Coronavirus Is Also an Economic Crisis: Balancing Health and Economic Concerns in the COVID-19 Pandemic

The coronavirus has greatly impacted the world. Cities are shutting down, travel is coming to a grinding halt, and borders are closing down. In multiple states, including my own, all "non-essential businesses" have been ordered to close in the hopes of mitigating the spread of coronavirus (COVID-19). What is causing all this panic?

COVID-19 is an upper respiratory tract infection similar to other coronaviruses. Its main symptoms are fever, cough, and shortness of breath. The fact that the symptoms are non-specific is what makes it very difficult (if not impossible) to identify without having a test. The other thing that makes it difficult to track or contain is that most people who contract COVID-19 either have mild symptoms or none at all, and even if they exhibit symptoms, it could take several days before doing so. On top of that, the rate of transmission (R0) is higher than the flu, making it about twice as likely to catch COVID-19 than the flu.

When I discussed how much we should worry about coronavirus about three weeks ago, the percent of mild cases was estimated at 80 percent. A recent CDC report put the hospitalization rate at 12 percent, which is higher than the initial estimated 20 percent. The number of asymptomatic or mild cases makes it difficult to determine what the fatality rate is, especially with a lack of testing in the United States. The crude death rate, which is calculated by number of deaths divided by number of confirmed cases (key word is "confirmed), is 1.5 percent. However, given that so many mild and asymptomatic cases are going uncounted, epidemiologists generally believe the fatality rate is lower. How much lower? That one is tricky to answer, although some are putting it at 1.0 percent, which is ten times higher than the flu. Conversely, a study from the New England Journal of Medicine (Fauci et al., 2020) projected that the fatality rate could be as low as 0.1 percent, which would be more on par with the flu.

A March 16 report from the Imperial College in London doesn't help with calming fears (Ferguson et al., 2020). That report predicted a worst-case scenario of 2.2 million deaths in the United States unless extreme disease-suppression measures (e.g., self-imposed quarantines, school closures, major social distancing) are taken for months. This worst-case scenario assumes that nothing is done, which is clearly not in line with the currently reality. Another Imperial College study suggests that getting COVID-19 is the equivalent of packing in a year's worth of risk into a couple of weeks (Walker et al., 2020). That sounds pretty dire, doesn't it?

Thankfully, worst-case scenarios are uncommon. When NIAID Director Dr. Anthony Fauci when asked by CNN reporter Jake Tapper about how many COVID-19 cases there would be, Fauci said the following:

"To be honest with you, we don't really have any firm idea. There are things called models. And when someone creates a model they put in various assumptions. And the model is only as good and as accurate as your assumptions. And whenever the modelers come in, they give a worst-case scenario and a best-case scenario. Generally, the reality is somewhere in the middle. I have never seen a model of the diseases that I have dealt where the worst-case scenario actually came out. They always overshoot. So when you use numbers like a million, a million-and-a-half, two million [deaths], that almost certainly is off the chart. Now, it's not impossible, but very, very unlikely."

Fauci proceeded to estimate that with our current trajectory, there would be 100,000 to 200,000 deaths, which is much lower than the CDC's worst-case scenario of 1.7 million U.S. deaths. A study from University of Washington School of Medicine published last week models a significantly less dire scenario (Murray, 2020; see March 30 estimate updates here). What is scariest about this report is that we are already approaching the peak in which hospitals become overwhelmed and there is a lack of beds and ventilators (see below). The good news is this peak going to be short-lived. More than that, the University of Washington has a baseline estimate of about 83,967 deaths (range estimate of 36,614 to 152,852 deaths).

This model is well within Fauci's estimate, as well as the estimate of 100,000-240,000 deaths, which was released just yesterday from the White House Coronavirus Task Force. Aside from University of Washington being a Top 20 medical school, the University of Washington model is more believable than the Imperial College one because it is a trajectory based on current mitigation and suppression policies, not on an unrealistic scenario of "doing nothing." I admit that it would be nice to have no deaths whatsoever. However, we are in the midst of a pandemic, so evading an even scarier number of 2.2 million like the Imperial College's worst-case scenario provides a silver lining.

But again, we don't know for certain how this situation will play out because the situation is evolving. That uncertainty certainly contributes to the fears and anxieties people have on COVID-19. The virus' properties are not fully understood, and projections could change as we get more information. Are we looking at a single peak and we're done with COVID-19? Will it subside because of warmer weather and come back with a vengeance in the fall? Also, the role of those who are asymptomatic is not clear. Oxford University released a model earlier this month (Lourenco et al., 2020) suggesting that half of the population of United Kingdom has already been infected. Is this a rosy projection or is the percentage of those who are asymptomatic higher than anticipated? We won't know the answer until there is more serology testing for coronavirus antibodies, but if true, it would imply that COVID-19 is much less deadly than initially anticipated and that we could remove the lockdowns. Is there immunity once exposed to COVID-19 or is it possible to catch it again? What is the rate of infection? There are enough unanswered, vital questions that it causing stress on a global level.

Looking at Economic Impact
Keep in mind that these previously mentioned statistics have a U.S. focus since that is where I live. As of 10:12 EST today, the global death toll is at 44,156 (Johns Hopkins). However, what is scary on the public health front is the worst-case scenario that millions could die globally while obliterating healthcare systems throughout the world. I think it is easier for people to think of the health-related effects of stopping a pandemic because a pathogen is most commonly associated with health. Conversely, COVID-19, or rather the response to COVID-19, is wreaking havoc elsewhere: the economy.

Most countries in the Western world, and indeed a number of countries in the developing world, have chosen drastic measures to slow the spread of COVID-19, whether that is closing down multiple industries or enacting either shelter-in-place, a nationwide lockdown, or a quarantine. When large swathes of the economy are being shut down and millions are not working, economic downturn is all too predictable.

When people hear about the economy, there are those who think it comes down to a callous reduction of dollars and cents. It's much more than that. Macroeconomic and microeconomic fundamentals have direct impact on one's livelihood. A livelihood is what is required to put food on the table, a roof over one's head, buy clothes, pay for education and healthcare...you get the idea.

