– March 11, 2020 Reading Time: 5 minutes

What is the story of the coronavirus, the market crash, and the economic upheaval that will likely follow? The pundit and intellectual classes are hard at work to tell the story in a way that confirms their ideological biases. Their message: in times when everyone turned against the public sector, with budget and staffing cuts, we learned that only the government can save us from a worse calamity. 

Let this be a lesson unto us all! Or maybe not. 

The storyline is not unlike the one they tell about the Great Depression and the Crash of 2008. The market was unstable, overly exuberant, and animated by “greed,” and the super rich were running wild, so of course the crash came, just as hell is the destination of the sinful. Then our government officials and charges, wise and brave, rode in on a white horse and cleaned up the place, instituted controls, and put history back on the right course. 

The elements of the evolving account aren’t true, but they make for a pleasant fiction for the ideologically minded. Of course, Herbert Hoover was not a “do nothing” president; of course, Bill Clinton didn’t “balance the budget.” 

Something in this same revisionist tradition is taking place before our very eyes. The coronavirus is penance for market-oriented sins, but the hallowed halls of government are forgiving and coming to our rescue.

Weaving the Narrative

For example, a popular talking point at present is that the Trump administration deeply slashed funding for the Centers for Disease Control, and consequently the government response to the coronavirus has been slower and less effective than it would have been otherwise. The mainstream media, the two most prominent remaining Democratic presidential hopefuls, and a smattering of other public intellectuals have thrown this claim around as well. In fact, the administration proposed sweeping cuts not only to the CDC but also the National Institute of Health, but neither were approved by Congress.

Nor does it follow that cuts to any particular branch of government would necessarily have led to a delayed or less effective response to this or any other public health hazard. In fact, the Centers for Disease Control’s budget was at its lowest in 2013, and throughout the current administration’s tenure it has been in line with average budget levels over the last decade, with the exception of 2018, at which point it was at its highest.

It is true that certain members of pandemic response teams were fired (or resigned – another detail glazed over) over the last two years, but there, too, it does not necessarily follow that this made the response to the outbreak of coronavirus – which initially took place in China, whose massive legions of state bureaucrats, near-total control of society, and considerable resources couldn’t get the outbreak under control either – more ineffective than it would have been otherwise. And in fact, the specific timing of the exit of those individuals seems to have had more to do with the sudden arrival of John Bolton and a planned restructuring of the National Security Council. 

It’s also no big surprise that numerous government positions have remained empty during the current administration: that has as much do with congressional foot-dragging and with rapid turnover in certain offices as it does the administration’s stated goal of trimming the size of government. But despite media (and congressional) claims of disruption, American life seems suspiciously none the worse for wear. It’s difficult to read an editorial that warns of “the dangers of an acting official” without snickering. 

And yet among millions and perhaps tens of millions of people, a fable has coalesced: that deep budget cuts and a winnowing of experts by an ostensibly free market–leaning administration have led to the more rapid spread of the coronavirus (and its consequent effects on the world economy). It has become the story, stolid and inviolable. 

Make no mistake: some people will vote based upon this chronicling of events. These anecdotes, undeniably false, will nevertheless appear in books, editorials, and other historical depictions of the current era. They will be taught to children, and through the process of second-hand dealing in ideas over time will be woven into the fabric of the zeitgeist. In ten or twenty years it will have become part of the received knowledge of pundits amateur and expert alike.

A Hoax of Hoaxes

Another widely held assertion is that, early on, President Trump referred to the coronavirus itself as a “hoax.” In fact, at a February 28 campaign rally in South Carolina he referred to criticism of the administration’s handling of the still-nascent pandemic as “the new hoax,” suggesting (cogently) that it was yet another attempt, following the Mueller Report and the thwarted impeachment campaign, to impugn his policies and prevent his re-election. 

And there have been others: a national emergency (with all of its unseemly accoutrements) was, contrary to other tellings, declared before there was a single coronavirus death within the United States. And comparing the US (read: Trump’s) response to the pandemic to that of Switzerland, a country with 2.6 percent of the population and 0.4 percent of the land mass of the United States, is nothing short of risible. 

In fact, there’s nothing particularly abnormal about the delays and missteps the current administration has demonstrated; subpar preparedness is a part of the political endeavor, regardless of the party in power. Yet in real time, a subplot is being rewritten and served wholesale to hundreds of millions of people: virally, indeed. 

In fact – long forgotten and absent from the prevailing account of the previous administration’s handling – six years after the original H1N1 outbreak, a serious resurgence took place.

There have been loose statements made that can be taken several ways. Big surprise: Trump makes wild, offhand comments vastly outside of his core competencies. That’s less revelation than landscape by now, and it isn’t unique to the current chief executive either – although he has undoubtedly made more of a habit of it than any other president in modern history. 

Post-truth, Post-fact

The fact is, if Donald Trump is the first “post-truth” president, he hasn’t been alone in crafting the workings of this era: the post-fact media and intelligentsia preceded him by decades. Misrepresentations, skewed reporting, and a prevailing inclination to accept news that buttresses one’s ideology while discarding, or labeling false, any contraindications are now the prevailing condition. 

It was just reported that New York State will activate the National Guard and deploy it to New Rochelle to “contain” the city. Will the media and the scolding class, always poised to pounce on the mere suggestion that government isn’t always the answer, report the most salient element of this development, which is that to the outside (or, more aptly, inside) observer enforced quarantine and “containment centers” bear an uncanny likeness to martial law?

The story that is being woven before our eyes is the opposite of the truth. Average people fear the quarantine more than the virus, and rationally so. Restrictions on travel increase public panic. The dictatorial canceling of events (and the mimicking of those cancellations to signal vigilance) has devastated hotels, airlines, restaurants, and destinations. The daily threats and warnings have spooked markets far more than the sober analysis from genuine medical professionals. Markets, non-interventionist policies, and budget cuts have between little and nothing to do with the fear now spreading. 

Peter C. Earle

Peter C. Earle

Peter C. Earle is an economist and writer who joined AIER in 2018 and prior to that spent over 20 years as a trader and analyst in global financial markets on Wall Street.

His research focuses on financial markets, monetary issues, and economic history. He has been quoted in the Wall Street Journal, Reuters, NPR, and in numerous other publications.

Pete holds an MA in Applied Economics from American University, an MBA (Finance), and a BS in Engineering from the United States Military Academy at West Point. Follow him on Twitter.

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