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Reopening too fast risks 'double-dip' recession
Instead of a V-shaped recovery expected when U.S. shut down, the virus surgemay produce a W

WASHINGTON (AP) — When the coronavirus erupted in the United States, it triggered quarantines, travel curbs and business shutdowns. Many economists predicted a V-shaped journey for the economy: A sharp drop, then a quick bounce-back as the virus faded and the economy regained health.

Others envisioned a slower, U-shaped course.

Now, as President Donald Trump and others press to reopen the economy, some experts see an ominous risk: That a too-hasty relaxation of social distancing could ignite a resurgence of COVID-19 cases by fall, sending the economy back into lockdown. The result: a W-shaped disaster in which a tentative recovery would sink back into a "double-dip" recession before rebounding eventually.

"The push to reopen the economy is making a W-shaped recovery very much more likely," said Jeffrey Frankel, professor of capital formation and growth at the Harvard Kennedy School.

In Frankel's view, any widespread reopening should wait for a sustained drop in death rates and the broad availability of tests. No one is completely safe until an effective treatment or vaccine can be produced and widely distributed — a scenario that's likely many months away.

Frankel said he also worries that the government might prematurely withdraw financial aid to the economy, thereby weakening the pillars of any tentative recovery.

"A W-shaped recovery is a distinct possibility," said Yongseok Shin, an economist at Washington

University in St. Louis and a research fellow at the Federal Reserve Bank of St. Louis. "Unless the reopening is carefully managed with extensive testing and voluntary social distancing, infections will rapidly rise in many localities.

"People will then hunker down for fear of infection, and local governments will reimpose lockdowns, quashing any economic recovery we will have had to that point.''

A double-dip recession would significantly heighten the risks for an already debilitated U.S. economy. Congress has provided roughly $3 trillion in aid — by far its largest rescue ever — to help households and companies survive the next few months. That short-term aid, though, assumes that any recovery will last. If a second downturn were to flare up, it's far from clear that Congress would be ready to offer trillions more to enable businesses to survive yet another round of months-long shutdowns.

Nor do many companies have the cash reserves to cushion against a second recession. And just as threatening, a double-dip downturn would sap the confidence of individuals and businesses that is essential to an economic bounce back. If consumers don't trust that a recovery will last, many won't resume spending, and the economy would struggle to rebound.

On Monday, plastic spacing barriers and millions of masks appeared on the streets of Europe's newly reopened cities as France and Belgium emerged from lockdowns, the Netherlands sent children back to school and Spain allowed people to eat outdoors. All faced the delicate balance of restarting battered economies without causing a second wave of coronavirus infections.

In the U.S., Federal Reserve Chair Jerome Powell has urged caution in reopening the economy. Powell has warned against taking "too much risk of second and third waves'' of the virus.

For now, the economy is essentially in free-fall. It shed a record 20.5 million jobs in April. The unemployment rate surged to 14.7%, the highest since the Great Depression. The gross domestic product — the broadest measure of output — shrank at a 4.8% annual rate from January through March and is expected to post an astounding 40% annual collapse in the current quarter. That would be, by far, the worst on record dating to 1947.

Facing a catastrophe in an election year, Trump and many Republican allies are eager to ease restrictions and restart the economy. They say the use of masks and other protections should allow many businesses to safely reopen under certain guidelines. Trump has openly backed protests that are intended to compel governors to "liberate'' their states from lockdowns.

But the Associated Press reported last week that many U.S. governors are disregarding White House guidelines. Seventeen states didn't meet a key benchmark set by the White House for beginning to reopen businesses: A 14-day downward trajectory in new cases or positive test rates.

But Texas' Republican lieutenant governor, Dan Patrick, has gone so far as to suggest that restarting the economy might be worth the risk of some additional deaths.

"There are more important things than living,'' Patrick told Fox News. "I don't want to die, nobody wants to die, but man, we got to take some risks and get back in the game and get this country back up and running."

