Policy Analysis

November 17, 2020 | Number 902

Government in a Pandemic
By Thomas A. Firey

W
EX EC U T I V E S UMMARY

hen the threat of COVID-19 job of identifying and implementing good policies for
became apparent, some political the pandemic that are compatible with those principles.
commentators began arguing that Instead, policymakers have attempted interven-
Americans must accept much tions far beyond the powers of a properly limited
greater governmental intervention government—with poor results.
in their lives if the United States were to respond effective- Americans and their political leaders are understand-
ly to the disease. This idea was soon distilled into a pithy ably worried about COVID-19 and its effects, both on
slogan: “There are no libertarians in a pandemic.” human health and the economy. That worry may indeed
In fact, government can respond effectively to the lead some people to reflexively demand broad govern-
historic COVID-19 crisis while following the principles ment intervention. But if the United States follows the
of limited government. However, federal, state, and lo- principles of limited government, those principles will
cal governments in the United States have done a poor help see us through this crisis.

Thomas A. Firey is a Cato Institute senior fellow and managing editor of Cato’s policy journal Regulation.
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INTRODUCTION bemoaned “a federal government crippled by
When the When the threat to the United States years of right-wing ideological assault” and “pol-
COVID-19 from the novel 2019 coronavirus disease iticians and donors who wanted government to
(COVID-19) became apparent, political lead- do as little as possible for the common good.”5
threat became ers and commentators began calling for large He described a dystopian America that, with-
apparent, governmental interventions to counter the out active management from Washington, DC,
some disease’s health and economic effects. Many of is nearly powerless against COVID-19:
commentators these people added that the political philoso-
phy of limited government—“liberalism” in the Every morning in the endless month
began classical sense—would handicap the country’s of March, Americans woke up to find
claiming response to the crisis and thus must be reject- themselves citizens of a failed state.
that the ed. This was soon distilled into a pithy slogan: With no national plan—no coherent in-
“There are no libertarians in a pandemic.” structions at all—families, schools, and
philosophy As COVID-19’s grim health toll and offices were left to decide on their own
of limited economic statistics have accumulated, the whether to shut down and take shel-
government criticisms of liberalism have grown louder. ter. When test kits, masks, gowns, and
would Appropriate to the era, the “no libertar- ventilators were found to be in desper-
ians” slogan was popularized by a Twitter post: ately short supply, governors pleaded
handicap Atlantic staff writer Derek Thompson used it for them from the White House, which
America’s to introduce a news item about Republican stalled, then called on private enter-
response to lawmakers advocating public funding for prise, which couldn’t deliver. States and

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COVID-19 testing and for treatment of unin- cities were forced into bidding wars that
the crisis. sured victims of the disease.1 A week later, his left them prey to price gouging and cor-
Atlantic colleague Peter Nicholas used a variant porate profiteering. Civilians took out
of the slogan as the title of a column criti- their sewing machines to try to keep
cizing President Trump for campaigning on ill-equipped hospital workers healthy
“anti-socialism” while his administration and their patients alive. Russia, Taiwan,
pushed a host of extraordinary interventions and the United Nations sent humanitar-
into the economy in response to the pandemic.2 ian aid to the world’s richest power—a
“Just as there are no atheists in foxholes, in a na- beggar nation in utter chaos.6
tional emergency, there’s no truly laissez-faire
government,” Nicholas wrote. As for the idea that private actors could re-
Others quickly picked up the theme. New spond to the virus, Packer asserted simply, “It
York Times columnist Farhad Manjoo, noting turns out that ‘nimble’ companies can’t pre-
the same news item as Thompson, conclud- pare for a catastrophe or distribute lifesaving
ed, “Everyone’s a socialist in a pandemic.”3 goods—only a competent federal government
Ryan LaRochelle, a lecturer at the University can do that.”7
of Maine, wrote in the Washington Post The belief that COVID-19 shows the
that a “decades-long war on the safety net need for bigger, more interventionist govern-
and the government’s administrative capacity ment has not been confined to the left of the
[has] made our society particularly vulnerable U.S. political spectrum. The right, which in
to the pandemic’s impact on our economic previous decades repeatedly declared a com-
life. This has seriously hampered the federal mitment to “small government,” began talking
government’s response to the coronavirus and about the need to boost “state capacity” to re-
shown how dangerously ill-suited this ideol- spond to the pandemic and other problems.
ogy is to the crisis.”4 Two of the right’s up-and-coming leaders,
Perhaps the sharpest criticisms came from Sens. Marco Rubio (R–FL) and Josh Hawley
essayist and novelist George Packer, who (R–MO), pushed large-scale government
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financial assistance programs, with Rubio help- That’s the vision; the reality is differ-
ing to craft the Paycheck Protection Program ent. Government leaders and their advisers Government
that has blossomed into a roughly $650 billion have been operating with imperfect knowl- does have
subsidy to businesses.8 Its creation was part edge about the recently discovered disease,
of the $2 trillion Coronavirus Aid, Relief, and resulting in public recommendations and
important
Economic Security (CARES) Act that provides policies that, especially in the early months roles to play
federal support to businesses, households, and of the outbreak, have been wasteful at best in a pandemic,
state governments.9 The CARES Act passed and harmful at worst. Though a number of
those failures can be attributed to an espe-
but those roles
with overwhelming support from Republican
lawmakers and was signed by President Trump, cially inept Trump administration, they can are consistent
who had his name prominently stamped on the be found across the political spectrum, at dif- with the
ensuing household subsidy checks.10 ferent levels of government, and among both principles
Those efforts are in accordance with the the virtuous and dishonorable.
new “national conservative” movement, which Government does have important roles
of limited
govern­

”
endorses government intervention in the to play in a pandemic. However, those roles
economy to promote a host of goals.11 As one are consistent with the principles of limited ment.
of the movement’s intellectual leaders, Henry government. This analysis examines some of
Olsen of the Ethics and Public Policy Center, those interventions—constraining negative
told Politico about policymaking in response to externalities and providing public goods—and
COVID-19: notes instances where government has per-
formed poorly in those areas when responding
This is going to jump-start the al- to COVID-19. The analysis also discusses in-
ready simmering debate over how the terventions that limited government should not
right should deal with domestic policy. undertake—such as manipulating the produc-
Clearly there’s going to be demand for tion and distribution of private goods—but
many types of stimulus. There’s going to that government has attempted broadly in
be demand for the view that we’re not this crisis, with poor results.
going to let this happen again. And a lib-
ertarian, hands-off policy doesn’t really
respond to that.12 LIMITED GOVERNMENT
AND MARKET FAILURE
These calls for government to intervene in Critics of limited government often equate
response to COVID-19 are understandable. it with anarchy, the lack of any government
The disease is often painful and sometimes activity. That equivalence is false. The phi-
fatal, and it is produced by a novel virus that losophy of limited government does place the
spreads through social contact. As yet, there is highest value on individual liberty, including
no known effective vaccine against the virus, people’s freedom to privately arrange for the
and treatment therapies are limited. People satisfaction of their wants. These arrange-
naturally want something to “fix” a crisis, and ments often take place in the market, an arena
they look for government to be that powerful for many forms of voluntary exchange. So,
fixer. It is comforting to envision government rather than rejecting government altogether,
scientists in their labs probing the virus, gov- valuing liberty means creating important roles
ernment doctors tending to the infected and for government in protecting the freedom of
uninfected alike, government financing re- exchange and private ordering.
search and development on therapies and Among the oldest roles of the state is de-
vaccines, and government policymakers, fending its citizens from violent invaders,
counseled by sage experts, directing the public thereby protecting against a dramatic disrup-
toward safety and away from danger. tion of the market. This defense is difficult,
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if not impossible, to provide through purely other than the participants who agree to the
Under the private agreement. Residents operating in- exchange. Externalities result in less welfare
philosophy dividually would be hard-pressed to fend off than if all involved parties had voluntarily
an invading horde, and private mutual aid reached agreement. For instance, a polluting
of limited agreements or contracts employing mercenar- factory inflicts a cost (negative externality) on
government, ies would be weakened by residents who did its neighbors, who may not be part of the vol-
government not join the arrangement or who joined only untary exchange between the factory and its
can intervene when a threat was imminent. A defense that customers. Positive externalities, in which a third
party receives a benefit, are less commonly cit-
protects only parts of a community is a de-
to address fense penetrated by invaders. ed as a problem, but they do exist.
market Defense is an example of market failure: a Government can intervene to address other

