Austan Goolsbee and Chad Syverson write,
While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry.
This is consistent with other findings, as described by Raj Chetty. It also aligns with my intuition.
So, I suppose that the logical implication was that we didn’t need the lockdowns?
No, Goolsbee and Syverson seem to be punching at a straw man here. Did anyone ever think lockdowns would reduce travel? That was never a rationale for the lockdowns. So far as I can tell, the rationale for lockdowns was that employees congregating at workplaces would increase infection rates. Is there any credible evidence that lockdowns did in fact reduce infection rates? That’s not a rhetorical question. I suspect the answer is “no,” otherwise it would have been shouted from the rooftops. Now that testing is much more widely available, and employers have incentives to test employees as well as enforce mask-wearing and social distance, locking down workplaces would make even less sense from a purely epidemiological standpoint, even setting aside the cratering of the economy.
No, no, no. That “the shutdowns were entirely harmless and had no economic consequences” dog simply won’t hunt. Although most USA economists, especially those claiming to be libertarian, are indifferent to unemployment rates, employment is a part of the economy. There are vast differences between year-over-year change in employment and a strong correlation between states with harsh and oppressive legal shutdown regimes and lower employment. And states with no or shorter legal shutdowns. See: https://www.bls.gov/web/laus/statewide_otm_oty_change.htm
The May 2019 to May 2020 change in employment In the most oppressive state, Michigan was -19.2%, in the least , South Dakota -7.5%. In oppressive New York -18.3% and in freer Florida -9.5%. In oppressive California -13%, in freer Texas -7.2%. And on and on.
There was a real difference between the the severity of legal shutdowns and unemployment was the price.
Government action tends to lag public sentiment. So at the start, we should expect people to lock themselves down before the government does and therefore see little effect, which is what we find. But now that (many) people are ready to come out of the lockdown, we should expect government to lag that change in sentiment and the negative effects are likely enormous (and growing).
Unfortunately it’s harder to measure the deregulation case because we can’t measure what people *might* be doing but can’t because it’s illegal.
What’s worse is that the public largely digested the relevant health information (old people isolate, young people get back out there) and are behaving correctly but since that makes METRICS go UP and that can be used political theater we are having more lockdowns imposed.
The fastest way to spread the virus is via young people. The more spread you have, the less control you have.
When METRICS go UP, pretty soon it actually matters.
Absent a vaccine, which nobody seems to be able to predict, the endgame is herd immunity. You want the part of your herd that accomplishes that to be young, not old.
Other parts of the country and going through what NYC did, but this time they aren’t sending COVID patients to nursing homes.
This approach at analysis is not sound. Things have changed too much since the start. The beginning is different from the middle which in turn is different from the end.
The question is: Over the course of the last five months of pandemic, what has been the additional contribution of government prohibitions to the decline in economic activity, compared to that caused by private preferences, choices, and precautions?
It is simply not correct to extrapolate over that whole period from observations of a brief snapshot of activities during the heights of panic, ignorance, and unfamiliarity. If when those restrictions are relaxed most people crowd the beaches and pubs, it would be equally invalid to conclude that 100% of the economic decline was due to government policy. At the very beginning it was mostly due to private choices, and then gradually become mostly due to government prohibitions.
Also, if like me you support the immediate termination of all lockdown measures, consider which is the stronger argument to end them:
1. The lockdowns are not causing any harm in the form of economic decline because all that decline would have happened anyway, but is probably doing at least a little good in keeping some fatally-vulnerable people unexposed long enough to get vaccinated.
2. The lockdowns are causing tremendous economic harm because of stopping people from conducting economic activities in which they would otherwise engage, but is producing only marginal benefit at best because of the particular profile of risk it presents to different age cohorts and other population categories.
Consider, in the 4.5 million people in Virginia under age 35, the number of cv19-attributed deaths in the last five months are exactly … 0. Not one in a million. Zero. Young people almost never get hit hard. Not “very young” people, but everyone younger than average. Not even the sickest, weakest, most immuno-compromised of them. That’s despite going a long time without any mask mandates.
