“Experimentation and varied approaches to trying to contain the virus, whether between nation states or U.S. states, provides valuable information about best practices that can then be adopted elsewhere. Central plans that do not allow variation depending on local circumstances, in contrast, risk entrenching systemic mistakes.” – Economics In One Virus
Some of the most prestigious medical journals in America, recently took time out of their busy COVID fighting schedule, to remind the public of the greatest threat to global public health…CLIMATE CHANGE! Specifically, “the continued failure of world leaders to keep the global temperature rise below 1.5 degrees, and to restore nature”. That’s quite a deflection from their miserable COVID record, with more deaths in 2021, with three available vaccines, than we saw in 2020 when everyone was unvaccinated.
When the virus first appeared in early 2020, decisions were made with only one end in mind. Government recommendations of two weeks to flatten the curve had near universal support at a time when little was known about its potential lethality. That support, however, quickly fell apart when costly draconian measures were continually extended while areas that took different action began reporting more favorable outcomes. As time went by, early COVID predictions began proving grossly inaccurate. Even as new information became known, governments were unable and unwilling to pivot and adjust to new conditions.
As early as May 2020, United Nations organizations were warning of dire poverty and hunger for an estimated 500 million people as a result of COVID mandates and universal lockdowns. These policies were also certain to exacerbate worldwide shortages from manufacturing stoppages and slowdowns.
Nonetheless, governments applied a one-size-fits-all approach to very different regions and people with very different risk factors with social welfare eclipsing all other considerations. Where suppression or mitigation choices were available, governments universally chose suppression. Strict lockdowns prevented healthy individuals from becoming infected and contributing to herd immunity, thus keeping the economy moving. As an organic remedy as old as the hills, natural immunity provides a positive externality for society. Individuals who recovered from COVID have natural antibodies allowing them to return to the public without fear of infection or threat to others.
The CARES Act, which included a Cash for COVID provision, actually paid hospitals for COVID-19 patients, creating an incentive to grow COVID-19 numbers. As a result, higher counts created expanded mandates that affected individual lives and businesses. The CARES Act also paid businesses to maintain payroll, while at the same time increasing unemployment payments to workers, making it more advantageous to stay home. This problem continued to persist when enhanced unemployment payments were replaced with monthly child tax credit payments. Then as workers lost jobs due to COVID-19 vaccine mandates, the promised V-shape recovery never materialized.
Although the virus has a target demographic: elderly citizens with multiple comorbidities, federal policy decisions were made as if everyone had the same risk factors. In fact, the CDC reported that 94 percent of all COVID deaths at one point, were people who died with other complicating ailments. Obviously, the odds of getting COVID and dying varied widely based on age, health, fitness, and behavior. Yet, instead of quarantining the sick, we isolated the healthy. Thankfully, federalism had the last word, and states intervened to address their own populations, with vastly different results.
In Ryan Bourne’s 2021 book, “Economics’ in One Virus”, Bourne uses economic principles like cost/benefit analysis, moral hazard, and the knowledge problem to debrief the government response to Coronavirus. For some, COVID was a catastrophic life-altering event that affected their health, their work, and their financial security. For others, the greatest economic impact of the virus was the limiting of choices. Bourne reveals how all actions, whether public or private, have costs and benefits. Making decisions based on short-term solutions ignores the long-term consequences that may result in even worse outcomes, as we experienced with excessive lockdowns. Then by not understanding the concept of moral hazard, mitigation efforts like masking and distancing caused people to act recklessly believing the measure was keeping them safe.
Vaccines, once available, also promised citizens a means to return to regular activity. Instead of full immunization, however, the vaccines, while helping to reduce symptoms for infected patients, began providing only a decreasing level of protection as months went by. Even so, vaccine passports were implemented in many jurisdictions while ignoring the increasing ability of the vaccinated to infect and spread the virus, creating the moral hazard of immortality.
The government’s most important job from the beginning of the pandemic was to provide its citizens with good information on which they could assess their own situations and make decisions. Unfortunately, most governments, whether national, state, or local, failed on even this simple task. Central planning of an economy doesn’t work. Central planning a virus doesn’t work either. Giving politicians a little only whets their appetite to seize more. By doing so, they robbed many a citizen of their financial and physical well-being.
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