What makes this situation particularly nerve-racking is that coronavirus is not just a health crisis. It is also an economic crisis. At this point, it seems that we are already heading for. Whether we look at economic forecasts from Goldman Sachs (also see here), J.P. Morgan, Morgan Stanley, Morningstar, Deutsche Bank, Harvard Business Review, Standard and Poor's, Fitch, Pacific Investment Management (also see here), Oxford Economics, or the OECD, it's not looking good. The International Monetary Fund (IMF) Director is already saying that 2020 is going to be a global recession with a comparable impact to the Great Recession, but is expected to recover in 2021. Former Federal Reserve Chair Ben Bernanke says that the shutdowns are more analogous to a natural disaster than they are the Great Depression.

The unknown nature of coronavirus is tied to the unknown nature of how the economic downturn is going to play out in the upcoming months. Much like there are unknowns with COVID-19, there are unknowns with the economy. Most of the current projections I have seen are showing a sharp economic contraction in Q2 (April-June), but are to start recovering either in the latter half of 2020 or early 2021. This is what is referred to as a V-shaped recovery.

A V-shaped recovery is looking to be the baseline, but there remain unknowns. How will households react? What impacts will monetary and fiscal policy have? How big of a hit will capital formation, labor participation, supply chains, and productivity growth take? How long will lockdowns, travel bans, and cancellations of large events last? While a V-shaped recovery is still the baseline scenario, we could be looking at a more prolonged U-shaped recovery, or even worse, an L-shaped recovery.

We already have started to see certain indicators get worse than initially projected. To cite a couple of examples: Last month, economic forecasting predicted that the GDP would fall, but still not so badly that it would automatically result in a recession. Now we find ourselves on a downward trajectory that will most likely result in a recession. Consensus estimates for jobless claims in the U.S. were supposed to be at 1.6 million claims last week, but ended up being 3.3 million. That number is scary because with all the people staying at home, the unemployment number has only begun to rise. Pew Research survey results already show that a third of U.S. citizens have either had been laid off or had their pay cut.

While it is possible that the situation gets worse and worse, the truth is that we do not know what the depth or the duration of the economic downturn will be here. The magnitude of quarantines and lockdowns taking place worldwide are historically unprecedented. But if we're looking at worst-case scenarios for public health, we should look at the worst-case economic scenario for fairness' sake. What are some of the more salient points to be made about how bad the economic situation can be?

• High unemployment rates. As already stated, livelihood is a vital means to not just survive, but to live life to the fullest. The more people that are deprived of a livelihood, the more people feel the hurt. The St. Louis Federal Reserve President James Bullard said that the unemployment rate could hit as high as 30 percent. A research paper released from the St. Louis Federal Reserve last week included a back-of-the-envelope estimate, and said that unemployment for the second quarter (April-June) could be 32.1 percent. To contextualize, the Great Depression reached 24.7 percent at its peak in 1933, which means we could be looking at an unprecedented amount of unemployment. 
• Much like with the public health aspect, it is likely that we would reach 32.1 percent unemployment. Plus, it would be likely that as lockdowns are lifted, a good number of people would resume working, and much of the remainder would eventually be working as we recover from the recession. At the same time, it does underscore what happens when you shut down "non-essential" businesses. 
• Disproportionate economic pain. Given the nature of the economic downturn, our response to fighting coronavirus will have uneven economic harm. As the Brookings Institution brings up, this will disproportionately affect low-wage workers. Small- and medium-sized businesses will feel more pain than larger enterprises. Those who have salaried pay, have paid sick leave, and can work remotely will fare better. While such industries as healthcare, grocery, and streaming services are doing better than ever, other such industries as restaurants, travel, hospitality, and entertainment are taking a huge hit. 
• Economic loss. The Government Accountability Office estimated that U.S. GDP output losses associated with the Great Recession range from several trillion to over $10 trillion. Given that the low-end estimation on aforementioned Federal Reserve back-of-the-envelope calculations was the approximately the same unemployment rate as the Great Recession, it would not be at all surprising that if the economic loss was significantly worse. 
• Increased social unrest. A 2013 report from the International Labor Organization found that the unemployment rate is the single largest determinants in social unrest: "A one standard deviation increase in unemployment raises social unrest by 0.39 standard deviations, while a one standard deviation increase in GDP growth reduces social unrest by 0.19 standard deviations (p. 14)." Jobs are how societies thrive, so it is no surprise that a significant increase in unemployment leads to more social unrest.  
• Health impacts of economic downturns. The National Institutes of Health (NIH) released a literature review entitled Health Impacts of the Great Recession: A Critical Review (Margerison-Zilko et al., 2016). Traffic fatalities and alcohol consumption decreased because of the Great Recession. However, the majority of indicators took a downward turn, including fertility, self-related health, morbidity, psychological distress, and suicidal behavior. 
• Instability in the developing world. If COVID-19 is having this much impact on developed nations, it would be a reasonable inference that it will be even more jarring for developing nations, especially given the correlation between GDP per capita and longevity (e.g., Swift, 2010). Emerging markets take on further debt, thereby increasing the likelihood of default and high levels of inflation. Argentina was already dealing with these issues before COVID-19. I can only imagine how their economy fares after this. India, Argentina, and Turkey are already experiencing capital flight (New York Times). Furthermore, individuals within these developing nations have minimal financial resilience, which is going to exacerbate both poverty and capability to fight COVID-19. Fragile states, such as Algeria and Nigeria, could easily destabilize, thereby creating real potential for instability in the MENA region. It's not just the economies would feel the strain. By extension, health care systems in developing nations would also feel the strain, which could also kills thousands of people, depending on the severity of the economic damage. 

This list is by no means complete, and it does not account for the human costs of the social isolation incurred, but it should help to give you an idea of what sort of havoc is unleashed on the world if we completely ignore the economic piece of the puzzle.

How Do We Strike a Balance?
What we face is scary. On the public health side, we face a virus that could kill thousands, if not millions of people globally. On the economic side, we face the potential for Great Depression 2.0. We have to get the public health aspect of this right, no doubt about that. After all, the economic outcome is so interconnected with how quickly we mitigate the public health issues behind coronavirus.

The majority of expert economists at the University of Chicago's Booth School in a recent poll show that abandoning lockdowns prematurely when there is a high likelihood of resurgence would cause greater economic damage. If we take the University of Washington model at face value, now would be a bad time to stop because we are making our way up to the peak. It varies from state to state, but things are supposed to start dying down around late April-early May, according to the model.

