search
Sections List
American Journal News

States that rushed to reopen damaged their economies — just as experts warned

Public health experts and economists warned that moving too quickly would only make things worse.

By Josh Israel - June 29, 2020
Share
Texas Gov. Greg Abbott

Numbers of COVID-19 cases in states that rushed to reopen for business are spiking, and their economies are suffering new setbacks, according to new analysis. This is exactly what economists and public health experts warned would happen if businesses reopened before the science said it was safe.

According to economists with Nomura, a financial services company, “high frequency data on service sector activity suggests businesses and consumers may already be responding to the surge in new cases,” Axios reported on Monday. The same report cited a Deutsche Bank analysis that found “states with faster case growth are now underperforming economically based on measures of small business activity, restaurant bookings and consumer spending.”

CBS News last week reported that economic growth was stalling in states with surges of coronavirus cases. The network quoted economist Ian Shepherdson of the research consultant firm Pantheon Macroeconomics: “More people are staying home as cases soar, and small firms are shedding jobs.”

CBS said that data released by small-business scheduling software company Homebase shows that hours worked by leisure and hospitality employees “increased until mid-June but have now stalled” in places where rising infection rates combine with consumer fears of lax social distancing and face cover use.

As Donald Trump and his Republican allies have pushed to end social distancing rules, ignoring the federal government’s own recommendations about when states could safely reopen, experts have warned that doing so would be bad for both public health and the economy.

Dr. Anthony Fauci, the nation’s top epidemiologist, warned in April that “unless we get the virus under control, the real recovery economically is not going to happen.”

“So what you do if you jump the gun and go into a situation where you have a big spike, you’re going to set yourself back,” Fauci predicted. “So as painful as it is to go by the careful guidelines of gradually phasing into a reopening, it’s going to backfire. That’s the problem.”

“The push to reopen the economy is making a W-shaped recovery very much more likely,” Harvard Kennedy School economist Jeffrey Frankel warned in May, predicting that things would improve and then worsen again.

“Unless the reopening is carefully managed with extensive testing and voluntary social distancing, infections will rapidly rise in many localities,” said Yongseok Shin, a research fellow at the Federal Reserve Bank of St. Louis, according to Fortune. “People will then hunker down for fear of infection, and local governments will re-impose lockdowns, quashing any economic recovery we will have had to that point.”

Also in May, Philadelphia Federal Reserve president Patrick Harker predicted that a rushed reopening would mean a spike in cases and a worsening economic downturn. “Not only would this be a health catastrophe, but it would reverse the recovery as well. In this less hopeful scenario, I project a similar growth path to the baseline for 2020, followed by a painful economic contraction of GDP in 2021 as shutdowns are reintroduced,” he told the Chicago Council on Global Affairs.

Despite the warnings, many states prematurely eased social distancing requirements. Gov. Greg Abbott (R-TX) even privately admitted that, “almost ipso facto,” the reopening would “lead to an increase in spreads,” but went ahead and began allowing his state’s businesses to reopen anyway.

Several Republican lawmakers took the view that the economy was more important than public health. Rep. Trey Hollingsworth (R-IN) suggested in April that COVID-19 deaths were the “lesser of two evils” compared to the economic pain of keeping businesses closed.

But the new data indicates that the two goals are inextricably linked. Over the past week, Abbott has paused Texas’ reopening, and governors in other states have reimposed some restrictions, in hopes of curbing the spread of the coronavirus.

On Saturday, 44,782 new cases of the coronavirus were reported in the United States — the fifth straight day the number of new cases had broken previous records.

According to the Department of Labor, 30,553,817 Americans claimed unemployment benefits for the week ending June 6.

Published with permission of The American Independent Foundation.


AJ News
Get the latest news here first.

Tai News

Newsletter
Read More
AJ News
Latest
Republican Eric Hovde makes inconsistent statements about family history

Republican Eric Hovde makes inconsistent statements about family history

By Jesse Valentine - February 26, 2024
Republican David McCormick invests millions in website that platforms Holocaust denial

Republican David McCormick invests millions in website that platforms Holocaust denial

By Jesse Valentine - February 09, 2024
Lawmakers will again take up bills expanding, tightening gun laws

Lawmakers will again take up bills expanding, tightening gun laws

By Annmarie Timmins, New Hampshire Bulletin - January 31, 2024
UAW delivers rousing presidential endorsement for Biden over ‘scab’ Trump

