Don's Tuesday Column

         THE WAY I SEE IT   by Don Polson  Red Bluff Daily News   3/24/2020

    Economic whole greater than parts

We all have stories of life interrupted as restrictions reduced activities, livelihoods, habits, family travel and recreation—due to something that most of us haven’t personally experienced, nor have caused. Colds to most are discomforting, even work-interrupting; the flu, more seriously so. Except for the tens of thousands that die, life goes on.

On Saturday night, March 7, we were excitedly watching the incoming snow, knowing it would refresh the slopes and runs of Mount Bachelor; after the weekend crowds left, we would add our gray hair and wrinkles to the sparse weekday skiing crowd. Seeing some of our senior ski buddies would be fun.

We could follow the spreading Wu-flu (my contraction of “Wuhan influenza” saves column space) pandemic on endless tv news but figured on little impact to our winter pre-occupation. Fresh, cold mountain air; minimal close proximity to others; sitting next to people on the chairlift came with a stiff, germ-removing breeze in the face.

However, our throat/bronchial infections reduced our energy level below 50 percent, prompting a return to the open spaces and (still) Wu-flu free countryside of Red Bluff, as soon as we could travel.

When Mt. Bachelor’s parent, Powdr Corporation, in near-coordination with many ski/board resorts, decided to shut down operations on May 8, it didn’t just disrupt the lives of employees, instructors, ski patrol and lift operators. Countless people, families and co-workers planning—in many cases with prepaid hotel and airline reservations—memory-creating winter recreation, had their trips thrown into chaos.

There are serious lessons and tradeoffs involved in what has become an economy halted outside of essential food and medical services. Ironies abound as some restaurants spread tables and defy the Governor Newsom-mandated shutdown of an entire state; such decisions should logically be left to counties with their unique levels of infection.

Regarding food shortages, I read that half the food produced, processed and transported in America has been devoted to the non-grocery sectors of restaurants, fast-food and packaged vending sources. Shipping, trucking, deliveries and union contracts can’t change on-a-dime to supply local grocery stores. A joke: pallets of toilet paper will clog the aisles when people have their 1-year supply and don’t need more.

Are we going through overreactions to something that will fade out by summer? Are the impacts of economic quarantines—bordering on a depression-level shutdown—worse than the Wu-flu itself? No one can honestly say that the mandated shutdowns have no serious, even fatal consequences as suicides, murders, violent and property crime rise in bad economic times. In the extreme, look at Venezuela; socialism, aside from jailing and killing political enemies, destroys health, lives and businesses.

An economy in the ditch does not easily pull itself out; surviving businesses must entice those receiving government checks to resume punching a clock. Every day that recovery is delayed, the inertia of inactivity sets in, the finely-tuned production of goods and services falls into disuse; suppliers and middlemen must reacquire relationships with their customers.

Once the government becomes too reliable a provider, its revenues require higher taxes, which become a potential “last straw” for businesses on thin margins. Those who mistakenly hold to the Keynesian theory of government stimulus see that as a feature, not a glitch.

However, we need only look at President Trump’s thriving economy—which far surpasses Obama’s numbers—to see the nationwide proof that lowering taxes and regulations produces economic vitality and abundance even for the lowest fifth of workers. Government revenues also rise.

The irrefutable lessons: Government creates nothing, but with resources that have already been taken from the private sector—and inevitably used less efficiently. Or, resources must now be taken via new taxes, or must be repaid from future taxpayers, who will have no choice about using that money for their own, their business’ or their family’s enjoyment.

It’s simple: money is most efficiently used when someone is spending it on themselves; they will never spend someone else’s money as tightly; another person, spending yet another’s money, has little concern for wise spending. Consider the difference in your Saturday night using your own wallet, versus if you are using your friend’s wallet, let alone the wallet of someone you don’t even know.

Fighting war, jump-starting a depressed economy, or stimulating a Wu-flu stalled economy arguably requires excess spending and repaying it later. This writer abhors the $22 trillion national debt and believes hard choices will have to be made to cut back spending.

Available data, absent panic and fear, gives us hope: The high likelihood of a pharmaceutical cure for those with life-threatening Wu-flu symptoms is a literal economic game-changer. An immunization won’t be available for a year; however, eliminating the mortality of Wu-flu reduces it to seasonal influenza, allowing America’s economy to grow. We can live with less than 1 percent mortality.

You cannot use Italy’s rates of infection and death for guidance. Both Italy and Iran happily welcomed China’s “Belt and Road” initiative, whereby China financed major infrastructure projects but required financing by Chinese banks and many Chinese workers—300,000 in the Lombardi region of Italy and similar numbers in Qom, Iran. Their travel to and from China remained unrestricted even as the Wu-flu spread from China. Italy even foolishly promoted (out of misplaced fear of racism) a “hug a Chinese today” campaign.

While news media focus on scary world infection and death numbers, America has the lowest per-capita rates in the world. We should emulate South Korea: Quarantine those with symptoms, advise vulnerable people to stay home; emphasize social distancing and disinfecting while the economy opens to normal activities by everyone else. Trump may well go that route in a week or so. We hope. Last week, I had the “Hunan” Chinese restaurant confused with “Wuhan” coronavirus.