After reading that blurb, I didn’t expect to find Tamny’s book impressive. Fortunately, I did. The highest compliment I can give it is that it’s Hayekian. Friedrich Hayek, in his 1945 article “The Use of Knowledge in Society,” argued that central planners could not successfully plan an economy because they didn’t have the necessary knowledge of people’s individual circumstances. Although I read every page and every footnote of When Politicians Panicked, I didn’t see Tamny ever reference Hayek. (The book doesn’t have an index.) But his book is thoroughly Hayekian. He argues that government officials didn’t know enough, and couldn’t know enough, to shut down whole sectors of the economy. He also argues quite persuasively that government policies like the Paycheck Protection Program badly misallocated both labor and capital, making us poorer than otherwise.
Lockdowns / Tamny completely opposes any lockdowns and even any restrictions on large, dense gatherings of people. How does he justify that? Absent such government regulations, wouldn’t people have simply continued to get together and ignore the danger? He argues that “the more lethal something is presumed to be, the less authorities need to do or say anything.” He notes, quoting several sources, that much of the decline in restaurant meals, travel, and mass entertainment events happened before any mayor or governor had acted to limit or restrict such activities. The NBA and NHL interrupted their regular seasons and the NCAA cancelled its men’s and women’s basketball tournaments before governments imposed restrictions. Thousands of colleges evicted millions of students. And large numbers of employers sent their employees home before they were required to.
Would some people have not followed those norms? Absolutely, says Tamny. But he argues that that can be good:
What cannot be stressed enough is that if the goal is figuring out the best way to combat a virus with no known cure, those who don’t follow norms are as crucial producers of information that will enable victory as those who do. Precisely because they don’t follow the unwritten societal rules, their contracting of the virus (or not), their sickness (or not) from ignoring broad social convention, and their death rates relative to the COVID‐obsessed would hopefully give those searching for solutions exponentially more to work with.
This reasoning does ignore the whole idea of negative externalities. But now that we’ve had extreme government lockdowns for many months — lockdowns that were badly thought through — Tamny could argue that harms from the lockdowns were worse than the possible externalities from the virus.
In a chapter titled “They Didn’t Need a Law,” he points to what would have happened if businesses had been allowed to be “individual laboratories.” Some “would have limited crowds by decree and some would have used surge pricing to moderate crowds.” He points to One Manhattan Dental in New York City, which offered a $1,500 private appointment to any patient who wanted to be the only one in the office. The beauty of freedom, he writes, “is that people are free to innovate.” Compare that to the innovation‐deadening one‐size‐fits‐all approach that most state governments used.
Saving and creating jobs / And then there was the federal government’s more than $600 billion Payroll Protection Plan, which paid small businesses substantial amounts to keep their employees on the payroll even if the employees were being underemployed. Was that a good idea? Absolutely not, says Tamny. He points out what should have been obvious to all but apparently wasn’t: government officials had no way of knowing which jobs should be kept and which ones shouldn’t. Precisely because some customers might want less human interaction because of their fear of the virus, “it was possible that businesses would devise all manner of ways to save on labor while meeting new or evolving needs of customers that they didn’t express before the spread of the coronavirus.” He notes that some factories and warehouses were rushing to “automate away some aspects of human exertion simply because employees of companies like Amazon were demanding the evolution.”
But isn’t it important that government save jobs? Every economist knows, or should know, the problem with that view, but Tamny has a particularly refreshing way of making the point. In a chapter titled “They Would Stop You at ‘Job Creation,’ ” Tamny writes that the fact that the Paycheck Protection Plan “was all about job preservation was the surest sign of how pointless and wasteful it was.” No one, he writes, starts a business with the goal of creating jobs. You create a business to make money and you make money by creating goods and services that people value. Indeed, often you do well by introducing technologies that allow you to produce more with fewer workers. That’s the story of agriculture, steel making, auto production, and pretty much everything else. Tamny writes, “If readers are looking for 100 percent labor force participation, just travel to the world’s poorest countries.” There you will see very little unemployment and a lot of people working in “unrelenting drudgery.”
One obvious fact about a dynamic economy that even many economists missed in their advocacy of government bailouts is that companies that are doing badly at one time can do better later and companies that are doing well now can fail later. Tamny doesn’t miss that point. He conducts a quick conceptual experiment, asking what would have happened if the virus had hit in 2000 instead of 2020? Would Apple, Amazon, and Netflix have qualified for loans? Probably not. Which companies might have qualified? Tamny suggests, quite plausibly, AOL, Enron, and Tyco.
Are economists all Keynesians now? / Tamny also lays out the problems with thinking that the way to stimulate an economy is for government to stimulate consumption. That idea is one of the worst legacies of Keynesian economics. Unfortunately, he writes as if he believes that all economists think this way. But even many New Keynesians see only a limited role for government stimulating consumption in demand‐side recessions. And many, many non‐Keynesians — present author included — agree with Tamny. But in numerous places in the book, Tamny lumps us all together as unreformed Keynesians.
He goes even further in criticizing economists. He writes:
Economics is said to be a science, but it’s generally a profession for the lazy and thoughtless. Almost to a man and woman, nearly every credentialed economist in existence believes that economic growth causes inflation (no, it’s the surest sign prices are falling), that government spending boosts growth (no, the political allocation of precious resources weights on progress), and that wars grow an economy.
To be sure, there are economists who believe the ideas Tamny cites, although many of them are neither lazy nor thoughtless. There are also many economists who are on his side of all three of the above issues. So why does he not seem to know that? His caricature of economists is the major failing of an otherwise quite successful book.
Tamny also points out how dangerous it is for governments to rely on experts because the experts often don’t know much. He quotes investigative journalist Michael Fumento’s statement in his 1990 book The Myth of Heterosexual AIDS that Dr. Robert Redfield had said in the 1980s that the chance of male‐to‐female vaginal HIV was 50% per contact. Does Redfield’s name ring a bell? He was the director of the Centers for Disease Control and Prevention from 2018 to 2021. And although Tamny doesn’t mention this, presumably because he had already sent the book to press, in September 2020 Redfield testified before a Senate committee that wearing a face mask might offer more protection from the coronavirus than getting vaccinated. Tamny mentions many other examples of expert failure.
Tamny’s less‐important failing is his ambivalence about statistics. In his final chapter, “If Lockdown Critics Make This a Numbers Game, They Ensure Future Lockdowns,” he starts by stating his conclusion, writing, “This chapter will conclude with an argument that numerical battles are a waste of time.” But if he really believed that, he wouldn’t have written most of the chapter, which is chock‐full of numbers. His more nuanced conclusion is that “if we make the C[OVID]-19 argument solely about numbers, we hand the very politicians who created so much personal and economic misery the power to do so again.”
I agree with Tamny that we should not argue solely about numbers and should give a full‐throated defense of freedom. I would love to have politicians who care a lot about retaining and even increasing freedom, but such people are in short supply. If politicians had been willing to look at numbers available in the spring of 2020 that showed the death rates from COVID-19 to be three orders of magnitude higher for the very old than for the very young, even those who cared little about freedom would have had trouble justifying many of their extreme measures. The moral of the story is that we should use both pro‐freedom and statistical arguments.
