The Evidence Base Against Lockdowns Grows: Why Lockdowns Are Ineffective and Very Likely Cause Deaths

"Stay home, stay safe." This was the mantra at the beginning of the pandemic that was used to solidify the justification the lockdowns. By shutting down workplaces, schools, and other venues, as well as staying home, the lockdowns were meant to lower the rate of transmission of COVID-19, and by extension, save lives. The so-called conventional wisdom stated that the cost of the lockdowns was worth the lives that we would save during this pandemic. I'm not going to get into the costs of the lockdowns right now. I will save that for another time since it will require much more detail. I simply want to ask whether lockdowns reached their primary goal of saving lives. 

I expressed my concerns about the lockdowns at the beginning of the pandemic. My concerns ranged from overestimation of the fatality of COVID-19 to the costs of the lockdowns and the burden of proof of such a policy prescription. I also bemoaned the lack of an evidence base for lockdowns. Speaking of a lack of an evidence base, there was no evidence base prior to the pandemic. Why? Because there was no instance in human history prior to this pandemic in which we isolated healthy individuals en masse. It was standard epidemiological understanding that it does not make sense. In September 2019, the well-renowned Johns Hopkins University stated that lockdowns would be the least effective manner to control the spread of a pandemic (p. 57). In October 2019, the World Health Organization said that isolating those who were not sick is not recommended because it had no rationale (p. 16). In short, using lockdowns to try to slow down the slow of coronavirus was not "following the science." 

Now that we have a pandemic in which we ignored the science and went through the social experiment of isolating the healthy en masse, we have better an evidence base as to whether lockdowns are good public policy practice. Have lockdowns actually saved lives? 

Earlier this week, economists from the University of South California and RAND Corporation released a paper asking this very question (Agrawal et al., 2021). The authors analyzed data across 43 countries and all 50 states in the United States. What did they find? A one-week increase in shelter-in-place [SIP], also known as lockdowns, was associated with a 2.7 percent increase in excess deaths per 100,000 individuals (p. 13). The big picture takeaway from the authors is that "we fail to find that SIP policies saved lives. To the contrary, we find a positive association between SIP policies and excess deaths (p. 4)." 

Three reasons suggested by the authors for the findings are a) people would have adjusted their behavior, with or without SIPs, b) SIPs increased deaths of despair, and c) reduction in non-COVID-19 healthcare increased excess deaths. If you need more details on the rationale behind such reasons, you can view my analyses last year here and here.

You might be thinking that this is one study, even if it authored by economists from prestigious institutions. The reality is that the aforementioned study is hardly the only study questioning the efficacy of lockdowns. If you are looking for something comprehensive, the American Institute of Economic Research provided a list back in December 2020 of 35 other studies showing that inefficacy of lockdowns. The list I provide below is a good sampling of studies from reputable sources, a majority of which are from 2021, showing why lockdowns are ineffective:

• A study from The Lancet (Chaudhry et al., 2020) concluded that "government actions such as border closures, full lockdowns, and a high rate of COVID-19 testing were not associated with statistically significant reductions in the number of critical cases or overall mortality." To the lockdown's credit, they provided improved patient recovery rates. So if lockdowns did not provide a reduction in critical cases or mortality, what played a major role in mortality or critical cases? Obesity and smoking prevalence negatively affected these factors, whereas nurses per capita and GDP per capita had a positive correlation.
• An economist from the University of Chicago provides further insight (Mulligan, 2021), specifically with regards to transmission rates at home versus work. The conventional wisdom was that the level of confinement at home would provide for lower transmission. However, households were shown to have a higher transmission rate. Why? Because the mitigation efforts in the workplace (e.g., universal mask wearing, screening, social distancing) were effective. These safety protocols used in the workplace were not used in homes. 
• Researchers from Tel Aviv University used mobility data to determine if lockdowns save lives (Loewenthal et al., 2020). These researchers were actually expecting lockdowns to help. What they found was no statistical correlation between lockdown severity and COVID-related fatalities. The authors continued to state that while social distancing matters, strict lockdown policies were not necessary. 
• Professors at the University of Chicago's Harris School of Public Policy found that lockdowns "had no detectable health benefits, only modest effects on behavior, and small but adverse effects on the economy (Berry et al., 2021)." The reason for the ineffectiveness, per the professors, is that people were social distancing before the lockdown measures were in effect. While the lockdowns did not affect social behavior, the authors nevertheless emphasize the importance of social distancing behavior. 
• Stanford researchers concluded that more restrictive non-pharmaceutical interventions [NPI] (e.g., lockdowns) were no more effective than less-restrictive NPIs (Bendavid et al., 2021). The researchers even postulate that increased intra-household density and transmission because lockdowns forced people to stay indoors more frequently. In other words, the lockdowns provided no significant, beneficial effect.
• An economist from the Simon Fraser University in British Columbia conducted a cost-benefit analysis of lockdowns (Allen, 2021). Some valid points are made in this cost-benefit analysis. The first is that the lockdowns were ineffective because the voluntary changes mimicked lockdowns. Second, the lockdowns were not able to prevent non-compliance to the extent required. Third, many of the earlier studies did not disentangle the effects of government restrictions from voluntary behavior (Plus, earlier studies relied more heavily on modeling). Fourth, and most importantly, there is a lack of correlation between lockdown stringency and COVID deaths per capita. Basic statistics teaches that without correlation, there is no causation, i.e., lockdowns did little to nothing to prevent COVID deaths. 
• French researchers used a Pearson correlation test to determine what most greatly caused COVID deaths (De Larochelambert et al., 2020). Regarding lockdowns, the researchers found that "stringency of the measures settled to fight pandemic, including lockdown, did not appear to be linked with death rate." What did appear to be linked with the death rate, according to the study, include high chronic disease levels, countries within the 25°/65° latitudinal strip, lower temperatures combined with lower UV levels, countries with a higher life expectancy and its slowdown, and metabolic risk factors (e.g., inactive/sedentary lifestyle, obesity).
• Although not a study per se, the Center for the Study of Partisanship and Ideology [CSPI] has a lengthy, but very nice piece called The Case Against Lockdowns.

