[UPDATE: please also read My case against lockdowns, which spells out why I don’t think lockdowns are saving lives.]
Tyler Cowen writes,
R0 won’t stay [below] 1 for long, even if it gets there at all. We will then have to shut down again within two months, but will then reopen again a bit after that. At each step along the way, we will self-deceive rather than confront the level of pain involved with our choices.
There is some more at the link. Tyler is careful not to say how he feels about this scenario, but one is left with the impression that he believes that it is about the best one can hope for. I am going to protest more strongly.
My own thinking is focused on our economic and political system. I would prefer a much milder government response to the virus. In fact, the only response might be to require people to wear masks in crowded public areas, such as the sidewalks of Manhattan or riding mass transit.
I expect that on their own, without any legal coercion, many stores would require mask use as a condition of entry. “No shirt, no service” would become “No mask, no service.”
I expect that on their own, without any legal coercion, many businesses and individuals would increase teleworking and reduce travel. Large conferences and sporting events will hold little appeal.
Many schools and day care centers would take measures to keep sick children (or sick adults) from coming into their facilities. Parents who do not want to take time off to care for sick children would have to find commercial services that will do so.
Compared with the outcomes of these individual choices, the marginal effect of government-mandated closures and lockdowns on the rate of virus spread is small. It may not even be in the right direction.
Note that it is not certain that slowing the spread rate of the virus has benefits. Because medical treatment seems to make little difference in many cases, the solution to the problem of “overwhelming the hospital system” might be better triage.
Of course, triage is not the American way. Our cultural norms are that keeping someone alive an extra few weeks on a ventilator is better than giving up. There is something admirable about such norms, but perhaps in a crisis they ought to give way in order to conserve resources, especially the health of hospital workers.
The main benefit of delaying the spread of the virus is the likelihood that there will be more effective treatments down the road. But individuals who would like to try to avoid getting the virus until better treatments become available can make their own decisions to act especially cautiously. They do not need the state to impose their preferences on everyone else.
Whether the government response is mild or severe, there will be considerable economic dislocation. Much of the economic dislocation comes from the actions of private individuals and businesses. The idea that the government has the power to “reopen the economy” is as wrong-headed as believing that it is government’s responsibility to close businesses and shut people up indoors.
But I don’t think of the government as a rich uncle with an attic full of toys to give away. Instead, I think of government as an institution for forcibly collecting charity that can be used to help some of the people who suffer the most in this crisis.
I favor giving people and businesses access to credit lines, backed by taxpayer funds. Many individuals and businesses will not need credit to get through the next few months. At the other extreme, many will say that they can never recover financially, and they have to declare bankruptcy. In between will be individuals and businesses able to use credit lines to ride out the crisis and get back on their feet.
I also could support a relief program that gives money to those individuals who are particularly hard hit by the crisis, with the relief checks paid for by reducing government spending elsewhere and/or raising taxes for the next few years. I do not favor deficit spending, which strikes me as catering to the “rich uncle” illusion.
To me, it seems highly probable that in the last few weeks we have discarded American capitalism and individual rights for something that more closely resembles the Chinese model. Unlike China, we will have competitive elections, but both parties will now be more statist than Bernie Sanders.
The rights of the state now take precedence over the rights of individuals. The economy will now be a form of state-capitalism, in which government will direct funding and firms will expect protection from competition and innovation. Where it used to be the responsibility of government to enforce contracts, such as those between renters and landlords, it is now the responsibility of government to tear up these contracts.
Federal government spending as a share of GDP will permanently rise above the 18-20 percent norm of recent decades, to somewhere between 30 and 50 percent (getting to the latter would require crowding out some spending by state and local governments). I predict that inflation will soon be manifest, and price controls will be instituted, at least on some “necessities.”
When someone like me objects to all of this, I am afraid that the response from people under age 45 will be, “OK, Boomer!” Even before this crisis, there was little appreciation among well-educated young people for the liberal institutions of free markets, equality under the law, and civil liberties.