Davos Man, page 27
But the nursing home deaths were not incidental to the story of Sweden’s otherwise-masterful handling of the pandemic. They were the story itself—a direct outgrowth of Sweden’s liquidation of key parts of its social safety net to free up money to hand to Davos Man while entrusting much of elder care to for-profit, private companies.
Under a series of reforms launched in the 1990s, Sweden transferred responsibility for older people from regional governments to municipal governments, while home care took precedence over a traditional reliance on nursing homes. Municipalities gained permission to contract with private companies for services. By 2020, roughly half the residents of nursing homes in the Stockholm area were living in for-profit institutions.
Part of the driver was philosophical. Sweden’s leaders concluded that older people would better enjoy the last years of their lives in the comfort of their own homes, surrounded by loved ones. Private companies would design more accommodating architecture and experiences for elderly people who required an institution.
But the private companies also brought something else—an ability to squeeze costs out of the equation.
A decade of tax cuts that benefitted billionaires like the head of H&M had resulted in diminished government revenues despite the Cosmic Lie that they would pay for themselves.
Much as in the United States, for-profit nursing homes derived savings in part by downgrading staff.
“This is an undervalued part of the labor market,” said Marta Szebehely, an expert in elder care at Stockholm University. “Some care workers are badly paid, badly trained, and have really bad employment conditions. And they were supposed to stop a transmission that nobody knew anything about, and without much support.”
Sweden was still devoting vast sums of money to elderly care—some 3.2 percent of its annual economic output, as compared to 0.5 percent in the United States. Only the Netherlands and Norway17 spent more. But increasing sums were being absorbed by administrative costs and, most crucially, dividends for the shareholders of private companies.
Mia Grane knew none of this when she moved her parents into the Sabbatsbergsbyn nursing home in the center of Stockholm in the summer of 2018.
The institution was owned by Sweden’s largest for-profit operator of nursing homes, Attendo. It was home to 106 residents, most of them suffering dementia. They were divided into eleven wards spread across three low-slung buildings.
Grane’s mother was descending into Alzheimer’s. Her father required a wheelchair. The facilities included lovely gardens used for midsummer parties.
“It was a perfect place,” said Grane. “They felt at home.”
But anxiety quickly replaced peace of mind as the pandemic spread.
The first case emerged in Sweden in late January. When Grane pressed the nursing home staff for their plans to protect the residents, they treated her like a child scared of monsters.
“The people who worked there had no information,” she said. “They told me, ‘Everything is fine.’”
On March 3, Grane visited and took a picture of her parents in the dining room, feeling a sense that this might be her last chance to see them together.
“I thought, ‘If this virus gets into this place, a lot of people are going to die,’” she said.
A few days later, she read in a local newspaper that someone in the same ward had died. She called the home in a panic to ask if the cause had been COVID-19. The staff refused to say, but they told her that her father was suffering cold symptoms. Two other people in the ward were also sick.
Inside the facility, staff were initially given no instructions on how to limit transmission, a care aide told me. Management also did not immediately supply face masks, so she used a plastic file folder and string to fashion herself a visor before she entered her ward.
The nursing team formulated an emergency plan. Staff had to be dedicated to individual wards while rigorously avoiding entering others to prevent transmission. But this design collided with the meager resources on hand. There were not enough nurses.
A geriatric nurse who was working at the home through a staffing agency typically attended to the entire facility with only one or two others during day shifts, she told me. On weekends and at night, she was frequently the only nurse on duty.
The nurse urged her supervisors to add staff to allow them to prevent the spread of the virus, she said, but they brushed her off. By the time she quit in early May, the virus had penetrated seven of the eleven wards, she said, and at least twenty residents were dead.
“The way we had to work went against everything we learned in school regarding disease control,” the nurse told me. “We tried to tell them, ‘This is wrong. This is killing people.’ They didn’t listen.”
The previous year, Attendo, the company that owned the home, had tallied revenues in excess of $1.3 billion. But it had failed to stockpile adequate supplies of protective gear like masks and gowns. It had enough to comply with national guidelines, but not enough to contend with the pandemic. As the virus spread Attendo sought to buy supplies.
“It took five or six weeks to get the volumes outside of China,” the company’s chief executive, Martin Tivéus, told me.
The shortages inside nursing homes attested to the degree to which Sweden had been seized by the mentality of marketization. Stockpiling masks cost money. So did employing full-time nurses. Why not just rely on the web and temp agencies to deliver products and staff as needed? Limiting expenses and rewarding shareholders had taken precedence over social welfare.
“What this pandemic has done is demonstrate a number of system errors that have gone under the radar for years,” said Olle Lundberg, secretary general of Forte, a health research council that was part of the Swedish Ministry of Health and Social Affairs. “We totally rely on the global production chain and just-in-time delivery. The syringes we need today should be delivered in the morning. There is no safety margin. It may be very economically efficient in one way, but it’s very vulnerable.”
