Monday, March 23, 2020

With COVID-19, That Which Is Not Forbidden Is Mandatory—and Subsidized

By J.D. Tuccille - March 23, 2020 at 08:15AM

Whatever your feelings about the right response to the COVID-19 pandemic, chances are that what you're actually doing was dictated to you by government officials at one level or another. It's equally likely that you have no idea what costs you'll ultimately face as a result of those mandates from above or because of promised subsidies and economic interventions.

Across the country, political figures are racing to do something—anything!—so long as it's mandatory for you and your neighbors. And they're pleased to offer showers of magic money borrowed from the future to pick up some or all of the costs.

Who knew that a virus would threaten to turn the Land of the Free into a command society where what we do is directed and paid for by the state?

"I'm calling on the Federal Government to nationalize the medical supply chain," Gov. Andrew Cuomo of New York announced on Sunday. "The Federal Government should immediately use the Defense Production Act to order companies to make gowns, masks and gloves."

Cuomo joined a chorus of voices including CNN's Jake Tapper and MSNBC's Kyle Griffin asking President Trump to follow up on his invocation of the dusty, Korean War-era Defense Production Act, which gave the government Soviet-style power over the economy in order to fight communism.

But why should the government start bossing private businesses around when these businesses are already scrambling to meet the massive demand for medical equipment driven by the COVID-19 pandemic?

Industrial giant 3M, which makes much-sought N95 masks, has already doubled output to 100 million units per month. Its efforts are being supplemented by fashion industry designers and manufacturers switching from fashion-forward clothes to medical supplies to meet massive demand.

Distillers, who have alcohol to spare, are stepping step into the gap to manufacture hand sanitizer, which is disappearing from shelves as fast as it's restocked (the only help they seem to need is regulators getting out of the way).

Ford and General Motors have announced plans to reopen car factories currently closed by the pandemic in order to manufacture ventilators to help critical-care COVID-19 patients. They're working with existing manufacturers to increase capacity using existing designs.

Some of the more interesting responses are the decentralized ones meeting peculiar local needs. That includes the hospitals and clinics working with their communities to share plans for masks that people can sew at home. It also means the Italian 3D-printer company—one of many such small, responsive firms responding to the crisis—that stepped up to supply components when a local hospital ran short of valves for connecting respirators to oxygen masks.

Nationalization of the medical supply chain, as Governor Cuomo demands, would replace a normal marketplace (well, normal-ish, considering the already considerable government intervention in medicine) of shifting incentives, responsive prices and supplies, and unplanned innovation with a single purchaser. That purchaser—the government—will also decide which lucky recipients get what, and the cost to the end user.

Likewise, social distancing seems to be a good idea during a pandemic, with many employers scrambling to promote telecommuting, schools and families struggling to master distance learning, and businesses innovating to survive the pandemic, if they can. (Even the long-established handshake may fall victim to COVID-19, fated to be replaced by less intimate greetings; the air kiss may finally have its day.) Not everybody is behaving as every official and expert would like, but it's not obvious that they should; we don't all face the same risks and we don't all live in the same circumstances. Nevertheless, most people have made big changes to work safeguards into their lives.

But politicians think such normal safeguards don't count unless they're enforced by law. That means we don't get individual decisions responding to varied preferences, values, and demands, but mandates from above, like California Gov. Gavin Newsom's stay-at-home order, reading in part:

I as State Public Health Officer and Director of the California Department of public Health order all individuals living in the State of California to stay home or at their place of residence except as needed to maintain continuity of operations of the federal critical infrastructure sectors, as outlined at

Forget that government officials' idea of "critical" may not match yours (Reason's Eric Boehm points out that politicians may disdain laundromats, but they're a necessity for many people). Forget, too, that you can't shut down parts of an economy without affecting the whole thing.

The politicians don't care, and they'll enforce their whims: violation of the California order is a misdemeanor, "punishable by a fine of not to exceed one thousand dollars ($1,000) or by imprisonment for not to exceed six months or by both." States including Connecticut, Illinois, Louisiana, New Jersey, New York, Ohio, and Pennsylvania, threaten similar penalties for not obeying government orders.

Of course, smothering whole sectors of the economy, and maybe the whole thing, might end up being a bit pricey. We should get ready for "a tsunami of economic destruction that will cause tens of millions to lose their jobs as commerce and production simply cease," the Wall Street Journal editorial board warns.

Not to worry, the government has a plan. Another plan, that is.

After ordering people to close businesses and having killed jobs, while threatening to nationalize procurement for the healthcare industry, government leaders want to make it all better by moving money around to offset the losses. With a price tag closing in on $2 trillion, Democrats and Republicans are competing to stuff favored corporate bailouts, interest-group payoffs, unemployment benefits for those forcibly sidelined, and more, more, more!

The ultimate result will be to transform a more-or-less free society, driven by individual preferences and private decision-making, into one in which planning is centralized and costs are shifted according to governmental priorities. You can assume that some calculation will be built into that spending, too – rewards for friends and punishment for enemies, as is always the case in politics. That is, we're becoming a country in which much of what we do is both mandatory and subsidized.

When this is all over, don't expect politicians to lose their taste for ordering us around. That's a hard habit to break. You can be certain, though, that they'll want us to thank them profusely for the checks they cut to offset some of what they inflict on us.

from Reason Magazine Articles