Most Americans say they're wary of trying to return to business as normal now. A Pew Research Center survey found that 68% said they feared that state governments would lift restrictions too soon. Just 31% wanted restrictions lifted sooner.

"The idea that you just turn the spigot back on is just ridiculous," said Diane Swonk, chief economist at the consulting firm Grant Thornton. "It's still a COVID-tainted spigot. No one wants water from a poisoned well.''

Many businesses are also tempering their optimism. The data firm Womply found that even in Texas and Florida, states that are being especially aggressive about reopening their economies, businesses are moving slowly. Womply found only a "small-to-negligible drop'' in the share of Texas and Florida businesses that remain closed.

"This could signal that previously closed businesses may have trouble figuring out how to open with new guidelines, attracting patrons, or may be closed indefinitely," Womply concluded.

At Big Buzz, a health care marketing consultancy in Denver, CEO Wendy Phillips is expecting "more a W-shaped than a V-shaped'' rebound. Phillips has reduced her staff from eight to six, two of whom kept their full-time jobs only after the government delivered a $105,000 loan under a rescue program for small businesses.

"There's so much unknown looking forward,'' Phillips said. "I think it's going to be a good two or three years, at a minimum, of recession.''

U.S. authorities declared premature victory over the 1918 Spanish flu outbreak, only to see it return, deadlier than before. In the current pandemic, South Korea eased restrictions as cases dropped. But on Saturday, Seoul had to shut down nightclubs, bars and discos after dozens of infections were linked to club goers.

Last week, researchers at the Columbia University Mailman School of Public Health warned that easing stay-at-home orders and allowing people to mingle more freely would mean that "new COVID-19 cases and deaths will rebound in late May.''

The Columbia researchers predict a resurgence of cases two to four weeks after states begin to reopen.

"The lag between infection acquisition and case confirmation, coupled with insufficient testing and contact tracing, will mask any rebound and exponential growth of COVID-19 until it is well underway," said the lead researcher, Jeffrey Shaman.

Inmate claimed he was penalized for reporting rape by Nebraska prison guard; judge says otherwise

A former warden and a former investigator at the Nebraska Department of Correctional Services didn’t retaliate against a prisoner who reported a sexual assault by a prison guard, a judge has ruled.

The former prisoner had accused corrections officials of putting him in solitary confinement and branding him a liar for reporting the guard, who ultimately was convicted of sexual assault.

The former prisoner did not appeal Judge Michael Coffey’s decision — and so the judge’s ruling should end the eight-year battle over the his treatment. Former corrections officer Anthony Hansen was convicted of the 2012 sexual assault of the man at the Omaha Correctional Center after the man saved the guard’s bodily fluids in a napkin.

The ex-prisoner never sued Hansen, who was sentenced to two years of probation for sexual assault. Instead, he focused on corrections officials’ interview of him and his subsequent placement in a segregated unit, alleging that both were punitive.

In the eyes of the former assistant attorney general who handled the matter, the judge’s ruling is an exoneration of Michael Kenney, a one-time warden who went on to an embattled stint as the interim director of corrections.

It also clears Geoff Britton, an investigator who has since retired from the Corrections Department and now leads a law enforcement agency in California.

“Our case never disputed or minimized the assault,” said Dave Lopez, a former assistant Nebraska attorney general who handled several appeals. “Our job was to demonstrate that what the warden and investigator did — immediately plac(ing) the victim in protective custody and accelerat(ing) the DNA testing of the napkin he submitted ... reflected a nearly perfect institutional response to a horrible crime.”

Judge Coffey ruled that the special housing unit at the Omaha Correctional Center included several different restrictive housing situations, some that were punitive and some that weren’t.

The 37-year-old inmate’s placement in this case was protective, not punitive, Coffey ruled.