”
failures. want that cannot be adequately addressed market failures.13 Often, such policies take the
through private exchange. Specifically, defense form of laws, regulations, and enforcement. For
is an example of market failure known as a public instance, environmental law is intended to re-
good. Public goods are difficult to limit only to duce the negative externality of pollution.
individuals who pay for them; the goods must
be provided to everyone in a community if the Minimizing Government Failure
goods are to have much value. If left to private From an economic perspective, under a
exchange, residents would be tempted to not properly limited government, market failure
purchase the goods but instead free-ride on the is a necessary but insufficient condition for
purchases of others. That would result in only government intervention. Another necessary
some residents—or perhaps none—purchasing condition is that the proposed policy does not
the goods. That, in turn, would reduce the fund- violate established liberties. Also, interven-
ing and quality of the public goods provided, to tion always comes with costs, and those costs
the detriment of all residents, including those must not outweigh the benefits.
who do purchase the goods. Further complicating matters, many of the
Government can provide its citizens public troublesome dynamics that produce market
goods via taxation. Government can produce failures also afflict government policymakers
the goods itself (e.g., by employing troops to and bureaucrats, producing government fail-
provide defense) or contract with a private ures.14 For instance, policymakers often suffer
provider to furnish them (e.g., purchasing from imperfect information, resulting in bad
materiel to equip the troops). The key is that policies.15 Also, policymakers and bureaucrats
taxation overcomes the market failure by re- are motivated by private incentives just like
quiring citizens to pay for the goods. Besides everyone else, and those incentives can yield
defense, examples of public goods include misguided—and even corrupt—outcomes.16
police and fire services (private security and Unlike in the marketplace, where interaction
firefighters cannot ignore crimes and fires is voluntary and participants can look for the
at noncustomers’ properties without put- exchanges that best fit their wants, citizens are
ting their customers at risk), street lights (the compelled to abide by and pay for the choices
lighting’s benefit cannot be limited to custom- of government policymakers and bureaucrats
ers), and—at least until recently—local roads regardless of how sensible those choices may
(before technological advances, it was prohibi- be. Classical liberal principles help to mini-
tively costly to toll local roads). mize those problems.
Other types of market failure exist. Despite the constraint of limited gov-
Though there is no definitive list, several ernment, there is much it can do to address
forms are commonly recognized. One of these COVID-19 by focusing on the market failures
is externalities, which are costs or benefits of associated with the disease. Unfortunately,
an exchange that are borne by some party the U.S. federal government and some state
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and local governments have struggled to iden- only a portion of its members develop
tify and implement such policies. Instead, resistance to it, a phenomenon known Under limited
they have intervened in ways beyond the pow- as “herd immunity.” Some diseases re- government,
ers of properly limited government, with poor quire high member immunity rates to
results. The following sections describe some produce this resistance—80 percent or
interventions’
of those government failures. more—but others have lower thresh- benefits must
olds.17 Currently there is no scientific outweigh
consensus on a threshold for COVID-19,
their costs
LIMITED GOVERNMENT though early guesses by epidemiolo-
AND COVID-19 gists fall in the 60–70 percent range, and must
Several market failures are present in the and one study argues that it could be as not violate
COVID-19 crisis. Among them: low as 43 percent.18 Those numbers sug- protected

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gest that a third to more than half of the
y Negative externality: Infected persons population could free-ride on others’
rights.
can transmit the virus that causes the dis- bearing the cost of the vaccine, allowing
ease, severe acute respiratory syndrome for a public goods problem.
coronavirus 2 (SARS-CoV-2), through
common social contact. Transmission Some government interventions are justi-
involuntarily inflicts costs on others, fied to address these market failures regarding
making it a negative externality. As liber- COVID-19, provided that the interventions’
tarians often say, “People’s right to swing benefits outweigh the costs and that the inter-
their fists ends at the tip of another’s ventions do not violate protected rights. The
nose”; likewise, people’s liberty ends at U.S. federal government and state and local
the point that they put others at involun- governments have made efforts at this sort of
tary risk. policymaking. Below are a few examples.
y The public goods of medical research:
People want to avoid the disease and Research on the Disease
recover from it quickly if they are in- When news first broke in late 2019
fected. That creates market incentives that a new and dangerous coronavirus had
for research into the virus and disease appeared in China, it seemed of little con-
and distribution of the findings. But the cern to Americans. Other epidemics had oc-
benefits from that work are difficult to curred in various parts of the world over the
confine to the individuals who pay for it. previous two decades: a previous novel coro-
Information is easily transmitted, and navirus, SARS-CoV-1 in 2002–2004; Zika
the academic world rewards the broad in 2007, 2013–2014, and 2015–2016; H1N1
distribution of many types of research “swine flu” in 2009; another novel coronavi-
to accelerate scientific discovery. That rus, MERS-CoV, in 2012, 2015, and 2018; and
makes research into SARS-CoV-2 and Ebola in 2014–2015. Only H1N1 made a sig-
COVID-19, and the resulting knowl- nificant appearance in the United States, and
edge, public goods. Though some people it was extinguished with the help of a quickly
would still pay for that work even if others developed vaccine.19 Given those experiences,
free-ride on the results, private funding many Americans in 2019 and early 2020 were
would likely be below optimal levels. rationally ignorant of the new virus.
y The public good of acquired immu- That did not change when, on January 21,
nity: Relatedly, an effective vaccine 2020, the U.S. Centers for Disease Control
against the virus has public goods char- and Prevention (CDC) announced the first
acteristics. A population can become confirmed U.S. case of the “mysterious virus
resistant to an infectious disease if that broke out last month in China.”20 (The
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name “COVID-19” had not been coined at the progress of science and useful arts, by securing
Officials’ time.) Several public officials quickly reassured for limited times to authors and inventors the
spreading the public, saying the illness did not appear to exclusive right to their respective writings
be a major threat to the United States and that and discoveries.” Congress thus created the
of false people did not need to change their lifestyles U.S. system of patents and trademarks, which
information because of the virus. In many cases, the offi- gives innovators exclusive rights over the use
about the cials carefully added caveats such as “at this of their creations for specified lengths of time.
pandemic is time,” noted that matters could change signifi- However, patents alone are believed to be
cantly in the future, and said that the situation insufficient to secure optimal financing for
not a failure required close monitoring.21 some types of research. “Pure science”—often
of limited Those reassurances may look bad in hind- described as “science for science’s sake”—leads
government sight, but they were reasonable given what was to many important, high-value breakthroughs
known at the time. Importantly, and following over the long term, but those advancements
but of the the adage that one should change one’s mind often cannot be foreseen, making it diffi-
officials who as new facts emerge, many of these officials al- cult for particular research efforts to secure
performed tered their stated views in the following weeks funding.25 Even “applied science”—research
their duties as the crisis unfolded. Unfortunately, other that applies previous discoveries to specific

