The order to reopen–who gives it?

Like all of us, President Trump is eager to reopen the economy. Does he have the authority to do so or do state governors? Fortunately, neither can force us to start eating out again, or return to our offices. We remain a country where those decisions rest with each of us individually (or jointly with your boss with regard to returning to your office, shop or factory). That means that those parts of the economy that have shut down will get going again when the affected businesses have taken measures to protect their customers and employees sufficient to regain their customers’ trust that they are safe places to visit. But as I argued last month, that should always have been the basis of social interactions.  “Beating-covid-19: Compulsion-or-Persuasion-and-guidance”

The broad-based, blunt instrument of sheltering at home unless your activities are vital (says who?) is imposing staggering damage to the economy.  The best way to minimize that damage is to restore public trust as quickly as possible that those with it are being isolated and treated.  A blanket shut down of non-essential activities is not the best approach. Each of us in our personal situation can better determine where we feel safe to go than can a government agency.  However, some of us will not give sufficient weight to the dangers of exposing our friends and the general public to the disease if we might have it.  Public policy should educate the public to the dangers of covid-19 and how best to protect ourselves and should minimize the financial incentive to continue working when sick. State coercion (mandatory quarantines) should only be applied to those testing positive for the virus.  This approach will allow all firms and stores to operate whose employees and customers judge them to be safe and will give businesses maximum incentive to make themselves safe.

Covid-19 will be around for at least another year or two until an effective vaccine is available and then distributed to more than 60 percent of the world population. The most effective way to contain its spread in the interim is to undertake widespread, quick, and accurate testing and to quarantine those who test positive with efficient contact tracing.  Adding the newly available tests for antibodies indicating immunity to the virus will identify those who are no longer susceptible to acquiring or spreading the disease. They should be safe in public.  Other corona viruses have created immunity in those who have had them and SARS-CoV-2 is expected to do the same, though this has not yet been established.

The U.S. has belatedly increased its testing for the virus. Initially it impeded the development and supply of test kits. As of April 16, the U.S. has tested 10,266 people per million while Germany has tested twice that. The U.S. by that date had 105 deaths per million while Germany had less than half that.  The Food and Drug Administration (FDA) should get out of the way and allow profit seeking entrepreneurs to flood the market with test kits.  The government should focus its (our) money on a large increase in testing for the virus and quarantining those testing positive and those they contacted and should offer significant financial prizes for an effective vaccine and for the development (or discovery) of effective treatments. Unlike patents as an incentive, this will encourage collaboration and knowledge sharing among those attempting to develop treatments.

On April 16 President Trump outlined guidance for the phased reopening of closed businesses and activities that is consistent with the approach outline above.  The government’s traditional public health role is important. But much more discretion should be given to individual case by case judgements about risks and entrepreneurial initiatives about remedies rather than broad based government edicts.

We will not return and cannot be required to return to the public square until we believe it is safe to do so. Individual shops and firms have a financial incentive to find convincing approaches to being safe and will get there quicker than even the best-intentioned government official issuing instructions and mandates. The government has an important role to play in fighting this virus and facilitating our return to normal life, but it should remove impediments it often creates to the private sector’s management of the related risks and the huge and unnecessary damage it imposes on the economy.

Beating covid-19: Compulsion or Persuasion and Guidance

March 31, 2020

The number of deaths in the U.S. from covid-19 have doubled every three days over the last 22 days amounting to 3,141 by the end of March 30. At that point there were 163,788 confirmed cases (those testing positive for the virus).  https://www.ft.com/coronavirus-latest  The actual number of cases is thought to be considerably larger but remains undetected because of limited viral testing.  America’s overall strategy for containing the virus is to isolate those infected in order to stop or slow its spread until a vaccine can be developed, tested for safety and effectiveness, manufactured and administered (one to two years after the discovery of the vaccine, with luck) or until enough of the population has acquired immunity as the result of surviving from the disease (herd immunization), i.e., almost everyone who gets it. The details of the approach vary from community to community.