“There is no evidence that the plaintiff’s conditions of protective custody constituted ‘solitary confinement,’ ” Coffey wrote. “The evidence shows that (the inmate) was not denied meals, medical care, mail, showers, contact with family” or even access to the law library.

“In a situation where an inmate ... (is) the victim of a sexual assault, it is the best practice for the correctional facility to place the inmate in protective custody for his own protection.”

As for the investigator, Coffey noted that Britton found the inmate’s account of the sexual assault credible — so credible that he ordered an expedited DNA test on the bodily fluid.

The inmate had stated that the most traumatic part of the interview was when Britton informed the inmate that he would prosecute him to the fullest extent of the law if he was lying. Such language is common in interrogations.

The judge further wrote that Britton’s admonishments to the inmate to not discuss the case were to “benefit the investigation,” not to squelch the inmate’s free-speech rights.

“Britton did not tell the plaintiff to change his story or (indicate) that he believed the plaintiff was lying,” Coffey wrote.

Britton now works as chief of the law enforcement agency overseeing the safety of developmentally disabled and mentally ill patients in the California state system.

Kenney rose from warden of the Omaha Correctional Center to interim director of the Corrections Department before a World-Herald investigation in 2014 revealed that officials had released, or were set to release, 750 prisoners years before they should have been. After that turbulence — which included seven special legislative investigative hearings — Kennedy retired, paving the way for the state’s hiring of the current corrections chief, Scott Frakes.

Ricketts rejects calls to cancel TestNebraska contract, name nursing homes with coronavirus cases

LINCOLN — Gov. Pete Ricketts rejected a call from four state senators to cancel the state’s $27 million contract with TestNebraska. He said the Utah companies behind the testing were the only group available for the hard-to-obtain tests.

“Every state was out there trying to find ways to expand testing and they still are looking — we’re still looking for ways,” Ricketts said Monday.

“We found a consortium of companies that had access to all of these (testing) materials that was able to set up very, very quickly,” the Republican governor added. “I don’t know of anyone else who was offering the same sort of thing.”

State Sen. Machaela Cavanaugh of Omaha joined three other Democratic senators in calling for the cancellation of the contract with Nomi Health of Orem, Utah, and three other firms from the so-called Silicon Slope in that state.

The senators questioned the expertise of Nomi Health, which is a data collection firm with little health background, and its ability to provide 540,000 COVID-19 test kits for Nebraska. They said the money should have been invested in Nebraska tech companies and its public labs.

“During this economic crisis it is also vitally important that every dollar we have be prioritized for reinvestment into Nebraska to strengthen our existing healthcare infrastructure,” said a press release signed by Cavanaugh and fellow Sens. Megan Hunt and Rick Kolowski of Omaha and Carol Blood of Bellevue.

But Ricketts, at his daily coronavirus briefing on Monday, called the request by the senators “ludicrous” and accused them of not wanting to have testing in the state.

“They should be happy that we’re doing the tests. That’s a good thing,” the governor said.

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Ricketts signed the $27 million contract with tech firms Nomi Health, Qualtrics and Domo, and a health care company, SafeLane Health, on April 19 and announced the deal on April 21, when the TestNebraska.com website was launched for residents to sign up for tests. Iowa announced an almost identical contract on April 21 with the companies, which had already been running a TestUtah program for a few weeks.

But questions have been raised about whether Nebraska companies and public agencies, including the University of Nebraska Medical Center, which has specialized in dealing with infectious diseases, should have been offered the no-bid contract.

And concerns have been raised about the accuracy of the TestNebraska testing, which through Sunday had provided 2,358 tests, of which 80 were positive, a 3.4% rate for positive tests. That compares to a 17.9% positive rate for tests done through the state’s public health lab, private labs and hospitals across the state, leading to questions about such a wide disparity.

“We should be starting with Nebraska companies and Nebraska health care infrastructure. (Instead) we looked outside of the state,” Cavanaugh said.

