By Rich Lowry
Tuesday, March 24, 2020
Countries have experienced economic depressions before,
but not usually as a matter of choice.
The nationwide coronavirus shutdowns over the past two
weeks have ground parts of the country to a halt. We have probably never before
in our history seen so much economic activity vaporize so quickly — within days
or even hours. The Great Depression and the panics of the 19th century are the
only possible analogues.
Goldman Sachs is forecasting a 24 percent drop in
quarterly GDP. Morgan Stanley is anticipating a 30 percent decline.
These are the top-line numbers of a vastation that will
throw millions out of work, stress families and blight personal lives, destroy
the dreams of small-business owners, and bankrupt industries. This is a tale of
human misery, not just of declines in the stock market and in GDP.
The federal government can alleviate some of the damage,
but even the biggest, best-designed stimulus bill is no substitute for
shuttered storefronts and factories. And how many times can Washington pass $2
trillion bills?
No, this is not sustainable, nor will people stand for it
except as a temporary expedient. President Donald Trump is already expressing
impatience with his own guidance against gatherings of more than 10 people for
the next 15 days.
If that sentiment is understandable, it’d be foolish to
give up on the lockdowns before they have much of a chance to, in the cliché of
the hour, flatten the curve.
And it’s important to remember that the disease itself is
imposing an economic cost. It would have caused a recession regardless of
government policy. Would New York City restaurants really be full if it weren’t
for the Andrew Cuomo–ordered lockdown? Would people be eager to get on
airplanes? To book a cruise? To see a Broadway show? To go to Disneyland?
If the disease had been left unchecked, it would have
exacted an enormous price, in lives of the infected, in the breakdown of the
hospital system, in the follow-on effects on people ill with conditions that
would have gone untreated. No matter how bad today’s lockdowns are, imagine if
we decided to undertake them at a time when the U.S. already had a million
cases and the health-care system was in deep crisis.
The answer to our current situation doesn’t require
downplaying COVID-19, or going about business as usual and hoping for the best.
The advantage of the lockdowns is that they make every other public-policy
option look cautious and inexpensive by comparison. What can be more radical
than telling tens of millions of Americans to shelter in place?
Our aim should be to shift from the blunderbuss solution
of mass shutdowns to rifle-shot remedies, on the model of what South Korea has
done with its widespread testing (although it has much more favorable
conditions as a smaller, more cohesive country with an outbreak centered on one
church).
We should focus on the production of tests, ventilators,
masks, and other protective gear on an industrial scale. Whatever the
government has to spend or do to get it done should happen — just as if we were
on a wartime footing.
The first priority should obviously be backstopping the
hospital system and protecting front-line medical workers. But, as economists
Paul Romer and Alan M. Garber argue, we need to widen out from there to create
a system of population-wide testing and the distribution of protective gear to
workers interacting with the public to protect against the spread, while
allowing for ordinary work.
This regimen would depend on innovation — cheaper, faster
tests, etc. — but that is surely within our power with enough will and
resources.
Then, we could begin to return to normal with much less
risk, even if vulnerable populations and metropolitan hot spots still require
extraordinary precautions.
Whatever path we take will be costly and have its
downsides. All we can know with certainty is that the current path is
untenable.
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