Additionally, researchers from the Federal Reserve released a paper using the 1918 Spanish flu as a case study to show that short-term non-pharmaceutical interventions can be so effective that they could potentially result in longer-term economic benefit (Correia et al., 2020). There seems to be a case for certain interventions, at least in the short-run. At the same time, putting the economy on hold for months on end until scientists come up with a vaccine is not feasible. The Left-leaning Vox acknowledges we need an endgame. Last week, New York Governor Andrew Cuomo mentioned finding a solution that balances both health and economic concerns. However, timing on lifting the lockdowns can be tricky, as Hoover Institute research fellow Paul Gregory points out:

"If the release turns out to be premature, accusations of sacrificing precious lives for economic gains will abound. If the release is judged as too delayed, the charge will be the destruction of the economy. Our political leaders will probably never face such a momentous decision in their political careers. They will have none if they come down on the wrong side." 

Perhaps the lockdowns are the right short-term decision to quell the transmission of COVID-19, and is thus the "least worst option." Even if that were the case, we should not have these measures in place a second longer than necessary. I can imagine decision-makers justifying lockdowns for much longer than necessary, either by saying "look how well this is working, let's keep doing it" or "imagine how much worse it would be without these lockdowns." Not even an economy as developed as that of the United States has unlimited resources. As individuals lose jobs and businesses close, we will realize just how limited those resources really are. Logically speaking, there is a juncture during which the cost rises too high and we need a new gameplay because costs exceed benefit. That is the whole point of a cost-benefit analysis: to estimate the strengths and weaknesses of current policy, as well as comparing the strengths and weaknesses of alternative policies. We need to compare current policy to realistic alternative scenarios, not an unrealistic "incomplete action" worst-case scenario like the Imperial College study does.

When governors are implementing lockdowns, "stay at home" orders, or "shelter-in-place," some of the most questions being answered. What is the net impact of closing "non-essential business?" What metrics are we looking at to determine when it's "safe to come out?" At what point will social distancing become ineffective? What sort of risk assessment was done to determine which jobs are "essential?" At what point does the economic harm exceed the virus? How much do we value a human life in the cost-benefit analysis? The average life insurance policy is $168,000. The median compensation for 9-11 survivors was $1.7M [in 2005 dollars]. The Environmental Protection Agency (EPA) puts the value at $8.4M in 2014 dollars (or $9.6M in current dollars). Such a wide range on the value of a human life has major policy implications in either direction. What other costs and benefits are to be valued in the cost-benefit analysis?

That is why I am glad that the American Enterprise Institute made an attempt to conduct a cost-benefit analysis (Scherbina, 2020). Her best-case scenario was a suppression period of seven to eight weeks, although her calculation was heavily caveated in Section IV of her analysis because of all the unknowns surrounding COVID-19. Although this cost-benefit analysis was released last week, it scares me that decision-makers are not taking these considerations into account when making their decisions. We're giving into panic and succumbing to the precautionary principle on steroids without asking ourselves whether this is ultimately the right decision or how long we should use such suppression measures.

On the one hand, I applaud AEI making an effort to do so because a cost-benefit analysis is the sort of thing we need to have to make an informed decision. On the other hand, I would still consider it preliminary. The reason for that is that there is a too broad of a range of estimated fatalities. As Dr. Jay Bhattacharya, who is a Professor of Medicine at Stanford University and a research associate at the National Bureau of Economic Research, points out (please listen to interview below), the policy measures for preventing two-million-plus deaths in the U.S. is different from preventing 50,000 or 100,000 deaths. Until we conduct a study on a broad population have an estimate of how many people have developed antibodies for COVID-19, we really don't know the lethality of COVID-19. Assistant Secretary of HHS Brett Giorir calls this a "denominator problem." Without accurate information on the prevalence and lethality of COVID-19 vis-à-vis the case fatality rate (CFR), we are flying blind.

What Does an Endgame Look Like?
In order to have a proper cost-benefit analysis, we need proper data. In order to have proper data, we have to have more testing. Testing is vital. Without testing, we cannot identify hotspots or identify key demographic trends, which means we cannot come up with a viable strategy. Thankfully, the FDA approved a molecular test from Abbot this weekend that can give test results in about five minutes and a 15-minute serological test from BioMedomics, so that should help things along. What else can be part of an endgame? While compliance seems to be high in the U.S. (Gallup), it will eventually wane with the growing financial and mental stress that come with the lockdowns. We need a more targeted approach than the blunt instrument of shutting down large swathes of the economy, but here are a few ideas:

• It is not only molecular tests that we need to figure out who currently has COVID-19. We also need serological tests to see who has developed antibodies to COVID-19. Those who have developed antibodies could go back to work since Dr. Fauci thinks that reinfection seems unlikely. Not only that, we have a better sense about such things as rate of transmission, what percent have severe symptoms (versus being mild or asymptomatic), what the fatality rate is, and whether we have reached herd immunity or not. 
• We need to expand treatment capacity, including temporary hospitals, making more masks and ventilators, and doing what we can (within reason) to speed up the production of a vaccine. 
• We know that COVID-19 disproportionately affects the elderly and the immunocompromised. As such, there should be stricter social distancing measures for those demographics.
• We can establish "safe zones" and gradually reopen establishments in the reverse order in which we closed them. Depending on what a cost-benefit analysis would have to say, I would also say that we could gradually allow for larger crowds as the transmission of COVID-19 decreases. This, of course, depends on whether we are passed the peak and infections are going down. 
• I covered monetary policy last week, and anticipate covering the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in future posts.

These are some preliminary ideas, but I will end with this. Asking how long people put their livelihoods on hold, when we all can return to our lives, and what an endgame looks like is far from crazy. It's natural. The longer it takes, the more pressing the urge to answer these questions becomes. Ultimately, I hope we can come up with a plan to minimize coronavirus-related deaths and make sure as few people as possible lose their livelihood.

Does the Federal Reserve Have a Place in Fighting the Coronavirus?

When you think of trying to fight coronavirus, you would first think of doctors, nurses, or researchers working tirelessly to find a vaccine. Monetary policy would not be the first thing that comes to mind. Yet the Federal Reserve has been active in its attempt to make sure that a health crisis doesn't also turn into an economic crisis due to this exogenous shock. The Fed cut interest rates to near-zero, as well as injecting $1.5 trillion into the short-term credit market (which is to be returned to the Fed with interest). The American Action Foundation (AAF) provides a timeline of the Fed's actions if you want more detail. What I wonder is whether monetary policy can be effective in this crisis.