But Ricketts said that there aren’t “tons of companies” set up to battle a pandemic and that several other states were being offered services by the Utah group. He said Nebraska needed to act now or miss an opportunity.

The state’s public health lab and UNMC, he said, lacked the space to set up a lab to handle the tests, and they did not have the test kits or the high-tech machines used to analyze the tests. Nebraska’s lab was instead set up at St. Elizabeth hospital in Lincoln, though Ricketts said the public health lab was used to verify the lab tests, and UNMC had offered the same service.

“UNMC told us they wanted us to get to 3,000 tests a day. So we went out and figured out a way to do,” the governor said. “The senators just don’t understand what this all involves to pull together something like this so quickly.”

Cavanaugh said the state, if it lacked the testing supplies and equipment, should have just purchased that, and let Nebraska labs handle the tests. But Ricketts said Nebraska was offered only one option — the contract that it signed.

The governor said that there’s such a wide disparity in positive test results because TestNebraska is testing health care providers and others who have no symptoms, while others are testing workers in packinghouses and other hot spots. When asked if he could provide the number of positive tests for TestNebraska for only those who indicated they had symptoms, Ricketts said he’d have to look into it.

In Utah, the Salt Lake City Tribune reported that when the positive rate for TestUtah and other testing was compared for only those showing symptoms, TestUtah still showed fewer positive tests. Accuracy of testing is vital in a pandemic, officials have said, and if tests are inaccurate, that would allow infected people who falsely tested negative to spread the disease.

Information provided to The World-Herald indicated that the Utah firms delivered 30,000 coronavirus test kits by the deadline spelled out in the contract, April 28, but that two of the four polymerase chain reaction (PCR) machines due by that date and one automated extraction machine due on April 28 were late arriving, by between five and nine days. Testing began on May 4.

Ricketts urged Nebraskans to be patient with TestNebraska and addressed a couple of problems that surfaced last week.

On Friday, people age 65 and over along with meatpacking plant workers were added as “priorities” for testing, which sparked a deluge of new approvals for testing that quickly gobbled up all the available times for tests at the state’s four TestNebraska test sites, Omaha, Lincoln, Grand Island and (beginning Monday) Schuyler.

The World-Herald's complete coronavirus coverage

The state’s call center to address questions about TestNebraska was overwhelmed with calls as a result, Ricketts said. More personnel are being hired to handle the calls.

The TestNebraska website now tells people that their test results will be ready in 72 hours. Initially, Ricketts had said test results would be turned around in 48 hours, but he said the lab’s median time for returning results has been about three days.

The briefing came as the state recorded its 100th death from COVID-19, the disease caused by the coronavirus. The number of cases stood at 8,572 as of Monday evening.

In related news:


Ricketts rejected a call from AARP Nebraska Director Todd Stubbendieck to name long-term care facilities that have had coronavirus cases. Stubbendieck said the disclosures are needed to protect public health and to protect people who live and work at nursing homes and assisted living facilities.

As of Wednesday, 455 residents or staff of long-term care facilities had tested positive for the potentially deadly virus, while long-term care residents accounted for two of every three deaths from the virus. Nebraska is one of 13 states in which half of or more deaths are nursing home residents, Stubbendieck said.

“Greater transparency is a key tool in this fight,” he said.

Ricketts, however, has released only aggregate numbers for those facilities. He said Monday that families should ask facilities if they want to know whether there have been cases there. He said local health departments can release names of specific facilities only if they verify the information and get permission from the facility.


All but four Nebraska counties will be allowed to ease up on social distancing restrictions by next Monday. Ricketts announced that he would allow dine-in restaurants, hair salons, massage therapy and other close-contact services to reopen in the Elkhorn Logan Valley Health Department on Wednesday.

Counties in the Two Rivers, South Heartland and Public Health Solutions health districts can follow on Monday. They will join 69 other counties with looser restrictions.

That leaves two coronavirus hot spots under the tighter restrictions, the Central District Health Department — encompassing Hall, Hamilton and Merrick Counties — and the Dakota County Health Department.

