COVID-19 and the recession

The media repeatedly report on the dual threats of “COVID” and “COVID recession” as if the COVID recession were an organic outgrowth of the virus. It’s sloppy. While there is an overlap between the COVID health threat and the COVID recession, the extent of the COVID recession is largely the result of political intervention to mitigate the health threat. It is more precisely referred to as the “COVID Policy Response Recession”. This is a critical distinction.

Of course, disease has a huge direct impact on the US economy each year. Sick people miss work. Dead cannot work. Illness due to the COVID virus certainly contributes to this. COVID would only have economic effects on the country because of the disease itself. The political reactions themselves, however, affect the economy in a separable and independent manner. As the National Bureau of Economic Research’s Business Cycle Dating Committee noted in June, “The committee recognizes that the pandemic and the public health response have resulted in a downturn that has different characteristics and dynamics than previous recessions” ( Emphasis added). This separation must be observed.

To see that the effects of disease and the effects of government intervention are separable, one does not need to advocate for inequality in one direction or another. It is believed that the effects of the disease – both economic and non-economic – easily outweigh the effects of the recession (which includes non-economic costs to people as well as economic costs). Believing so, however, doesn’t take the trifle of rhetoric to treat recession costs as if they weren’t a compromise, as if the cost of government response to public health simply evolves organically from the virus itself.

Treating them as the same problem rather than as separate challenges obscures the need for policymakers and citizens to make decisions that involve compromises. And the tradeoffs aren’t easy, just choosing whether to keep everything closed or left open. between stopping the virus and leaving it out freely.

These policy choices tend to contain grays and gradations rather than discrete blacks and whites. Most of the cost of the COVID recession has been attributed to measures attempting to confine people to their homes unless they have a justification for leaving, measures to target broad categories of “non-essential” businesses should be closed, and measures aimed at imposing a wide travel ban even for healthy people. These guidelines are in stark contrast to much less burdensome guidelines: wearing masks, social distancing, hand washing, and contact tracing.

The question is what was the win of the most draconian policies in fighting the virus compared to the much less onerous policies.

Treating the “COVID recession” as a natural, necessary outcome of the pandemic also risks normalizing the real novelty of the most draconian government policy responses to the novel coronavirus. Perhaps more worrying, whether or not draconian guidelines are warranted, it can serve as a precedent and become the expected response to the next novel virus (or severe flu season).

For example, the government-mandated population-wide confinement of healthy people to their homes unless they are engaged in necessary employment of one kind or another is unprecedented in the United States. The discussion about the ordering of house arrest tends to turn too quickly into a discussion of the very real and significant quarantine power that US governments have often used in the past to respond to pandemic threats. In fact, there are significant differences between traditional quarantine orders and this year’s detention orders, not least the sheer breadth of house orders today compared to quarantine orders in the past. Sure, quarantine orders can in themselves be draconian (look at the nightmarish quarantine result upheld in State ex rel. McBride v Superior Court for King County). However, “quarantine” in the past legally refers to the isolation of sick people or individuals known to have been exposed and at risk for the disease for the duration of their illness or for the duration of incubation. After that period, they were released from custody.

This year’s arrest warrants restrict many more healthy people than sick people, and there is no natural time limit to the detention of healthy people beyond the end of the pandemic. It is no more than government laziness – the real reason often clarified by claims of manageability – that the possibility of asymptomatic carriers of the COVID virus has been assumed to imply exposure to the entire US population and this could therefore be indefinitely limited under the traditional quarantine rationale.

First, there are many communicable diseases, some of which are much worse than COVID-19, that carriers are asymptomatic. US law has had little difficulty in admitting asymptomatic carriers in the past. (See, for example, the asymptomatic cases discussed in People ex rel Barmore v Robertson and Kirk v Board of Health.)

The wealthier sectors of US society are those best placed to work from home. You can purchase your security against infection cheaply compared to poorer social classes. However, we don’t hear much about the privileged access of the wealthy to the government’s ears under virus policy.

In addition, there is an initial, much less stressful, alternative to quarantine. “Contact tracing” means that once a carrier has been identified, those with whom the carrier has come into contact are reached. The quarantine is then carried out on a case-by-case basis and only where the need is demonstrated. Of course, it is possible that an entire neighborhood or even a city could have to be quarantined because of the spread of a disease. It did so at the Compagnie Francaise de Navigation of a Vapeur v Louisiana health department (although the city’s quarantine was almost certainly an excuse to avoid taking in a shipload of immigrants from Italy). But here, too, it requires a positive determination of the disease, the inadequacy of less stressful measures and the recognition that the quarantine would be of limited duration.

Likewise, the policy of closing down all “non-essential” businesses in US history was unknown. There is again a laziness in the modern approach where “non-material” companies are companies that are not on a list of otherwise “material” companies. This paints with a much wider brush than previous pandemics. During the pandemic flu of 1918-1919, it was common practice to identify the companies to be closed by name. Bars, dance halls, theaters, etc. The unnamed shop could remain open. If it is not on the government-approved “Material Business” list today, the business must be closed. The reverse of the guess is just administrative laziness. However, this indolence comes at a high cost, since it imposes the need to earn a living – especially among the less affluent – as well as the occasional substitution of administrative dictation for individual risk assessment.

Observers across the ideological spectrum note that the effects of the “COVID recession” hit the less affluent and economically most vulnerable sections of the American public the hardest. This by and large overlaps with the segments of the population most at risk from the virus. This underscores the need to carefully understand and weigh the tradeoffs between the virus and policies that are designed to respond to the virus. The wealthier sectors of US society are those best placed to work from home. You can purchase your security against infection cheaply compared to poorer social classes. However, we don’t hear much about the privileged access of the wealthy to the government’s ears under virus policy.

It is the most draconian policy that has contributed disproportionately to the extent of the “COVID recession”. Perhaps it is tenable given the threat that COVID poses. In this case, lockdown advocates should have recession as a necessary, albeit deplorable, condition. However, it is imperative to pretend the COVID recession is an organic result of the COVID virus as opposed to what it is as a result of human interference, however well intended that intervention may be.

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