• The libertarian Mercatus Center actually details the tools that are at the Fed's disposal, including eliminating reserve requirements, price level targeting, quantitative easing, and buying a wider range of assets (e.g., stocks), or buying Treasury bonds and mortgage-backed securities.
• In a similar vein, the Council on Foreign Relations covered how the Fed is doing so far and what tools are at its disposal. 
• The Economic Cycle Research Institute, which focuses on business cycle research, opined that lowering the interest rates was an exercise of futility because a lack of consumer demand is not what is triggering this economic downturn. 
• The Brookings Institution postulates that the Fed will have minimal impact on the economic contraction. One, the businesses are shutting down regardless of the Fed injecting the liquidity into the economy. Two, it didn't have much wiggle room and has even less with near-zero rates, which eliminates conventional tools. Third, the uncertainty behind COVID-19 means that investors are more likely to wait and see what happens with the outcome before proceeding with future investments. 
• An article from the Foundation for Economic Education argues that it is not the coronavirus per se that is responsible for the economic downturn, but the structural problems that underlie the economy, some of which are propped up by the Fed.
• For a criticism of the Fed's loans to the short-term credit market, the Mises Institute provides a perspective from the Austrian school of economics. 
• The American Institute for Economic Research argues that monetary policy cannot mitigate the aggregate supply shocks that we are experiencing. 
• The conservative think tank Heritage Foundation makes the case to stop paying interest on bank reserves in order to improve liquidity. 
• Economist and Senior Fellow at the University of Chicago John Cochrane argues that the Fed should not go for negative interest rates or quantitative easing. Instead, Cochrane finds that the Fed's best bet is to focus on a price-level target and fixing the spread between indexed and nominal debt. 
• American Enterprise Institute (AEI) scholar Desmond Lachman makes a call for what economist Milton Friedman called "helicopter money." Essentially, helicopter money is a monetary stimulus of distributing large amounts of money to the public in the hopes that it spurs consumer demand. I'm skeptical about helicopter money in this case because stimulating demand can't be nearly as effective if output (and therefore supply) cannot increase. For further detail on helicopter money, you can read this brief from the centrist Brookings Institution.
• AEI scholar Stan Veuger thinks that small- and medium-sized businesses should receive loans that are facilitated by the Fed.
• As the International Monetary Fund (IMF) mentions in its brief on coronavirus and policy, the Fed launched the Term Asset-Backed Securities Loan Facility that could be helpful with loans to businesses. 
• The President at the AAF explains why the Fed has been doing a good job so far (see video below at the end).

My Takeaway: Much like the coronavirus is "more than a common flu," the upcoming economic downturn is more than your typical economic downturn. In most recessions, it is either a supply shock or a demand shock. In this case, we have the worst of both worlds by having a simultaneous supply shock and demand shock. Monetary policy can do very little to nothing to deal with supply shocks. I think the Fed's role will be more minimal since it cannot cure coronavirus or deal with the supply shocks. Rather than save us, the Fed's job is to make sure that the impending economic downturn doesn't go from bad to worse. While I do not agree with all of the Fed's measures (e.g., the aggressive lowering of interest rates), I think there is still something they can do to mitigate fallout, but more of this is going to fall on fiscal policy and the cooperation of individuals in the private sector to voluntarily come together and win this. The current partisan dumpster fire in Congress gives me less hope that they will provide targeted relief instead of trying to advance agendas, but I can comment on that in future posts. Although I have criticized the Fed in the past, it's amazing how they seem more put-together than Congress. Let's hope that policy can be enacted so we can avoid either the Great Recession or, even worse, the Great Depression 2.0. 

For more reading on macroeconomics and coronavirus, here is a nice online compilation from the Centre for Economic Policy Research entitled Economics in the Time of COVID-19.

Why Social Distancing Is Better to Fight Coronavirus Than Large-Scale Quarantine

You would have to be living under a rock if you have not heard of coronavirus (COVID-19) by now. It has prompted the shutting down of schools, travel bans, and tumbling stock markets that are likely to cause economic downturn of some sort. It is not that we have never dealt with pandemics before, but the last one was the 1918 Spanish influenza pandemic. While there were international trade flows a century, our world has become more interconnected since then, which makes the matter of COVID-19 all the more unprecedented. It depends on the country, state, province, or jurisdiction, but government officials have been imposing greater measures to slow down the spread of COVID-19.

Last week on this blog, I discussed how worried we should be about COVID-19. While there are reasons for concern, my conclusion was that there were enough factors to minimize the worry, something that the stock markets do not seem to take to heart. In any case, one of the things I had mentioned was the idea of "flattening the curve." If too many people catch the pathogen too quickly, it could overwhelm the hospital system, as we see in Italy. Since COVID-19 is a pathogen that is most commonly past by being less than 6 feet (2 meters) from someone or by respiratory droplets (e.g., coughing, sneezing), keeping one's distance is important. The non-pharmaceutical practice of keeping greater distance than normal to prevent the spread of a disease, known as social distancing, is vital as the world deals with COVID-19. The reason it is vital at the onset of an outbreak is because it could mean the difference between a lot of infections all at once (thereby overburdening the healthcare system) or spacing it out enough where we can handle it.

What does social distancing entail? Per the World Health Organization, it means maintaining an absolute minimal distance of 3 feet (1 meter). Measures have varied as to what sort of distancing that entails. In Maryland, which is where I currently reside, the Governor shut down restaurants, bars, movie theaters, and gyms yesterday, as well as public gatherings involving 50 or more people. My employer has told me that all employees (except the ones that have to be in the office) are working remotely until further notice. You can read more from the Atlantic or Vox on social distancing.

The academic paper that has been cited to prove the success of social distancing is a 2007 paper in the Proceedings of the National Academics of Sciences of the United States of America [PNAS] (Hatchett et al., 2007). According to the PNAS paper, Philadelphia did not impose social distancing at the beginning of the 1918 Spanish Flu, whereas St. Louis did. The per-capita death rate in St. Louis was less than half in Philadelphia as a result (see below) because St. Louis banned large public gatherings [of 20 people], shut down schools, libraries, playgrounds, and limiting of streetcars. One of the co-authors of the PNAS paper, Richard Hatchett (also worked for the Obama administration), said earlier this month that timing on these social distancing efforts matters greatly. If we can implement them before 1 percent of the population catches the pathogen, then the measures spread the disease much less.

