“We may or may not have flattened the curve,” Fox News’s Brit Hume said recently, “but we’ve certainly flattened the economy.”
With that, Hume captured the fundamental dilemma of the nation’s response to the coronavirus crisis. The methods federal and state officials chose to reduce the spread of infection — stay-at-home orders, closing “nonessential” businesses, limiting the size of gatherings — have involved enormous damage to the economy. After a period of early optimism in which some believed the disease could be conquered and then — presto! — the economy quickly turned back on, a more sobering reality has set in. What lies ahead is a long period of restoration, as well as a tricky and difficult path back to physical, and then economic, health.
How should it begin? The first issue to consider is why the economy is actually shut down. Is it the result of all those government restrictions on public and private life? Listening to the media debate, there is a widespread impression that the government closed the economy and the government can open it back up. But some of the officials most thoughtfully considering how to move forward don’t see it that way.
“What has caused the economy to grind to a halt is not some governor or mayor’s order, or some public health bureaucrat’s recommendation,” said Arkansas Republican Sen. Tom Cotton, who warned of the coronavirus’s danger back in January. “It’s just the fear of the virus.”
Cotton pointed to Japan, where the government did not take the restrictive measures adopted in the Western world, and the economy still collapsed. There, as elsewhere, fearful people stopped traveling, stopped going out, stopped patronizing businesses — all on their own.
In the United States, it happened with extraordinary swiftness in March and early April. At the beginning of March, many Americans, skeptical about doomsday scenarios, resisted calls to shut down everyday public life. By April, that resistance virtually disappeared.
What changed? On March 1, there had been one — one — coronavirus death in the U.S. By April 12, there were 22,105. That changed attitudes.
At the beginning of March, a headline in USA Today read, “Americans are more worried about finances than their health amid coronavirus outbreak.” A poll accompanying the story showed that 34% of respondents said the virus posed a “high threat” to the U.S. In early April, after conducting an identical poll, the headline was, “In four devastating weeks, Americans’ fears of the coronavirus have exploded.” The survey showed 71% saw the virus as a “high threat.”
Respondents’ related anxieties — fears that they themselves would contract the virus, fears that their local hospitals were ill-prepared to treat them — also rose dramatically.
Those fears were the reason widespread government action was possible. Restrictions that many would have rejected out of hand on March 1 were welcomed in April.
But now, it is time to look at the reverse scenario. What will have to change to reduce public fears to the point that people will accept the easing of restrictions?
The government can’t just announce a turnaround in policy. Imagine that, with today’s fear level, some public officials such as President Trump, a governor, or a mayor declared that everything is back open. “Go to restaurants! Attend a convention! Jump on an airplane!” How many people would do that? Probably very few, and certainly not enough to lift the economy out of its current hole.
Instead, the priority should be to bring the virus under control, which will reduce public unease, and then begin to reopen the economy. The virus first, then the economy.
The first thing needed is for the current virus mitigation measures to work. The number of new cases, hospitalizations, and deaths has to go down. And not for just a day or two; they have to show a clear declining trend. That is a prerequisite for anything.
And it could be in sight. “I think we are reaching a place where some return toward normalcy is possible,” said Yuval Levin, a former Bush White House domestic policy adviser now with the American Enterprise Institute. “There have to be some standards where we say if, in your state or your part of the state, we’ve gone 10 days with declining caseloads, then we think of ourselves as in phase two. At that point, based on testing capacity, some things can open. These things would happen at different times in different places.”
Others propose another standard — for example, some say cases should decline for 14 straight days. But to restore confidence, other things have to happen, too. As Levin suggested, there needs to be widely available, fast testing. There must be plenty of masks. There needs to be confidence in local hospital capacity. “We have to arrest the spread of the virus,” said Cotton, “and we have to give people confidence that if they do get out of their homes, go back to work, or go back to their normal economic life of shopping and going to restaurants and so forth, that 1) they’re probably not going to get the virus, and 2) if they do, the healthcare system will be up and functioning and able to treat them.”
There will have to be new federal guidelines on social distancing and density — how many people can safely be allowed in any public place? There should be a state-by-state and locality-by-locality assessment of conditions. And then, if these prerequisites are met, a progressive easing of restrictions.
That easing could be based in part on the density of the business involved. First to reopen might be some automated manufacturing where workers are not physically close to one another. Then, white-collar work, where offices can be reconfigured to keep people physically apart. Then, low-density retail such as department stores. Later, high-density retail such as restaurants, gyms, and bars, although with public areas more widely spaced and possibly with protective barriers between customers. And finally — and this could take a while — the large gatherings such as sporting events and concerts.
