Common Cents & The Delta Variant

On this week’s Trading Perspectives podcast, Sam Clement and I discussed the recent upsurge in COVID-19 cases due to the Delta Variant. Would this lead to another shutdown of local economies and schools? Usher in new guidelines and/or mandates on this or that? If so, what would that mean for the longer-term health of the US economy and even society.

Although neither of us are epidemiologists, we don’t anticipate a return to last year’s somewhat Draconian precautions and protocols, at least not across the board. While some states and municipalities might try to do so, we both seriously doubted whether the US population would be as compliant as it was. After all, we have had over a year learning to deal with it, and there are now some accepted safeguards. For otherwise healthy people, willful failure to follow them carries some measure of ‘assumption of the risk.’

Even so, in order to maintain a safe work environment, employers have to tread a fine line. Essentially, when does the ‘greater good’ trump any one individual’s ‘right’ to not get vaccinated, etc., if they chose not to do so? What are acceptable precautions employers can take to mitigate both the likelihood of a workplace infection and legal liability? There is no end to the problematic scenarios.

Compounding the problem is the politicization of the pandemic and the mistrust it has caused. Consider these snippets in an article by Dejania Oliver posted on June 9, 2021 on webmd.com:



Out of nearly 2,000 U.S. nurses surveyed on Medscape (WebMD’s sister site for health care professionals) between May 25 and June 3, 77% said their trust in the CDC has decreased since the start of the pandemic, and 51% said their trust in the FDA has decreased. Similarly, out of nearly 450 U.S. doctors surveyed in the same time period, 77% said their trust in the CDC has decreased and 48% said their trust in the FDA has decreased.

“I do not question, doubt or disagree with the mission(s) of the agencies,” one nurse wrote in a comment on the Medscape poll. “I do (within the last 2 years) question the degree to which leaders of those institutions are able to truly implement scientifically sound and public health-centric recommendations and practices free from political influence and bias.”

Fewer WebMD readers said their trust in the agencies had taken a hit during the pandemic. Of nearly 2,200 U.S. WebMD readers surveyed between May 26 and June 1, 44% said their trust in the CDC had decreased during the pandemic, and 33% said their trust in the FDA had decreased.

Doctors and nurses reported relatively lower trust in the CDC than WebMD readers. Among doctors, 31% said they trust the CDC in general, compared to 25% of nurses and 45% of WebMD readers. The FDA didn’t fare much better: 37% of doctors, 27% of nurses, and 41% of WebMD readers said they trust the FDA in general.


Those are some pretty startling statistics, but they aren’t surprising given last year’s shambolic behavior.

In all truth, the best summation and/or recommendation I have heard about COVID-19 and getting vaccinated was pretty straight forward, and it wasn’t from a public health agency: “Coronaviruses aren’t new, just this one. Scientists have been dealing with these things, in general, for years, and they have a good understanding of how they work. That is the reason the pharmaceutical companies were able to develop their vaccines so rapidly.” I suppose that is the reason why my doctor friends, with whom I have spoken on the matter, have had little to no qualms with getting their families vaccinated.

Still, arguably due to this distrust, really of authority in general, many people are opting not to get jabbed, to use the colloquialism. So, what is a company to do without infringing on anyone’s rights or alienating associates? Again, this is a fine line.

Moving forward, ‘we’ are going to see all sorts of responses, and none of them are going to be perfect. Someone will be offended and/or in some form or fashion. That is just part of the territory these days, but something has to happen and it will. So, here are a few of the more common potential scenarios:

  • Employers mandate everyone who can get vaccinated to get vaccinated, no exceptions.
  • Employers ‘send home’ workers who refuse to get vaccinated to work ‘remotely’ until they do.
  • Employers require all associates to wear masks and social distance.
  • Employers require their unvaccinated workers to wear masks and social distance from other associates.


They will have to do something, anything, to show they are taking steps to safeguard their associates. Not doing anything is probably not a great option. But what does this mean for the economy and society?

Probably not much. The economic dislocation we experienced last year was NOT due to wearing masks, maintaining an appropriate distance from others in public, or getting a vaccine. It was due to the mandated lockdown of numerous economic sectors and arbitrarily defined ‘non-essential’ jobs. Period. To the best of my knowledge, this had never previously happened in the United States; officials knowingly shutting down their local economies. THAT caused the job losses. THAT caused the breakdown in economic activity and corporate profits. THAT is what caused the dislocations. THAT is what caused the huge expansion in public debt and government overreach: shutting things down. It wasn’t anything employers said or did to try and protect their workers.

Employees will have to understand this when their employers take steps like those I outlined above. It isn’t to infringe upon anyone’s individual rights. It isn’t an arbitrary power grab to disrupt lives and economic livelihoods. It isn’t capricious. It is none of those things, and nothing bad in general. Far from it.

Employers will be doing these things to ensure there isn’t a stoppage in work. That they will remain open for business. That they are attempting to provide a safe work environment. That they are trying to minimize any potential infections, either in the form of the virus or a lawsuit. That they are doing what they feel is necessary to protect you and your job, and the list goes on.

Fortunately, business owners will do a much better job explaining what they are doing any why than public officials have. They will be less fuzzy and more to the point, the brass tacks if you will. Do you care to know what these brass tacks are? That’s right, profit. It is a wonderful incentive to do things correctly and is the driving force why the private sector is more efficient than the public one.

In the end, the Delta Variant won’t cause too much long-erm disruption to the US economy if employees do what their employers are going to ask them to do. IF they don’t, I suppose we can bide our time until the government tells all us what to do, and few of us want another repeat of last year.

Take care, have a great weekend, and be sure to listen to our Trading Perspectives podcast.

John Norris
Chief Economist & Managing Director


As always, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. My opinion, as those of our investment committee, are subject to change without notice. Finally, the opinions expressed herein are not necessarily those of the reset of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself. Finally, we do NOT make a market in any of the companies listed in this newsletter, and I do not own them personally.