Whether we have reached that stage is unknown since COVID-19 testing has been painfully slow. According to Dr. Marty Makary, who is a professor at Johns Hopkins, the number of infected, as of March 13, could be anywhere between 50,000 and a half million." The good news is that even if you take the higher estimate of half a million, that would only mean that 0.15 percent of the U.S. population of 327.2 million are infected, which means there is still time for social distancing to work. Also, if you want to read more on the positive potential of social distancing, read this policy paper from the CDC (Fong et al., 2020).

In either case, I am worried to see how other countries are handling this. Italy was just the first country to issue a nationwide quarantine. France and Spain have recently implemented quarantines, only allowing for such essential businesses as grocery stores and pharmacies to remain open. The difference between social distancing and quarantine is that of magnitude. There is a difference between isolating those who are sick from the rest of the population and throwing everyone in together. It is hard to give definitive impact, in part because the quarantining that Wuhan province of China or the country of Italy has imposed are historically unprecedented. That is why I am not citing a ton of studies like I normally do. But let me get into some postulating as to why going into the direction of quarantine, as opposed to major social distancing, is problematic.

As an article from FiveThirtyEight, the website maintained by statistician Nathan Silver, points out, there is not much historical evidence to find that quarantines actually work, especially given the enforceability issues involved. I find quarantines to be problematic because those who are not sick can be stuck with at-risk or already-infected individuals. Think of how the spread of COVID-19 on cruise ships has played out, and you get the idea.

I also think that quarantines do not have an end game in mind, at least without relying too much on creating a vaccine. Regardless of outcome, one could dig in their heels with a quarantine and continue to justify draconian measures. At least with social distancing, we see that they are most effective at the onset of a disease, which implies that there is a certain point in which we have minimized COVID-19 spreading it or we are screwed regardless.

The more major actions, such as cutting off other countries, also have major impacts on the economy because cutting off all of this international trade, especially when entire countries are doing it (as opposed to back in pre-modern times when it was just a single city), has its impact. Right now, global financial services firm Morningstar predicts that the global 2020 GDP will most probably drop by 1.5 percent, which is not terrible all things considered. At the same time, there is still reason for concern on the economy. The travel and retail industries are already getting hammered by some of these international decisions. The more that countries decide to shut out their economies from the rest of the world, the longer they will feel the economic impact. Economic impact is not just about "dollars and cents." It is about livelihood, the ability to afford food, healthcare, and education. Eroding purchasing power is eroding one's way of life.

As much as COVID-19 causes health issues, going to the extreme of quarantine is going to economically impact us all in a way that we have only begun to feel. Because we live in such a global economy, it will not only affect those who live in currently quarantined countries (although they will feel it most acutely). In short, such measures as social distancing are shown to be more successful than the more draconian measures.

How long social distancing last depends on when the United States reaches its peak, as well as such factors as whether or not spring and summer weather will provide some reprieve or how long the people can handle social distancing. What we, as a people, should continue to do is practice social distancing, wash our hands, work remotely if we can, and not cough or sneeze on people. Aside from that, we can only hope that social distancing measures will be adequate in the United States, and indeed other countries who are not overburdened like Italy, to slow the spread enough to minimize its overall impact.

How Worried Should We Be About Coronavirus?: March 2020 Edition

Coronavirus. It's all over my news feed, and was an even bigger news item than President Trump's recent impeachment proceedings. I have seen everything from "it's just like the flu, and it's not a big deal" to the mentality of "we're all going to die," as if this were the first time in human history we are dealing with pathogens. For most of us, we realize that the truth is somewhere in the middle of these two extremes, although it is more difficult to tell where since the World Health Organization (WHO) declared yesterday that coronavirus is at pandemic stage. Coronavirus (COVID-19) symptoms are non-specific, although they tend to be similar to an acute upper respiratory disease of the flu. As I am writing this, coronavirus (COVID-19) has been identified in nearly 128,000 individuals over the span of 112 countries (see database from Johns Hopkins here). Even with the WHO's announcement, how worried should we be? Viruses are never fun, but are the concerns overblown or is the panic legitimate?

Before delving into the particulars, I want to say that because it is a novel virus (i.e., it has not been previously identified in humans), there will be new information coming in that will better inform us of the severity of coronavirus. That  means over time, the situation will evolve. It could either be better or worse than previously predicted. Second, the data used are as of March 12, 2020 at 10:33am EST. Third, I am not an expert epidemiologist, but I will be citing public health experts in the hopes to give you the best information available. Let's begin, shall we?

Reasons to Worry

• A novel disease comes with unknowns. Oftentimes, it is the unknown that scares us more than the known. We don't know if we can cure it. We're not certain about all modes of transmission, although social distancing seems to be one of the best ways to slow down transmission. This affects our sense of risk and control, which can cause anxiety (read this article on how to deal with anxiety during the coronavirus pandemic). 
• We do not have a vaccine for COVID-19. People compare COVID-19 to flu season. The flu has a mortality rate of 0.15-0.20 per 100. The problem with that comparison is that there are flu vaccines to keep the mortality rate low. It would most likely take at least 6-12 months to have a vaccine ready for mass production.
• It mimics other viruses. Since its symptoms are non-specific, it is more difficult to determine whether one has COVID-19. Without getting a test, COVID-19 looks quite similar and undistinguishable from a cold or flu. Both the mildness in most cases and issues with detectability make it more difficult to contain. 
• Particularly risky for elderly and immunocompromised. The elderly and immunocompromised have a greater difficulty fighting off diseases generally. COVID-19 is particularly bad for these demographics because it can evolve into pneumonia or other major respiratory issues. The fatality rate is estimated at 3.6 percent for those in their sixties, 8 percent for those in their seventies, and 14.8 percent for those in their eighties. To put in perspective, the fatality rate for influenza is 0.83 percent for those in their eighties, but that's because we have a vaccine (see previous point).
• Global macroeconomic risk. If there is anything that markets hate more than regulations, it is uncertainty. It's no wonder that stock markets are taking a nose dive. But it's more than the financial sector that is hit. Especially since China is such a vital contributor to supply chains worldwide, there is a supply shock reverberating across multiple industries. Macroeconomic modeling from the Brookings Institution (McKibbin and Fernando, 2020) has shown that the global economy could easily take a significant hit in the short-run.
• Transmission rate of COVID-19. The basic reproduction number (or R0) indicates the level of transmission of a pathogen. If R0 is less than 1, it means that the pathogen will unlikely pass it on to even one person. A R0 greater than 1 means that one sick person infects one person on average. While still preliminary, a study in the Journal of American Medical Association [JAMA] puts it somewhere between 2.0 and 3.5 (Del Rio and Malani, 2020). This means that someone with coronavirus will, on average, infect at least 2-3 people. Since COVID-19 is so new and certain measures can be enacted (see Postscript at the end), the R0 can change. However, to contextualize the R0, the typical season flu has an R0 of 1.2, SARS has an R0 of about 3.5, smallpox has an R0 of 7, and measles has an R0 between 12 and 18. I put this in "Reasons to Worry" because it is higher than the flu (although again, we now have a vaccine for the flu). At the same time, it is lower than other viruses that have plagued humanity before.
• Another word on transmission: COVID-19 is primarily spread either through person-to-person contact within six feet or respiratory droplets (e.g., coughing sneezing). This helps contribute to its R0. On the other hand, COVID-19 does not seem to be particularly airborne, which is why social distancing works as well as it does (see Postscript).
• Possibility of underestimating death toll. If you include all the cases that have not run their course, it is possible that the death rate is underestimated because it does not include cases that could result in death later.  
• Potential overload of hospital systems. This is the most valid worry I have seen so far. If the number of those infected with COVID-19 becomes too high too fast, it could overburden the health care system. We already see this playing out in Italy. Overwhelmed health care systems are bad for everyone, not just those infects. This is why epidemiologists suggest social distancing through what is referred to as "flattening the curve." If we can at least prevent COVID-19 from being spread too quickly, it would likely not overburden hospitals. 