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officials—including elected ones—were less problems—can have problems finding suffi-
poorly. careful in their reassurances and were much cient funding, including research on vaccines
slower to change their messages as information for emerging infectious diseases.26
developed.22 Some even spread false informa- Government has long addressed this mar-
tion on how to avoid and treat infection—for ket failure by providing grants for scientific
instance, dismissing the benefit of wearing research and operating research centers, of-
facemasks, not worrying about crowded pub- ten making the results of this work available
lic spaces, and promoting therapies unproven for public use. This support will be important
to treat COVID-19.23 in the response to COVID-19. The People’s
Some of this is understandable. Especially Republic of China, for instance, contributed
in the early weeks of the outbreak, it was to this effort by identifying and making freely
difficult for policymakers (and even epidemi- available the genetic code of SARS-CoV-2 in
ologists) to stay current on discoveries about January 2020.27 In the same vein, the U.S. gov-
the virus and disease. Moreover, because ernment has allocated billions of dollars to the
the public often overestimates the risk of National Institutes of Health for research into
low-probability, high-cost events, it is usually SARS-CoV-2 and COVID-19.28
good policy for authorities to offer assurance.24 There is reason to worry that this money
That said, it is also good policy for authorities could crowd out private funding for research
to be forthcoming about the limits of their into the virus and disease rather than supple-
knowledge and how a situation might change. ment it.29 Federal science grants have had this
Instead of increasing public knowledge about effect in the past.30 Though there likely is no
COVID-19, many U.S. policymakers spread way to fully avoid this problem without cut-
false information. That is not a failure of lim- ting off government support for research, it is
ited government but of government officials important for grant monitors to direct govern-
who performed their duties poorly. ment funding away from research that would
RESEARCH FUNDING. As previously noted, attract sufficient private funding.
scientific research, especially in health and
medicine, suffers public goods problems. Facemasks and Social Distancing
The U.S. Constitution specifically authorizes When the risks of COVID-19 became
federal intervention to address this market known, many Americans voluntarily began so-
failure by permitting Congress “to promote the cial distancing and/or wearing facemasks and
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other personal protective equipment when in the plane36—a low-cost, highly effective in-
public. Transmission of the SARS-CoV-2 virus tervention to prevent a repeat of the negative The
is believed to occur primarily through the in- externalities of the 9/11 terrorist attacks.37 protection
halation of moisture droplets expelled through Ideally, a public information campaign pro-
the nose and mouth of an infected person. moting distancing and mask-wearing would be
from
Those droplets are thought to typically float sufficient government intervention to promote distancing
in the air at dangerous concentrations only broad public adoption of these practices and and mask-
briefly before dispersing and falling, though reverse the virus’s spread. Government could
wearing has
droplets expelled indoors may linger in the air also provide law enforcement support of busi-
at dangerous concentrations for much longer.31 nesses and other property owners that choose public goods
Distancing and universal wearing of facemasks to require visitors to follow the practices. characteristics
reduce the chance of transmission in two ways: In many places in the United States, peo- because it
by reducing the number of droplets expelled by ple have refused to adopt these practices,
infected persons wearing masks and by reduc- especially wearing masks in public. Given
requires
ing the number of droplets absorbed by healthy the seriousness of the COVID-19 negative most people
persons who are both masked and some dis- externality, legally mandating masks and dis- to adopt the
tance away. There is no scientific consensus yet tancing is appropriate in certain situations
practices in
on exactly how much protection these practic- under classical liberal principles. Though
order to be

”
es provide, but studies indicate it is large.32 some commentators have claimed that any
This protection has public goods charac- sort of government facemask requirement effective.
teristics: distancing requires that most people violates protected liberty, they do not raise
(if not everyone) adopt the practice for it to similar objections to other clothing mandates,
be effective, and wearing a facemask if you’re and a facemask order would seem to be a much
infected appears to especially protect others.33 clearer example of addressing a serious mar-
Moreover, scientists believe people carrying ket failure than, say, requiring people to wear
the virus are highly contagious before they shirts and shoes in restaurants or certain ar-
become symptomatic, and a large portion of ticles of clothing when in public.38 If mask
infected people never become symptomatic and distancing mandates are necessary, they
or else experience symptoms so mild that they should be drafted and implemented by local
do not realize they are infected.34 That means governments, which could tailor the ordinanc-
they could unknowingly transmit the virus es to local circumstances to minimize costs.
to others.35 Given those characteristics, it is Unfortunately, policymakers in the United
especially important for the population to dis- States were slow to promote these practices.
tance and wear masks to combat the disease. Indeed, some officials initially discouraged the
As previously discussed, classical liberal general public’s use of facemasks, claiming they
principles allow for government intervention offered little or no protection.39 This is a gov-
to address market failures if the intervention’s ernment failure, and it underscores the earlier
benefits outweigh its costs and if it does not point that policymakers must take care to be
infringe on protected liberties. Both distanc- forthcoming and admit what they do not know
ing and mask-wearing typically can be done when dealing with a public problem. Another
at low expense and limited inconvenience, government failure involving facemasks oc-
so policies that promote the two practices curred in states such as Arizona and Georgia,
can be highly cost-effective. These interven- where the governors prohibited local govern-
tions are reminiscent of the 2001 Aviation and ments from mandating the wearing of masks
Transportation Security Act provision that in public.40 Perhaps it could be argued that lo-
commercial passenger aircraft cockpit doors cal governments did not first try less-stringent
be “hardened” and kept locked during flight policies, such as public information campaigns,
to prevent hijackers from taking control of to promote mask-wearing, but the policies
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ultimately should be left to local officials to Transmission and fatality rates generally
It remains craft and implement. did plateau and even decline in the wake of
to be seen Government has done better at promoting the shutdown orders, and some states subse-
social distancing, but there have still been fail- quently experienced large rate increases after
whether the ures. For example, President Trump’s political (sometimes long after) their orders were re-
shutdowns campaign and administration have discour- laxed.47 However, it is unclear how much the
will yield aged distancing at both his political rallies and policy changes contributed to the rate changes
any benefits presidential functions, and they have seem- or how much the policies were responsible
ingly encouraged political allies at the state for such ill effects as economic contraction.
beyond what level to do likewise.41 Local political leaders People and organizations voluntarily began
would have have continued to operate their mass transit reducing commercial activity out of fear of
been achieved systems, on which distancing is difficult if not COVID-19 before the orders, resulting in the
impossible, and the federal government has fi- economy falling into recession by the begin-
from mask- nancially supported them.42 ning of March.48 The first local government
wearing and