It should all be done on a state and local basis instead of a one-size-fits-all national policy. “What’s good for New York City is obviously not going to be what’s good for Kansas City,” said Cotton. “And neither one of them is going to be good for Star City, Arkansas.”
Just to emphasize Cotton’s point, Star City is located in Lincoln County, Arkansas. On April 14, the county had a total of 56 coronavirus cases and zero deaths. Kansas City and Jackson County, Missouri, had a total of 552 cases and 15 deaths, while New York City and its three largest suburban counties had a total of 172,550 cases and 9,453 deaths. No single policy will cover all of those cases.
Federalism will mean that each state, and hopefully, each local area, can work out the best circumstances for recovery. But do not expect the process to be orderly. “Whatever we do is going to be pretty messy,” said Levin. “At first, absent an overall coordinated national effort, which I think is unlikely, it will be some governors who are particularly anxious [to return], or whose states are in particularly decent shape, you’ll start to see people released from constraints in pretty haphazard ways.”
The worry is that if some places reopen too quickly, the virus will make a comeback, leading to a yo-yo effect. In that case, there would be what Dr. Anthony Fauci called “an extraordinary risk of there being a rebound [of the virus].” That will likely be, unfortunately, part of the process.
That process, of first getting the virus under control and then carefully reopening business, could take months. The plan sounds reasonable until millions of employers and workers say: We don’t have that long. You can’t expect us to close our businesses for months, or to be out of work for months, and then happily return, no problem, when all is safe. What about now? We’re going broke!
That is where the federal government comes in again. “It’s going to be hard to reopen the economy if nobody has a job,” said Missouri Republican Sen. Josh Hawley. “The best way to reopen the economy is to get people rehired and ready to work so that when we get that green light, whatever that green light might consist of, we’ve got folks who are ready to get back on the job.”
The measures Congress has taken so far to shore up the economy are needed but not enough to accomplish that, Hawley argues. So he has proposed a plan in which the government would use a refundable payroll tax rebate to give employers money to rehire workers for the duration of the crisis, picking up 80% of payroll up to the median wage. “We’ve got a system right now where government is essentially paying the workers, but it’s paying them at the unemployment line,” Hawley said. “The problem with that is that it is severing the work relationship.”
It’s an audacious plan, and at the moment, it does not have the support in Congress to pass. But the staggering unemployment claims of recent weeks have stunned everyone. People are shocked by the government’s role in shutting down the economy to deal with a public health crisis. They see a healthy economy, one that could be healthy again, but only if it can get over this devastating period. So, bold proposals will get a hearing.
Beyond that debate, there will be a continuing argument over who is in charge. The White House recently announced the creation of an advisory group to guide the process. At the same time, Trump tweeted that the authority on restoring the economy was exclusively his.
“For the purpose of creating conflict and confusion, some in the Fake News Media are saying that it is the Governors decision to open up the states, not that of the President of the United States & the Federal Government,” Trump tweeted April 13. “Let it be fully understood that this is incorrect … It is the decision of the President, and for many good reasons. With that being said, the Administration and I are working closely with the Governors, and this will continue. A decision by me, in conjunction with the Governors and input from others, will be made shortly.”
But the virus crisis has already shown that no single authority can handle the entire issue. Restrictions on travel into the U.S., such as those Trump issued concerning China and Europe, had to come from the president. The Centers for Disease Control and Prevention and other federal agencies issued health practice guidelines. Congress and the president threw roughly $2 trillion (so far) at the problem. At the same time, it is the nation’s governors who have taken a leading role in imposing limits on behavior in their states. A complex federal system with 50 states and 330 million people is not an exclusively top-down operation. It was not when the virus crisis was worsening, and it will not be when the virus crisis subsides.
In the meantime, though, there’s no doubt impatience is growing. Many people seem resigned to stick with restrictions until May 1, but not beyond. “At some point, the president is going to have to look at Drs. Fauci and Birx and say, ‘We’re opening on May 1,'” Fox News’s Laura Ingraham said recently. “Give me your best guidance on protocols, but we cannot deny our people their basic freedoms any longer.”
The good news is that with luck and smart planning, conditions will be right on May 1 for the reopening to begin on a state-by-state, county-by-county basis, guided by the federal government and state and local officials. There will undoubtedly be surprises. The coronavirus has presented the U.S. with an unprecedented crisis, and so the recovery will be unprecedented, too. The time is quickly coming to move forward.