When the care aide came down with a fever, she stayed home. But other low-wage workers at the Attendo home continued to show up. The nurse overheard several in the changing room, discussing how they had to keep working because government-furnished sick pay did not begin immediately, and did not cover all lost wages.
While the care aide lay at home recuperating, she received a package from Attendo. Inside was a thick binder detailing instructions for managing the pandemic: how to properly put on safety gear, which she had initially lacked; how aides had to remain at least two meters removed from residents, which was impossible in caring for people with dementia.
At the nursing home, the phone rang relentlessly, with callers left on hold. Mia Grane was calling five and ten times a day. Her father had tested positive for COVID-19. She was terrified that he was being allowed to slide toward death without intervention. She urged the staff to transfer him to the hospital.
“They said, ‘No one is going to be sent to the hospital,’” Grane recalled. “Those were the rules.”
In Stockholm, guidelines encouraged physicians to prescribe palliative care—forgoing efforts to save lives in favor of keeping people comfortable in their final days—as soon as nursing home residents displayed COVID-19 symptoms.
The guidelines permitted doctors to proceed without so much as examining patients or conducting blood or urine tests to get information about their overall health. They prescribed morphine, cognizant that death would result within days. Experts likened it to active euthanasia, which was illegal in Sweden.
“As a physician, I feel ashamed that there are physicians who haven’t done an individual assessment before they decide whether or not the patient should die,” Yngve Gustafson, a professor of geriatrics at Umeå University, told me.
Doctors were adapting to scarcity. Over the previous two decades, the number of hospital beds in Sweden18 had dropped from 3.58 per 1,000 people to 2.1, placing the country below even Italy and the United Kingdom.
“We understood early on that we had to think very carefully about how we will benefit the most patients,” Michael Broomé, a physician at an intensive care unit in Stockholm, told me. “We had to think twice about whether to put elderly people with other conditions on ventilators.”
Swedish nursing homes became warehouses for people waiting to die.
At the Sabbatsbergsbyn home, the geriatric nurse was dependent upon reports logged by overworked colleagues to provide the proper care. Vital information fell through the cracks.
She was still tortured by the case of an elderly man who had been showing signs of reaching his final hours. No one had informed her of his status when she had come on duty. His family had not been told that the end was near.
“I would have gone to check on him, and maybe hold his hand to see if he was feeling anxiety or pain,” the nurse said. “Maybe I would have given him morphine.”
Her voice caught. “He died alone,” she said.
On April 2, Grane called the nursing home and was told that her father was barely alive. He died later that day with no one by his bedside.
She begged the staff to save her mother. But she wasn’t eating, and she was dehydrated. This time, Grane was at least permitted to sit in the room until the end.
Grane was wrecked by the experience. She sifted through what had happened—the confusion, the short staffing, the lack of awareness as the pandemic removed both parents from her life.
“For me, it’s clear that they wanted to save costs,” she told me. “In the end, it’s the money that talks.”
By the middle of 2021, Sweden had lost more than fourteen thousand people to COVID-19, giving it a per capita death rate far worse than its neighbors—more than triple Denmark’s, and almost eight times Finland’s. Attendo convened a call with stock analysts to discuss its latest earnings.
The pandemic had made Scandinavians reluctant to entrust their relatives to nursing homes. This had limited the number of “customers,” said Tivéus, the CEO, yielding a “lower average occupancy compared to a year ago.”
But there was better news for shareholders. The company reiterated its dividend target: 30 percent of its profits over the next three years.
As the pandemic tore at the economies of Europe, it seemed unlikely to bring out the best in a continent prone to bickering, recrimination, and tribal animosity.
Europe had never fully recovered from the economic damage left from the financial crisis less than a decade earlier. Now, an even bigger shock was playing out, threatening a wave of bankruptcies and joblessness.
The European Union was like a family in which trauma only heightened the existing dysfunction. During the crisis of the previous decade, conflict had centered on whether and how the bloc should marshal a collective relief effort, with some suggesting that it be financed by sales of so-called eurobonds backed by all member states. But Northern European countries had balked, consigning the hardest-hit nations like Greece, Spain, and Italy to unmitigated agony.
Northern European unwillingness to shoulder collective debts traditionally rested on crude stereotypes of their southern brethren. Germans were appalled by the prospect of putting their hard-earned savings on the line to allow orgiastic borrowing by Greece and Italy, where civil servants supposedly retired during their prime years, living on extravagant pensions as they reclined on the balconies of sea-facing villas.
“You cannot spend all the money on drinks and women19 and then ask for help,” the Dutch finance minister, Jeroen Dijsselbloem, had once remarked.
These sorts of depictions skipped over the fact that Greeks actually worked longer hours than many Northern European countries. They ignored how German banks had lent aggressively to finance Mediterranean investment debacles. In limiting European relief and demanding austerity, Germany ensured that ordinary households20 in southern Europe would suffer years of desperation so that its own lenders could collect on their debts.
