Much has been written about how the U.S. governments’ failures to prepare, and policy missteps since the pandemic began, have exacerbated COVID-19’s toll in terms of lives lost and economic harm. Columnists regularly denounced former President Donald Trump and claimed his poor leadership worsened outcomes. Combined “informed conventional wisdom” holds that better preparation and a more attentive response from Trump and state governors would have avoided much of the harm suffered in the United States.
The relative success of South Korea, Taiwan, Australia, and New Zealand suggests that good policy and effective leadership can make a real difference. Even so, the conventional wisdom fails to explain one crucial factor that underpins why many bad decisions in the United States have been made: faulty economic thinking on behalf of U.S. policymakers.
When economics is discussed during this pandemic, it’s usually in relation to unemployment numbers, forecasts for gross domestic product, or the debate around an appropriate fiscal policy response. But at its most basic, economics is about analyzing choices made under constraints. Politicians and government agencies made a vast range of public health decisions this past year that violated principles that good economists take for granted. These decisions made the public health and economic welfare impacts of the pandemic worse than they needed to be. In that sense, the poor response to COVID-19 represents a failure to think economically.
These errors were not deliberate. Policymakers were working under extreme pressure and, at the start of the pandemic especially, were faced with radical uncertainty. But the combined results of the errors were devastating. Together, they meant an initial spread of the disease far worse than otherwise; an impaired adjustment to our living with the pandemic; volatile behavioral change from the public; shortages of products that could help contain the virus; heightened skepticism about the efficacy of helpful, voluntary behavioral changes; and distrust in public health officials.