We should avoid rushing into radical solutions that are based on insufficient data and knowledge
“I think it’s important to start off from the beginning by saying there’s need for very, very strong humility right now for everybody who is talking about potential solutions to this problem,” Blanco says.
The government could be doing more to help by getting out of the way instead of intervening, she argues. For instance, the government could reduce tariffs on goods and services, like Purell, or end the FDA’s monopoly on disease testing.
Throughout all of this we’ve seen serious issues with the rollout of testing in the United States. A lot of that falls directly at the feet of the FDA. Letting private companies develop, deploy, and interpret the results of these tests could mean testing more people faster and open up different avenues for policy options.-Abby Hall Blanco, University of Tampa
In regards to intervention, other solutions could include ending price gouging laws, in order to allow price signals to properly allocate resources for their best use, and eliminating certificate-of-need laws that prevent the addition of hospital beds or new medical facilities.
Blanco also argues that people should be allowed to “open themselves up to economic activity while still maintaining an appropriate level of distance and appropriate level of safety.” Instead of applying a single policy of intervention to the entire United States as one homogeneous population, we should allow different places and people to take actions that meet their specific needs.
When talking about this, those who are suggesting these intensive interventions—locking down cities, closing off borders to people from particular locations—the impetus is really on those individuals to illustrate, and I think they should be doing it ex-ante, that these are going to have a positive benefit.-Abby Hall Blanco, University of Tampa
An issue that arises with public health crises like COVID-19 is that leaders and policymakers have to consider the potential political consequences of their decisions. Blanco says that if they don’t engage in more intense policies and more people end up getting sick and dying, then they will face personal consequences. “However, if people overestimate and overreact then, on the back end for those individuals, the consequences do not appear to be as severe because they can always say, ‘Oh well, it’s better to have overreacted than underreacted,’”Blanco says.
We should avoid rushing into radical solutions that are based on insufficient data and knowledge, Blanco says. Even experts disagree about how the virus has spread and what the trajectory for the virus is, so we should not expect political officials to be able to base their policies on accurate information.
Regarding the new stimulus package, Blanco notes that, while it sounds appealing, it is not likely to have any kind of long-term relief. Individuals are receiving funds based on their income rather than employment status, and a lot of the stimulus money is actually going to larger businesses with political ties.
I think that there is a real necessity here to question both the knowledge that individuals possess as well as the incentives that those who are implementing are facing when they do.-Abby Hall Blanco, University of Tampa
Blanco points out that the policies people are promoting are not costless policies. They have a very real human cost as well as monetary cost. She explains that restrictions on mobility and economic activity can lead to a recession and other consequences. “Economic cost and human cost are intertwined,” Blanco says. “We can’t separate those two.” When people lose their jobs, rates of depression, drug use, domestic abuse, and suicide rise.
One of the things that we learn as economists is that some things are long and variable. There are system effects or changes that occur as the result of intervention that we can’t anticipate at the outset, and those things can and do have very real and far-reaching consequences.-Abby Hall Blanco, University of Tampa
Additional articles, videos, and content on this topic and others can be found on the Institute for Humane Studies blog.