Conclusion: It might seem intuitive to have lockdowns slow down the rate of transmission enough to save lives. What has played out in the data is different, including a lack of correlation between lockdown stringency and COVID deaths. If anything, the lockdowns could have caused more deaths than saved. We have seen multiple factors contribute to the ineffectiveness of lockdowns. People were already social distancing prior to the lockdowns, and would have done so regardless of regulations. Lockdowns increased deaths of despair. Non-COVID health concerns were delayed, thereby creating more health problems than preventing. Lockdowns forced people to spend more time indoors, which increased transmission. Such lifestyle factors as obesity, smoking, and being sedentary played a major role in severe COVID cases and mortality. There is no shortage of explanations of what affected COVID mortality or morbidity more so than the lockdowns.

Given what we all went through during lockdown, it must be shocking or jarring to hear that we endured it for nothing. A lockdown might seem like a nice way to placate the fear or a way to seem to take control over a virus with the real potential to kill you. However, the growing amount of evidence shows that lockdowns do not fulfill its goal of saving more lives than it takes. Since we went through so much pain and sacrifice to so little effect, this should truly make us ponder whether the lockdowns were worth all the costs. 

Why We Should All Celebrate Juneteenth

Up until this past week, the last time a federal holiday was enacted into law was during the Reagan Administration when Martin Luther King, Jr. Day became a federal holiday. For the first time in nearly forty years, we have a new federal holiday: Juneteenth. This past week, both the House and the Senate passed bipartisan legislation enacting Juneteenth as a federal holiday. Since 62 percent of Americans know little to nothing about Juneteenth (Gallup), the first question I have to ask today is "what exactly is Juneteenth?" 

Aside from being a portmanteau of the words "June" and "nineteenth," Juneteenth is a holiday in the United States celebrating the Emancipation of African-American slaves. While the Emancipation Proclamation was signed on January 1, 1862, the Union was unable to enforce the edict in the Confederate States. It was on June 19, 1865, that Union Army General Gordon Granger proclaimed freedom for African-American slaves in Texas. The reason why April 9, 1865, which is the date that Robert E. Lee surrendered to Ulysses S. Grant at Appomattox Court House, was not chosen is because it took a few weeks for the people of Texas to get the memo. June 19, 1865 represents the moment that all African-American slaves within the United States were effectively freed from slavery. 

With critical race theory, the 1619 Project, the protests subsequent to George Floyd's murder, and all the other politics surrounding race relations in recent U.S. history, I have to wonder about the origin of Juneteenth. Matt Rosendale (R-MT), who was one of the 14 Representatives that voted against the Juneteenth bill, argued that "it is an effort by the Left to create a day out of whole cloth to celebrate identity politics as part of its larger efforts to make Critical Race Theory the reigning ideology of our country." 

The main issue with Rosendale's argument is that Juneteenth is not new. As the Congressional Research Service brings up in its primer, Juneteenth celebrations date back to 1866. Texas was the first state to make it a state holiday in 1980. All but two states in the Union had it as a state-level holiday prior to Congress' enactment this week. All of this is to say that Juneteenth predates our modern-day concepts of political correctness, wokeness, or cancel culture.

This leads me to ponder Juneteenth in contrast to the Fourth of July. The Fourth of July commemorates the day in which the Declaration of Independence was signed: July 4, 1776. The Declaration of Independence established the ideals upon which this country was to be based, including that "all men are created equal" and that we are given the unalienable rights of "life, liberty, and the pursuit of happiness." 