Southern Europeans had forgotten none of this. The pandemic revived their grievances, especially as the so-called Frugal Four—Austria, the Netherlands, Denmark, and Sweden—demanded that aid be extended in the form of loans that would have to be paid back by national governments.
“One can at least ask21 what they will do to save themselves the next time,” Dutch prime minister Mark Rutte said in May 2020.
Spain’s morgues were overflowing22, prompting local authorities in Madrid to use an ice rink to store bodies. Italians were denied funerals23 amid the quarantine. Lectures about fiscal rectitude from the wealthy countries of the north had always grated. Now, they seemed a sign that European solidarity was a fraud.
But then an extraordinary consensus emerged. With uncharacteristic speed and decisiveness, European leaders ditched their budgetary strictures to yield action. The pandemic was so alarming, its potential dangers at once enormous and incalculable, that it eclipsed the usual rancor that frequently divided the nations of Europe, supplying one fundamental objective: limiting the damage. The austerity-minded governments of Northern Europe for the moment had something greater to fear than public debt, so they assented to a suspension of the rules, permitting the worst-hit countries to borrow as needed. The European Union transcended its legacy of national suspicion to forge a shared relief fund worth 750 billion euros. More significant than the sum was how the money was raised—by borrowing collectively24.
In striking an agreement to sell so-called corona bonds, Europe diminished doubts about the sanctity of its union in the post-Brexit era while applying a salve toward healing foundational bitterness. It was a victory engineered by Germany and France, the two charter members whose deadly animosities had been the impetus for the creation of the bloc. Macron had pursued as a primary target building out the next phase of the European Union. He won over a key source of opposition to collective debt, German chancellor Angela Merkel, for whom the endurance and vitality of the European Union was a legacy issue. Davos Man was happy to see an aggressive expenditure of public money, cognizant that it could be used to bail out his troubled investments in the name of protecting jobs.
Decades of widening inequality, immigration, and cuts to public services had torn at the fabric of the European Union, giving life to extremist parties that courted votes by attacking the institution. The pandemic appeared to have strengthened European solidarity while demonstrating the merits of European-style social democracy.
The United States had employed a Rube Goldberg contraption, with Mnuchin’s slush fund funneled through Jamie Dimon’s bank, and Larry Fink’s firm buying bonds on behalf of the Fed, allowing Steve Schwarzman’s private equity empire to borrow for free. All of this was supposed to trickle down through the rest of the populace.
European governments cut out the Davos Man intermediaries and stepped directly into the fray, essentially nationalizing payrolls. Instead of rescuing billionaires, they rescued workers. From Denmark to Ireland, governments agreed to pay the lion’s share of wages25 for companies whose businesses were threatened by the pandemic provided they held on to their employees.
While the unemployment rate in the United States soared, joblessness nudged up only a tad in most of Europe through the fall of 2020.
In Britain, the shock was profound enough to end the era of austerity. In place of stern homilies about the need to live within national means, Boris Johnson called for spending26 with appropriate abandon. Central to this was a dramatic increase in infrastructure spending, allowing Johnson to bolster the communities in the north of England whose deteriorating fortunes had produced the revolt that had propelled him to power.
Even in Germany, where a loathing of debt amounted to a national religion, the government borrowed to finance a substantial relief program—a package of spending measures worth 750 billion euros27.
But how long would the new spirit of European harmony last?
The budget rules that restricted spending by E.U. member states remained on the books. They would not be suspended indefinitely. Eventually, the bills for the rescues would be tallied, and the money would have to be paid back.
In theory, governments could raise taxes to amass what was needed. Indeed, as Britain’s treasury overseer, Rishi Sunak, announced a new budget in March 2021—extending relief programs for workers through the fall—he said the bill would eventually have to be collected by lifting corporate taxes.
But Davos Man was skilled in wielding influence to deflect the burden elsewhere, raising the possibility that the debt would ultimately be paid in a fashion that had become ritual—through cuts to government services and greater burdens on rank-and-file workers. Sunak had already announced pay freezes for many government workers, while promising to “keep debt under control.”28 Even as Prime Minister Johnson outlined proposed tax increases to finance a bolstering of the national health care system in the fall of 2021, it was clear that an outsize share would be paid by ordinary workers.
Austerity was no random faith. It was the complement to the Cosmic Lie, a value system promoted by the affluent people who benefited from it. Less public spending spelled less need for taxes—which meant more for Davos Man. And what public spending was required to pacify a restive populace could be paid for by the sacrifices of others—ordinary wage-earners, especially younger people.
Austerity might go dormant for a while, but it was never fully dead.
The relief effort in the United States was no fount of transparency. But in Britain, the treasury refused to disclose the names of the companies securing government-guaranteed loans, even as their outstanding value swelled beyond £52 billion.
Officials at the British Business Bank29—a government entity that was handling the transactions—declared that allowing the public to see where its money was going would make borrowers uncomfortable, perhaps discouraging them from taking loans.
Still, the odd disclosure about such programs demonstrated that Davos Man was applying his usual prowess toward tapping the public’s generosity.
