With roughly one-quarter of the American workforce laid off and state and municipal treasuries running dry, the pressure to reopen our pandemic-ravaged economy is growing.
But as President Donald Trump promises a shortcut to an economic revival by simply rescinding lockdowns before the virus is contained, prepare for a rude awakening. In places where restrictions have eased or were never imposed, evidence is emerging that it's the virus itself, not the lockdowns, that is sapping the strength of commerce, even as state and local officials shoulder the blame for imposing measures meant to protect the public's health.
A study released May 12 by researchers from the University of Copenhagen compared the economic effects of the pandemic on two neighboring countries that took vastly different approaches: Denmark and Sweden. Sweden declined to take the strict measures imposed in Denmark and elsewhere, earning praise from U.S. conservatives desperate for evidence to support their preconceived notion that lockdowns are unnecessary.
But the study will disappoint those who would hold Sweden up as a blueprint for how the U.S. can avoid economic malaise. It found that while consumer spending in Denmark dropped 29 percent compared to last year, it also dropped 25 percent in laissez-faire Sweden. Only 4 percent of Denmark's decline could be attributed to consumers being willing but unable to shop because of restrictions on public activity. A review of Google mobility data by the New York Times confirmed that Swedish economic activity has declined by about the same amount as its neighbors.
It's a small sample size, but it points to an obvious conclusion: people are afraid of getting sick, and aren't likely to resume a vibrant, active public life until the virus has been contained. As for Sweden's public health? Its death toll from COVID-19 has far exceeded those of its neighbors, in total and per capita.
Here in the U.S., Georgia Gov. Brian Kemp's approval rating has plummeted from the mid-50s to 39% in a recent Washington Post-Ipsos poll since his reckless decision to make Georgia the first state in the nation to reopen. Kemp's call was widely panned as a transparent effort to bolster Trump's jobs-at-any-cost strategy during an election year in a contested state where Democratic challenger Joe Biden has made inroads. But the economic revival Kemp hoped for hasn't materialized, as shown by Georgia's steady stream of unemployment claims since the reopening, and public health experts have blasted Kemp's administration for its Orwellian manipulation of health statistics to conceal whether Georgia's contagion has worsened.
“We’ve been chasing a bit of a false narrative that the economic hit is about the restrictions and not the disease itself,” Julia Coronado of the Macropolicy Perspectives consulting firm said to Politico. “The economic story really isn’t about lockdowns ... It really is about the disease, and how fearful people are about getting sick.”
One might assume that Trump and his Republican allies on Capitol Hill would see how badly this strategy could backfire, but they seem dead-set on forcing Americans back to work. Senate Majority Leader Mitch McConnell, R-Ky., has taken a hard-line stance against further economic relief, instead urging liability protections for businesses, so that workers forced to get sick would have no recourse against negligent employers. Sen. Rob Portman, R-Ohio, and White House economic adviser Larry Kudlow are reportedly mulling a $450 "back-to-work bonus," like highwaymen forcing Americans to choose their money or their lives.
“Our human capital stock is ready to get back to work,” White House economist Kevin Hassett crudely declared on May 25 in a CNBC interview, despite overwhelming polling evidence to the contrary. But such out-of-touch ignorance shouldn't come as a surprise from an administration that treats workers as little more than livestock.