Reasons to Not Be So Worried

• Most cases of COVID-19 are mild. Coronavirus is not a death sentence for the vast majority of those infected. Eighty percent of those infected have such minor symptoms and do not require care, according to Dr. Robert Murphy, who is the Executive Director of the Institute of Global Health at Northwestern University. A study of over 72,000 Chinese individuals who had COVID-19 concludes that 81 percent of those infected have a mild form of COVID-19 (Wu and McGoogan, 2020). As the WHO stated, "most people will have a mild disease and get better without needing any special care."

• Estimated mortality rate likely to be too high. Yes, the WHO estimates that 3-4 percent of COVID-19 cases have died. The caveat here is "reported" cases. Since there are more hard-to-count cases (see previous point), it is reasonable to assume that the current estimated mortality rate of 3.0 deaths per 1,000 is too high. 
• Another reason for optimism: South Korea has tested 140,000 people. There have been 6,000 confirmed cases with a mortality rate of 0.6 people. This is not only significant because they have an ample sample size, but also because South Korea has brought done the infection rate without resorting to citywide lockdowns seen in China and Italy. 
• A report from the New England Journal of Medicine (Fauci et al., 2020) points out that pneumonia has a mortality rate of 2 percent, which is worth pointing out since some coronavirus cases lead to pneumonia. Assuming that the number of mild or asymptomatic cases is much higher, the report predicts that the mortality rate will be much closer to flu season [of 0.15 percent], as opposed to a SARS-like 9-10 percent.
• A preliminary modeling analysis from European researchers shows that the mortality rate can be as low as 0.15 per 100 people (Anastassopoulu et al., 2020), which would make it comparable to the flu.
• Progress has already been made. While there is still not a vaccine, we already have a head-start in comparison to past epidemics. First, we have already identified the genome. Contrast that to HIV/AIDS, which took two years to identify. Second, we have been able to detect the virus since January 13 (Corman et al., 2020). We already have 164 scientific articles on COVID-19 that are accessible. For the SARS epidemic of 2003, it took a year to reach half of that amount. Finally, there are already vaccine prototypes and there are 80 clinical trials that have been launched.  
• Many more recoveries than deaths. There have been 68,310 recoveries while there have been 4,718 deaths. That means that for every death, there have been over 14 recoveries (Johns Hopkins).
• Lower death rate for younger people. With the data from China, the death rate for those under 40 is 0.2 per 100, and 0.4 for those between 40 and 50 (Wu and McGoogan, 2020). 
• Number of cases in already-affected countries is leveling off. This point is brought up by economist Anatole Kaletsky. Because it is an exponential process, Kaletsky uses a logarithmic scale. With that scale, Kaletsky shows how the spread of COVID-19 in the countries affected earliest in the outbreak are leveling off (see below). This finding can also suggest that the contagion effect is weaker than initially anticipated. 

Postscript 
The first person fell ill to COVID-19 about three months ago. For many countries, including my home country of the United States, we are in the outbreak stage of coronavirus, which means that any findings are preliminary. What we do know seems to provide a sense of mixed blessing, although I would say that the media has overblown COVID-19 based on information we have so far and that there is reason for medium-term optimism. Yes, there is risk, as there is for any pandemic. While we should not dismiss areas of concern, COVID-19 needs to be kept in perspective.

COVID-19 is especially a problem if you are elderly or are immunocompromised. However, for most people infected, the effects of coronavirus will be minimal or simply nonexistent. That's on an individual level. The implications for public health and the economy depend on how well we can slow the spread of coronavirus. It is too soon to tell what the magnitude of the effects of coronavirus will be, but it is safe to say that it will get worse before it gets better. In the meantime, the best ways to minimize contagion are to wash your hands, minimize social interactions, avoid close contact, clean surfaces you use often, work remotely if you can, and only wear a face mask if you are sick (or if you are caring for someone who is sick). Let's hope that we can do enough to minimize the spread of coronavirus and make the coronavirus scare as much of a thing of the past as we did with SARS and H1N1.

Bernie Sanders Cherry-Picks New and Flawed Study to Advocate for Medicare for All

During the Democratic primary debate last Tuesday, forerunner Bernie Sanders had a rough night because the other candidates were targeting Sanders. As Pete Buttigieg brought up, "Senator Sanders at one point said it was going to be $40 trillion, then it was $30 trillion, then it was $17 trillion. That's an incredible shrinking price tag." Of course, Sanders wants to make Medicare for All (M4A) appear as inexpensive as possible. That is why during the debate, Sanders mentioned a study from Lancet magazine, which is one of the most prestigious medical journals in the world. It is true that such a study exists in Lancet (Galvani et al., 2020), and it is true that the study claims that it would save $450 billion annually in health care expenditures. This study sounds like a win for the Sanders campaign. But is it? Let's forget for a second that the primary co-author, Prof. Alison Galvani, was an unpaid advisor for the Sanders campaign. The study itself is riddled with flaws that make the claim quite spurious. Kaiser Health News (KHN) and Politifact co-authored an analysis of Sanders' claim. I will integrate those findings with other points I found upon research to show why the Lancet study is greatly flawed.