The virus that causes covid-19 is spread from person to person. It can be picked up from surfaces touched by a sick person, coughed or sneezed into the air within six or so feet or by direct contact, but it can only enter one’s body via the month, nose or eyes.  “Prevent-getting-sick/how-covid-spreads”  “Protecting-yourself-from-coronavirus”  Thus those who test positive for the virus should be isolated from the rest of us (quarantined) and the rest of us should self-isolate if we experience symptoms of the disease. To protect ourselves from picking up the virus and bringing it to our faces we can reduce our social interactions (work from home, avoid public gatherings such as religious services, and restaurants, bars and public entertainment). Two measures are more important than any others: test as many people as possible in order to detect and isolate those with the virus and wash our hands with soap frequently.  The President’s coronavirus-guidelines for American

These measures can be imposed by government decree and enforcement by the state or can be urged by public education and voluntary individual actions. On March 17 the Governor of Virginia explained why he had not ordered restaurants and bars to close. “Northam said too many Virginia residents rely on restaurants for their meals to justify ordering they shut down.”  “Northam-adopts-10-person-standard-opposes-closing-restaurants”  For the United States as a whole and for most communities (public health services are administered by cities and states) the restrictions on our activities are voluntary. The specific guidance or rules are determined locally, thus providing useful data on which approaches work best.

As in Singapore, S. Korea, Japan, Hong Kong, Sweden and a few other countries, business closures in the U.S. have generally been voluntary until March 30. But unlike these countries, which have successfully kept death rates relatively low, the U.S. failed to undertake significant testing for the virus for more than two months after the outbreak of the disease in Wuhan, China. After the tenth death, the death rate from covid-19 in the U.S. has doubled every three days and passed the number of 9/11 deaths on March 30. On March 30, the Governor of Maryland, followed by the Governor of Virginia and the Mayor of the District of Columbia, made shelter in place mandatory: “We Are No Longer Asking Or Suggesting That Marylanders Stay Home, We Are Directing Them To Do So.” “As-covid-19-crisis-escalates-in-capital-region-governor-hogan-issues-stay-at-home-order-effective-tonight”

There is general agreement that testing should be pursued vigorously and those testing positive should be quarantined and their contacts tested, etc. This buys time to better prepare for the increased demand for medical care that will be needed and to develop treatments and vaccines. Though many will die needlessly in the U.S. because of a several months late start with such a program, the question remains which policy to follow for everyone else going forward.  Should it be government mandates to shut most things down and keep everyone home (or at least try to), or should we rely on the choices of each individual for how best to protect themselves and their loved ones while carrying on with their lives? What are the matrixes by which that choice should be judged? “This-pro-trump-coastal-community-in-florida-hit-early-by-virus-sits-at-emotional-nexus-of-national-debate-over-reopening-economy-amid-health-crisis”

In my opinion maximizing individual choices about how to respond to the epidemic is both more effective and more in keeping with America’s freedom loving culture. By more effective I mean that it will best slow the spread of the disease with minimal damage to the economy and the quality of our lives. We each have a strong incentive to protect ourselves from contracting the virus. We also care about protecting others from exposure (most strongly our families and loved ones) but can be deterred from that goal by the loss of income if we stay home. The CARES Acted signed into law a few days ago is meant to compensate firms that shut down temporarily and workers who stay home temporarily and thus to better align the incentives to protect others with the financial consequences.

We protect ourselves and others by diligently adhering to enhanced hygiene practices (frequent hand washing) and by reducing unnecessary social contacts (no hand shaking etc.). As with most everything else in life we are each better able to determine how best to balance the risks of social interactions (whether to work from home or in the office) with safer isolation, than are government officials making general rules for everyone.  The countries that have adopted this approach have left their citizens free to go to work or restaurants but undertaken extensive educational programs on the best practices to protect against transmission of the virus. “South-korea-keeps-covid-19-at-bay-without-a-total-lockdown”

South Korea, Singapore, Taiwan and other countries taking this approach provide their citizens with honest information needed by them to evaluate the risks of different choices. This includes information on who is infected and identifying infection hot spots. In the U.S. a person’s health status is private. But when a person carries a contagious disease into the public, his/her condition should be made known to those who risk exposure.  “Coronavirus-data-privacy”

Government mandates to shelter in place or cease many business activity will become increasingly difficult to enforce (have you watched the “Steven Soderbergh movie Contagion”). Persuading the public to adjust their behavior in ways that slow the virus’s spread and providing helpful guidance on how best to do so until a vaccine is found or most of the population becomes immune would be both more effective and more politically popular.