UAW delivers rousing presidential endorsement for Biden over ‘scab’ Trump

By Ashley Murray, States Newsroom - January 24, 2024
Republicans Sam Brown and Jeff Gunter sling mud in Nevada senate primary

Republicans Sam Brown and Jeff Gunter sling mud in Nevada senate primary

By Jesse Valentine - January 17, 2024
A Young Texas Woman Almost Died Due To The Texas Abortion Bans – Now She’s Battling To Save Other Women

A Young Texas Woman Almost Died Due To The Texas Abortion Bans – Now She’s Battling To Save Other Women

By Bonnie Fuller - January 10, 2024
Health care legislation preview: Maryland advocates want to focus on access, patients in 2024 session

Health care legislation preview: Maryland advocates want to focus on access, patients in 2024 session

By Danielle J. Brown, Maryland Matters - January 08, 2024
How GOP senate hopefuls try to excuse the  January 6 insurrection

How GOP senate hopefuls try to excuse the  January 6 insurrection

By Jesse Valentine - January 05, 2024
NH lawmakers will be taking up major voting bills this year. Here are some to watch for.

NH lawmakers will be taking up major voting bills this year. Here are some to watch for.

By Ethan DeWitt, New Hampshire Bulletin - January 04, 2024
Republican US Senate candidates want to make Trump’s tax cuts permanent 

Republican US Senate candidates want to make Trump’s tax cuts permanent 

By Jesse Valentine - December 22, 2023
Rand Paul went all in on the Kentucky governor’s race. It didn’t work.

Rand Paul went all in on the Kentucky governor’s race. It didn’t work.

By - December 15, 2023
Texas governor and attorney general do little to curb state’s chemical plant crisis

Texas governor and attorney general do little to curb state’s chemical plant crisis

By Jesse Valentine - December 08, 2023
Likely GOP Senate candidate Eric Hovde proposed tax hike for poorer workers and retirees

Likely GOP Senate candidate Eric Hovde proposed tax hike for poorer workers and retirees

By Jesse Valentine - December 07, 2023
Whitmer signs specific criminal penalties for assaulting health care workers into law

Whitmer signs specific criminal penalties for assaulting health care workers into law

By Anna Liz Nichols, Michigan Advance - December 06, 2023
105 Republicans voted to expel Santos for things Trump has also done

105 Republicans voted to expel Santos for things Trump has also done

By Jesse Valentine - December 05, 2023
For Texas Sen. Ted Cruz, another Trump term is another chance to kill Obamacare

For Texas Sen. Ted Cruz, another Trump term is another chance to kill Obamacare

By Jesse Valentine - December 04, 2023
Florida Sen. Rick Scott backs Donald Trump in revived push to repeal Obamacare

Florida Sen. Rick Scott backs Donald Trump in revived push to repeal Obamacare

By Jesse Valentine - November 30, 2023
Tate Reeves took donations from power company that hiked customer rates

Tate Reeves took donations from power company that hiked customer rates

By Jesse Valentine - November 06, 2023
Daniel Cameron ran on depoliticizing the Kentucky AG’s office. He made it more political.

Daniel Cameron ran on depoliticizing the Kentucky AG’s office. He made it more political.

By Jesse Valentine - November 03, 2023
Republican operatives sound every alarm on current trajectory of 2023 governor’s race

Republican operatives sound every alarm on current trajectory of 2023 governor’s race

By Adam Ganucheau, Mississippi Today - October 24, 2023
Republican Bernie Moreno opposes existence of minimum wage

Republican Bernie Moreno opposes existence of minimum wage

By Jesse Valentine - February 23, 2024
Texas Gov. Greg Abbott floats building a wall on the Oklahoma border

Texas Gov. Greg Abbott floats building a wall on the Oklahoma border

By Jesse Valentine - February 22, 2024
More than 48,600 18-year-olds are registered to vote in Ohio, a 35% increase from late August

More than 48,600 18-year-olds are registered to vote in Ohio, a 35% increase from late August

By Megan Henry, Ohio Capital Journal - February 22, 2024
Not if, but when: Parents of slain Parkland students urge Utah lawmakers to pass school safety bill

Not if, but when: Parents of slain Parkland students urge Utah lawmakers to pass school safety bill

By Kyle Dunphey, Utah News Dispatch - February 21, 2024
Key takeaways from Monday’s U.S. Senate Ohio Republican primary debate

Key takeaways from Monday’s U.S. Senate Ohio Republican primary debate

By Nick Evans, Ohio Capital Journal - February 20, 2024