COVID-19 and the Recession

The media repeatedly report the twin threats of “COVID” and “the COVID recession” as though the COVID recession were an organic outgrowth of the virus. This is sloppy. While there is overlap between the COVID health threat and the COVID recession, the magnitude of COVID recession results in the main from policy intervention in an attempt to mitigate the health threat. It is more accurately labeled “the COVID policyresponse recession.” This is a critical distinction.

To be sure, illnesses have huge direct effects on the U.S. economy every year. Sick people miss work. Dead people can’t work. Illness due to the COVID virus certainly adds to this. COVID would have an economic impact on the country due merely from the illness itself. Yet the policy responses themselves have a separable, independent impact on the economy. As the National Bureau of Economic Research’s Business Cycle Dating committee observed in June, “The committee recognizes that the pandemic and the public health response have resulted in a downturn with different characteristics and dynamics than prior recessions” (emphasis added). This separation must be kept in mind.

Recognizing that the impact of the disease and the impact of government intervention are separable does not require that one commit in advance to the inequality facing in one direction or the other. One can believe that the impacts of the disease—economic as well as non-economic impacts—easily outweigh the impacts of the recession (which also include non-economic costs imposed on people as well as economic costs). Believing this, however, does not require the rhetorical slight-of-hand to treat recession costs as though they are not tradeoffs, as if the costs of the governments’ public health response simply develop organically out of the virus itself.

Treating them as the same problem rather than separate challenges obscures the necessity that policymakers, and citizens, need to make decisions that have tradeoffs attached. And the tradeoffs are not easy ones of simply choosing between closing everything down or leaving everything open; between stopping the virus cold and letting it have its way unhindered.

There are grays and gradations in these policy choices, rather than discrete blacks and whites. The bulk of the costs of the COVID recession can be traced to policies that sought to confine people to their homes unless they had a justification to be out, to policies that sought to close broad categories of “non-essential” businesses, and policies that imposed broad prohibition of travel by even healthy people. These policies contrast sharply with significantly less burdensome policies: mask wearing, social distancing, hand washing, and contact tracing.

The question is what was the gain of the most draconian policies in fighting the virus relative to the much less burdensome policies.

Treating the “COVID recession” as though it were simply a natural, necessary outgrowth of the pandemic also runs the risk of normalizing the real novelty of the most draconian governmental policy responses to the novel corona virus. Perhaps more worryingly, it might serve as a precedent, becoming the expected “go to” response to the next novel virus (or serious flu season), whether or not draconian policies are indicated.

For example, the government-ordered, population-wide confinement of healthy individuals to their homes unless they are in pursuit of a necessary occupation of one sort or another is without precedent in the United States. Discussion of the home confinement orders typically moves too quickly to a discussion of the very real and significant quarantine power that U.S. governments have often employed in the past to respond to pandemic threats. There are in fact significant differences between traditional quarantine orders and this year’s confinement orders, not least the sheer breadth of today’s home confinement orders relative to quarantine orders historically. To be sure, quarantine orders can be draconian in themselves (consider the nightmarish quarantine outcome affirmed in State ex rel. McBride v. Superior Court for King County). Yet “quarantine” in the past legally refers to the isolation of sick people or people known to have been exposed and at risk for the duration of their illness or for the period of incubation for the disease. Once that period had passed, they were freed from confinement.

This year’s confinement orders constrain many more healthy people than they constrain sick people, and there is no natural time limit on the confinement of the healthy beyond the end of the pandemic itself. It is no more than governmental laziness—the real reason often papered over by the assertion of administrative convenience—that the possibility of asymptomatic carriers of the COVID virus was taken to imply that the entire U.S. population has been exposed to the disease and could therefore be confined indefinitely under the traditional quarantine rationale.

First, there are many communicable diseases, some much worse than COVID-19, in which carriers are asymptomatic. U.S. law in the past has had little difficulty accommodating asymptomatic carriers. (See, for example, the asymptomatic cases at issue in People ex rel Barmore v. Robertson and Kirk v. Board of Health.)

The more affluent sectors of U.S. society are those most enabled to work remotely from home. They can purchase their security from infection on the cheap relative to poorer segments of society. Yet we don’t hear much about privileged access of the affluent to government ears in the context of virus policy.

Further, there is an initial, much less burdensome alternative to quarantine. “Contact tracing” means that once a carrier is identified, outreach is made to those with whom the carrier came in contact. Quarantine then takes place on a case-by-case basis and only where the need is demonstrated. To be sure, it is possible that an entire neighborhood or even a city might need to be quarantined because of the spread of a disease. This occurred in Compagnie Francaise de Navigation a Vapeur v. Louisiana Board of Health (although the city’s quarantine was almost certainly a pretext to avoid accepting a boatload of immigrants from Italy). Yet even here it requires an affirmative finding of disease, the inadequacy of less burdensome measures, and the recognition that the quarantine would be of a limited duration.

Similarly, the policy of closing down all “non-essential” businesses was unheard of in U.S. history. There is again, a laziness in the modern approach in which “non-essential businesses” are businesses not identified on a list of otherwise “essential” businesses. This paints with a much broader brush than in earlier pandemics. During the 1918-1919 Flu pandemic, it was usual to identify the businesses to be closed by name. Bars, dancehalls, theatres, etc. The unnamed business could remain open. Today, if unnamed on the government-approved list of “essential businesses,” then the business must close. The reversal of the presumption is just administrative laziness. This indolence, however, comes at a steep cost, with its imposition on the need to make a living—particularly among the less affluent—as well as the casual substitution of administrative dictate for individual judgment of risk.

Noted by observers across the ideological spectrum is that the impact of the “COVID recession” affects most severely the less affluent and most economically vulnerable sections of the American public. This overlaps, by and large, with those parts of the population most at risk from the virus. This underscores all the more the need carefully to understand and weigh the tradeoffs between the virus and policies intended to respond to the virus. The more affluent sectors of U.S. society are those most enabled to work remotely from home. They can purchase their security from infection on the cheap relative to poorer segments of society. Yet we don’t hear much about privileged access of the affluent to government ears in the context of virus policy.

It is the most-draconian policies that disproportionately contributed to the magnitude of the “COVID recession.” Perhaps it is defensible in light of the threat that COVID represents. If so, proponents of the lockdown should own the recession as a necessary, if lamentable, requirement. It is legerdemain—sleight-of-hand—however, to pretend that the COVID recession is an organically outgrowth of the COVID virus, as opposed to what it, the result of human intervention, however well-intended that intervention might have been.