”
On the other hand, some state and local of- shutdown orders were not imposed until
distancing. ficials who did adopt distancing orders did so mid-March, followed by state orders.49 Policy
with insufficient attention to avoiding unneces- analysts are trying to untangle the effects of
sary costs. For instance, several states—at least the government orders from voluntary private
initially—prohibited such activities as boating, actions, but right now it is plausible that the
golfing, leisure driving, and shopping in spe- orders had little effect on either the virus’s
cific sections of stores, and they ordered the spread or the economy.50
closing of public parks and other large spaces If the orders did—or if future shutdown
where distancing could be done easily.43 Those orders would—reduce transmission and fa-
interventions not only reduced the net ben- tality rates, that would not necessarily justify
efits of policies intended to address COVID-19 the orders. As previously noted, legitimate
market failures, but they also likely weakened intervention under classical liberal prin-
public tolerance for unpleasant but sensible ef- ciples must have benefits that outweigh the
forts to combat the virus.44 costs. Such policy costs would go beyond
negative economic effects to include reduced
What about Shutdown Orders? individual happiness from lost outings, psy-
In March 2020, as U.S. infection rates chological and physical harm from social
soared, states and localities began adopting isolation and economic distress over both
“shutdown orders” that directed businesses and the short and long term, and public pushback
other public places to close unless policymakers against practices that reduce COVID-19.51
deemed them essential. Ultimately, each of the Further, limited government philosophy re-
50 states had some sort of closure order in place quires not only a net-positive effect but that
for at least a portion of its population.45 the net benefits are greater than those pro-
These orders were initially justified as an duced by policy alternatives. It remains to
effort to “flatten the curve”: that is, slow the be seen whether the shutdowns yielded any
rate of infection spread so that health care benefits beyond what the government would
resources would not become overwhelmed, have achieved simply by encouraging or man-
thereby allowing for better treatment of the af- dating mask-wearing and social distancing.
flicted.46 Other justifications were added later,
including that “the curve” should not just be What about Test, Trace, and Isolate?
flattened but put on a permanently downward A much-lauded intervention option is “test,
slope and that the closures gave researchers trace, and isolate”: using widespread testing to
and doctors more time to learn about the dis- identify people infected with SARS-CoV-2,
ease and develop better treatment options. isolate them, and track down others who have
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had contact with the infected to encourage The results of these policy efforts have ranged
them to self-quarantine and be tested.52 This from useless to wasteful to deadly. Below are Many
strategy is often heralded as effective to stop some examples of these government failures. Americans
the disease without resorting to disruptive in-
terventions such as shutdowns. South Korea’s Developing a Test would not
success at containing COVID-19 has been The first confirmed U.S. case of COVID-19 accept
credited to test, trace, and isolate.53 was announced on January 21. Two days prior mandated
But there is reason to doubt this strat- and half a world away, South Korea likewise
regular testing
egy would be effective in the United States. announced its first confirmed case.57 At the
Because infection is frequently asymptom- time, neither country had a test for the disease or the privacy
atic, people would have to undergo regular ready to be distributed, and both set to work infringements
testing—perhaps weekly—even if they feel to remedy that. But they went about it in very of contact

”
well and have not been around anyone different ways.
thought to be sick.54 People who test posi- A week after South Korea’s first case, of-
tracing.
tive would have to submit to quarantine ficials there met with representatives of the
and provide government officials the names country’s top medical device companies,
of others with whom they have had recent telling them that if they created a test for
contact, and the officials would need to con- the disease, it would receive quick regula-
tact the others quickly and convince them tory approval.58 Within a week, one firm’s
to self-quarantine or be tested. It is likely test was ready; three others soon followed. By
that many privacy-valuing Americans would mid-February, laboratories across the coun-
not voluntarily follow such a regime for an try were processing samples; the lab network
extended period and would politically op- soon swelled to 96 public and private facilities,
pose a mandated regular testing regime.55 processing 20,000 samples a day with results
Nonetheless, testing is an important part in five to six hours. By mid-March, there was
of a good virus suppression strategy. It even has no shortage of test kits in South Korea.
public goods qualities—testing reduces others’ In contrast, the U.S. Food and Drug
risk of infection—so classical liberal principles Administration (FDA), at the behest of
can permit public subsidy of testing (and the the CDC, elected to approve and distrib-
United States is subsidizing such tests56). But ute a test that the CDC had developed and
policy that moves beyond subsidizing testing would manufacture.59 Some 20 commer-
to a broad, mandatory program of testing, trac- cial and academic labs informed the FDA of
ing, and isolating is unlikely to play a major role their interest in developing similar kits, and
in suppressing the virus in the United States. the World Health Organization made avail-
able a German-produced test in mid-January,
but the FDA responded that those would
BEYOND CLASSICAL have to go through the standard, arduous re-
LIBERAL PRINCIPLES view process for new medical tests to ensure
Instead of focusing on policy responses their quality.
to COVID-19 that would have been effec- Some of the would-be CDC competitors did
tive and consistent with the principles of seem to catch a break on January 31 when the
limited government, U.S. policymakers have U.S. Department of Health and Human Services
aggressively pursued other interventions, with (HHS) designated the new virus a public health
poor results. Specifically, the White House, emergency. That allowed for temporary ap-
Congress, and state officials have attempted proval prior to FDA review of tests developed
to manipulate the supply and distribution of by “government-certified clinical laboratories”
goods important to alleviating the pandemic at universities, research centers, and hospitals.
even though no market failures were apparent. But this came with a catch: the labs first had to
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obtain an Emergency Use Authorization (EUA) and distribute tests early in the crisis. At least,
The federal from the FDA to construct the tests, and EUAs it would have been preferable for doctors and
government themselves are difficult and time-consuming members of the public to have had the choice
to obtain.60 So, instead of clearing the way for of using those tests.
made the new tests, the HHS swapped one regulatory
CDC the barrier for another. The federal government The Defense Production Act
monopoly had made the CDC the monopoly provider of As community spread of SARS-CoV-2
provider of SARS-CoV-2 testing in the United States. took hold in the United States, several im-
The FDA approved the CDC test on portant medical supplies grew scarce. Some
SARS-CoV-2 February 4, and the CDC promptly shipped state governors, members of Congress, and
testing in kits to state and local public health labs. But us- political commentators called for the federal
the United ers soon found the kits yielded a high number government to actively manage the produc-

