• Our Favorite ETF Ideas: Get 30-Days Free

    Get 1-month of completely free access to “ETF Pro Plus” – our Macro team’s monthly strategy note distilling our macro investment research down to our favorite ETF exposures.

Takeaway: Biden's Jobs and American Families Plans may become victims, in part, of his success; caveat-laden schools reopening & Science wants answers

Editor's Note: Below is a brief excerpt from a complimentary Health Policy Unplugged note written by our Health Policy analyst Emily Evans

Health Policy Unplugged is Hedgeye's newest Unplugged Product; click HERE to learn more about Emily's research process and the analysis subscribers receive.

Science Speaks Up | Politics, Policy & Power - 48548497852 1484b9e1ef b

Politics

For Donald Trump, the November 2020 election came too soon. For Joe Biden, it looks like it may have come too late.

Had Biden been able to propose his American Jobs or American Families Plans last year, they might have slid through Congress on bipartisan Crisco-coated rails.

With vaccinations having the desired effect on COVID-19 cases, hospitalization and mortality, science’s demands for a change in mitigation tactics became difficult to ignore. The White House acquiesced last week, announced new Centers for Disease Control and Prevention guidance for fully vaccinated people and adopted the central tenet of public health; trust everyone will do the right thing.

The relaxation of mitigation standards – except in a few situations like travel – has been greeted by many as a symbolic end to the pandemic. Companies are considering new schedules for office openings. Sporting events and live music are scheduled at full capacity. Life, it seems, might return to, if not normal, then at least more fun.

Unfortunately, for President Biden, the American Jobs and American Families Plans are predicated on the durability of the pandemic, much as FDR effectively used the twin crisis of depression and war.

As we have pointed out, especially in the context of the refundable child tax credit, exploiting crisis does not automatically beget bad policy. The Civil Rights Act of 1964 was passed in the wake of the assassination of John F. Kennedy and during significant social unrest, as just one important example.

What crisis does do is bring factions together in a way not possible in a less urgent environment. With the wrath of COVID-19 receding, Congress no longer needs to fear the political implications of inaction.

Catching Congress’ fickle attention are other concerns. Unemployment is not receding as quickly as a few trillion dollars suggest it should. Inflation, even if you buy the transitory arguments – which in health care is difficult to do – usually has significant downside implications for politicians and is to be avoided like the plague.

Then there is the problem of the states. There are 52 different versions of pandemic response and demonstrable evidence in differing unemployment rates, for example, to support or indict a mayor or governor’s approach. The variety of solutions persists post-pandemic as California plans state-funded stimulus checks while Ohio terminates enhanced unemployment benefits

The trick now is making sure that, whatever office you may hold, you pick the right combination of policy solutions that delivers the best possible economic outcome and that probably will not include all of the president’s proposals.

Science Speaks Up | Politics, Policy & Power - 20210516P3

Policy

Nearly simultaneously with the White House announcement on mask mandates, President of the American Federation of Teachers,’ Randi Weingarten, announced union support for a return to full in-person learning in the fall which includes the elimination of “zoom in a room” instruction.

The announcement was the first definitive support for normalization of community schedules across the country, offering hope that women will return to the workforce in pre-pandemic levels.

The shift in union position was not without its caveats. In addition to the expected requirements for testing, improved ventilation, sanitation, social distancing and, yes, masks, Ms. Weingarten’s speech also included changes in policy that “reimagine” public education like the attainment of a long-sought goal to end federally mandated standardized testing.

By far, the most interesting part of the speech was the announcement of a $5M “Back to School for Everyone” campaign that will include door-to-door canvassing; “we’ll also reach out to families and communities about the value of children returning to school in-person.”

Intentionally or not, the AFT president is acknowledging that, for the first time in a century, public education has de facto stopped being compulsory. Children and their parents now must be convinced to attend school.

It may not be easy.

Certainly, there are health concerns despite overwhelming scientific evidence dating back to mid- 2020. Just as likely is school age children and their parents may have become accustomed to extra help on a job site or at home or a little extra income. All of which are more easily accommodated by remote learning that is certain to be offered in some form in most districts.

Such a massive disruption in family schedules and community priorities does not seem easily undone, even if most jurisdictions are able to dust off their truancy enforcement. Many women may never return to the workforce and that makes the structure of the health care system look very different.

Power

Hanging heavy in the geo-political air is SARS-CoV-2’s origin story. It persists, despite or, really because of, early dismissals by some members of the scientific community.

Hasty conclusions about disease origins have a long history of being wrong. Poor Gaéten Dugas, a Canadian flight attendant, was erroneously implicated as “Patient Zero” in Randy Shilts 1984 book, “And The Band Played On” because it made for a better story. As it turns out, after decades of research, HIV had been circulating around the world since at least the 1920s after making a leap from primate to human.

The ease with which the recent World Health Organization report dismissed one theory – a laboratory incident – while accepting another – transmission via frozen foods makes Shilts’ look like an adherent to the scientific method.

Even WHO Director-General Tedros Ghebreyesus acknowledge the report provide insufficient analysis of a laboratory incident and offered to provide more resources to investigate.

As was the case of HIV, the scientific community seems determined to prevail in their search for SARS-CoV-2’s origins. Friday, 18 scientists including Marc Lipsitch at Harvard, Ralph Baric at the University of North Carolina and David Relman at Stanford – and a number of others you have not seen on CNN – published a letter in the prominent journal, Science, asking for a full scientific inquiry.

The letter is notable for several reasons. First, it moves into the scientific mainstream, the theory of a laboratory incident as the pandemic’s origin. Second, it bravely ignores the political implications that might fault some people of one nation for a year of global misery and millions of deaths.

Lastly, and most important, it asserts the independence of science and its methods.  Well worth the read:

“We must take hypotheses about both natural and laboratory spillovers seriously until we have sufficient data. A proper investigation should be transparent, objective, data-driven, inclusive of broad expertise, subject to independent oversight, and responsibly managed to minimize the impact of conflicts of interest. Public health agencies and research laboratories alike need to open their records to the public. Investigators should document the veracity and provenance of data from which analyses are conducted and conclusions drawn, so that analyses are reproducible by independent experts.”

No word on who will be looking into Birdseye’s involvement.