A formula for reopening
The economy cannot remain shuttered indefinitely
This week, President Donald Trump began openly considering at what point the American government ought to take steps to reopen the American economy. He explained: “Our country wasn’t built to be shut down. America will again and soon be open for business,” suggesting that the timeline will be weeks instead of months. “If it were up to the doctors,” Mr. Trump said, “they’d say, ‘Let’s shut down the entire world.’ This could create a much bigger problem than the problem that you started with.” Later, Mr. Trump optimistically proclaimed that he “would love to have the country opened up and just raring to go by Easter.”
Mr. Trump’s projections drew fire — as do all of his statements. These statements, however, caused inordinate faux heartburn among commentators, who shouted that Mr. Trump was weighing dollars against lives and deciding in favor of dollars.
The hashtag #NotDyingForWallStreet began trending on Twitter, followed by the hashtag #DieForTheDow. New York Gov. Andrew Cuomo tweeted: “My mother is not expendable. Your mother is not expendable. We will not put a dollar figure on human life . ... No one should be talking about social darwinism for the sake of the stock market.” Presumptive 2020 Democratic presidential nominee Joe Biden said, “I don’t agree with the notion that somehow it’s OK ... to let people die.”
That, of course, was not Mr. Trump’s suggestion. Mr. Trump was merely pointing out — quite correctly — that since the federal government has now taken the unprecedented and justifiable action of completely shutting down the American economy, to the tune of millions of lost jobs and the greatest quarterly economic decline in recorded history, we must also have a plan to end this situation.
The economy cannot remain shuttered indefinitely; the federal government cannot engage in endless cash expenditures on the basis of Treasury notes nobody is buying. Nor is the economy merely Wall Street. The vast majority of those who will lose their jobs are not day traders but workers. Small companies are more likely to go under than large ones. The economy isn’t an abstraction. It’s the real lives of hundreds of millions of American citizens, and costs to those Americans must be weighed in the balance.
That’s not controversial. That’s a simple fact. Public policy is the craft of weighing risks and rewards, and policymakers do it every day. It’s just that this time, the stakes are the highest they have ever been.
So, when do we reopen, and how?
The biggest problem is that we lack the data to answer the question. How many lives will be lost if we take heavy social measures after how many weeks? Moderate social measures? What will be the concomitant economic gain or loss? How many additional ICU beds and ventilators will we need to make available in order to clear the flattened curve such that we do not experience excess deaths due to lack of equipment, a la Italy? Our goal should be to move from the Chinese model — total lockdown — to the South Korean model — heavy testing, contact investigations and social distancing. In order to accomplish that, we need to flatten the curve and stop the spread, allowing us to reset. How long will that take?
We’re not going to have answers until some time passes — until we test more, until the outcomes of cases are made certain. But we can certainly construct the formulas that should allow us to calculate possible outcomes as new data come in, and that should allow us to collectively commit to actions directed at certain outcomes. We require a formula from the government. That’s the transparency the markets need, that the American people need. And that, at least, should be attainable over the next two weeks.