What you are looking at aint cheap...
What you are looking at ain't cheap... Morsa Images/gettyimages.com

I honestly have no idea which universe conservative commentators like Jason Rantz live in. I also have no idea why Newsweek regularly publishes his rubbish ideas, the latest of which is contained in a mix of madness and deception called "New Washington COVID Rules Could Kill More Businesses Than Save Lives."


If you think there is more to the article than is expressed in the headline, you are mistaken. The argument begins where it ends: COVID Rules = More Dead Business Than Dead People. How can one say such a thing on the day when a record number of infected Americans—nearly 100,000 people—are fighting for their lives in hospitals? And we have not yet reached the expected surge caused by plain American stubbornness: It is my constitutional right to eat that turkey with my family and do that shopping on Black Friday.

The issue is not the restrictions. They must happen because there is no other way around this crisis at this moment. The problem with the restrictions is they are not accompanied by commands to bring the economy to a standstill (this would take the form of a moratorium on debt servicing of every imaginable kind) and programs that provide financial assistance to the closed business and unemployed workers. What we have instead are just the restrictions and a few insufficient programs.

But conservative commentators pull the same dumb trick every time. They begin with the restrictions and then want us to believe they've done something amazing by taking a step backwards and arguing that businesses should remain open.

Here is Rantz dishing up the usual drivel:

In Downtown Seattle alone, at least 140 businesses permanently shut down according to the Downtown Seattle Association. Now, just as downtown visitor traffic started to pick back up for the holiday shopping season, they'll be forced to restrict access to their stores while likely also cutting back on staff hours.

The woes extend far outside of Seattle.

With the airline industry suffering so dramatically, Boeing announced it would pull production of the 787 airliner out of Snohomish County. This impacts at least 1,000 jobs, on top of the previously announced 12,600 layoffs and buyouts.

To begin with, Boeing was in deep trouble almost a year before the pandemic hit, and the company also laid off thousands of workers during its boom period in the previous decade. Indeed, many believe these layoffs and cost-saving shortcuts resulted in the 737 MAX crisis. Of course Rantz ignores this, and instead presents a fantastic world were the only answer can be, must be, shall always bloody well be: keep businesses open, keep the planes flying, and keep the cash registers popping.

The only effective tool we have right now are these bothersome and un-American restrictions. And though it's a frustratingly limited response, it is still, from a long-term economic perspective, a far cheaper one than just permitting businesses to run as if our country has some kind of control over the highly infection virus.

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The Rantz type always tries to trap the COVID economics discussion into one about the cost of the restrictions, but never mentions or considers the possibility of the true cost of not having them. And yet, what is so plain to see or imagine is the enormous financial pressure that the out-of-control pandemic is exerting on our profit-driven health system.

In September, McKinsey & Company, a U.S.-based worldwide management consulting firm, explored the possible financial impact that COVID-19 would have on America's healthcare system:

While the direct impact of COVID-19 has already been substantial, additional layers of delayed or indirect impact have the potential to dwarf the immediate effects. These additional layers of impact related to COVID-19 could result in $125 billion to $200 billion in incremental annual US health system cost.
I think this estimate is conservative, and the authors of the study say as much. They know there are "known unknowns"—unseen and not yet imaginable costs that are not directly medical. Also, the report was made at a time when the U.S. was descending from a second surge, which was much smaller than the present one, which has no end in sight.

And so, the business solution to the pandemic's severe economic stress may be fine for an individual owner of an enterprise but a catastrophe for the economy as a whole. Indeed, it is for this very reason, this nagging truth (market rationality has little to no universal/lasting/social value), that orthodox economics shunned macroeconomics for so long and instead focused on the fiction of the optimizing individual.