For those who are inclined to see every crisis as an opportunity to advance their parochial political objectives, the Coronavirus outbreak is the mother of all opportunities.
Social media is mobbed by the over-confident and under-educated, some of whom are capitalizing on the opportunity presented by images of ransacked supermarket shelves to make favorable comparisons with more socialistic societies. These snarky tweeters don’t seem to know they’re suggesting that the tangible effects of socialism are akin to a perpetual pandemic.
It is nevertheless true that those who are taking this acute crisis seriously have dropped their ideological objections to economic relief that involves a measure of redistribution. To those for whom big government is always in fashion, witnessing conservatives accept the necessity of expansive emergency safety-net programs has become a source of validation. Republicans both within and outside the administration have endorsed direct stimulus payments to Americans to prop up faltering consumer demand. To some onlookers, this is a qualified embrace of Andrew Yang’s proposal for a universal basic income. CNN editors, New York Times reporters, and candidates for federal office rushed to insist that the right had capitulated to the compelling logic of getting money for nothing. It’s hard to imagine that the Coronavirus crisis has relieved the nation’s best and brightest of their capacity to distinguish an extraordinary contingency measure from a perpetual government program.
It’s hard to imagine that the Coronavirus crisis has relieved the nation’s best and brightest of their capacity to distinguish an extraordinary contingency measure from a perpetual government program.
This obtuse reaction is easier to understand when viewed from the perspective of a Democrat, for whom emergency contingencies are justified even in the absence of an emergency. In the effort to outbid the White House’s economic relief proposal, Senate Democrats, including Michael Bennet, Cory Booker, and Sherrod Brown, have proposed a much larger individual economic stimulus that could be extended indefinitely for those who are eligible. No doubt, their hearts are in the right place, and no one should fail to appreciate properly the unendurable conditions that those on society’s margins would endure if a deep recession is on the horizon. But the perpetuity of their proposal establishes a contrast with Republicans that journalists and policymakers are actively trying to blur.
Those who are even more persuaded by the socialist model have adopted the notion that this, a time in which the myriad shortcomings of the inherently lethargic federal government are self-evident, is a time when the government should have even more centralized control over the economy. “This is a war-like situation,” said New York City Mayor Bill de Blasio. “This is a case for a nationalization of crucial factories and industries – literally a nationalization – that could produce the medical supplies to prepare this country for what we need.” The mayor was not alone. Watching America’s critical domestic airline industry suffer, the New Yorker’s John Cassidy suggested that “Temporary nationalization/conservatorship is the obvious solution.”
De Blasio’s suggestion is vague and broad, but we can explore it critically via just one avenue. When it comes to the matter of life-saving supplies and technologies such as ventilators, which experts believe could be needed in vast numbers if infections begin to spread at exponential rates, the problem is not the private sector. According to Forbes magazine’s William Baldwin, there are a number of domestic ventilator manufacturers that can fill the gap. “We could increase production five-fold in a 90- to 120-day period,” said Ventec Life Systems executive Chris Kiple. As the Oregonian reported, however, neither state governments nor the federal government have made the orders that would yield increased production. Before the nation assumes control of those industries, governments might want to try placing those orders first.
As for the airlines, many Americans are too young to recall a time when that industry was far more heavily regulated than it is today; a time when routes were limited, nonstop flights were hard to find, airports were few and farther between, and fares were higher due to price controls and a lack of competition. Managed bankruptcy has since become a regular feature of the airline industry, along with radically reduced fare prices and route options. “There’s not a good nationalized airline anywhere in the world, and they cost a fortune to taxpayers,” financial journalist Felix Salmon observed in 2011, the last time the national conversation veered in the direction of nationalized transportation networks. The model of what a new nationalized airline industry would look like is not the groovy (and misleadingly idealized) PanAm cabins of yore but Amtrak.
Indeed, one of the reasons why markets have responded with such a dramatic selloff in the last two weeks is that policymakers are flying blind. Without a robust regime of testing to determine what infection rates are within a random sample of the population, we don’t know whether the draconian social isolation and economic constraints policymakers have embraced are efficacious. But even the left would admit this is a terrible failure of the public sector and, specifically, agencies like the Centers for Disease Control. The White House has relied on private labs and research hospitals to fill the gaps left by the government. Indeed, the states of emergency adopted by federal and state governments are designed, in part, to cut the regulatory red tape that prevents private institutions from doing the kind of work that was absolutely necessary in the earliest days of this crisis.
Donald Trump has done everything he could have in the last several weeks to treat the national health crisis like it was a financial crisis, but the markets did not respond. You can lower rates to zero, inject trillions of dollars into the economy, and send every American a check, and it won’t staunch the bleeding. But to judge by the left, Trump isn’t the only lawmaker who has misread the nature of this event. Market (or anti-market) solutions will not stabilize the markets. You’ve got to get your hands around the infection first.
