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The myth that botched the US Covid response

Rick Newman
·Senior Columnist
·5-min read
CARDIFF, WALES - FEBRUARY 22: A closed sign in the window of a small business on February 22, 2021 in Cardiff, Wales. Wales First Minister Mark Drakeford has said Wales will remain in lockdown for another three weeks. Primary school children will begin returning to school from February 22 and the Welsh Government has confirmed that it will be reviewing the restrictions around non-essential retail and close contact services as part of its next 21-day review which will end on Friday, March 12. (Photo by Matthew Horwood/Getty Images)
A closed sign in the window of a small business on February 22, 2021 in Cardiff, Wales. Wales First Minister Mark Drakeford has said Wales will remain in lockdown for another three weeks. (Photo by Matthew Horwood/Getty Images)

For the last year, government officials in the United States and many other countries have grappled with business shutdowns that have limited the spread of the coronavirus but caused widespread economic hardship. The debate turns on a basic question: What’s the optimal tradeoff between virus control and economic contraction?

That entire framework may be erroneous. In a new study, researchers at MIT’s Sloan School of Management found that the biggest declines in economic activity in 2020 didn’t correspond with lower death rates, while some countries with low death rates performed best, economically. This challenges the presumption that controlling the pandemic necessitates a sharp contraction in commerce and consumer mobility.

“The public conversation around the pandemic response thinks about it as a tradeoff between saving lives and cutting social interaction,” says Sloan Professor Hazhir Rahmandad, a co-author of the study. “We find there is no tradeoff. The tradeoff framing really hurt the response. That framing was wrong from the beginning.”

The Sloan research examined Covid-19 death rates and mobility data in more than 100 countries from June to December of 2020, to analyze the severity of the pandemic relative to the change in economic activity. Mobility data from Google, serving as a proxy for economic activity, measured the percent change in two categories: daily visits to retail and recreation locations, and to workplaces. If there were a predictable tradeoff between public health and economic activity, then mobility would be higher in countries with higher death rates, because lockdowns or other restrictions were less aggressive, allowing more activity. Mobility would be lower in places with lower death rates, where shutdowns were more stringent.

Kiosks for outdoor dining are situated in front of restaurants along Sixth St. in downtown Pittsburgh, Sunday, Jan. 17, 2021. (AP Photo/Keith Srakocic)
Kiosks for outdoor dining are situated in front of restaurants along Sixth St. in downtown Pittsburgh, Sunday, Jan. 17, 2021. (AP Photo/Keith Srakocic)

That’s not what happened. Some countries with high death rates had the biggest declines in mobility, meaning they fared the worst economically. Other countries with lower death rates had smaller declines in mobility, meaning those economies didn’t contract as much.

The United States had one of the highest death rates, but it fared worse than average economically. The average death rate for all countries was 1.13 deaths per million people per day. The U.S. rate was 2.97 deaths per million, or 163% higher. Mobility, on average, declined 18.5% among all countries. In the U.S., it declined 22.7%. There was no economic payoff for tolerating a higher death rate than elsewhere.

South Korea’s death rate was just 0.04 deaths per million, while mobility declined just 8.5%. Japan’s death rate was 0.06 deaths per million, with mobility down 11.6%. Australia: death rate 0.13 per million, mobility down 16%. Those countries all fared better, economically, than the United States, with far lower death rates.

Some countries did worse than the United States. The death rate in the UK was 3.14 per million, with mobility down 34.6%. Italy endured a death rate of 3.24 per million, with a mobility decline of 19.6%.

Many countries had stricter lockdowns than the United States in 2020, according to a Financial Times tracking tool. But other countries, such as South Korea, relied on aggressive public health measures rather than indefinite lockdowns. Cultural factors, such as trust in government and willingness to follow public-health guidelines, probably contributed to virus control in some countries.

No federal guidelines

The United States imposed a one-month national shutdown last April, but after that, states and cities largely made their own rules, amid inconsistent federal guidance. The United States may be the only country where refusing to wear a mask or follow distancing guidelines became a mass expression of political defiance. Americans paid for it with more deaths.

President Trump repeatedly argued that the “cure can’t be worse than the problem,” meaning shutdowns could end up causing more harm—through lost jobs and income—than the virus itself. Trump is gone, but that storyline isn’t. Republican Rep. Tom McClintock of California told Yahoo Finance recently that “there’s only one way to provide relief to the American people. That’s to end the lockdowns.”

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That logic fails because it doesn’t anticipate public reaction as the pandemic worsens and people perceive a higher risk of going out. As death rates mount, more people stay home and more businesses shut down or curtail activity. “It will happen one way or the other,” Rahmandad says. “If there’s no policy in place, people will say, my grandparent has died, or I know somebody else who died. I will stay home.”

The data suggest the best way to attack a pandemic like coronavirus is through aggressive measures at the outset to limit its spread, followed by extreme vigilance to keep it in check. That might entail a sharp cutback in economic activity at the beginning, but it allows activity to resume at a higher level once initial measures contain the virus. A less aggressive approach might not hurt as much at the beginning, but unchecked spread of the virus depresses activity over time by more than the early-intervention approach.

There’s also a notable difference among countries in the death rate that seems to trigger action. The United States and most European countries endured higher death rates than most Asian countries, for instance, even though it’s now clear national policy can significantly lower the coronavirus death toll. That may reflect a more hands-off governing style in the west, or public ambivalence about trusting what the government says. That framework remains unsettled.

Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.

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