The Top Line

• Republicans top off funding for small business by infusing new cash into the Small Business Administration’s Paycheck Protection Program, helping workers through the economic fallout of COVID-19.

• Vaccine researchers around the globe race to find an inoculation for COVID-19. Last week, another candidate drug entered the ranks of those in human trials.

• As COVID-19 lockdowns have changed the ways we spend our money, economists and statisticians are adjusting how they measure prices and inflation.

• A renewed focus on cybersecurity vulnerabilities could present an opportunity to improve our critical IT systems.

Filling Up the Tank

On April 23, the House passed H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act, after Democrats blocked previous attempts to quickly replenish the popular Paycheck Protection Program (PPP), which then ran out of money on April 16.

• The new legislation replenishes the Small Business Administration’s (SBA) efforts to support the small and medium businesses that are the backbone of the American economy. An additional $320 billion will be available to help keep employees on payroll.
• The bill also allocates an additional $60 billion to the SBA’s Economic Injury Disaster Loan program, $75 billion for grants to hospitals on the front lines of the fight against COVID-19, and $25 billion to bolster manufacturing and distribution of COVID-19 testing supplies.
• The prior week, 4.43 million Americans filed for unemployment as PPP money began drying up to the consternation of an Obama-era SBA Administrator.

Rapid Response Research

In a monumental effort, the medical research community is racing to develop a vaccine for COVID-19. With a handful already in human trials and over one hundred others in some stage of development and testing.

• Last week, scientists at Oxford University in England entered another vaccine candidate into human testing.
• A cautionary note must be sounded that vaccine development usually takes years. One of the U.S.’s top immunologists noted the difficulty and long time periods it can take to develop vaccines, even for illnesses that have been known for generations.
• While vaccines are in development, a testing survey in New York suggests that approximately 14% of people in the state have COVID-19 antibodies.

Myth vs. Fact

• MYTH: Amid the economic turmoil of COVID-19, certain commentators have suggested that share buybacks and stock dividend payments that companies give their shareholders only go to wealthy households and should be ceased.

• FACT: Individual retirement vehicles, commonly a 401(k) or IRA, as well as group retirement funds like pensions, rely on dividends and share buybacks to supply a steady stream of income to those who hold the accounts. Buybacks and dividends not only give retirees money to live off, they also allow for reinvestment of one firm’s profits to other firms’ benefit.

What About Second Breakfast?

To measure inflation, economists and statisticians measure the change in prices of commonly purchased goods and services over time. COVID-19 lockdowns have rapidly shifted spending patterns and how the proverbial ‘basket of goods and services’ is filled.

• Early numbers indicate how much even just how we get our meals has changed. In Spain, spending on groceries has risen to 60% of average expenditures from 18%, whereas money spent on bars and restaurants has fallen to 4% from 15%.
• Changes in spending patterns will likely move back in the other direction after lockdowns end; however, how quickly is unknown. Prices in the most affected industries, like restaurants, will likely be lower, as they seek to draw in customers, but this could be counteracted by longer lasting shifts in how people buy certain goods, like food.
• Despite the change in measure and potential shifts in spending patterns, the risk of inflation remains low in the U.S., with curtailed spending cooling prices. Evidence coming out of our neighbors, Canada and Mexico, indicates much the same.

Disruption of the Week

"Every Country in the World has experienced a COVID-19 Cyber Attack"

Cybersecurity and protecting our nation’s critical IT infrastructure is not a new challenge for businesses and the government. But with the surge in those working from home and increased remote accessibility, the risks to information security are higher than ever.

• Social distancing and other safety measures have greatly increased our exposure to cyber threats, highlighting just how easy it can be for bad actors to disrupt almost any industry.
• These threats can range from large-scale cyberattacks to shut down hospitals, to electronic theft of COVID-19 related research, to simple security flaws that allow unwanted users to access private meetings.
• Now, with government institutions like the House of Commons meeting virtually and multi-billion dollar organizations like the NFL operating with the help of collaborative technology platforms, the need for strong security will be critical to ensuring normal day-to-day operations.
• On the federal side, President Trump’s 2017 executive order on cybersecurity and the Cybersecurity and Infrastructure Security Agency Act, signed into law in 2018, helped increase our ability to detect and mitigate cyber threats to government IT networks and data.
• However, given new COVID-19 related risks to cybersecurity, the federal government could use this opportunity to take further action to improve our systems and stay ahead of potential threats.

Further Reading

• In his first career, Bill Gates helped make possible the same technology part of the U.S. workforce now uses to telework. In his second career, he sought to cure the world of preventable disease. He recently penned a piece about how three key advances in medical technology he sees others developing will be key to defeating COVID-19 and potential pandemic-level pathogens of the future. The Economist