”
of false positive results. It would later be discov- tion and distribution of those goods. It was
States. ered that, when the CDC scaled up production an odd demand: government is not a mass
of the tests, one component—which was ulti- manufacturer of ventilators, facemasks,
mately deemed unnecessary—became tainted, medical gowns, and gloves. Rather, consum-
corrupting the results.61 The CDC should have ers rely on private firms with expertise and
been on guard against such a failure; something specialized manufacturing facilities to sup-
similar befell a test it developed for the Zika vi- ply the goods at large volumes. Nonetheless,
rus and other pathogens in 2016.62 President Trump obliged the calls, invoking
When the problem first became appar- the 1950 Defense Production Act (DPA) for
ent, local and state officials quickly surmised ventilators and medical-grade facemasks.66
that the flaw was in the unnecessary compo- Production of those and other health care
nent and that screening could be conducted goods did expand in the following weeks,
effectively by forgoing that part of the test.63 but the DPA had little if anything to do with
But FDA regulations did not allow for that ad- that.67 Before Trump’s order, ventilator manu-
aptation; the kits had to be used as directed, facturers were gearing up for unprecedented
making them largely useless. So, the United output in response to the emerging crisis
States had no diagnostic test for a novel, con- and ensuing market demand. One manufac-
tagious, deadly disease that was then spreading turer, Ventec Life Systems of Seattle, had
in parts of the country.64 forged a partnership with General Motors
It would take until February 26 for the FDA (GM) to create a production line at a GM
to permit public health labs to forgo the flawed plant in Kokomo, Indiana, tapping the auto-
part of the kit. Three days later, the agency re- maker’s mass-manufacturing expertise and
laxed regulations on outside groups that want- global supply chain. Similar deals were struck
ed to develop their own tests. By then, a sharp between Medtronic and Tesla and between
rise in COVID-19 cases was underway in the GE Healthcare and Ford.68
United States. Likewise, the target of the facemask DPA
Long before COVID-19, policy analysts action, 3M, had already doubled its output rate
had criticized the FDA’s lengthy approval and begun shipping masks it produced in oth-
process for new medical tests.65 Policymakers er countries to the United States.69 The Trump
justify this regulatory barrier as ensuring the order came when the administration learned
tests are of high quality—though clearly that that a small percentage of the U.S. production
was not the case for the CDC’s COVID-19 would go to Canada and Latin America.70
kits. In the current pandemic, it likely would Manufacturers’ robust voluntary response
have been far better to risk possibly lower to the U.S. (and global) need for more medical
quality in exchange for tapping the abilities equipment suggests that the DPA was unnec-
of commercial and academic labs to create essary. Indeed, it is unclear how the DPA could
 11

“
increase production of those goods under the of the federal government can control the dis-
current circumstances. The law was enacted tribution of the goods covered by the orders. Advocates of
in September 1950 after the U.S. military was That latter explanation may sound like a the Defense
caught ill-equipped by the start of the Korean good idea: federal managers could direct sup-
War. At that time, the post–World War II plies to where they are most needed. But there
Production
economy was surging, and government of- is reason to doubt that government can do Act seem
ficials apparently did not want to bid against that well. For example, federal officials were to believe
other consumers for output. Instead, they given control over distribution of the antivi-
ral drug remdesivir, which has been shown to
that simply
responded with the DPA, which grants the
federal government three powers: speed recovery of patients seriously afflicted invoking it
with COVID-19. This oversight proved inept: will promptly
1. It can order producers to accept and some vials of the precious medicine were sent create new
prioritize the federal government’s de- to hospitals without COVID-19 patients, and
mands ahead of others. others went to hospitals without the necessary
capacity for
refrigerated storage.73 That would be unlikely the desired

”
2. It can provide producers with capital
and tax incentives to initiate and expand to happen if distribution were left to market goods.
production. forces; hospitals without COVID-19 patients
3. It can act against price gouging and or proper storage would have little incentive
hoarding. to purchase the drug.

In the COVID-19 crisis, federal financial Distribution of Aid

support under the second power might help One of the sharpest criticisms leveled at the
manufacturers to expand their production federal government’s response to COVID-19
lines. But that apparently was not what moti- is that politicians are routing disaster aid to
vated President Trump, who justified the GM favored constituencies and away from the con-
DPA by decrying the automaker’s corporate stituents of political opponents.74 The Denver
leadership for not working hard enough to Post charged that President Trump “is treat-
manufacture needed supplies and who excori- ing life-saving medical equipment as emolu-
ated 3M for sending some of its U.S.-produced ments he can dole out as favors to loyalists.”75
masks to Canada and Central America.71 Michigan Gov. Gretchen Whitmer, a promi-
Trump, members of his administration, nent Trump critic, similarly claimed that
and other political leaders and commentators “vendors are being told [by the White House]
seem to believe that simply invoking the DPA not to send stuff here to Michigan” in retribu-
would promptly create new capacity for the tion for her criticism.76
desired goods.72 Yet, unlike in the Korean War, There is some evidence supporting those
there has been no general shortage of U.S. charges. An analysis of the first round of the
manufacturing capacity amid the COVID-19 Paycheck Protection Program found that busi-
pandemic; instead, there has been a scarcity nesses in states that supported Trump in 2016
in the time and investment necessary to con- received much more generous government as-
vert some of this capacity to medical goods. sistance than businesses in states that went to
And there has been no market failure in the his Democratic opponent, Hillary Clinton.77
supply of these goods; they are private goods Another analysis alleged that lobbyists with
that have responded appropriately to the shift connections to the Trump administration and
in demand, independent of any government presidential campaign have delivered billions
taskmaster. There are only two reasons to in- of dollars in federal aid to their clients.78
voke the DPA in this crisis: so that politicians Political favoritism in a disaster is a long-
can gain the political benefit of appearing to time practice in Washington, DC. A rich
take action and so that the executive branch academic literature indicates that New Deal
12

“
spending was channeled to politically val- increasing production far above ordinary
Political ued districts and to districts with members levels to meet surging demand, resulting in an
favoritism in on key congressional committees.79 Beyond increase in the marginal cost of production.
the New Deal, empirical work finds that Capping price increases dampens manufac-
a disaster is Federal Emergency Management Agency aid turers’ willingness to increase output; they
a longtime flows more generously in election years, that will not expand beyond what is profitable to
practice in federal agriculture disaster aid flows dispro- produce. Accordingly, some demand will go
Washington, portionately to states with members on the unmet at the capped price, resulting in short-
ages, while shoppers who happen into a supply
relevant House and Senate agriculture com-
DC, but mittees, and that disaster declarations are of the goods will be more likely to stockpile, to
Trump issued more readily to politically competitive the detriment of others.
allegedly went states than to noncompetitive states.80 Most In the early weeks of the COVID-19 cri-
relevant to the COVID-19 crisis, an analy- sis, Americans experienced shortages in such
further and sis of the distribution of the H1N1 vaccine household staples as bath tissue, paper tow-
withheld aid during the 2009 epidemic found that those els, and cleaning products, while health care
to punish doses went disproportionately to states with facilities ran low on protective masks, gowns,
swing Democratic members on a key congressional and gloves. Some such scarcity was inevitable

