“The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences.  The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.” ~Henry Hazlitt

“In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects.  Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen.  The others unfold in succession — they are not seen: it is well for us, if they are foreseen.  Between a good and a bad economist this constitutes the whole difference — the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.” ~Frederic Bastiat

As I write this, most of the United States has been shut down for the last week or so due to fear of the coronavirus spreading.  Admittedly, it is even worse in many other places, particularly parts of Western Europe, where people are forced to stay inside their homes while needing papers to go anywhere.

In the U.S., just over 700 people have died where the coronavirus was attributed to the death.  It is hard to get accurate statistics, but it seems that most of the people who have died were elderly people who already had other significant health problems.  It is hard to know if some of these people would have died within a matter of weeks or days without the coronavirus.

There are about 327 million people in the United States.  About 100 people die every day on the roads, yet the roads don’t close down.  On average, according to the CDC, over 1,700 people die every single day of heart disease, yet you don’t see a ticker on your local news with the annual death count.

It should be acceptable to point this out without others calling you heartless.  Personally, I think it is heartless with what is being allowed to happen to the economy.

Everyone has a story.  It is tragic for anyone and their families who dies of the coronavirus, just like it is tragic for those who die of a heart attack.

Do you know what else is tragic?  When you see someone lose their job while living on the brink of poverty.  When you see someone who doesn’t know how they are going to feed their family this weekend. When you talk to someone who has spent years and countless money trying to build up a sustainable business only to see it shut down by the government.  There are millions of these stories right now.

I guess one person’s story is a tragedy, while one million is a statistic.

To say that the cure (shutting down most of society) is worse than the disease (the coronavirus) is to put it mildly.  Up to this point, it has been socially unacceptable to utter such words, but I think things are finally starting to shift.

A Cost/ Benefit Analysis

I hear that we should listen to the experts.  In this case, the experts are the epidemiologists.

I hear this a lot.  We are told we have to listen to the experts when it comes to vaccination. We have to listen to the experts when it comes to climate change.  We have to listen to the experts when it comes to Iraq having weapons of mass destruction.  I guess there are experts in pointing out who the acceptable experts are.

One problem here is that not all of the “experts” agree.  I’ve been told I don’t know what I am talking about with a legal issue because the Supreme Court ruled contrary to my own thoughts on a particular case.  Yet, the Supreme Court decision wasn’t unanimous, so there were obviously Supreme Court justices (experts?) who did not agree with the consensus.

You can almost always find people in a particular field who disagree on certain things.  It is no different with the coronavirus.  We shouldn’t assume that the experts are just the ones who get the most airtime on the mainstream (establishment) media.

For the sake of argument, let’s say that we could completely trust the epidemiologists who say that we should really be worried about the coronavirus and that it could potentially kill tens of thousands of people in the United States.

Even if that were the case, it shouldn’t be up to the epidemiologists to decide whether or not to shut down society.  Just because they are experts in viruses, it doesn’t make them experts in economics or cost/ benefit analysis.

When you largely shut down society as has been done by governments at all levels, there are consequences.  There are the unseen impacts.

You may hear, “it is worth it if we can save just one life.”  But this is a ridiculous statement, especially when we are talking about an economy of 327 million people.  We could save 100 lives per day by closing roads, yet nobody I know suggests that.

There will be no ticker on the news for the number of people who die because of the economic depression that is upon us.  Yet, these are real lives.  These are real people.

There are people losing their jobs and experiencing severe anxiety. There are children watching their parents panic about how they will pay rent.  There are people losing their business and not sure if they will ever be able to reopen.  There are people not going to the doctor with health problems other than the coronavirus.  There are factories that have been shut down.  There are interruptions in the development of new technologies, which could include delays in life-saving equipment and life-saving medicine.

How many suicides will occur just because of the economic disruption that has taken place?  Do those lives count?  Do those people get a ticker?

Greater wealth in general means longer lives.  Socialism kills.  Socialism doesn’t just kill in the sense of Stalin setting up death camps in the Soviet Union.  The economics of socialism kills, as people are deprived of proper nutrition, medical care, and a lack of life-saving technology.

Our only hope is that the fear of economic devastation will start to outweigh the fear of the coronavirus.  But even if everything is allowed to open back up for business within a couple of weeks, the devastation will not easily be undone, especially with the massive interference of the government and the central bank.

We can only hope that people will come to their senses quickly and not succumb to the fearmongering that has taken place over a virus that little is known about.  I don’t know that anything is ever going back to the way it was, but if we can reopen society, hopefully the disastrous unseen consequences can be minimized.

You can fear the virus, but you shouldn’t ignore the lessons of Bastiat and Hazlitt.