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Good morning.
The notion of a trade-off between opening the economy and protecting public health has always been a false one. But in the U.S., we are now seeing proof of that in spades. Many of the states that rushed to reopen are now reporting exponential growth in new COVID-19 cases–and the inevitable, but lagging, increase in deaths as well. That will either lead them to shut down again, or, more likely, create massive uncertainty that continues to depress travel, bars, restaurants, retail shopping, school reopening, and more. For the economy, that may not lead to a second downturn, but more likely a very slow upturn, as Fortune’s Anne Sraders explains here.
When the history of the pandemic is written, the U.S. rightly will get credit for the unprecedented scope and speed of its economic policy response, but blame for the massive failure of its health care response. One small data point: As of this morning, it’s been nine days since I was tested for COVID, and still no results. (No symptoms either, fortunately.) That undercuts any notion that we can defeat the virus through testing and tracing. As Anthony Fauci said recently: “If you are going to do contact tracing and the test comes back in five to seven days, you might as well not do contact tracing, because it is already too late.”
Lots of folks can share that blame. I’d put the commercial testing services–Quest Diagnostics and LabCorp–high on my list, for their recent delays. They’ve had months to ramp up for this moment.
But at the end of day, as every CEO understands, it is leadership that matters most. The U.S. has had a massive failure on that front.
News below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
China sanctions
China is placing sanctions on several high-profile U.S. officials, including Senators Marco Rubio and Ted Cruz. The move is retaliation for U.S. sanctions against certain Communist Party officials, announced last week as punishment for human rights abuses in Xinjiang province. In both cases, the sanctions are mostly symbolic, as their targets have little exposure to the other country. Fortune
TikTok CEO
White House trade advisor Peter Navarro has branded TikTok's new American CEO a "puppet" for fronting the Chinese-owned social media service. Kevin Mayer, a former Disney executive, was hired by TikTok parent ByteDance earlier this year. The Trump administration is considering banning both TikTok and WeChat, which is also a Chinese product. CNBC
Ads and BLM
Target and other big advertisers have been telling major news publishers that they don't want their ads appearing next to stories about the Black Lives Matter movement—including stories referencing police-brutality victims such as George Floyd and Breonna Taylor. The advertisers say this is because they want to respect the sensitivity of the issue, and don't want to look like they are exploiting tragedy. The publishers say they are being punished for covering important news. Wall Street Journal
Trump mask
President Trump has for the first time worn a mask in public, while visiting a military hospital. Trump, who not long ago insisted he did not think he would wear the protective garment—reportedly because it would make him appear preoccupied with health rather than reopening the economy—said Saturday: "I've never been against masks but I do believe they have a time and a place." BBC
AROUND THE WATER COOLER
Indian payments
Remember Indian Prime Minister Narendra Modi's disastrous attempt in late 2016 to encourage a shift to digital commerce (among other things) by suddenly invalidating most of the country's high-value currency notes? That didn't work—but it seems COVID-19 is now pushing people in India to pay bills and buy their groceries online. Fortune
South African lockdown
South Africa is un-relaxing some of its lockdown measures, as COVID-19 case numbers are dramatically increasing. A partial curfew is being re-introduced, alcohol sales are once again banned, and the wearing of masks in public spaces is now mandatory. President Cyril Ramaphosa: "A number of people have taken to organizing parties, having drinking sprees and walking in crowded spaces without masks. It is concerning that many are downplaying the seriousness of this virus." Daily Maverick
Audit problems
The big auditors need to fix their internal culture, writes Karthik Ramanna, a business professor at the University of Oxford's Blavatnik School of Government, for Fortune in the wake of the Wirecard scandal: "To have gone back to Wirecard to chase after more evidence on cash balances would have been unpleasant for the auditors—it suggests to the client that the auditor does not trust them. And to be so aggressive with clients is anathema, even for partners in the firms. Not surprisingly, the juniors also learn how to sing in this choir." Fortune
Rowling lessons
Gender consultant Lisa Kenney writes for Fortune about the lessons companies can learn from the storm around author J.K. Rowling's opinions on the subject: "Many of us, likely Rowling included, were raised in a culture that revolved around the gender binary. Adopting more expansive understandings of gender can feel like a leap. We all have blind spots and biases. There is nothing wrong with that; we can only know what we have experienced or been helped to understand through our relationships with others. We can’t control our blind spots, but we can commit to addressing them." Fortune
This edition of CEO Daily was edited by David Meyer.
