John Hood: Government got COVID mostly wrong

Published 12:00 am Sunday, July 17, 2022

By John Hood


RALEIGH — I’m a liberty-minded conservative, not an anarchist. I think government is inevitable and necessary but its legitimate scope and practical competencies are rather limited. The many public-policy failures during the COVID-19 pandemic illustrate the point well.

For the most part, these failures were about competency, not legitimacy. As I argued when the COVID crisis began, combating communicable disease as always been a proper exercise of the police power enjoyed by states and localities. And reacting to truly national emergencies is one of the few powers properly enjoyed by the federal government.

Alas, when the time came to deploy these powers in a prudent manner, public officials mostly blew it. In Washington, the Food and Drug Administration excluded private firms from offering rapid testing and then bungled the release of its own test kits. Congress and the executive branch (under both Donald Trump and Joe Biden) ran massive fiscal deficits to fund massive expansions of cash relief, unemployment insurance, business subsidies, Medicaid, and aid to state and local governments.

While some fraction of this largesse might have been justified if judiciously spent, that’s not how things worked out. Billions of dollars flowed to households and businesses that were never at significant financial risk. A large share of UI payments, as much as half in some places, turned out to be fraudulent.

Many states and localities exited the pandemic with piles of (borrowed) federal money they wouldn’t or couldn’t spend on the originally stated purpose of keeping schools open and avoiding mass layoffs. Indeed, a new study by Jeffrey Clemmens and Philip Hoxie of UC-San Diego and Stan Veuger of the American Enterprise Institute estimated that the federal aid amounted to a mindboggling $855,000 per job saved in state and local government.

Speaking of school closures, public officials in North Carolina and most other places got that policy wrong, too. Perhaps there was a justification for shutting down schools and other critical services during the first weeks of the pandemic in the spring of 2020. Much was then unknown about the severity and transmissibility of the coronavirus. But by the start of the 2020-21 school year, it was obvious that the costs of closure, in both educational and economic terms, far outweighed any health and safety benefits.

As a longtime advocate of restoring the constraints of the federal constitution on Washington and devolving power and responsibility to states and localities, I will freely admit that the greatest public-policy success during the pandemic was a federal one: Operation Warp Speed, which used a combination of financial rewards and regulatory relief to encourage the rapid development of effective vaccines by private companies. To the extent states and localities facilitated the rapid deployment of the vaccines, they also deserve credit.

If you look at COVID death rates adjusted for age, obesity, and other risk factors — and you should only be looking at the data that way — the statistical relationship between vaccination rates and mortality is unambiguously negative. That is, the vaccines clearly reduced the severity of the illness and somewhat reduced the chance of getting it.

On the other hand, when researchers study state and local policies such as school closures, shutdowns, and limits on public gatherings, they typically find little-to-no relationship between the stringency of state and local restrictions and health outcomes. What they do tend to find is that places with more stringent regulations had larger job losses during the height of the COVID recession.

While North Carolina and other states have largely recovered from the economic costs of the shutdowns of 2020 and 2021, the same can’t be said for the economic costs of the federal government’s policy errors during the pandemic. By adding trillions of dollars to the federal debt while vastly expanding the money supply, Washington set the stage for our current inflation crisis as well as the recession that may well follow it.

Government coercion is a blunt instrument, best used sparingly. We’ve just relearned this timeless lesson.

John Hood is a John Locke Foundation board member and author.