Poll workers

Ricketts signed an executive order Monday allowing residents from outside a county to serve as poll workers during Tuesday’s primary. He said the order will make it possible for National Guard members to step in as needed, especially in eight hard-hit or higher-population counties: Douglas, Lancaster, Dakota, Dawson, Hall, Lincoln, Madison and Scotts Bluff.

New directives

State guidance for reopening barbershops, beauty salons, tattoo parlors and massage studios has been posted on the website of the State Department of Health and Human Services.

Our best staff photos of May 2020

Photos: Our best staff photos of May 2020

Erin Grace: South Omahans confused, scared as coronavirus hits; 'I don't want to die'

Silverio Diaz Castelan steered his Chevy Tahoe last week to a South Omaha health clinic, into a parking space that was designated for people like him who had or were suspected to have COVID-19.

The 33-year-old had been diagnosed the week before and was here now to get his oxygen checked and see about getting testing for his wife, who was crying quietly in the passenger seat. She had lost her sense of smell and was experiencing terrible headaches.

They both wore masks. Silverio gripped the steering wheel with gloved hands.

“I don’t want to die,” he said.

The scene played out on a cold, sunny weekday in May, illuminating how some parts of Omaha — and some segments of its population — are being hit harder by the highly contagious and sometimes fatal disease.

OneWorld Community Health Center, which serves a largely immigrant and low-income population, sits in the old Omaha Stockyards, where cattle used to await slaughter. As it turns out, Silverio himself happens to work for an Omaha-area processing facility as a meatpacker — a job that has been linked closely to outbreaks across Nebraska.

Omaha Latinos like Silverio, as well as Asians and black people, are disproportionately falling ill from the coronavirus. As of Monday, Latinos made up 43% of Douglas County’s 1,635 confirmed COVID-19 cases, more than triple their share of the population. Asians account for 15% of the county’s cases, more than three times their population share. Black residents of Douglas County, too, are confirmed ill in a higher proportion than the population.

Douglas County is mostly white: 69%. Yet known COVID-19 cases in the county are mostly nonwhite: 77%.

This fact has health officials alarmed that not enough is being done for local minority groups. The heads of the metro area’s two largest federally funded community health centers — Andrea Skolkin of OneWorld in South Omaha and Kenny McMorris of Charles Drew in North Omaha — are calling on the state to do more testing in those parts of town.

Currently, the local TestNebraska site is at the CHI Health Center downtown. Applicants must register online in advance, a process Skolkin and McMorris say creates extra hurdles for minorities.

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The sick here in Omaha live disproportionately in four ZIP codes: 68107 and 68105 in southeast Omaha and 68104 and 68111 in northeast Omaha. Those four ZIP codes account for more than a third of the county’s COVID-19 cases — and two-thirds of the 21 deaths.

One reason for the concentration is that people living in the eastern part of Omaha often provide service-oriented, blue-collar labor that cannot be done from home. Some of those jobs, like meatpacking, have been deemed essential by President Donald Trump.

Adi Pour, Douglas County Health Department director, said she’s been concerned about the disproportionate effect of coronavirus on minority communities. She said many people of color work in jobs that put them in regular face-to-face contact with the public, increasing their risk. And because chronic diseases are more prevalent in communities of color, coronavirus in those areas can threaten serious complications — or death.

OneWorld created an outdoor triage area to minimize exposure of its employees and patients being treated for other health problems. A large white tent staffed by nursing students enables people with non-coronavirus health concerns to get diabetes checks, strep tests and other needs addressed.

Those with COVID-19 or suspected COVID-19 call ahead, as Siliverio had done, to book parking lot appointments. OneWorld staff conducts about 100 to 125 COVID-19 tests a day in this lot.

The precautions taken at the testing site haven’t protected everyone. Five members of OneWorld’s staff are now ill with the virus, and it’s on everyone’s mind.

