Engaging today's political economy
with truth and reason

sponsored by

The False Dichotomy of Shut Down and Back to Normal

28 Apr 2020

Is anybody else frustrated at the false dichotomy that is continually talked about of whether we reopen again and when? When the reality is that we must reopen and the question is how?

Even in a shut down, which does have remarkably lower economic activity, we still eat, we still consume resources, and those resources cannot be printed by the Federal Reserve, nor borrowed from the Chinese. We understand that, which is why we’ve allowed “essential” businesses to keep going. But in an any exchange economy, we need to produce so that we may have something to exchange, and there are things that are integral to modern life that will not be put away forever. In a very real sense, all businesses are essential. The ongoing costs of the shutdown are staggering and really, incomprehensible–which is part of why they are happening. The average American can’t contemplate or understand what the difference is of a Federal Reserve balance sheet of $4T and $10T, nor are they able to fully appreciate the implications. Forget the average American; I’m not sure I understand the full implications either and this is something I’ve studied/thought about for decades. Then there is the reality of America itself; we are not naturally a compliant people–and that’s a good thing. There has been some understanding of the need for sacrifice, but that patience is wearing thin.

Further, we were told we needed to shut down to “flatten the curve.” Flattening the curve was necessary, not to save lives per se–but to spread out the infection rate so that we did not overwhelm the health care system. Flattening the curve in itself didn’t save lives, except to the extent that we might be able to treat more successfully in our system while ramping up capability to treat this particular disease. The only way to successfully handle this is with a vaccine, but its known to be a difficult and lengthier process at best. And viruses are particularly difficult. I don’t believe we can alter our way of life until a vaccine is available, and even if we could, I don’t believe there will be political will to do so. This, like all parts of life, is a tradeoff. We tradeoff death for a certain quality of life every time we get into a car and drive, when there is a small but positive probability we will never come home. We tradeoff death for a certain quality of life when we go to a foreign land with less safe conditions. We tradeoff death for what some of us think is living if we get into an airplane and jump out of it for the 30 second thrill of a free fall, trusting the high probability that our parachute will open up. But it may not–sometimes it doesn’t. That is what we accept as part of life, and all these activities sometimes lead to death. Tradeoffs are unavoidable in this fallen world.

So the question is not if we open up, but how we open up. The how part would then dictate the when. What does this look like? The Trump Administration’s phased approach is a reasonable approach in broad strokes, but there is going to be a dramatic difference in implementation by geography, work conditions, etc. The question needs to be, given we’re going to resume the activities we did previously, what can we do to minimize the possibility of infection? Then there are whole hosts of questions the experts ought to be discussing, like does everybody need to wear a mask in public? How do we sanitize the working environment and with what frequency? What guidance do we have right now to make large gatherings possible again? Not completely safe, but reasonably safe–so that meeting together at church or a public event is a reasonable tradeoff. These are the questions that we need to be talking about. Further delay may be necessary if we have a plan that includes how to do it that requires time to implement the preparation steps. But we don’t delay for waiting’s sake; that “cure” is worse than the disease. Better, more reliable testing would be beneficial, but its not clear we’ll have the quality that we’d like. I think our experts need to say how do we make the work environment as safe as possible if we don’t have the ideal quality of testing. We assume some part of our group has the virus, and how do we then minimize its spread, and deadliness if it does.

More may die with the approach I’m suggesting. But more will be living too. But unless we believe that “flattening the curve” is equivalent to making the area under the curve smaller, then its not clear at all that this will result in less deaths–even Covid-19 deaths. And you can be sure that we’re going to have a lot more deaths from the public health choices we’ve already made. Heart surgeries have been delayed, potential cancer victims haven’t been screened, and the list goes on. We’ve already made that tradeoff–some will now die that wouldn’t have otherwise. Those tradeoffs are unavoidable no matter which direction we go.