(Bloomberg Opinion) — President Donald Trump’s approach to the issue of coronavirus lockdowns has been characterized by a series of unsettling overreaches and reversals. In late March, Trump declared that he wanted to end U.S. lockdowns by Easter. A few days later the president reversed his statement and extended federal guidelines for shutdowns through the end of April. This week, Trump briefly attempted to assert presidential authority to order states to end their lockdowns, but after it became clear that this probably was unconstitutional, he backed down and declared that he wouldn’t interfere with state and regional reopening plans. At a press briefing today Trump gave his blessing to governors to go ahead with their own plans, issuing guidelines for recommending when each state or region should reopen. It’s a step in the right direction.
Some voices continue to call for the economy to reopen quickly in spite of the mortal danger of the pandemic. Indiana Representative Trey Hollingsworth recently asserted that the many American deaths that would result would be the “lesser of…two evils” compared with the economic cost of continued lockdowns. Investor Michael Burry, famed for shorting the housing bubble of the early 2000s, has claimed there is “no justification” for current policies. And protesters in Michigan, Ohio and elsewhere have demanded immediate reopening.
These voices are dangerously wrong. Even with most of the nation under lockdown as of the end of March, U.S. deaths have climbed to more than 34,000 and are forecast to surpass 60,000 — more Americans than died in the Vietnam War and many times the number who died in the War on Terror. Without lockdowns, epidemiologists predict that deaths could reach into the hundreds of thousands and possibly claim more lives than any war in the country’s history. And that doesn’t even include the long-term damage to the lungs and other organs of many who survive the disease.
But weighing these staggering human costs against the supposed economic benefits of a quick reopening relies on a crucial and flawed assumption — that economic conditions would rapidly go back to normal if only governments allowed people out of their houses. The truth is much grimmer.
If the economy were reopened without sufficient suppression measures in place, many people would rightly be wary of shopping in stores and eating in restaurants before the danger of coronavirus had passed. As some left their homes and infections began to rise rapidly once again, people would be afraid once more to go out. Retail businesses, which were generally not operating on huge profit cushions before coronavirus, would still suffer, except that without government support most would fail and lay off workers instead of being paid to keep them on payroll, as they now are doing. Eventually, fear of the virus would increase public pressure for renewed lockdowns, costing the economy more crucial weeks or months even as the disease destroyed more lives.
Furthermore, regions that shut down early and decisively will probably be primed for more rapid growth after the crisis passes. This was the experience of American cities during the Spanish flu outbreak of 1918; as my Bloomberg View colleague Scott Kominers explained, cities that enforced more social-distancing measures early in the epidemic grew faster afterward.
Thus, it’s not a choice between the economy and people’s lives; it’s a choice between short-term economic losses or extended economic losses combined with mass death. Small wonder, then, that even business-oriented nations such Singapore have been quick to shut businesses and schools when coronavirus seemed to be getting out of control.
The question of when the economy can be reopened is a matter of if, not when. It must wait until a public-health regime capable of suppressing the virus is in place. As National Institute of Allergy and Infectious Disease Director Dr. Anthony Fauci has explained, the core of that system must be a so-called test-and-trace program. This means that when someone tests positive for Covid-19, public-health workers need to track down everyone they’ve had contact with in the two days before their symptoms manifested (when most patients start becoming contagious), and test all of those people as well. All who test positive must be ordered to isolate themselves at home for at least two weeks.
Fortunately, many of the governors now organizing regional reopening plans seem to understand the importance of test-and-trace. Technology companies such as Apple and Google, meanwhile, are working on software that allows phones to do contact tracing anonymously, preserving individual privacy.
Trump’s also needs to emphasize test-and-trace. Bloomberg News reported that the administration is focused on expanded testing capacity as one of the key criteria for reopening. But only a few days ago, Trump’s Department of Health and Human Services almost ended support for community-based coronavirus testing sites around the country, reversing course only after a major outcry. And some laboratories report that more federal funding is urgently needed if testing is merely to be sustained at current levels, much less expanded. If Trump really is serious about testing, he needs to do more to prove it. Meanwhile, Trump’s guidelines should be modified to add the need for contact tracing and isolation of the sick.
Right now, investments in testing, contact tracing and patient isolation systems offer a higher return on investment — both economically and in terms of human lives — than any stimulus plan, and certainly a lot more than a premature reopening. The sooner these systems are in place, the sooner Americans can feel safe and confident enough to come out of their homes and start shopping and going to work once again.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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