-American men, are not walking in lockstep behind their elders. To bridge the enthusiasm gap, Biden is going to have to come up with policies that are appealing to the young and Medicare for All, a cause championed by the telegenic Rep. Ocasia-Cortez, is one of those. 

Getting something past the Senate will be tough even if Democrats pick up a seat or two. Moderates in both parties are likely to resist radical change. He won't go all in like Bernie Sanders' direct care model - a sort of massive expansion of the VA system - instead probably choosing to expand Medicare Advantage through a demonstration. But still.

Another approach is reviving the COOPs that were formed under the ACA as a response to calls for a public option.

They still exist in law but need funding, something accomplished via the budget process.

Policy

Governors are generally pretty moderate people regardless of the party from which they hail. They have to be.

They can't print money or distract the population with foreign wars and trade deals. Being a governor in most states is blocking and tackling on mundane issues like road projects. However, Covid-19 has allowed most governors to demonstrate their skills as managers and communicators in a crisis.

Politics, Policy and Power | The Outlook In The Time Of COVID-19 - 20200601P3

We are as surprised as anyone to see Governor Ron DeSantis of Florida emerge as a model for other governors in addressing the threat of COVID-19 but there is no denying his risk-based approach was effective.

Instead of shutting down the entire Florida economy as some pundits argued, DeSantis ignored the models and took a risk-based approach. He prohibited hospitals from discharging COVID-19 positive patients to long term care facilities and supplied those same facilities with PPE.

Most of the state was left to go about its business.While DeSantis did bow to some pressure to "shut down Florida," he never put in place more economically damaging policies like suspension of construction.In fact, the State of Florida used the greatly reduced traffic to complete projects in highly congested areas around Orlando.

Phase I in Florida looks more like Phase II in California and maybe never in New York.

As soon as he could DeSantis relaxed the social distancing orders. Immediately concerns about a resurgence in cases were raised. There are daily swings, as there are everywhere, but Florida's case count continues to drop and deaths are only 1/10 of New York's, a state with a very similarly sized population. The worst did not happen and with each passing day looks like it won't.

The proof is in the pudding.

Assuming outbreaks in the fall when the full effects of both Covid-19 associated economic disruption and the now greatly accelerated end of the cycle, the DeSantis model is likely to prevail.

Power

In what looks just a little too coordinated for our political mind, peaceful marches protesting the death of George Floyd in Minneapolis turned violent over the weekend.

The national response (i.e. non-risk-based, see above) to COVID-19 left 40 million people without work, many of them young, low wage earners; mandated isolation; and required dehumanizing and identity-obscuring face masks.

What could go wrong?

The steadfast refusal of the boomer generation to cede power except to those that echoed, often mindlessly, their policies and priorities, was never going to end well. Peaceful marches were hijacked by the least, the lowest and the left behind; the victims of 30 years of economic and social policies.

Community policing, a high cost, high touch process, gave way to surveillance cameras and poorly chosen and trained recruits. Wage growth, what was left after some disastrous corporate policies, was swallowed by an increasingly expensive health care system.

The normal path to the middle class, a college education, turned out to be mostly a scam.

Violence is the language of the unheard, as Dr. King put it, so the question for American politics is who will listen?