THE POLITICAL ECONOMY OF ENDING THE HOUSE ARRESTS.

Today, a look at how we might do social science.  I'm going to disclose one of my priors, though.  I'm skeptical of Wise Experts.  This Randall G. Holcombe post dates to the (now relatively sane?) days of 2016, where he summarizes the Fatal Conceit.

In a country based on the principle of liberty, should we really contemplate depriving people of freedom because they sometimes don’t make choices experts think are best for them? My title really understates the liberty-depriving philosophy of the nanny state. More accurately, it is: Some people make what we think are bad choices, so we are going to deprive everyone of liberty.

That's annoying enough when it's general nanny-state homeowner association stuff involving drinking straws or paper cups or tote bags.  Now comes a pandemic, where even the people who study this stuff for a living are making it up as they go along still engaging in research, and people are understandably chafing under restrictions being imposed on them by people who still aren't sure what the good choices are.  As early as St Patrick's Day, Reason's Matt Welch was calling a time out.  "Self-imprisonment orders from panicky politicians are not a prudent way to flatten the curve."  It wasn't hard to see, even then, that there would be push-back.

We are about to see a lot of resentment from the healthy Youngs about how they no longer have jobs or the ability to make student loan payments because of draconian governmental measures to combat a disease disproportionately affecting the Olds. But even setting that aside, in the absence of V-1 bombs flying overhead, people are eventually going to bust out of their containment. Setting up legal regimes in contravention of human nature is a recipe for all kinds of trouble.

How do these curfews and mandatory quarantines end? No really, how do they? What does success look like? When is the "emergency" over? We see very little acknowledgment that these questions are even relevant, let alone attempts to answer them amid the cascade of competitive shutdowns.

I, too, urgently hope that people mostly stay the hell away from each other over the coming weeks. But not at gunpoint, and not in such a way that creates new and perhaps even worse pathways for unhealthy behavior. Let's be careful out there both personally and governmentally.

The resentment from the healthy could take on an even uglier form, as over the past month the contagion has been more widespread in thickly settled cities: New York (particularly Brooklyn and the Bronx), Detroit, Chicago.  Fortunately, Our Political Masters are beginning to think of an exit strategy, although they are being too ham-handed about substituting "testing" for "flattening the curve" particularly as the curve has never lived up to the modellers' expectations.

Also in Reason, Eric Boehm was thinking, a month ago, about how best to temper principle with practicality.  "How extreme should shut-down and shelter-in-place orders be, and how long should they last?" In addition, he suggests that readers develop a healthy skepticism about the experts. "There is little to do at this point but hope that our elected and appointed officials can pull the right levers and steer the country and its economy through this. But under the best of circumstances, we should be skeptical about their ability to do that—and these are far from the best of circumstances."

We'll turn next to John "Grumpy Economist" Cochrane, who has been writing -- a lot -- about sensible political economy.  Each of the following is a long post, read them in full.  I'll provide the epigrams.  First.

Shutting everything down and staying home for a few weeks is a sledgehammer. OK, our leaders have to hit a virus with a sledgehammer when they have nothing else up their sleeve. But it cannot last. Businesses will close, people will lose jobs, the economy will not be there to start up again.

Second, "The needed option is reopen with social distance." That seems to be emerging as the consensus, although the governors are behind the citizens.

Third, reopen smart.  Go, read the whole thing.

Neale Mahoney of the University of Chicago has an instructive perspective.

Prioritizing the medical battle against COVID-19 helps us in the economic battle on two fronts. When we spend more on personal protective equipment (such as the masks, gowns, and gloves used by health-care professionals), ventilators, additional hospital space, and other health-care infrastructure, this both slows the virus and injects money into the economy. When government officials instruct citizens to stay home except for essential errands, this harms the economy in the short run, but allows us to transition to less aggressive measures over the medium run, and is therefore also good for the economy.

But don't confuse easing up on the aggressive measures with giving in to the rent-seekers.

Finally, we've got economists working on the optimal duration of the house arrests.  But Marginal Revolution's Tyler Cowen raises a trenchant question.  "I hope there is a variable in the analysis for 'risk of extreme societal pressures,' though I am not sure if those are higher for extreme lockdown scenarios or for extreme 'let it rip' scenarios." We don't know yet what the reproduction rate (R₀) is. We do know that the models that have influenced policy have been wrong.  We do know that the societal pressures are building.  That will be the next installment.