• Estimation of payment rates to hospitals. This is the first flawed assumption made under the Lancet study, which is that it assumes that Sanders' M4A plan can pay hospitals Medicare rates across the board. First, the hospital lobby is a powerful lobby in the United States that has fought off payment reductions in the past, which would put political feasibility into question. Second, this assumption has not played out in the past. As I brought up when analyzing Elizabeth Warren's M4A plan in November, there is one state that has a plan similar to Sanders' M4A plan: Maryland's all-payer system. Under Maryland's system, they could not keep prices down (Pope, 2019). In Washington state, they passed a public option. They could not keep prices down at Medicare rates; they ended up being 174 percent higher than Medicare rates.
• Estimation of utilization rates. As one can imagine, some people skip treatment if they cannot afford it. The authors of the Lancet study assumed that there would be an increase of consumption of health care goods and services for the 24 percent that are uninsured or underinsured. The problem with the assumption that the Lancet study makes is that the remaining 76 percent are not going to increase their utilization as a result of M4A. Harvard health economist Adrianna McIntyre was so critical of this assumption that she wondered how the Lancet study ever made it past the peer review process. And I'm not at all surprised at McIntyre's criticism. Other countries that have implemented single-payer healthcare could not keep down utilization rates, which contributed to single-payer costs.  
• Estimation of administrative costs. By removing the middle man (i.e., the insurance company), certain costs are removed, such as co-pays. There is some intuition to that notion, which is why the Lancet study estimates a savings of $219 billion annually. Medicare has its administrative costs at 2 percent, and the Lancet study assumes that M4A can maintain those rates. I remain skeptical about these cost savings. First, Medicare is partially administered by the IRS [for tax collection] and the Social Security Administration [for collecting premiums]. Also, Medicare's administration is tax-exempt, which cannot be said for private insurers. Second, when you look at cost per beneficiary as opposed to percent of budget, it turns out that Medicare pays more than private insurers (Book, 2018). Third, as brought up in the KHN/Politifact analysis, while M4A would require a smaller back-end staff, it would still not be able to fully reduce the costs at Lancet estimations due to need for such expensive items as electronic health records. This helps explain why Politifact ranked Sanders' "administrative cost savings" claim as half-true.
• Long-term care. Sanders wants to be more comprehensive in M4A than even the Lancet authors assume. Sanders wants to cover for long-term care, which is estimated to cost $4 trillion over a decade. This expenditure is not covered at all in the Lancet study.  

Postscript: It's no wonder why Sanders picked the Lancet study to make M4A look good: it comes with quite rosy and unrealistic assumptions. Sanders' claims ignore how other countries could not contain their costs. More importantly, he claims that all studies, whether "conservative or progressive" show savings. The truth is that reputable estimates independent of the Sanders campaign put the cost of M4A anywhere from an additional $26 to $35 trillion over a decade, which is significantly higher than his most current estimation of $17 trillion. The centrist Rand Corporation estimated that M4A could increase costs by 9.8 percent in a year. The left-of-center Urban Institute estimated that a) federal spending would increase by $34 trillion over ten years, and b) even factoring in the net spending of private and public spending, it would still cost a net increase of $7 trillion over ten years. Urban's conclusion was that "the increase of spending for people with this generous new coverage would outweigh the savings from lower prices for health care providers and and lower administrative costs." And this says nothing of the libertarian Mercatus Center, provided a high-bound estimate of a net increase of $32 trillion in new costs.

Yes, it is true that there is a study from Lancet claiming how M4A could theoretically save money. Yet it is equally true that it has such flawed assumptions that it ignores the reality that M4A comes with too high of a price tag, far higher than Sanders claims. If Sanders were to confront this reality, he would not only realize that he would have to considerably raise taxes on everyone (and not just the 1 percent), but that he truly does not know how he would pay for it.

Why Japan Is Neglecting Climate Change Commitments by Building Coal Plants

With the Kyoto Treaty, the Paris Climate Agreement, and the international pressure to curtail carbon emissions, you would think that coal would become more a thing of the past. At least in the United States, coal consumption as a percent of overall consumption has been on the decline (EIA). That does not seem to be the case for Japan. As a matter of fact, Japan has been increasing its reliance on coal. In 2018, Japan was looking to 36 new coal plants. The New York Times reported earlier this month, however, that Japan revised that figure down to 22 coal-fired plants because building the other plants did not make economic sense. Even with a downward revision, it is a notable trend in an age of more carbon-neutral alternatives. Japan was set to be carbon-neutral after 2050. If Japan is successful in building the 22 plants, it would most probably delay Japan's acquisition of carbon-neutral status. Not only that, these plants would emit 74.7 million tons of carbon every year. Why is Japan bucking the trend towards fewer carbon emissions?

The most obvious answer dates back to the Fukushima nuclear accident. In March 2011, an earthquake with a magnitude of 9.0 followed by a tsunami hit Japan. These natural disasters particularly hit the Fukushima Daiichi nuclear power plant, thereby causing the most severe nuclear accident since Chernobyl. I can talk about the advantages of nuclear power, but the truth of the matter is that Fukushima made a mark on the psyche of the Japanese people where it all but eliminated nuclear power consumption (EIA).

Tangentially, Japan is also looking to diversify its energy portfolio. In part, Japan does not want to generate too much liquified natural gas (LNG), especially since demand from China and India could cause LNG prices to spike. It is true that renewable energy as a percent of Japanese energy generation has increased to 16.7 percent, which is still lower than its European counterparts. Solar power increased from 1.9 percent of energy generation in 2015 to 6.5 percent in 2018 (ISEP). Aside from the general issues of capacity and intermittence with solar and wind power, Japan has the additional issues of limited sunshine and a lack of land for large-scale projects, both of which make solar power twice as expensive in Japan than in Europe.

There is also a geopolitical element to Japan's rush to coal, the "clear and present danger" being China. On some level, there could be a national security threat from China, which could be reason for Japan to become less dependent on Australia for its coal. However, I would contend that it is China's interactions in the energy market in the Asia Pacific that are driving concerns. China is using its Belt and Road Initiative to expand influence in Asia and Africa. The truth is Japan would like to have some of that influence. South Korea is also part of the equation because South Korea is exporting nuclear energy to countries that are of national interest to Japan. While Japan is nowhere near the military threat it was in the middle of the twentieth century, I would surmise that it would like to remain an economic powerhouse.

