by James A. Bacon
Governor Ralph Northam is one of four governors in the United States to be slapped with an “F” rating by the Committee to Unleash Prosperity, a think tank associated with supply-side economists Stephen Moore and Art Laffer.
Northam joins Governors Phil Murphy of New Jersey, Tom Wolf of Pennsylvania, and Tony Evers of Wisconsin, in the estimation of the group, for putting their state economies, state budgets, and even state populations in peril through continued shutdowns.
The report assesses how the 50 governors have handled the shutdowns by measuring how restrictive and damaging their edicts have been for their state’s economies. States the report:
It may not seem of much consequence whether a state has opened in April or a governor like Ralph Northam has decreed that the Commonwealth of Virginia will stay closed down to the middle of June. But the start date emphasized in this study matters a lot. A recent study by Laffer Associates finds that states that open up earlier will have substantially better economic recoveries than states that stay closed for another month or so. …
That study finds that early opening states could be in recovery by the end of the Summer of 2020, while the laggard states could be in recession for six months or more. This is because businesses, stores, shopping centers, restaurants, and office parks are much more likely to fail if their doors aren’t opened sooner rather than later. Every day counts.
As an aside, excessive shutdowns have health consequences not captured in the daily death toll.
“Skyrocketing unemployment will lead to rampant substance abuse, domestic violence, suicide, drug overdoses, and other severe public health harms,” the report says. Citing research by Harvard professor Greg Mankiw, it states that each one-percentage-point increase in the unemployment rate is associated nationally with 920 more suicides, 650 more homicides, 4,000 more people admitted to state mental institutions, 3,300 more people sent to state prisons, increases in domestic violence and homelessness, and 27,000 more deaths.
The study gives each governor a score “based upon the extent to which they are banning economic activities, restricting individual freedom of movement, and failing to provide a clear timetable around which citizens and businesses can plan.” Researchers considered the extent of the virus threat in each state to calibrate expectations by separating them into three tiers — high, medium and low death rates from the coronavirus. “The D and F grade governors continue to arbitrarily ban activities without respect to any sensible risk versus benefit calculations — and are therefore taking the largest risk of all — the risk of catastrophic economic collapse.
Here is the study’s state-specific commentary on Virginia.
Click for more legible image.
It is a truism that people believe what they want to believe, and readers of Bacon’s Rebellion are no exception. I tend to be sympathetic to the Moore-Laffer supply-side view of how the economy works, but I’m also an empiricist. Predictions based on theories and mathematical models are fine, but let’s follow up to see how the predictions turned out. I hope the Committee to Unleash Prosperity does just that. In the meantime, Bacon’s Rebellion will endeavor to track the numbers for the economy and public health.