Lorena Salazar, 25, is a OneWorld dental assistant staffing the COVID-19 parking lot. She has a 9-month-old son at home and struggles with her own anxiety.

“It’s really hard to be exposed and to see all these people who want to get tested,” she said. “I just pray everyone comes out safe out of all this chaos.”

She and other dental assistants in the parking lot say there is confusion about coronavirus among those they serve.

Some people think there’s medication you can take for it. There is not.

Some think they can just drive up to get tested. They can’t. Testing supplies are limited, and people must be experiencing symptoms before being approved for testing.

Many are scared.

“We try to explain as much as we can,” Marisol Carr said.

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Last week, a pair of Guatemalan immigrants who had been treated for COVID-19 previously at OneWorld were trying to recover at their South Omaha home. Both are in the U.S. on work permits and spoke on the condition that they be identified by first names only as they feared losing their jobs.

Marcos, a 59-year-old meatpacker in Omaha, and his daughter-in-law Augustina, 25, were getting by on tea and Tylenol.

The disease had forced their family to separate, with Augustina’s husband taking their 1-year-old to another home to avoid exposure. Their older children, ages 5 and 7, were with relatives in Omaha for the same reason.

Speaking in Spanish through a OneWorld translator, Ilse Ramirez, they said they had never experienced feeling like this before. Marcos said he has body aches and headaches and never feels terrible but never feels good. The uncertainty is a challenge: He doesn’t know when he can return to work, yet his wife and children in Guatemala depend on the earnings he sends them.

“He will get paid for the days he worked but not for the days he was staying home,” Ramirez said. “He doesn’t want to get other people sick. He doesn’t know what’s going to happen. If he loses his job, he’s not going to pay rent or get food.”

Marcos said his meatpacking facility started employing safety strategies like face masks, hand sanitizer and separation during breaks only in mid-April, well after the coronavirus had arrived in Omaha.

Augustina said she feels weak and achy and has trouble breathing. She cannot taste or smell.

Both said they feel like no one really cares how they’re doing.

McMorris, the Charles Drew director, said the pandemic has exposed health disparities in minority communities.

He said there has been mixed messaging and inconsistency from federal and state government leaders, which exacerbates mistrust minorities already have with the health system.

He said that it’s important for community health centers to “stay disciplined and diligent” and that people do all they can to stay informed and seek sources of relevant information from trusted sources.

“We’re not going to be out of this any time soon,” he said.


Non-coronavirus patients go to this tent at OneWorld Community Health Center to keep them separate from those carrying the virus.

The OneWorld parking lot last week was a scene of both hope and fear. On the hopeful side were nursing students who took pride in their role in helping inform and care for the community. They could speak both English and Spanish.

“I really enjoy helping others out,” said Adriana Perez, 19.

Meanwhile, Silverio and his wife waited pensively.

Speaking in Spanish and translated by Carr, Silverio’s wife described her symptoms: a loss of smell, fatigue, headaches. She talked about her worry that 3-year-old Jacob, in the back seat, and two children at home, ages 14 and 13, could get ill. She said she was sleeping on the living room couch. A family member drops off food, but they are running short. They need cleaning supplies.

She looked miserable behind her mask.

Hers was one of 700 coronavirus tests OneWorld conducted last week. Results take a couple of days. By Monday, about half had come back positive. About 100 were still pending.

Skolkin, the executive director, said she’s in discussions with Gov. Pete Ricketts’ office and Douglas County officials about increased testing in South Omaha. For every positive test result, OneWorld provides follow-up counseling and assists the county with contract tracing to see who else might be affected. She said the state’s test results represent an undercount. South Omaha, she said, has an outbreak.

On Monday, OneWorld closed its pharmacy for deep cleaning after a staffer fell ill. It will reopen Tuesday.

“We will be packed,” Skolkin predicted.

Our best staff photos of May 2020

Photos: Our best staff photos of May 2020