World events no one saw coming are taking the shine off the season when Alaska traditionally begins the steady, uplifting transition from the long, cold dark of winter into the season of the sun.
Alaska Gov. Mike Dunleavy today declared a public health disaster emergency in response to the global coronavirus pandemic, but the potential health crisis might pale compared to the economic crisis now looming on the horizon for the 49th state.
What no one could foresee when the sun rose in Utqiagvik (formerly Barrow) on Jan. 23 and everything seemed so normal was that the planet was already hurtling toward a global economic slowdown with possibly devastating repercussions for a fragile, Alaska economy dependent on oil, tourism, fisheries and the state Permanent Fund – all now suffering the fallout from the consequences of an invisible, contagious and too-often-deadly pathogen.
A month before that sunrise, with Utqiagvik still cloaked in darkness, a new coronavirus spawned no one knows exactly where was already spreading in Wuhan, China far to the south and west. And by the time the sun peaked above the horizon on the state’s North Slope, the virus destined to be officially labeled “COVID-19” was only a week away from being declared a global emergency by the World Health Organization (WHO).
The potential was then growing for the sort of global pandemic that erupted in 1968 when the Hong Kong Flu killed 500,000 residents of that Asian city and spread globally to bring the ultimate death count to 1 million.
Within a month, in a world far more connected by international air travel today than four decades back, COVID-19 has escaped from China to Taiwan, South Korea, Italy, Iran, Kuwait, Bahrain, Iraq, Iran, Israel, Afghanistan, and Oman, and global death toll was rapidly rising into the thousands.
The disease remained primarily a world health crisis, but the possibility COVID-19 could spark a global economic disaster was increasing as a sense of panic began to set in. And by Feb. 25 the U.S. stock market was crashing.
“Stocks Slide for 2nd Day as US Sounds Alarms on Coronavirus,” the New York Times headlined as the Alaska Permanent Fund began to bleed billions of dollars.
Four days later, the first U.S. citizen died and the efforts of President Donald Trump to calm the nation served to do the opposite as Democrats in a highly divided and partisan country latched onto COVID-19 as a political weapon.
Democrat Presidential candidate Joe Biden, the former vice-president, quickly accused Trump of labeling COVID-19 a “hoax” because of a Trump complaint at a South Carolina rally that Democrats were “politicizing the coronavirus” and a subsequent reference to the “impeachment hoax,” as Politico reported.
National media hostile to Trump were quick to pile on. “Trump Has Sabotaged America’s Coronavirus Response,” Foreign Policy headlined above a story written by Laurie Garrett, a former Pulitzer Prize winning journalist turned, in her words, “author, world health policy analyst, speaker, (and) public intellectual.”
She attacked Trump for reducing federal health spending, eliminating the National Security Council’s “global health security unit” and reducing the global health section of the Centers for Disease Control (CDC) to downsize the “number of countries it was working in…from 49 to merely 10.”
Though the story repeatedly mentioned the CDC, it did not mention the $6.6 billion the nation spends annually on an agency specifically set up to, as its mission statement says, work “24/7 to protect Americans from domestic and foreign threats to health, safety
and security. Whether diseases start at home or abroad, are chronic or acute, curable or
preventable, due to human error or deliberate attack, CDC fights disease and supports
communities and citizens to do the same.”
As this coronavirus has spread across the nation, as it has across other nations and as public health officials expected it would, its weaponization as a political tool has only grown.
“Biden tests role as empathetic answer to Trump during coronavirus crisis,” CNN headlined today.
“After taking command of the Democratic nominating race in Tuesday’s primaries, the former vice president projected presidential-style gravitas, positioning himself as the antidote to President Donald Trump’s in-denial stewardship of the novel coronavirus crisis in a strategic pivot towards November’s election,” the story below reported.
Alaska’s difficult position
As the crisis spreads medically, politically and most of all economically, Alaska finds itself in a troubling spot on so many fronts:
- The Permanent Fund, which pays Alaskan those coveted annual dividends, and helps support state government, has devalued from $67.7 billion at the end of January to under $65 billion today.
- State government, still largely dependent on oil revenues, has watched oil prices fall to $28 per barrel with some analysts predicting they could drop to $20 per barrel. Falling oil prices reduce the royalties paid the state on every barrel and have now eliminated any tax producers pay on profits that no longer exist.
