May 2, 2020 Reading Time: 5 minutes

We need to shut them down. Governments that is. At least the ones that cannot pay their bills because of unnecessary economic lockdown orders.

I have tried just about everything in these pages to induce politicians to see that they are pushing the worst policies since at least the New Deal and are not going to get reelected if they continue their lockdown policies, which could end in bloody revolt if the power or another essential system goes out

I’ve also tried to induce Americans to sue for their freedom on both civil and Constitutional grounds. I’ve tried to stir their patriotism, and to shame them into rising above the status of mindless test subjects or medieval peasants. I’ve tried to get “Progressives” to see that they can’t have both Social Security and government health insurance simultaneously without increasing the probability of future fiascos. 

I have also proffered two separate ways out of this mess, one recently implicitly endorsed by Elon Musk, and another that no self-respecting social scientist could dispute. And I suggested that COVID-19 life insurance would help Americans to face death more like their brave ancestors, or younger selves, did at Woodstock.

But oh the powers that be, be a mighty whale some doth call Leviathan, with the magical power of creating something out of nothing, or rather, like the Wizard of Oz, appearing to create something out of nothing! So the money doth spew forth from the whale’s blow hole in mighty bursts to assuage and calm those who might wish it ill. And worked so far it has.

That the beast might spew forth again, some state and local governments complain of pecuniary distress. But to satiate their greed for power and lucre will be our undoing. The best that our ship’s captain, Ishmael Trump, can do right now is to make clear that state and local governments that remain locked down shall never hear “Thar she blows!”

The penultimate power, before resorting to the harpoon, be the power of the purse, an old expression not so much about money per se as the real resources that money can command. Typically tyrants try to seize resources to strengthen their tyranny. Today, we are faced with tyrants who are deliberately destroying resources despite ample evidence from Sweden and the five free states that they need not do so to successfully slow the spread of the novel coronavirus.

In fact, as I predicted, the New York Times-Columbia “we are all going to get COVID and die” model has been way off, even in the five free states. South Dakota’s cases and deaths, for example, are about 7 percent of those predicted and some counties expected to be overrun by now haven’t had any reported cases, most of which have occurred in Minnehaha and Lincoln counties, which share parts of Sioux Falls, the state’s eastern metropolis of 190,000. A big hunk of those cases stemmed from the infamous but super essential Smithfield pork processing plant.

I do not have a ready explanation for why places that imposed less extreme mandatory restrictions have fared about as well on “flattening the curve” as those that have locked down. It could be self-selection but Stockholm and Omaha are real cities, not one stop sign hamlets, and even their infections and deaths have not run rampant

Something like the Peltzman Effect could be at play, meaning that people in free areas take fewer unnecessary risks because they know that they may be interacting with infected people while the poor souls in locked down areas assume, often wrongly, that they can crowd into a Walmart because everybody is on lock down and the government is “doing something,” even if that something is utterly irrational, like keeping beaches open while closing beach parking lots. That bit of brilliance had Floridians parking in the lots of shuttered businesses across A1A and then congregating at the few crosswalks!

In fact, in retrospect, a 99 percent 3-week shelter-in-place for everyone (except COVID-19 HCPs and first responders) for any reason except dire emergency (and I don’t mean the dog needing to defecate) would have been preferable to what has evolved. A simple stay law deferring all debts for three weeks would have been far preferable to seemingly endless bailouts. 

That approach would have been unconstitutional too, and people would have died, but America would have been rid of COVID-19 by early April and thereafter could have concentrated on border controls and testing/tracing a la South Korea for any new outbreaks. The economy would have experienced a shock but one that it would already be rebounding from because of the certainty of the policy. That “nuclear” option is now off the table as we are too weak to suffer such a shock now.

For whatever reason, many governments persist in destroying resources and fundamental liberties on the basis of a debunked epidemiological model. The national government should actively intercede, as it did to protect Americans’ rights during the Civil War and Civil Rights Movement, neither of which were very civil. But even if it doesn’t want to interfere with states’ rights today, under no circumstances should it FUND their oppression. Verily, I believe any attempt to do so will lead to a tax revolt, probably of the quiet variety at first. There is just no way Americans in the free states are going to fund the continued subjugation of their fellow Americans in California, Michigan, and elsewhere, which have essentially been invaded and occupied by their own governments

But what then shall the poor state and municipal governments do? Obviously, they need to lift most economic restrictions so that taxes again begin to flow in. And they also need to cut their “nonessential” workers, which is essentially most of them. In the short term anyway, we need courts and police officers and other first responders. (Ultimately, we do not need any of them but this is no time for novelty, even if we have rich comparative and historical examples from which to draw.) But teachers, recorders, prothonotaries, and all sorts of other bureaucrats need to be furloughed immediately. (If you think that many will then join the ranks of protesters, you’re starting to understand the power of the purse! They can arrest some protestors, but not all of them, especially with their budgets so tight.)

There is no reason to exclude national government employees from furloughs either. The bailouts and other forms of hush money already paid out has to be repaid somehow, through higher taxes or lower expenditures. Why do we need parts of the SEC if no corporations are issuing securities? What good is the EPA if factories are shuttered? The USDA if meat processors are closed? What does the Department of Education do even in normal times? Surely most of the Department of the Interior can be let go. 

Is furloughing 75 percent of government workers a draconian suggestion? Absolutely, but why shouldn’t government employees suffer along with the rest of us? You can’t expect civvies to bear all the burden of flattening an already pretty flat curve indefinitely. Plus, unlike the private sector, which is all “essential” or it wouldn’t exist, we know from budget battle government shutdowns that much of the national government is nonessential. Life goes on, and some think improves, without it. 

The nonpartisan Congressional Budget Office (CBO) estimated the deadweight loss of the 35-day partial federal government shutdown in early 2019 at only $3 billion. We will be lucky to get out of the current mess for $3 trillion in deadweight losses.

Governments messed up by botching testing, then not stopping the spread of the virus when it was still manageable, then did so again by shutting down too much of the economy for too long to cover their incompetence, and now they want to be rewarded with continued nonessential employment, and the forced redistribution of wealth from all Americans to Constitution-smashing state governments? Where is the last straw?

Robert E. Wright

Robert E. Wright

Robert E. Wright is the (co)author or (co)editor of over two dozen major books, book series, and edited collections, including AIER’s The Best of Thomas Paine (2021) and Financial Exclusion (2019). He has also (co)authored numerous articles for important journals, including the American Economic ReviewBusiness History ReviewIndependent ReviewJournal of Private EnterpriseReview of Finance, and Southern Economic Review. Robert has taught business, economics, and policy courses at Augustana University, NYU’s Stern School of Business, Temple University, the University of Virginia, and elsewhere since taking his Ph.D. in History from SUNY Buffalo in 1997. Robert E. Wright was formerly a Senior Research Faculty at the American Institute for Economic Research.

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