Mises Wire

Coronavirus Panic: From Trillion-Dollar Paternalism to “Cash for Bunkers”

Life in America has been reshaped dramatically in the last two weeks. The fear of the Chinese coronavirus has completely eclipsed all other news stories in the US and abroad. Among these stories is the Democratic primary race, which is apparently still going on—and where Joe Biden has managed to stumble into near presumptive-nominee status by outlasting an elderly democratic socialist from Vermont. Primaries are being postponed and forgotten for the time being, though. Right now, the Great Coronavirus Panic of 2020 is front and center, and it is leading many Americans to demand sweeping government action at any cost. Needless to say, the national and state governments are happy to oblige.

The headlines and news alerts seem to be blowing up by the hour, but currently the Trump administration is pressing Congress to distribute hundreds of billions of dollars to Americans as a fiscal “stimulus” of sorts. Treasury secretary Steven Mnuchin said that the administration is “looking at sending checks to Americans immediately.” This is after he reportedly told Republican senators that the unemployment rate could reach up to 20 percent this year. Mitt Romney and others have floated similar ideas for distributing cash to Americans in a time of national emergency (a “Cash for Bunkers” policy), and the Universal Basic Income fantasy has apparently been revived for now. The Yang Gang is having a moment.

The Trump administration also wants $50 billion in bailout funds for the airline industry. This would presumably be in addition to the paid leave and augmented unemployment insurance in the second House bill, which was passed by the Senate this past week. The second bill followed an $8 billion package that was passed weeks ago. Majority Leader Mitch McConnell has signaled support for the most recent (third) spending package coming from the House, advising his fellow GOP senators to “gag and vote for it.” And right on cue, Nancy Pelosi and House Democrats have demanded money for taxpayer-funded abortions via Hyde Amendment maneuvering, as part of the economic stimulus package. All in, we’re looking at more than $1 trillion in new federal outlays.

This orgy of spending is on top of the Federal Reserve’s move this week to cut interest rates to zero and then begin buying at least $700 billion in government and mortgage-related bonds. Quantitative easing is here again, just in time to prop up the greatest economy ”in the history of the country”—and to forestall the day of national-debt reckoning that seems to be looming.

The foundation for rapidly expanding government intervention in this coronavirus miasma originated more than one month ago. Back in February, it became apparent that there was a problem with distribution of functional coronavirus test kits, and a general lack of transparency on this issue seemed to delay its resolution. In addition, the FDA had been maintaining ironclad control over approvals for coronavirus testing alternatives. Certain organizations such as the Association of Public Health Laboratories have had to beg for the FDA’s blessing to develop their own test kits. Nonetheless, the rallying cry of many in the American populace seems to be that we must now have even more federal government involvement in testing and that we need the government to “persuade” private insurance companies to offer the test kits for free.

As testing becomes more widely available in the US, the good news seems to be that the reported mortality rate will more than likely decline. Mild or asymptomatic cases will now be added to the “denominator” of coronavirus infections, driving the mortality rate down even though the number of documented new cases will increase in the short term.

Good news notwithstanding, there are alarmists, columnists, establishmentarians, and other serious people that are very critical of anyone who urges calm and encourages others to adopt a “don’t panic” approach. There is almost a palpable anger or disdain for those who question the necessity—and constitutionality—of completely shutting down restaurants, bars, conferences, meetings, parties, church services, and small businesses. Don’t dare be caught asking “Is the price we’re paying worth it?” or “Is this an abundance of caution, or an overdose?.”

These questions are now a semimoot point; California and a growing number of states have ordered involuntary sheltering-in-place directives that will last several weeks at a minimum. Among many other measures, the National Guard will be deployed in California to provide “food security.” Residents are “allowed” to leave their homes for groceries, medical care, exercise, and essential services. They are not to get within six feet of other humans when they are outside. Violations of the prisoner-at-home policy could be enforced as misdemeanors.

But violation of an involuntary quarantine is not the only way to run afoul of the law during the Great Coronavirus Panic of 2020. Several attorneys general from states across the country, as well as columnists, politicians, and everyday American citizens on social media are demanding an end to “price gouging“ and predatory retail practices. There are numerous phone hotlines set up where one can anonymously “drop a dime” on one’s greedy neighborhood grocer. Of course, there’s virtually no mention of the property rights of business owners—or of the fact that without rising prices during an emergency the shortage of critical items is accelerated and prolonged.

The rights of landlords have also come under attack in certain jurisdictions, where they are now legally prohibited from evicting tenants who are experiencing financial hardship due to the coronavirus or the ensuing lockdown on the economy. It’s not clear exactly what landlords are “allowed” to do when tenants stop paying their rent.

There is a silver lining to all of the heavy-handed economic paternalism and creeping authoritarianism, though. While many Americans are begging for more government in their lives, a handful of others are growing skeptical of inviting Washington, DC, and state governments to contravene our republic’s principles of federalism, subsidiarity, and freedom of assembly. These skeptics are quietly going about their business, localizing their lives. Neighbors are shopping for their elderly neighbors, families are caring for one another, and parents are defying the Federal Reserve and saving for the futures of their children.

Image Source: Gage Skidmore
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