Arpit Gupta joins Brian Anderson to discuss how New York City can safely restart its economy and allow people to resume normal activities—the subject of his new Manhattan Institute issue brief (coauthored with Dr. Jonathan Ellen), “A Strategy for Reopening New York City’s Economy.”
As the U.S. city most affected by the coronavirus, New York faces unique challenges in its road to recovery. The key question remains: how can the city’s economy reopen safely? The issue brief provides a strategic blueprint for doing that, with two key components: effective measures to reduce the risks of new infection and a phased approach that protects vulnerable populations.
Brian Anderson: Welcome back to 10 Blocks. This is your host Brian Anderson. Joining us on today's show is Arpit Gupta. Arpit is an assistant professor of finance at NYU's Stern School of Business and he's an adjunct fellow at the Manhattan Institute. You can follow him on Twitter @arpitrage. He has also written for City Journal. Professor Gupta is a coauthor along with the epidemiologist Jonathan Allen of the new report published by the Manhattan Institute just this week called “A Strategy For Reopening New York City's Economy.” You can find it on MI's homepage and we'll link to it in the description.
We're here today to talk about the report and some of the measures they propose for getting new Yorkers and commuters back to work safely. As our regular listeners know, it's been over a month since the city entered into lockdown and no one yet knows when we can expect to be able to return. Arpit, thanks very much for joining us.
Arpit Gupta: Thanks so much for having me on Brian.
Brian Anderson: To start with, let's just lay out some of the current situation. New York as I think most people know is born the brunt of the pandemic today in the United States. The city itself accounts, I think for more than a quarter of all US Covid related deaths. For that reason, the city faces a kind of unique challenge, both controlling the outbreak and reviving an economy battered by the shutdown. Your report addresses both of those things, which we'll get to momentarily, but I'd like to get your sense on the scope of the economic crisis facing the city in particular, but maybe even more broadly the whole country.
Arpit Gupta: Yeah, Brian, I think this has been just an incredibly devastating shock both for our city as well as the country as a whole and here in New York we do have the advantage that many workers are able to work remotely. But we know that many workers are not able to have those same advantages and so are forced to either continue going to frontline jobs that are potentially very risky. Those include medical workers, subway workers and so forth. Or many workers are simply facing unemployment and lost income. And that's true across a range of businesses in New York. I think the hospitality, leisure, luxury businesses are possibly some of the worst effected. But, I think we're really seeing a broad based economic slow down across really the entire New York city economy.
Brian Anderson: In the report you outline two key components of a safe and hopefully successful strategy for getting the city back to work and we'll try to cover both of them as much as we can on the podcast. The first is risk mitigation and then you discuss a kind of staged or tiered approach to reopening.
For risk mitigation, let me just quote directly from the report. "Mitigation should include a large expansion in testing capacity, ensuring mask usage, temperature checks, contact tracing and centralized isolation sites". Can you explain as succinctly as possible each of these steps for our listeners? And then maybe we can ask you how you think the city may have done so far in enacting some of those measures.
Arpit Gupta: Absolutely. So first in terms of the big picture, I'd really like to emphasize that I think tackling the nature of this disease and infection is really going to be the first order challenge in order to ensure that new York's economy can reopen. And I think that's true for two reasons. The first is that people aren't going to feel comfortable or safe going back to work unless they think that an outbreak can in fact be successfully contained. So there's a huge perception problem that the city needs to overcome.
I think we see some evidence of this. If you look internationally, for instance, at Sweden, this is a country that has not imposed lockdown orders. Nonetheless, they're still seeing that a lot of their economy has nonetheless slowed down in comparison with other Scandinavian countries that have had those more direct locked on measures. So what that kind of tells us is that even if we throw open the economy tomorrow, unless people feel safe, they're not actually going to show up to work, show up as consumers.
So addressing that public perception, I think is a key priority. Also critical to these steps, I think, is ensuring that we have in place the public policy measures that will mitigate the spread of this disease in the future. So if we reopened the economy and infections continue to grow at the same exponential speed that we saw before, we're simply going to have to shut the economy back down again. So the overall goal here is to try to think of a set of policies that will both ensure public confidence as well as ensure that a reopened economy will not have the same increase in infection rates that we saw previously. And so all the steps are intended to try to provide a layered series of interventions towards that goal.
Now more specifically, the cornerstone of this plan, as in many other plans, is testing. The reason that testing is so important is that it's the only way to adequately measure who actually is infected and should therefore be isolated from the population. So Paul Romer has written a lot about this. Many others have as well and the medical experts have really emphasized the importance of testing in the context of asymptomatic cases, right? So we know that so many people are spreading the disease at a stage in their infection where they haven't yet shown symptoms.
Now, another tactic to address this asymptomatic carrier situation is the use of masks. That's something that New York I think is already moving quite in the direction of many other States have as well and I think it will have to be part of our response going forward. Masks are really valuable for a lot of reasons in this disease in particular masks are actually quite important to ensure that those asymptomatic carriers aren't actually spreading the disease to other people even if they don't know themselves that they are infected. That is kind of intended to address these asymptomatic carriers. There are some symptoms that I think we can try to address. So the temperature checks is an idea that again, other States, Ohio in particular have tried out in which you might test the workplace and see if anyone has a fever and ensure that those individuals or are sent back home and another measure that you brought up is this issue of centralized quarantine zones.
