Can the pandemic be separated from the economy? As the pandemic continues in Europe and the United States but seems to be subsiding in Asia, more and more questions are being raised about how to relaunch the economy. The importance of public health is being opposed to opening for business. The battle in the U.S. Senate over how trillions will be spent is indicative of two economic problems: Should businesses function in spite of the virus? How should money be spent to relaunch – from the top down or bottom up?
The medical necessity of social distancing and staying home has had dire consequences for the global economy. Consumers are not spending. Many companies are closing or limiting activities. Employees are being laid off or given partial compensation. Independents are stranded. Business people like Donald Trump are eager to get rolling again.
“Our country wasn’t built to be shut down,” Trump said at a press briefing. “America will, again, and soon, be open for business. Very soon…We cannot let the cure be worse than the problem itself.” In response, the leaders of seven large academic health systems wrote an op-ed article asking the U.S. government “to resist pressure to lift tough social restrictions.”
What should governments do? Should they allow businesses to open? Obviously businesses that provide essentials such as food and its distribution as well as all that relates to medical services should function, although one can certainly question why President Trump has not nationalized the manufacture of masks, respirators and other medical necessities. If fighting the virus is equivalent to fighting a war, as French President Macron said, then the manufacture of masks and ventilators should be front and center as was the manufacture of tanks and bombers during World War II.
There seems to be some agreement that governments should step in to alleviate the financial suffering. That is accepted, but where they should step in is not clear. The Swiss union chief Pierre Yves Maillard proposed to get money out as soon as possible to those in need such as small enterprises and independents so that people could pay rents, mortgages and buy food. He said that bureaucratic regulations could wait. On the other hand, U.S. Republicans prefer a top down approach to help large businesses, hoping that the money will trickle down to employees and independents.
All of these economic questions assume that the pandemic will slow down and that there will be some return to normal. Behind the arguments over how much money to spend and where to spend it is the assumption that focusing on the medical is another matter. The doctors will take care of the medical, the economists will take care of business. Different sections of society have their own priorities.
At a time when hospitals are overwhelmed and lacking basic medical services, how can we focus on the health emergency and financial crisis at the same time? Is it possible to have a holistic approach to both? Or, as I suspect, is each segment of the population focusing on its own needs instead of seeing the larger picture.
That individuals will profit from this emergency reflects human nature as does applauding health care workers from balconies at a specific hour. Emergencies show the best and the worst in people. And there is no question that economic considerations cannot be ignored during the pandemic. People are out of work. Many are without pay. Somehow bills must be paid. The end of the month is approaching. The post-pandemic economy cannot be ignored.
The problem is how to weigh the economic with the medical. If businesses open too quickly, the pandemic will continue to spread. If money is given to large companies, such as the banks during the 2008 subprime debacle, the average person will not be helped. Trickle down economic policies have not proven successful to the middle class.
A lack of testing equipment, masks and ventilators reflects poor decisions about where public spending should go. (In Switzerland, it will be interesting to see how an upcoming popular vote on military equipment such as fighter jets will be affected by the pandemic and insufficient hospital resources. The former French Minister of Health has been criticized for her 2009 decision to cut back on stockpiling equipment that is now lacking.) The pie cannot grow unless increased national debts are accepted. Guns and butter (or masks and ventilators) has never worked. You can’t have it all.
The pandemic has also revealed inherent problems in federal systems. Contradicting orders from the national and regional levels have shown a lack of centralized power. States are competing and bidding against each other for material; Swiss cantons are giving different instructions to their citizens.
And, finally, the pandemic has shown the limits of democracies. The Chinese seem to have turned the emergency around because of highly centralized, authoritarian decisions. Chinese doctors are now traveling around the world showing other countries how best to contain the virus while federal systems remain divided at different levels and different departments. It’s not always easy to understand who is in charge.
The dilemma of health or wealth depends on who is in charge. In an ideal world, one authority would be able to balance the two. In democratic, federal systems, the answers are more complex. The final result may be that neither side will dominate. Hopefully, that will also mean that neither side will suffer unnecessarily.