Category Archives: Economic policy

Economic policy other than monetary policy

What Is Essential?

The recent government lockdowns and stay-at-home orders are long on lists of things that are essential and not essential without defining or saying what determines whether something is essential or not essential.

What does “essential” mean? A synonym in the Merriam-Webster dictionary is “necessary.” “Necessary” has the advantage of being less vague. It also raises a question: “Necessary for what?”

A good example of the arbitrariness of government officials determining what is essential is a recent dust-up concerning wrestling in Florida. Florida has determined that sporting events, including wrestling matches, are essential. The headline and subheading on a negative editorial show the split: “His explanation doesn’t make much sense” reads the headline with DeSantis’s explanation that “I think people have been starved for content … we’re watching, like, reruns [of sporting events] from the early 2000s” under it.

The headline was written by a true non-sports fan. To those of us who watch little if any sports on television, sporting events are not only not essential, they’re not even interesting.

On the other hand, for those who like to watch sports, the drought of sporting events has in fact resulted in people watching long-ago reruns of run-of-the-mill events because, for them, it’s better than nothing. They would be a lot happier with new sporting events.

Why pick on wrestling in particular? It is easy to make snide comments about wrestling matches, and wrestling matches have started. While the order concerns sporting events generally, wrestling matches do have an advantage that team sports such as baseball do not. There are few people in a locker room before a wrestling match. Before sports such as baseball and football can resume, they have to resolve a basic problem: How does one deal with many athletes preparing for a game? Even eliminating the physical audience or limiting the stadium to a fraction of normal capacity will not resolve that problem. Also, most sports are contact sports and definitely are not “socially distant” games. Wrestlers are in close contact with few people compared to the typical lineman in a football game.

Are wrestling matches or more generally sports events necessary? If you are a sports fan stuck at home worrying about when your life will resume, maybe so. It might be better than hitting the bottle.

Leaving aside sports, what is necessary? One person’s essential or necessary is another person’s unimportant.

To some people, going to church is essential to their salvation. To some people, going to a church is a waste of time.

Are “elective surgeries” essential? The shutdown of hospitals’ non-essential services, which includes bypass surgery, may already have increased deaths due to this apparently not-so-immediate ailment.

Is a lawn service necessary? If you don’t own a lawnmower because you employ a lawn service and can afford it, buying a lawnmower – if you can because lawnmowers are “essential” – is an expensive stopgap. Letting your lawn grow for a few weeks, a month or maybe longer might not be very attractive but might be the best thing to do. The worst part of declaring lawn services non-essential: Shutting them down in the name of “social distancing” reflects ignorance about how lawn services work. The workers mow the yard, do some trimming and leave. They are nowhere near the homeowner and not even close to each other besides in the truck.

Part of the argument for shutting down “non-essential” activities is that it is better to have fewer people going to work. This may have been a plausible argument while “flattening the curve.” It misses an important problem beyond that time frame.

It will take a year or more to create and produce a reliable vaccine in the quantity necessary for the United States. In the meantime, every activity accomplished with a stranger will involve the risk that the other person has coronavirus. Besides keeping most people in the U.S. at home until a vaccine is found for the coronavirus, the risk of contracting coronavirus while engaging in everyday activities will be a fact of life.

Taking care can limit the risk of contracting coronavirus. Wearing a mask might be a way to assure people that you are trying to avoid spreading coronavirus to them should you have it. Widespread and readily available testing can limit the risk because people will know whether or not they have coronavirus. Government edicts about “essential” and “not essential” activities are no help.

Coronavirus Lockdowns: When Will They End?

When will the lockdowns and business restrictions end? This is an extremely important question, the importance of which doesn’t seem to be widely appreciated or even acknowledged. Some others, notably The Wall Street Journal and John Cochrane are making related points about the importance of outlining when the lockdowns and business restrictions will end.

All the most recent developments are additional, severe closings of economic activity in much of the country. The governors of California, Illinois and New York issued decrees on March 20 similar to those in place in Italy and Spain and earlier in China. People are supposed to stay in their homes and not go out other than for “essential” reasons. On the same day, Pennsylvania ordered all “non-life-sustaining’ businesses to close and Florida ordered all restaurants closed for on-premises dining. This occurred after social distancing including widespread closures of businesses had been ongoing for over a week.

When asked about whether life might be close to normal by Easter, April 12, Dr. Fauci, head of the National Institute of Allergies and Infectious Diseases, responded “I can’t predict what the situation would be,” Fauci said. “I think we need to be prepared to modify behavior, even when it involves things that are very close to our hearts.” I do not want to over-interpret Dr. Fauci’s reply in an interview, but he certainly did not indicate that the end of these increasing restrictions is in sight. This is a profoundly disturbing state of affairs.

If the large-scale shuttering of businesses goes on for more than another week or so, many people’s lives will be ruined. While it is not entirely clear how many people in the United States live paycheck to paycheck, the number is far from zero. One estimate is that half of all people making less than $50,000 a year have no savings to pay the bills. Most people working in retail establishments and restaurants make less than $50,000 a year. These people have no way to buy food after not being paid for a short period. Some have credit cards, some don’t. Some have relatives who can help, some don’t.

There is no evidence that these grave consequences are being considered in a serious way. Instead, presentations tend to focus on technical issues and avoid the widespread suffering that soon will overwhelm many in the United States.

Discussions of the coronavirus need to change now and start focusing on when life can start to gradually return to normal.

The gradual lifting of these restrictions should be outlined soon. The lifting of restrictions should include measures taken by businesses and the government to limit exposure. The lifting also should take account of the costs of these restrictions on people. A gradual return of activity will occur naturally, no matter what. There is no evidence that people are ready to rush out to stores and restaurants right after restrictions are lifted. On the contrary, many restaurants decided to close to on-premises dining because few people were willing to venture out given concerns about the coronavirus.

In the meantime, the main preparation that will let people return to something like normal economic activity is testing. Testing anyone who thinks they might have coronavirus is the surest way to reduce infections and let people return to work with some confidence in their own health and others’ health.