”
committee.81 in the short run because supply chains had to
states. There is an important difference between be reconfigured in response to obstructions
the allegations made against the Trump ad- and increased demand. But the price con-
ministration and those earlier examples of trols hampered the market’s ability to provide
political gamesmanship. In the earlier epi- goods to consumers who would pay for them.
sodes, disaster aid apparently was a reward to
politically valuable districts, whereas Trump Regulatory Barriers
allegedly put lives at risk by withholding aid The previous government failures in re-
from a swing state that seems vital to his 2020 sponding to COVID-19 have been frustrating
reelection prospects. Nonetheless, playing and painful. But they are not the only gov-
politics with disaster aid is an old game. ernment interventions that have weakened
America’s response to the crisis. Others have
Anti-Price-Gouging Laws existed for decades: regulations that dampen
Once the COVID-19 crisis hit and sup- virtuous economic incentives and protect in-
ply chains came under stress, prices for goods cumbent industries from competition. These
rose. Some public officials responded to this by interventions harm economic efficiency and
invoking state and federal price-gouging laws, human welfare at any time, but they are es-
which typically cap price increases at a speci- pecially harmful in a crisis, when markets are
fied percentage during a state of emergency.82 under severe stress.
Higher prices in a disaster are aggravating, These regulations include rigid health care
but they are also the natural response when licensing requirements that prohibit medi-
supply dwindles or demand intensifies. And the cal professionals from practicing outside of
increase is virtuous: It encourages consumers specific geographic areas; supply-limiting and
to conserve the goods and manufacturers and price-raising protections for funeral homes
stockpilers to provide more of the goods. It also and other “death care” services; freight trans-
rewards shippers for delivering the products. port restrictions that dampen competition
Critics of price increases in a disaster typi- over the delivery of goods; and tariffs and other
cally allow that there should be some increase trade barriers that constrain the importation
but only by some legally specified percent- of foreign-made goods.83 Encouragingly, state
age. This overlooks the nature of production and federal regulators have suspended some of
in a crisis: suppliers typically respond by these regulations during the crisis.84 However,
 13

“
most of the suspensions are temporary and de- such a pandemic a century ago. Policymakers
pendent on the whims of government officials, were bound to make mistakes when combat- Rather than
while many other questionable regulations re- ting a completely new virus in a world-historic intervene in
main in place. crisis. Moreover, their desire to use the power
of government to reduce human suffering is
functioning
morally respectable. markets,
CONCLUSION However, policymakers and the public policymakers
When the danger from COVID-19 became must realize that there are limits to what
government can do well. Perhaps in some
should focus
apparent, Americans looked to government
for help. That was appropriate; there is much cases and to some small degree it can as- on cases
that government can do to combat the mar- sist the market in producing needed goods, where there
ket failures present in the crisis. Among but far too often government interven- are market

”
those interventions are policies to reduce the tion hinders economic output—sometimes
negative externality of the virus, promote the dramatically—rather than aids it. And too of-
failures.
public good of resistance to the disease, and ten, when state intervention is successful, the
expand the public good of knowledge about benefits are eclipsed by the costs.
SARS-CoV-2. Rather than intervene in functioning
Unfortunately, government in the United markets, policymakers should focus on cases
States has done a poor job of identifying and where markets are obstructed—where there
implementing cost-effective policies that are true market failures. Intervention in
would address these market failures. At the these cases may improve welfare, provided
same time, it has intervened with poor re- that the benefits are greater than the costs
sults in market efforts to respond to the virus and that protected rights are not infringed.
and reduce its harmful effects on Americans’ By following classical liberal principles,
health and the economy. policymakers would improve America’s
To some extent, these government failures overall response—public and private—to the
are understandable. Humankind last faced COVID-19 crisis.
14

NOTES 14. Charles J. Wolf, “A Theory of Non-Market Failure,” Journal

1. Derek Thompson (@DKThomp), “There are no libertarians of Law and Economics 22, no. 1 (1979): 107–39.
in a pandemic,” Twitter, March 2, 2020, 4:22 p.m., https://twitter.
com/DKThomp/status/1234952340807077892. 15. F. A. Hayek, “The Use of Knowledge in Society,” American
Economic Review 35, no. 4 (September 1945): 519–30.
2. Peter Nicholas, “There Are No Libertarians in an Epidemic,”
The Atlantic, March 10, 2020. 16. Edward L. Glaeser, “Paternalism and Psychology,” University
of Chicago Law Review 73, no. 1 (2006): 133–56.
3. Farhad Manjoo, “Republicans Want Medicare for All, but
Just for This One Disease,” New York Times, March 11, 2020. 17. Paul E. M. Fine, “Herd Immunity: History, Theory, Practice,”
Epidemiologic Reviews 15, no. 2 (July 1993): 265–302.
4. Ryan LaRochelle, “Decades of Conservative Governance
Has Worsened the Coronavirus Crisis,” Washington Post, April 7, 18. “Expert Comments about Herd Immunity,” Science Media
2020. Centre, March 13, 2020; Tom Britton, Frank Ball, and Pieter
Trapman, “A Mathematical Model Reveals the Influence of
5. George Packer, “We Are Living in a Failed State,” The Atlantic, Population Heterogenity on Herd Immunity to SARS-CoV-2,”
June 2020. Science 369, no. 6505 (June 23, 2020): 846–9; and Apoorva
Mandavilli, “What If ‘Herd Immunity’ Is Closer Than Scientists
6. Packer, “We Are Living in a Failed State.” Thought?,” New York Times, August 17, 2020.

7. Packer. 19. Andrew J. Broadbent and Kanta Subbarao, “Influenza Virus

Vaccines: Lessons from the 2009 H1N1 Pandemic,” Current
8. Burgess Everett and Marianne Levine, “Marco Rubio Finds Opinion in Virology 1, no. 4 (October 2011): 254–62.
His Next Act,” Politico, April 6, 2020; and Kelly Anne Smith,
“Congress Approved More Funding for the Paycheck Pro- 20. Lena H. Sun and Lenny Bernstein, “First U.S. Case of Poten-
tection Program. Here’s What You Need to Know,” Forbes, tially Deadly Chinese Coronavirus Confirmed in Washington
April 22, 2020. State,” Washington Post, January 21, 2020.

9. Kate Davidson and Josh Mitchell, “Relief Package Would 21. Warren Fiske, “Did Fauci Tell U.S. ‘Not to Worry about’
Limit Coronavirus Damage, Not Restore Economy,” Wall Coronavirus?,” Politifact, Poynter Institute, April 29, 2020.
Street Journal, March 26, 2020.
22. Tim Miller, “Warnings Ignored: A Timeline of Trump’s
10. Coronavirus Aid, Relief, and Economic Security Act, Pub. COVID-19 Response,” The Bulwark, March 25, 2020; and
L. No. 116-136, 134 Stat. 281 (2020); and William Cummings Aaron Blake and J. M. Rieger, “New York Mayor Bill de Blasio’s
and David Jackson, “Trump’s Name to Be Printed on $1,200 Repeated Comments Downplaying the Coronavirus,” Wash-
Coronavirus Stimulus Checks Going out to Americans,” USA ington Post, April 1, 2020.
Today, April 15, 2020.
23. Jacob Sullum, “The CDC’s Revised Face Mask Advice Is
11. Stephanie Slade, “The New Conservative Nationalism Is Based on Information That Was Available Months Ago,” Rea-
about Subverting Individual Liberty,” Reason, July 18, 2019. son, April 6, 2020; Blake and Rieger, “New York Mayor”; and
Aaron Blake, “FDA’s Hydroxychloroquine Reversal Raises
12. Ryan Lizza, “Big-Government Conservatives Mount Take- Even Bigger Questions about Trump’s Role in Pushing for the
over of GOP,” Politico, April 27, 2020. Drug,” Washington Post, June 15, 2020.