- Salmon processors already sitting on big inventories of Alaska fish after a strong 2019 season are facing the double whammy of difficulties retrieving product shipped to China to be fileted and falling prices as salmon farmers slash the cost of fresh fish. A major shakeout in the processing industry – likely leading to lower prices paid Alaska fishermen for salmon – was expected even before COVID-19 became a global crisis. The lower prices are now looking more and more like they could be way lower.
- Older travelers are being advised by the CDC to “avoid situations that put them at increased risk for more severe disease. This entails avoiding crowded places, avoiding non-essential travel such as long plane trips, and especially avoiding embarking on cruise ships.” The average age of an Alaska visitor is 54.8, according to the McDowell Group, and 59 percent of cruise passengers are over age 55 with 34 percent of those over age 65, the prime cohort at risk.
- The White House is considering a full-on cruise ship shutdown, which would have a devastating impact in the state’s Panhandle where nearly all tourism is cruise ship driven.
The cumulative effect of all of this might have been best summarized by state labor economist Neal Fried’s when asked Tuesday if this is “Alaska’s perfect economic storm?”
“Is that a rhetorical question?” he replied.
State economists who sometimes disagree – Fried, Dunleavy advisor Ed King and Mouhcine Guettabi at the University of Alaska’s Institute of Social and Economic Research (ISER) – now appear in agreement the state economy is heading into decidedly troubled seas.
“It’s going to be ugly,” King said, “but the worst part will be the overreacting.”
And for the members of that generation it is hard to not be a little nervous – if not downright afraid – given the global behavior of COVID-19 to date.
For people under age 40, Covid-19 acts more like the ordinary flu than an especially deadly disease, although scientists do not know exactly why.
“Reports out of China that looked at more than 70,000 COVID-19 patients found that about 80 percent of illness…was mild and people recovered. Fifteen to 20 percent developed serious illness.
“Let’s talk about who those people are. So far it seems like it’s not children. Of the 70,000 cases, only about 2 percent were in people younger than 19. This seems to be a disease that affects adults. And most seriously older adults. Starting at age 60, there is an increasing risk of disease and the risk increases with age. The highest risk of serious illness and death is in people older than 80 years. People with serious underlying health conditions also are more likely to develop serious outcomes including death. ”
Italy has been hard hit because it has the oldest population in Europe. Almost a quarter of Italians are reported to be over the age 65 or older. The median age is 47.3, according to the webiste Statista.
The median age in Alaska is 34.9, according to the state Department of Labor. Epidemiologists are in general agreement that the younger a population, the lower the COVID-19 risks and the number of deaths.
The demographics do not appear to have tempered concerns among younger Americans, however. A Reuters/Ipsos poll found about 40 percent of Democrats, who trend younger than Republicans, consider the latest coronavirus an “imminent threat.” Only 20 percent of Republicans shared that view.
An Axios/Survey Monkey poll found “fully 62 percent of Republicans see news reports about the seriousness of the novel coronavirus as ‘generally exaggerated,’ double the percentage of Democrats saying so (31 percent).”
In Republican-dominated Alaska, the Iditarod Trail Sled Dog Race went off without anyone expressing any worries about COVID-19 even though the event created exactly the kind of situation against which global health authorities warn – a concentration from people around the world who might have been exposed to the coronavirus anywhere.
The state likely owes a thank you to a Chinese travel ban imposed by the U.S. government at the end of January. Alaska now attracts a small but economically significant flow of Chinese tourists who want to see the northern lights in winter.
The ban was not popular at the time with New York-based Observer Media reporting how staff member beat the travel ban and noting “WHO has explicitly advised against such extreme measures to wall off foreign visitors.
“It was the U.S. government’s first time to impose a blanket travel ban in response to a global infectious disease outbreak. But, in retrospect, the decision wasn’t a complete surprise given today’s ‘America First’ political climate in Washington….”
Country-first travel bans have since been instituted by India, which has banned travelers from more than a half dozen countries, the latest being France and Germany; Spain, which has blocked all flights from Italy; and Vietnam, which is now prohibiting entry of people from Denmark, Finland, France, Germany, Norway, Spain, Sweden and the United Kingdom.