Let’s expand the net to “below 45” and about 6 million Virginians. Now we’re talking 24 people, which for people between 35 and 45 represents only a mere 3% increase over the baseline risk of death of normal life.
As everyone now knows, almost two thirds of deaths are people above the age of 75, most of whom were living in nursing homes. Meanwhile the economic devastation of Lockdown Socialism and the crushing burden of a mortgaged future is compounded every day.
The point is, the second argument is by far the stronger one, and conveniently, also happens to be the true and accurate one.
I know at least three young men who got « mild cases » months ago. Still short of breath, having difficulty to work, unable to do any sport. How heavy the real damages, how long will it linger, will it flare up later like zona?
Libertarian paradise of mass invalidated for decades.
Yeah, I hear this story every single day, and haven’t found one case that can be reliably believed.
I’ll gladly inform my friends that they have been totally cured by a commenter on an economics blog.
1. First, a quibble. By international standards, America has never had a full lockdown anywhere. We have not put padlocks on apartment buildings, had the Army delivering food, stopped and searched pedestrians, etc. We are not urban enough for that, in any event.
But we have had ‘shelter in place’ advisories, and the arguments are still important.
2. This is a nine-inning game. The virus panic started in America on about March 15, so we have not yet reached four months of experience. I think we will need 9 to 12 months to judge any social strategies.
3. Industries matter. The states that depend on tourism — Hawaii, Nevada, Florida —
all have very high unemployment despite very different public health responses. Meanwhile Nebraska putters along with 5% unemployment.
4. Minnesota also has a death problem in nursing homes. But the state is busy closing down state parks and basketball courts — because that sort of closing is cheap and easy.
To fully protect nursing homes, you would have to:
a. Inspect all the homes with extra state personnel;
b. Provide medical equipment to all the homes, at state expense and at a time when hospitals have shortages;
c. Test all the workers every few days, when tests are in short supply and again need to be paid for;
d. Raise the salaries of all workers so they do not need to take second jobs;
e. Provide paid sick leave to all nursing home workers, again at state expense because many nursing homes are close to broke.
By contrast, a governor can close the malls or parks, and still feel virtuous and refreshed. Michigan, New York, and New Jersey are no different.
When you look at this, you need to incorporate the following concepts:
1. “Individual choices were far more important and seem tied to fears of infection.”
Fear of infection is largely driven by reality of infection. It is not a coincidence that New York, New Jersey and Massachusetts, three states burned early, are wearing masks the most and doing the best now.
2. The consequences of behavior follow several weeks behind. The benefits of freedom are immediate, and they feel awesome. This is not a good match of incentives for intelligent decision making.
3. The more infections you have, the harder it gets to prevent further spread.
4. After a certain point, shutdowns occur as an emergent order. No economy can operate openly with NYC like infection rates. See #1. Texas, Florida and Arizona are going to be destroyed economically for a generation because they failed.
The only thing that matters economically is whether a state can prevent persistent infection growth. The discussion about letting the healthy get it and protecting the vulnerable is irrational. If healthy people drive runaway infection growth, a collapse in consumer activity will soon follow.
If a state thinks it can make a shutdown optional and can somehow prevent infection growth, great. The problem is you better be right, and you won’t know for a month whether you were or not.
“Texas, Florida and Arizona are going to be destroyed economically for a generation because they failed.”
Uh, ok. Please propose your bet and terms. Happy to part with $100.
Excuse me if I don’t make bets with someone I don’t know, but let’s take a look in a month if you are posting here.
What do you think will happen in the next month in these states? Do you think they will do enough in time to stop the progression from running away? Do you think it will just fade? Do you think they can just ride out these increases?
A month is not = to a generation (as per your op). Happy to make your acquaintance to that you can take my $100.
I am aware of the fact that a month is not a generation. A month will tell us the short term consequences of the decisions being made now. We will find out whether my characterization of the situation makes sense or not.
If I’m right, the response in the next few weeks will be insufficient to control the spread, and they will begin to experience something equal to, or worse than the NYC spike. We’ll see the social response.
Or, maybe we will see that the logical implication was that we didn’t need the lockdowns.