Tuesday , July 7 2020
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Get Ready for the Careful Economy

Summary:
Source: Wall Street JournalReady or not—mostly not—the reopening is at hand. The economic carnage of a continued lockdown is simply too great to sustain. But the virus is still with us, so the carefully reopened economy will be less efficient than the pre-pandemic economy.....A Wall Street Journal Oped on where we are and peering in ...

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Get Ready for the Careful Economy
Source: Wall Street Journal
Ready or not—mostly not—the reopening is at hand. The economic carnage of a continued lockdown is simply too great to sustain. But the virus is still with us, so the carefully reopened economy will be less efficient than the pre-pandemic economy.....

A Wall Street Journal Oped on where we are and peering in to the muck. Much is inspired by my "dumb reopening" blog post of a week or so ago.

I must say my faith in human wisdom is a bit shaken by the videos of massive crowds on Memorial Day. Spring break and Mardi Gras were super-spreader events, and being outdoors is good but not perfect. On the other hand, in many parts of the country maybe 1/1000 people are infected at most. And the media has been known on occasion to pick one or two sensational stories and let them stand in.

The oped is cut to the bone, as there things are. I did not emphasize enough that isolating the vulnerable and making sure they don't get it -- testing anyone who wants to walk in to a nursing home -- is a much more effective tool than a blanket business lockdown. This disease is very concentrated

Also I wanted to hammer home that parties are dangerous, business per se is not. Locking down all business will likely be seen as a huge waste. We will see if Americans are able to refrain from partying. Indeed I worry that by focusing attention on business closings as the main policy tool, people get the idea that business is dangerous, staying at home is not. Let's party.

One worry on regulation is that it will provide a recipe  for a wave of lawsuits. That may have been a reason the Administration tried to hold back CDC guidance. A long, expensive, and impractical list of things you must do to reopen is catnip when someone gets sick and wants to blame a business. Show us the records that you wiped down the bathrooms every half hour. A legal system that can sue over talcum powder is not above this.


John H. Cochrane
In real life I'm a Senior Fellow of the Hoover Institution at Stanford. I was formerly a professor at the University of Chicago Booth School of Business. I'm also an adjunct scholar of the Cato Institute. I'm not really grumpy by the way!

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