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Guestwords: Prepping for the Next Disaster

Wed, 05/27/2020 - 19:06

Are we ready for the next disaster?

Presidents George W. Bush and Barack Obama both utilized an office in the White House to prepare for public health disasters. They provided funds to all 50 states and 20 territories and localities to prepare for bioterrorism threats and pandemics. But when the Covid-19 pandemic hit, the office was no longer functional. That meant valuable time was unnecessarily lost, as states figured out which level of government should do what.

The country needs a permanent national preparedness board that we could all count on to continue planning for responses to future disasters. Disaster preparation must not be solely dependent on which party or official is in charge. A White House-congressional-National Governors Association board could be created that is not subject to dissolution from either end of Pennsylvania Avenue. Members of the board could be appointed by the key institutions, such as the White House, Senate majority leader, House speaker, National Governors Association, National League of Cities, National Association of Counties, and the 50-year-old National Voluntary Organizations Active in Disaster.

What would this preparedness board do? Here are some ideas:

First, it could standardize cost-estimating and formulas for cost-sharing, to enable fast decision-making at all levels of government in the event of a countrywide disaster. When the 9/11 terrorists struck in 2001, the New York City comptroller’s office generated an estimate of the cost of the terrorist attacks on the World Trade Center within two weeks. It became the basis of a prompt $20 billion package of aid from the federal government and won a national award for its timeliness. A standard template for such estimates would make it easier to move ahead to face a disaster.

Second, the board could develop ways to estimate the impact of disasters on the value of real assets, which are part of the basis of city, county, and local revenues. The value of a real estate asset depends on the owner’s ability to rent or use it, which depends on the local infrastructure and tax levels. When New York City was threatened in the Reagan administration by a federal cap on the deductibility of state and local spending (SALT), the chief executive of American Express told one of us: “Our new building is worth $1 billion and will lose one-fourth of its value if this law passes. We will fight it.”

The real estate industry then successfully lobbied to preserve the SALT deduction. Two and half decades later, the real estate industry failed to stop the SALT cap, and it became law in late December 2017. Now it is far more difficult for state and local governments to replace the tax revenues they lost in the economic shutdown.

Third, the board could examine options for helping states cope with a disaster. When human lives are at stake, worries about cost take a back seat — as they should — to addressing illnesses and the rising death toll. The Northeast and West Coast coalitions of governors joined together to get facts jointly and respond swiftly. Now that the bills are piling up, all eyes are on the federal government. Only the feds can create money and issue virtually costless debt. In 2017, the federal government paid for reduced taxes by borrowing trillions of dollars. Now, Federal Reserve Chairman Jay Powell warns that the May unemployment rate could be close to the Great Depression peak of 25 percent.

Only the White House and Congress are able to backstop the heavy burdens on states and localities imposed by the Second Great Recession. One way or another, only the federal government has the resources to pay for the out-of-pocket costs of the shutdowns. It would help states and localities balance their budgets if the SALT cap were lifted or raised.

Fourth, the board could address the threats to the functioning and backup of information technology. Multibillion-dollar I.T. investments can be more valuable than the buildings in which they reside. Unfortunately, backup systems in the World Trade Center were too often in the same Lower Manhattan neighborhood, even though some risk managers had vociferously recommended they be miles away. A preparedness board could advise on backup and security systems that could hold together in a disaster.

Fifth, trauma in a disaster creates lasting damage to workers, their families, and even onlookers. State and local workers such as police, firefighters, teachers, and those in health care are called on to make superhuman efforts in a disaster. (In the case of financial disasters, the worst-hit trauma victims may be homeowners or owners of declining financial assets.)

Mental torment suffered by survivors of a disaster and even people who may be remote observers is serious and can be of long duration. Some psychologists estimate that a major urban disaster with severe physical consequences can generate a doctor’s diagnosis of post-traumatic stress disorder among more than one-fourth of those within a circle of physical injury or death. Bystanders out of that circle would be subject to 5-percent risk. So every kind of disaster becomes a mental health crisis, and we must plan for ways to prevent or ameliorate the effects on people.

Sixth, business appetite for risk suffers a major shock from a disaster. Recovery depends on re-establishing faith in the future of the national and local economies. One of Mayor Michael Bloomberg’s first great contributions to New York City was to restore the business community’s faith in the city’s future after 9/11. The 2020 pandemic has devastated small businesses that depend on a dense clientele at bars, restaurants, and retail stores. This exacerbated the shift in consumer habits from in-store purchases to online buying.

It will take planning and public education to overcome travelers’ valid fears of contracting illness on public transportation. The highest levels of public and private-sector leadership must come forward to restore local confidence and to prevent the disaster from accelerating a general downturn.

With more potential disasters ahead, like hurricanes or new coronavirus waves, there is no time to lose.

Steven Newman was chief of staff for one New York City comptroller and first deputy for another, and is a frequent visitor to Springs. John Tepper Marlin was the chief economist for three comptrollers and has been a Springs resident since 1981.

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