What Should Be Done in Regard to the Coronavirus Epidemic

By March 27, 2020 Commentary

Here is crux of the current problem.  What is the proper set of government actions in response to the coronavirus epidemic.  Let me repeat again, this is a very serious problem, one which needs government action.  Lives are threatened, there is a very legitimate concern about the effect on certain health resources, and at this point, the population is alarmed.  The range of responses could range from doing nothing, to what we basically have today, a complete shutdown of normal social and economic activity.  I hope there is no one who advocates for doing nothing.  We should rule that out.

Then responses, from a public health perspective, fall into two broad categories: suppression or mitigation.  A suppression attempts to completely eliminate any infections; a mitigation one is more oriented to controlling the spread.  While some of the efforts to date appear to be oriented to suppression, the reality is that we are just seeing various mitigation strategies being applied.  This is in part because at this point suppression is unrealistic, and possibly not desirable in terms of long-term adaptation to the virus.

The mitigation approach repertoire is large.  Standard parts include good hygiene, social distancing, and quarantine of infected or suspected infected persons, and stronger measures to protect vulnerable populations, which for this virus is primarily the elderly.  More drastic measures include shutting or limiting the activities of certain industries where large numbers of people tend to congregate, such as gyms, bars, restaurants and hotels; banning or limiting travel from various locations; stopping activities that have large crowd sizes, such as sporting events, concerts, plays, and movie-going; and requiring that businesses not be open to the public or allow employees to come to the workplace.  The theory behind these shutdown measures is that it limits opportunities for transmission of the disease.

These measures all have potential economic effects.  In the case of basic hygiene, social distancing and quarantine, the costs could be pretty minimal, unless infection rates get truly large.  For the other measures, the economic costs should now be apparent to everyone.  When you deprive any business of substantial revenue over any length of time, jobs are lost.  The economic damage is very, very large.  But there is also a toll in other areas.  People commit suicide more often, there is more homelessness, food insecurity, domestic and child abuse, divorce, stress-induced exacerbations to health conditions, lack of access to health care due to loss of insurance and other impacts.  There is a psychic toll on individuals who lose their jobs and their families.  No government program can adequately repair the damage.

Trying to decide where to come down on the spectrum requires good information.  On one scale you have the disease and mortality burden from various scenarios of disease spread.  You need to do the work to have a reasonable range of likely infection and hospitalization and death rates.  Lives have a value as does avoiding disease.  On the other scale, the measures you take will have a cost.  Treatment has costs that must be paid for by someone.  There is some offset as treatment for other conditions gets deferred or displaced.  Shutting down industries has a very substantial impact on economic output.  It is now clear that for some time we will have a massive decline in gross domestic product.  That is linked to huge declines in employment, and we are seeing that already as well.  We could see unemployment on the order of 10% to 15%.  That is almost unprecedented.  And you need to take into account all those non-economic harms  associated with job loss.

The hard part is doing the balancing and doing it in a rationale way.  The initial reactions have been driven by what I view as relatively extreme projections of likely infection and death rates.  Politicians are fearful of being accused of not taking some action that could have saved a life, so they tend to over-react.  The economic and other damage from the mitigation measures taken isn’t typically as immediately apparent, although because the measures have been so extreme, the economic effects are already highly visible.  The danger for decision-makers  is over-weighting the immediate concern about lives lost to coronavirus and under-weighting the less-immediately visible effects of the mitigation measures they put in place.  That is where we are now in my judgment.  I am not alone in that concern.  One of the best enunciations of the need for better balancing is found in Tom Friedman’s column in the New York Times  (Friedman Column) and there are a variety of similar views being expressed in other opinion pieces.

My personal perspective is that political decision-makers are relying on, or at least being frightened by, infection rates and death rates that are much higher than is likely to occur.  And the economic damage is truly mammoth.  So the mitigation measures currently in place should be softened as soon as possible, really immediately.  Businesses should be allowed to reopen, travel should be permitted.  We need to restore some semblance of normal economic activity and stop, and hopefully reverse, the employment losses. I recognize that this may result in more infections and more deaths.  I am not suggesting in any way that we stop the basic hygiene measures, including quarantines of infected individuals and protection of vulnerable populations.  But the economic damage, including the lives lost, are just too great to continue on the current course.  Any of you may do a different weighting and come to a different conclusion.  But the answer to me is pretty clear.

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