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What are the costs of lockdowns?

Treat where the problem is

Yesterday, I wrote about the proposal from Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, and Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, to lock the United States’ economy down again hard for six weeks to kill Covid-19.

This is a classic sledgehammer to crack a nut. This is not to say that Covid-19 isn’t serious, but a look at the data shows that, generally, it affects very specific segments of the population. As I wrote last Friday, 34.1% of care home cases in Minnesota have resulted in death. Outside of care homes, just 0.7% of Covid-19 cases outside care homes have resulted in death. And this is doesn’t take into account the 10 cases which the CDC says go undetected for each each case we now about.

Given how concentrated the acute effects of Covid-19 are in certain settings or groups, it makes sense to target our response to shielding those groups. We do not need to stamp down equally hard on everybody to fight a virus that doesn’t affect everybody equally.

The costs of lockdowns

Economic costs

Too often, those who recommend new, stricter lockdowns proceed as if there is no cost in doing so, that it is all public health upside. This is not the case.

There are, of course, economic costs. Economist Abigail Devereaux wrote that longer lockdowns were associated with much worse economic outcomes. As Devereaux notes, there was an economic effect of Covid-19 separate from lockdowns:

A significant voluntary reduction in consumption–people staying home, shifting to remote work, and taking their kids out of school—occurred before the cascade of shelter-in-place orders and restrictions on assembly and certain businesses. Will Luther has written on the voluntary reduction in consumption and production prior to the institution of lockdowns, and in states where there were no lockdowns. Additionally, many businesses and particularly services temporarily closed shop—ceased production—before the lockdown orders.

But, she goes on to note:

…it’s obvious that if you restrict and ban certain businesses, they will suffer for it. Some business owners who made it through the first wave of lockdowns are saying their businesses won’t be able to survive another. This isn’t rocket science. Perhaps businesses do need to adapt to better serve their customers during this time, but they cannot do so if they are restricted or banned from operation completely and indefinitely. They can keep paying their fixed costs—rent and bills and taxes—until they can’t, anymore. Most small businesses in particular don’t have the kind of generous margins to last through one lockdown, let alone two or more.

Health costs

Lockdowns also impose health costs of their own. Last week, Kare 11 reported on “the hidden costs of fighting this virus and the long-term effects that might stick around for many years to come”:

While the virus is a big concern, Dr. Maroushek says the United States’ COVID-19 response plan has also led to many other negative health problems.

Mental health and addiction have really been a struggle, people with overdoses, people with depression, people with anxiety. Those things are really starting to wear on people,” Dr. Maroushek says.

And those mental wounds could linger on long after the pandemic is over.

Dr. Maroushek also worries about the way this virus is affecting kids.

“I worry about child abuse. Our primary first line reporters are teachers, and when the kids aren’t in school, we’ve already seen our numbers of child abuse case reporting go way down, but at the same time, domestic abuse case reporting is going way up. So, we know there’s abuse happening in the communities, but the child abuse isn’t being reported,” Dr. Maroushek says.

“The other big issue that we’ve been struggling with as pediatricians is the vaccination rate, because so many families are scared to come to the hospital and bring in their kids. We’re really worried about the immunization rates falling. So, we really want our kids to come in and get vaccinated.”

Doctors also wonder about kids growing up in a world with less human interaction and how that might affect their brain development and social skills.

Fox 9 reported on the impact of lockdowns on drug use:

Drug overdoses are up between 30 and 40 percent, the [National Institute on Drug Abuse] says. Experts say they’re seeing more relapses than usual and a high number of young people turning to drugs during the lockdown and COVID-19 restrictions.

Lockdowns may have health benefits. These may, in turn, bring economic benefits. But it would be neglectful to make policy only by looking at the benefits of a measure. We ought to look at its costs too. We cannot pretend that these don’t exist.

John Phelan is an economist at the Center of the American Experiment. 

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