U of Chicago economists say COVID fears slowing the economy

Pennsylvania Democratic Governor Tom Wolf takes precautions with mask and temperature check

A revealing new study by two University of Chicago economists indicates that fear of COVID (a/k/a COVID-19 or Coronavirus) has had a greater negative impact on the U.S. economy than government-imposed Coronavirus lockdowns, as Americans make their own choices for themselves and their families. Among the findings from Drs. Austan Goolsbee (former Chair of the Council of Economic Advisers under President Barack Obama) and Chad Syverson, based on cell phone records of customers visiting over 2 million businesses:

–“While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that.”

–“Individual choices were far more important and seem tied to fears of infection.”

–“Traffic started dropping before the legal [shutdown] orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry.”

The study appears to indicate that (1) many Americans feared the Coronavirus even though they were being told by Republican politicians not to fear it; and (2) based on the current explosion in COVID cases, those fears were perfectly rational.

Donald Trump (boosted by Fox News) deserves blame for the current economic conditions, as well as the extent of illness and death, resulting from the COVID crisis. Trump’s dangerous combination of conservative anti-government politics, reelection fears and incompetence has led us to where Coronavirus cases are now rising in over 30 states, exceeding the previous highs set in early April. Trump did too little at the beginning, then pushed for reopening too soon (wanting everyone to go back to normal by Easter). Republican governors such as Ron DeSantis of Florida followed Trump’s lead. As was plainly foreseeable, at least 16 states, including Florida and Texas, now must pause, or even reverse, their previous reopenings. So much for the Republicans’ false choice of “the economy” over public health.

Amazingly, given all the false Republican propaganda that was fed to them, many (though not all) Americans trusted their instincts and, as the U. of Chicago study indicates, have acted with caution in the face of the continuing Coronavirus threat. An illustrative example was the Trump rally recently held in Tulsa, Oklahoma. Based on their own hubris and delusions in ignoring COVID-19 (with an assist from numerous creative teens and one “grandma” using the TikTok social media platform), Trump’s campaign team thought that up to one million people would attend the rally at the 19,000-seat BOK Center in Tulsa. The Trump campaign set up a huge outdoor area complete with stage, lights and sound equipment, for Trump and Vice President Mike Pence to address the overflow crowd. To add to the delusion, Trump’s campaign directed the removal of some 12 thousand “Do Not Sit Here, Please!” stickers from seats in the arena that were intended to establish social distance between rally goers.

Instead, largely due to fears about crowding together indoors, fewer than 6200 attendees showed up to Trump’s rally. The many video shots of the two-thirds empty arena made for very bad optics, which were exacerbated when no one showed up outside and the Trump team embarrassingly dismantled the outdoor stage in broad daylight, canceling the Trump/Pence outdoor speeches. Trump was reportedly “furious” about these dismal results, to the point where his campaign manager, Brad Parscale, is apparently in danger of being fired. At the same time, television viewers were treated to the sight of the 6,200 attendees crowded together on the lower level of the arena, receiving and taking no precautions against spreading COVID. These images no doubt set off even more alarm bells around the country, leading to the rally being nicknamed a “super spreader event,” with eight Trump staffers connected with the event testing positive for Coronavirus.

Let’s give the American people some credit, therefore. They rightly fear the Coronavirus, and believe, increasingly, that Trump has not handled the crisis well. It turns out that their fears are completely rational, and are manifested in their economic behavior, as Trump and his fellow Republicans could have predicted with some aforethought. If the Republicans’ goal is to win the 2020 elections, their bungling of the COVID emergency and the economy, by focusing on political concerns while ignoring the underlying public health concerns, may turn out to be one of the costliest political blunders of all time.

Photo by Governor Tom Wolf, used under Creative Commons license. https://is.gd/yCeFSz

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