13. For some criticisms of the concept of market failure and 24. Baler Bilgin and Lyle Brenner, “Context Affects the Interpre-
government response, see Tyler Cowen, ed., The Theory of Mar- tation of Low but Not High Numerical Probabilities: A Hypoth-
ket Failure: A Critical Examination (Fairfax, VA: George Mason esis Testing Account of Subjective Probabilities,” Organizational
University Press, 1988). Behavior and Human Decision Processes 121, no. 1 (2013): 118–28.
 15

25. For a discussion of the theory behind this intervention, 36. Bartholomew Elias, Airport and Aviation Security: U.S. Policy
as well as historical problems with its implementation and a and Strategy in the Age of Global Terrorism (Boca Raton, FL: CRC
proposed remedy, see Scott Wallsten, “The R&D Boondoggle: Press, 2009), pp. 236–7.
Why Is Government Subsidizing Commercially Promising
Business Projects?,” Regulation 23, no. 4 (2000): 12–16. 37. John Mueller and Mark G. Stewart, Terror, Security, and Mon-
ey: Balancing the Risks, Benefits, and Costs of Homeland Security
26. Jonathan T. Vu et al., “Finding Vaccines for Global Health (Oxford, UK: Oxford University Press, 2011), pp. 145–7.
Security,” working paper, March 20, 2020.
38. Cheryl K. Chumley, “Forced Face Masking Is a Civil Rights
27. Lisa Schnirring, “China Releases Genetic Data on New Offense,” Washington Times, May 1, 2020.
Coronavirus, Now Deadly,” Center for Infectious Disease Re-
search and Policy, University of Minnesota, Jan. 11, 2020. 39. Ben Schreckinger, “Mask Mystery: Why Are U.S. Officials
Dismissive of Protective Covering?,” Politico, March 30, 2020.
28. Jocelyn Kaiser, “NIH Grapples with Rush to Claim Billions
in Pandemic Research Funds,” Science, June 3, 2020; and National 40. Jim Nintzel, “Ducey Reverses Course, Says Mayors Can Set
Institutes of Health, “Coronavirus Disease 2019 (COVID-19): Local Standards for Face Masks,” Tucson Weekly, June 17, 2020;
Information for NIH Applicants and Recipients of NIT Fund- and Jeremy Redmon, J. Scott Trubey, and Willoughby Mariano,
ing,” U.S. Department of Health and Human Services, https:// “Kemp Bans Cities, Counties from Mandating Masks,” Atlanta
grants.nih.gov/policy/natural-disasters/corona-virus.htm. Journal-Constitution, July 15, 2020.

29. Julie Steenhuysen, “U.S. Government Awards Novavax $1.6 41. Dave Brooks, “In Tulsa, Trump Campaign Subverted Social
Billion for Coronavirus Vaccine,” Reuters, July 7, 2020. Distancing One Sticker at a Time,” Billboard, June 26, 2020;
David Nakamura and Josh Dawsey, “Few Masks, Little Dis-
30. Wallsten, “The R&D Boondoggle.” tancing: Trump Celebrates at Crowded White House Party
Largely Devoid of Coronavirus Precautions,” August 27, 2020;
31. Lidia Morawska and Donald K. Milton, “It Is Time to Ad- Anthea Butler, “Trump’s Phoenix Megachurch Rally Proves
dress Airborne Transmission of Coronavirus Disease 2019 How Much Faith and Masks Are Now Political,” NBC News,
(COVID-19),” Clinical Infectious Diseases, July 6, 2020. June 24, 2020; and David Welna, “Revived Mount Rushmore
Fireworks Will Feature Trump but No Social Distancing,” Na-
32. Derek K. Chu et al., “Physical Distancing, Face Masks, and Eye tional Public Radio, July 1, 2020.
Protection to Prevent Person-to-Person Transmission of SARS-
CoV-2 and COVID-19: A Systematic Review and Meta-Analysis,” 42. Randal O’Toole, “Why Are Transit Systems Still Running?,”
The Lancet 395, no. 10242 (June 2020): 1973–87; and Christopher T. Cato at Liberty (blog), Cato Institute, April 17, 2020.
Leffler et al., “Association of Country-Wide Coronavirus Mortal-
ity with Demographics, Testing, Lockdowns, and Public Wearing 43. Mike Morea, “Coronavirus Pandemic Rules Sink Spring
of Masks,” working paper, updated August 4, 2020. Boating on the Chesapeake Bay,” Capital Gazette, April 1, 2020;
Mike Stachura, “Here’s a State-by-State Breakdown of Where
33. Siddhartha Verma, Manhar Dhanak, and John Frankenfield, Golf ’s Allowed and Where It Isn’t,” Golfworld, April 29, 2020;
“Visualizing the Effectiveness of Face Masks in Obstructing Teresa Boeckel, “Red Lion Woman Cited $200 in Violation of
Respiratory Jets,” Physics of Fluids 32, no. 6 (2020). the Stay-at-Home Order after Going for a Drive,” York Daily
Record, April 3, 2020; Gretchen Whitmer, “Executive Order No.
34. Matt Apuzzo, Selam Gebrekidan, and David D. Kirkpatrick, 2020-42: Temporary Requirement to Suspend Activities That
“Behind the Curve: How the World Missed COVID-19’s Silent Are Not Necessary to Sustain or Protect Life,” Office of the
Spread,” New York Times, June 27, 2020. Governor, State of Michigan, April 9, 2020; and Zeynep Tufekci,
“Keep the Parks Open,” The Atlantic, April 7, 2020.
35. Ruiyun Li et al., “Substantial Undocumented Infection
Facilitates the Rapid Dissemination of Novel Coronavirus 44. J. D. Tuccille, “Post-Pandemic Americans May Be Done
(SARS-CoV-2),” Science 368, no. 6490 (May 2020): 489–93. with Taking Orders,” Reason, July 3, 2020.
16