Now, this is I think is a really critical measure that has been adopted a lot in some of these Asian countries but has not yet seen a widespread use in the United States. The a number of States are experimenting with this and the basic idea is that if you have someone who has tested positive, we need to find ways of ensuring that they don't spread this disease further to individuals they actually live with and having a place-
Brian Anderson: Right, and that's been a major, a major source of infection according to some of the studies I've read.
Arpit Gupta: Absolutely. I mean I think one kind of puzzle at this point is why the infectious spread seems to be as high as is even under a lock down situation. And I think one plausible explanation for that has to do with the fact that people are still spreading the disease in their homes, in their apartment buildings, and allowing individuals the opportunity to go to a secure area and wait out the disease progression without necessarily affecting the other people they live with, I think could possibly be very valuable. It's particularly important in the context of New York as we know because of our high housing costs. We have a lot of families that are living in cramped quarters.
Brian Anderson: Right, and what about the contact tracing, which has been discussed in other plans? How feasible is that given the number of asymptomatic carriers, which some evidence suggests could be as many as a quarter of New York city residents who have been exposed at least at some point to the virus.
Arpit Gupta: Right. So I think this contact tracing idea is certainly not going to work in isolation. Right. I think we are at a stage of this disease progression that we're not able to track down cases that are just kind of a few of them in the population. We really are dealing with a much more severe outbreak. The idea of introducing contact tracing into this broader discussion is to try to just have a layered series of interventions such that in the future when it is possibly safe to open new York's economy, we will at that point be looking at a smaller case load and we'll need to rely on more targeted interventions than are appropriate now. And so I think it's worth investing this time that we have to ensure that we have this capacity in the future.
And I think what that will do is help to track these clusters of communities in which individuals are infected and try to ensure that those individuals that are in contact with those that are testing positive are able to quarantine effectively. So, it's not going to be enough in isolation. I view these as a menu and a series of options that in tandem can hopefully bring down that all important infection rate to a level that the economy can safely work.
Brian Anderson: The second component of your strategy is this tiered approach to reopening. You discuss three different stages. Could you elaborate on that a little bit and how we would move from one stage to the next?
Arpit Gupta: Absolutely. So the big picture here is to think about this pandemic as something that doesn't have equal impacts on all people or on all establishments, but in fact has very heterogeneous impacts on different population groups and on these different establishments. So one of the biggest ways we see that is through the mortality differential among the elderly and the young. Right? We know that this is a disease that can certainly kill younger people and can certainly bring them to hospitalizations, but it's just substantially more deadly for that elderly population. So as well as for individuals that have certain preexisting medical conditions.
So that just means it's essential to ensure that those vulnerable populations remain sheltered as much as possible, even as other individuals are able to return to work. And that same degree of risk stratification is important when we think across different types of establishments. We know that there are many establishments that present greater risks than others. Just some examples of these institutions would include places like malls and other places where you have lots of different people mixing together and possibly spreading the disease, whereas other establishments might be less risky. And actually something like an office building where you've got regular workers coming in, interacting only with a certain subset of people, it might actually be one example of the less risky establishment.
So the idea with the staging is to try to triage these population groups and businesses. And in the first stage we would release to work only the youngest individuals, those younger than 45 and those who don't have a variety of preexisting conditions to a subset of establishments. That would include things like offices and offices would also ideally stagger themselves. The number of people that can come to work at any given time and that and that would kind of remain the status quo until we got a better sense of what the infection rate looks like under those conditions.
Now, if we are in a situation in which this infection rate starts to increase again, the case load start to rise, then we may need to reintroduce stay at home orders. However, if we have a sustained reduction in these cases over a period of something like 14 days and we're seeing improvements in our testing capacity as well, that may allow us to then move to the next risk level in which we would allow a larger set of establishments and a broader set of people to also return to work.
Brian Anderson: That makes sense. I'd like to get your thoughts on implementation and what's your view on the likelihood that the city would adopt this kind of strategic careful reopening that you and Dr Ellen recommend?
Arpit Gupta: Yeah, that's a really tricky question. I think we're seeing elements of the ideas that we're proposing in various different places around the world and we're certainly drawing from these international examples in illustrating proposal. For example, Israel is currently considering an idea to also have this age based stratification in which they have younger people go to work and older people and those with preexisting conditions stay at home. We know in Massachusetts they are rapidly expanding the number of employees for contact tracing and New York city is in the process of doing so as well.
We've also seen very recently the mayor has agreed to open up many more streets, about 40 miles in the short term of streets to pedestrian traffic. That's another element of our plan to help ensure social distancing and allow individuals to have necessary space. So I think there we've seen really rapid progress in a lot of these different areas and I'm hopeful that the city is going to be able to draw on international best practices and introduce a measured series of interventions to ensure a safe reopening.
Brian Anderson: Thanks very much. Don't forget to check out Arpit Gupta's report. It's coauthored with Dr. Jonathan Ellen. It's called “A Strategy For Reopening New York City's Economy.” You can find it on the Manhattan Institute's homepage and we'll link to it in the description. You can follow City Journal on Twitter, @CityJournal, and on Instagram at @cityjournal_mi. Remember you can email us firstname.lastname@example.org if you've got any questions or suggestions for the show and always, if you like what you've heard on the podcast, give us a rating on iTunes. Thanks for listening and thanks very much Arpit for joining us and offering such an illuminating breakdown.
Arpit Gupta: Thanks so much for having me.