This brings up an interesting theme: ideals versus reality. Ideally, the Founders wanted a nation built upon freedom and equality under the law. The reality was much different. Thomas Jefferson, along with other signers of the Constitution, were slaveholders. We don't need anyone chiming in from modern-day times to point out the incongruence between theory and practice. Frederick Douglass did a fine job in his 1852 speech entitled "What, to the Slave, Is the Fourth of July?" Douglass called the celebration of the Fourth of July a sham, the boasted liberty an unholy license. For Douglass, the Fourth of July was "mere bombast, fraud, deception, impiety, and hypocrisy." Given the historical context, Douglass was spot-on. Why have a holiday celebrating freedom and equality under the law when only some had said freedom? The Fourth of July represents the day that freedom was granted to some. Juneteenth represents the day that freedom was granted to all in the United States. 

This brings up another tension: progress versus the continued need for improvement. Getting rid of slavery was a major step in bringing us closer to equality. At the same time, it is not as if things were hunky-dory for African-Americans after June 19, 1865. The Civil War was followed by nearly a century of African-American citizens being de jure and de facto treated as second-class citizens, including Jim Crow laws, the racial terrorism of the Ku Klux Klan, and Plessy v. Ferguson. The Civil Rights movement, with the culmination being the Civil Rights Act of 1964, was another major milestone that represented a turning point in racial relations and those ideals enumerated in the Declaration of Independence. Even so, U.S. history since 1964 shows that progress still needs to be made. 

The culmination of these thoughts is why everyone should celebrate Juneteenth. The events leading up to Juneteenth most directly affected African-Americans. Historically, African-Americans have been the ones most likely to celebrate Juneteenth. While I acknowledge the impact the events surrounding Juneteenth have had on African-Americans, the themes surrounding Juneteenth are universal. 

Juneteenth is first and foremost a celebration of liberty over slavery, much like the Jewish celebration of Passover. Juneteenth reminds us that freedom is not just for some people. Freedom is for all people, regardless of race, religion, sexual orientation, gender, or political beliefs. Any well-functioning democracy entails protecting the rights for its entire populace, and we should be mindful of that moving forward. 

Second, Juneteenth is an opportunity both to acknowledge African-American history as a part of the tapestry of U.S. history while bringing us closer as a society. Part of living in a pluralistic democracy is to be able to embrace others' differences, and ideally, celebrate our neighbors' histories. I view Juneteenth as a time to celebrate freedom generally and African-American history specifically, not to mention our commonality as human beings.  

Third, Juneteenth teaches us that we are to acknowledge our flaws while celebrating our achievements. The march towards progress or freedom isn't linear, consistent, or without bumps in the road. We as a country have made great strides, but we are also a work in progress. In addition to celebrating our progress, we should also look forward and ask ourselves where we would like to head. 

I hope you all have a Happy Juneteenth!

Has COVID Resurrected the Concerns Behind Zombie Firms?

Once in a while, I get friends who like to submit requests on topics I can cover. One such topic is that of zombie firms during the pandemic. What is a zombie firm or zombie company? A zombie firm is a company that earns just enough to continue operations and servicing debt, but is incapable of paying off of debt. More specifically, a common definition of a zombie firm is a business coverage ratio of less than 1 for three consecutive years. They are called "zombies" because they are close to insolvency but do not quite make it to that level. The term "zombie firm" was coined during Japan's "Lost Decade," which refers to Japan's economic stagnation in the early 1990s when Japan's asset price bubble burst. The Congressional Research Service provides a nice primer on the topic.

Why are zombie firms so problematic? As the Bank of International Settlements [BIS] brings up in their study on the topic (Banerjee and Hoffman, 2018), zombie firms are a problem because they are less productive and crowd out more profitable firms (also see Caballero et al., 2008). How so? Under normal circumstances, these firms would exit the market and make way for newer and more productive firms. However, zombie firms stay afloat because they have access to an abundance of credit, much like we have seen when the U.S. Federal Reserve decided to lower interest rates to near-zero or created emergency lending programs in response to the pandemic. For more information on zombie firms and weak productivity, you can read OECD resources here.

On the one hand, I feel better about zombie firms now than I would have a year ago because the economy is recovering. Zombie firms tend to die a natural death once the economic situation improves. This is why I am happy to see unemployment benefits be curtailed by states: lavish unemployment benefits slow down economic recoveries. The sooner we can recover, the sooner we can lower the rate of zombie firms. 

On the other hand, I worry about how monetary policy plays a role in keeping these firms afloat. While there is a potential case for such lending from the Federal Reserve in the short-run in terms of boosting aggregate demand and increasing employment and investment, what happens in the long-run is that the credit is based on firm size or sector, thereby creating a misallocation. This is another reason why low or negative interest rates are problematic beyond the short-term: because such rates lock economies into a vicious cycle of anemic economic growth, much like we have seen in the European Union and Japan. 

The Peterson Institute for International Economics is correct in saying that we need to push the economy above potential. As long as we create an economy with tax, regulatory, and trade dynamism, we can help reduce the rate of zombie firms.