45. Jasmine C. Lee et al., “See How All 50 States Are Reopen- and How We Should ‘Trust the Science,’” Cato Institute,
ing (and Closing Again),” New York Times, updated October 14, September 15, 2020.
2020.
53. Laura Bicker, “Coronavirus in South Korea: How ‘Trace,
46. Harry Stevens, “Why Outbreaks Like Coronavirus Spread Test and Treat’ May Be Saving Lives,” BBC News, March 12,
Exponentially, and How to ‘Flatten the Curve,’” Washington 2020; and Derek Thompson, “What’s Behind South Korea’s
Post, March 14, 2020. COVID-19 Exceptionalism?,” The Atlantic, May 6, 2020. The
Korean effort continues; see Choe Sang-Hun, “New Covid-19
47. Bonnie Berkowitz et al., “At Least 215,000 People Have Outbreaks Test South Korea’s Strategy,” New York Times,
Died from Coronavirus in the U.S.,” Washington Post, data September 2, 2020.
as of October 14, 2020, https://www.washingtonpost.com/
graphics/2020/national/coronavirus-us-cases-deaths/. 54. Dan Mangan, “The US Economy Can’t Reopen without
Widespread Coronavirus Testing. Getting There Will Take a
48. Raj Chetty et al., “The Economic Impacts of COVID-19: Lot of Work and Money,” CNBC, April 16, 2020.
Evidence from a New Public Database Built from Private Sec-
tor Data,” Opportunity Insights working paper, September 55. Sharon Otterman, “N.Y.C. Hired 3,000 Workers for Con-
2020; Will Feuer and Jabari Young, “Coronavirus Grinds the tact Tracing. It’s Off to a Slow Start,” New York Times, June 21,
Sports World to a Halt: Here’s What’s Canceled,” CNBC, 2020.
March 12, 2020; and “US Business Cycle Expansions and Con-
tractions,” National Bureau of Economic Research, https:// 56. “HHS Awards More Than Half Billion Dollars across the
www.nber.org/cycles.html. Nation to Expand COVID-19 Testing,” press release, U.S. De-
partment of Health and Human Services, May 7, 2020.
49. Sarah Ravani, “Bay Area Coronavirus Decision: Behind the
Scenes of Nation’s First Shelter-in-Place Order,” San Francisco 57. Joyce Lee, “South Korea Confirms First Case of New Coro-
Chronicle, March 21, 2020; and Matt Perez, “New Jersey Ordered navirus in Chinese Visitor,” Reuters, January 19, 2020.
to Stay-at-Home, Joining California, Illinois and Others,” Forbes,
March 21, 2020. 58. Chad Terhune et al., “Special Report: How Korea Trounced
U.S. in Race to Test People for Coronavirus,” Reuters,
50. Charles Courtemanche et al., “Strong Social Distancing Mea- March 19, 2020.
sures in the United States Reduced the COVID-19 Growth Rate,”
Health Affairs 39, no. 7 (May 14, 2020); Wei Lyu and George L. 59. Yasmeen Abutaleb et al., “The U.S. Was Beset by Denial and
Wehby, “Comparison of Estimated Rates of Coronavirus Disease Dysfunction as the Coronavirus Raged,” Washington Post, April
2019 (COVID-19) in Border Counties in Iowa without a Stay-at- 4, 2020; and Shawn Boburg et al., “Inside the Coronavirus
Home Order and Border Counties in Illinois with a Stay-at-Home Testing Failure: Alarm and Dismay among the Scientists Who
Order,” JAMA Network Open 3, no. 5 (May 15, 2020); Solomon Sought to Help,” Washington Post, April 3, 2020.
Hsiang et al., “The Effect of Large-Scale Anti-Contagion Policies
on the COVID-19 Pandemic,” Nature 584, no. 7820 (2020): 262–7; 60. There is an academic debate over whether the Food and
Guihua Wang, “Stay at Home to Stay Safe: Effectiveness of Stay- Drug Administration has authority to require emergency use
at-Home Orders in Containing the COVID-19 Pandemic,” work- authorizations for laboratory-developed tests. See Barbara J.
ing paper, April 23, 2020; and Ka-Ming Tam, Nicholas Walker, and Evans and Ellen Wright Clayton, “Deadly Delay: The FDA’s
Juana Moreno, “Effect of Mitigation Measures on the Spreading Role in America’s COVID-Testing Debacle,” Yale Law Journal
of COVID-19 in Hard-Hit States,” Louisiana State University Forum 130 (2020): 78–120.
working paper, April 30, 2020.
61. David Willman, “Contamination at CDC Lab Delayed
51. Romeo Vitelli, “Are We Facing a Post-COVID-19 Suicide Rollout of Coronavirus Tests,” Washington Post, April 18, 2020.
Epidemic?,” Psychology Today, June 7, 2020.
62. David Willman, “Lessons Unlearned: Four Years before
52. This section is indebted to Peter Van Doren, “When the CDC Fumbled Coronavirus Testing, the Agency Made
 17

Some of the Same Mistakes with Zika,” Washington Post, July 4, 75. Editorial Board, “Editorial: Trump Is Playing a Disgusting
2020. Political Game with Our Lives,” Denver Post, April 9, 2020.

63. Boburg et al., “Inside the Coronavirus Testing Failure.” 76. Aaron Keller, “Michigan Governor Claims Federal Govern-
ment Told Vendors ‘Not to Send Stuff Here,’” MSN, March 27,
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How Delays in Testing Set Back the U.S. Coronavirus Re-
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Shows Not All States Are Created Equal,” Bloomberg, April 20,
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79. Gary M. Anderson and Robert D. Tollison, “Congressio-
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Chain Task Force,” White House, June 10, 2020. Journal of Law and Economics 34, no. 1 (April 1991): 161–75;
Robert K. Fleck, “Inter-Party Competition, Intra-Party Com-
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by GM and Ventec to Make More Ventilators for Coronavirus Deal Data,” Public Choice 108, no. 1–2 (July 2001): 77–100; Jim
Fight,” Seattle Times, March 30, 2020; Timothy B. Lee, “Tesla F. Couch, Keith E. Atkinson, and William H. Wells, “New Deal
Plans to Retool Solar Panel Factory to Make Medtronic Venti- Agricultural Appropriations: A Political Influence,” Eastern
lators,” ArsTechnica, March 26, 2020; and Peter Valdes-Dapena Economic Journal 24, no. 2 (1998): 137–48; and Gavin Wright,
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Days,” CNN, March 30, 2020. metric Analysis,” Review of Economics and Statistics 56, no. 1
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69. Bade, “Trump Expands DPA.”
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“Trump Seeks to Block 3M Mask Exports and Grab Masks no. 3 (July 2003): 496–509; Thomas A. Garrett, Thomas L.
from Its Overseas Customers,” New York Times, April 3, 2020. Marsh, and Maria I. Marshall, “Political Allocation of US Agri-
culture Disaster Payments in the 1990s,” International Review
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eral Motors to Make Ventilators,” Wall Street Journal, March 27, Reeves, “Political Disaster: Unilateral Powers, Electoral Incen-
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72. Arian Campo-Flores, Rebecca Ballhaus, and Valerie Bauerlein, 81. Matt E. Ryan, “Allocating Infection: The Political Economy
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cies,” Wall Street Journal, July 9, 2020. (January 2014): 138–54.

73. Yasmeen Abutaleb et al., “Administration Initially Dis- 82. Matt Flener, “Kansas Invokes Anti-Price Gouging Law,”
pensed Scarce Covid-19 Drug to Some Hospitals that Didn’t KMBC News, March 13, 2020; Sydney Stallworth, “Don’t Be
Need It,” Washington Post, May 28, 2020. a Victim of COVID-19 ‘Price Gouging’: Report It,” WZDX,
March 24, 2020; and Allen C. Guelzo, “A Wolf in Emergency
74. This section is indebted to Steven Horwitz and E. Frank Clothing,” Wall Street Journal, June 25, 2020.
Stephenson, “The Politicization of Disaster Relief,” Regulation 43,
no. 2 (2020): 4–5. 83. Jeffrey A. Singer and Richard P. Menger, “The Coronavirus
18

Pandemic Shows the Folly of Medical-Licensing Laws,” Nation- (blog), Cato Institute, April 2, 2020; and Thomas A. Firey, “It’s the
al Review, May 29, 2020; David E. Harrington, “Sticky Funeral Supply Shock, Stupid,” The Bulwark, March 17, 2020.
Prices and Rigid Regulations in the COVID-19 Crisis,” Regulation
43, no. 2 (Summer 2020): 2–4; Colin Grabow, “Jones Act Waiver 84. Thomas A. Firey, “Regulation after COVID-19,” Cato at
under Consideration to Bolster U.S. Oil Sector,” Cato at Liberty Liberty (blog), Cato Institute, April 13, 2020.
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CITATION
Firey, Thomas A. “Government in a Pandemic,” Policy Analysis no. 902, Cato Institute, Washington, DC,
November 17, 2020. https://doi.org/10.36009/PA.902.

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