Mistakes waiting to happen

BY DAVID GEORGE SURDAM

The Presidential election cycle will undoubtedly include finger pointing and assigning blame for the COVID-19 pandemic. I'll be blunt: Leaders of all political persuasions made mistakes. Given the novel aspects of the virus, even epidemiologists and their forecasts proved inaccurate in the details, if not the main thrust. Expecting legislators to make "correct" decisions under such conditions is unrealistic. In a sense, legislators from the President on down were blindly swinging at a piñata of policies.

Our ability to forecast the future is limited. As an economist, I am painfully aware that our macroeconomic models are incapable of guessing turning points in the business cycles. The efforts of twenty or so determined people sent our economy tumbling for a brief period in 2001. No economist’s forecast included crashing planes into tall buildings. Nor did many, if any, mainstream economist predict the 2007 real estate debacle.

Given the complexities of viruses, even the best epidemiological models will be off in some aspect. Even if the models were accurate, however, the models would not be panaceas. Epidemiologists are experts in their field. However, they should never be the sole input for legislators making decisions. Legislators have to balance the preferences or demands of various groups and individuals.

The public, however, is unable to fully analyze the situation. The legislators have better access to data and expert opinions than do citizens. Citizens have to rely upon various media sources, all of which suffer from biases. Television and internet outlets favor visually-striking images and stories and not extended analysis requiring more explanation than is possible in a sound bite. To attract attention, such outlets frequently rely upon the shrillest and often most dramatic opinion makers.

People’s subjective preferences also hinder policy makers’ decision-making. If legislators could base policy purely upon objective aspects, their jobs would be easier. People, however, place different weights or emphasis on outcomes. Some people believe every life is priceless and believe legislators should act to prevent each and every death (“not one person should die.”) Others may place more weight on material well-being.

People certainly do not act as though their own lives are priceless. Every time you take the stairs or cross a busy street, you are demonstrating that you don’t place an infinite value upon your life. The stark truth is that we live in a world of scarcity. We face trade-offs, and a basic trade-off is between the incremental cost of taking a risk (crossing a busy street, for example) and the incremental benefit of doing so. This might provide an answer to the deathless question, “Why did the chicken cross the road?” (Although in Iowa, I might substitute “squirrel.”) “Because the incremental benefit exceeded the incremental cost.”

You may have heard or made the specious comparison regarding people 39,000 Americans dying each year in auto accidents (including people crossing the street), so why are coronavirus deaths any different? Most of the people dying in automobile accidents decided that the benefit of driving exceeded the risk of driving. In the coronavirus situation, many of the initial victims did not get to make a choice. The re-opening of America involves the same calculation: Individuals have to decide whether the benefits of going to a restaurant outweighs the risk of being infected. Here is where the medical experts are quite valuable: They can help us assess the risk.

Although March was not a time for deliberation, the lack of discussion of the tradeoffs involved in drastic public health measures undoubtedly meant that legislators made mistakes. What lessons will legislators draw from this episode? Will experts and legislators, facing another pandemic in a few years (and there will be new pandemic threats in the not-too-distant future), be akin to generals fighting the last war's battles? Will they attempt to include people’s often subjective preferences in making policy decisions?

David George Surdam is a professor of economics at University of Northern Iowa. The views and opinions expressed are those of the author and do not imply endorsement by the University of Northern Iowa.

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