More on Coronavirus Overreaction

Here’s an article from the Cato Institute on the economic dangers of overreacting to the Wuhan Flu. Important bit:

In a Washington Post piece, a small‐​business owner with 75 employees expressed her fear at the impossible situation she is in. Cathy Merrill argues that even a two‐​month closure would be a death sentence to businesses such as hers. As she points out, she might be able to borrow to keep paying rent and labor costs, but borrowing would be risky because she doesn’t know when revenues may come back since this is an open‐​ended crisis. I think she’s right that small‐​business layoffs and bankruptcies will soar if shutdowns extend very long.

The logic of virus‐​fighting suggests strong measures to flatten the curve of infection in coming months. But as Merrill says, “who is going to quantify the number of deaths from unemployment stress, food insecurity, depression or lost health insurance — plus the spike in suicide rates and heart angina from the stress of being laid off or furloughed?”

Merrill suggests that officials don’t appreciate the financial vulnerability of America’s 30 million small businesses when they are ordering all‐​encompassing shutdowns.

There’s the rub. Most of the people in positions of power at the highest levels of government have never done anything but work for the government their whole lives. They don’t know how to run any kind of business, large or small.

The closest thing they ever experience to an economic downturn is when a congressional budget fight leads to a “government shutdown,” which is really just bonus vacation time for government employees. When it’s over, everybody comes back to the same jobs at the same pay, including all the back pay for the days they stayed home and did whatever they wanted.

This is not like that. A restaurant owner can’t shut down for a month, and then flip a switch and pick right back up as if he had never shut down. People will really lose their jobs. Businesses will really go bankrupt. And I don’t know if lifetime politicians can appreciate that.

Here’s where we need Trump, someone who has had to make payroll in his life, to step in and educate some people.

Leave a Reply