Where Does This Leave Us?
Japan is under economic and political pressure to continue with its coal production. In spite of the naysaying from other countries, I do not see Japan's coal consumption changing anytime soon. This is all the more lamentable since carbon capture and storage (CCS) technology is too cost-prohibitive to be commercially available. It will be difficult for Japan to get past the geographic hindrances that limit solar energy production. I also do not see the Japanese populace getting over Fukushima quickly enough to restore nuclear power capacity.

We have to be careful of what lessons to draw from Japan when it comes to energy policy. The Fukushima accident does not show the issues with nuclear power per se, but rather about proper planning and construction. An archipelago nation in which most of the people live on the coasts and are prone to natural disasters is not the best candidate for nuclear power. That does not mean other countries should not use nuclear power. Nuclear power is still the only carbon-neutral energy source that can adequately satisfy energy needs. Removing nuclear power from the equation while trying to rely more on renewables would most probably either lead to greater energy outages or considerable increases in energy prices. Until technology can be developed to overcome the limitations of solar and wind power, nuclear power is the world's best bet for a more carbon-neutral energy consumption.

Illinois' Attempt to Ban Self-Service Gas Stations: Why I'm Not Pumped About This Misguided Overregulation

I have complained about my home state, Illinois, on here before. I have pointed out how the State's budgetary mismanagement is so nightmarish that it almost makes Greece look fiscally responsible. I have criticized Illinois' governor on wanting to remove the flat income tax and a general call for wanting to raise state taxes. I have also gone after my home state for manipulating statistics to increase food stamp beneficiaries or how high pensions for Chicago Public Schools teachers is making pension reform in Illinois all the more difficult. As if there were not enough crazy news items coming from the Land of Lincoln, Illinois House Representative Camille Lilly introduced a bill to ban Illinois drivers from pumping their own gasoline (see Bill HB4571 here). It is likely that the Bill would not pass committee given the nature of the bill and the lack of co-signers. However, if it passes, Illinois will not be the only state with such regulations on self-service stations. Two other states already have restrictions on self-service at gasoline stations: New Jersey and Oregon.

The Bill's language is unclear as to why the Illinois House bill is necessary, although Lilly makes an argument based on safety and convenience. The regulation from the Oregon Assembly (2017 ORS 480.315) lists 17 reasons as to why the regulation exists, including needing someone who is professionally trained in dispensing liquids to contributing to the employment of young people. I want to respond to some of the arguments that proponents use in attempts to justify this regulation.

1. Handling gasoline is unsafe because it could cause a fire. You would think if people were dying or getting injured because of gas station fires, media outlets would bombard us with stories about it. That is why I looked at what the National Fire Protection Association had to say. The most recent NFPA statistics I could find were from 2004-2008 and 2009-2013 data from its 2015 report. Per the 2015 report, the average number of annual deaths was zero deaths (yes, that is nil), whereas the number of injuries was 14 injuries. This was the death and injury count over 460 fires at gasoline stations. According to the National Convenience Store Association, there are an average of 1,100 customers a day at a convenience store that sells gasoline. Multiply that by the 60,000-plus gas stations with convenience stores that exist in the United States, and the likelihood of catching on fire as a result of going to the gas station is quite small. 
• The safety argument is a solution in search of a problem. Even if gasoline fires were more prevalent, what is the basis that an attendant responsible for filling up multiple vehicles is going to be less rushed? 
2. Exposure to toxic fumes is unhealthy for customers. Healthline says that it's generally safe, but for argument's sake, let's assume this argument is valid. Customers are only exposed to the fumes for a short period of time (less than five minutes) once or twice a week, depending on how often they fill up their car. If I understand this correctly, it would not be okay to expose customers to a small amount of toxic fumes, but it is somehow acceptable to expose gas station attendants to these fumes for multiple hours throughout their work week? I don't know about you, but I don't consider gas station attendants to be disposable or that their health should be put at risk like that. 
3. Having full service is convenient. Some people do not want to have to get out in bad weather to fill their car or they do not want to smell like gasoline. If convenience were such a major factor for customers filling up their car, then there would be notable demand for full-service gas stations without a government mandate. 
4. What about the elderly and disabled? The elderly and disabled are the ones who are most vested in having full-service gas stations because it is otherwise difficult to fill up the car with gas. Instead of having a full-time attendant for a full-service station, an employee could help on a need-by-need basis. As a matter of fact, as long as a gas station provides assistance upon request [and it is not operated by a single employee], they are in compliance with the Americans with Disabilities Act (ADA). 
5. Reducing theft of gasoline (gas-and-dash). If you are a convenience store own that finds gasoline theft to be that much of a concern, you can install better video surveillance equipment. Or better yet, you can require pre-payment of gasoline. 
6. Full-service gas stations provides employment opportunities that would otherwise be destroyed by automation. Do proponents think that without these gas attendant jobs, people would be otherwise unemployed? If we go with the logic of this argument, does this mean that we need to mandate all entry-level positions or create superfluous jobs for the sake of employment? That's not how economic growth works. Yes, there is a concern that automation is decreasing job opportunities, although I have wondered if that concern is overblown. In the case of gas station attendants, self-service did not create a net loss in employment. As this Census Bureau working paper illustrates (Basker et al., 2015), there was a net loss of 0.4 workers per pump. Paradoxically, there was an increase of overall employment in the sector because stations became larger, they were able to add convenience stores, and freeing up the attendants' times allowed for the stations to be open for longer hours (Basker et al., p. 23). 

Whether it is safety, job creation, or convenience, the arguments banning self-service gasoline stations are flimsy at best. It is not simply that a self-service ban limits the freedom of consumers as to how they want to make purchases, erodes personal responsibility, or mandates that a business should hire certain labor. In the states that did not enact a government mandate, the full-service gas station did not withstand the test of time.

Self-service became increasingly popular throughout the 20th century, and it will only become more popular as technology progresses. We can use the ATM when we need money from the bank. Grocery stores have self-checkout lines. Fast food restaurants are installing kiosks to order food instead of interacting with a cashier, not to mention there are drink machines that allow you to pour your own drink. Airlines allow for purchasing tickets on their websites. Most drivers would rather pump their own gas than deal with the longer wait for an attendant, so why should self-service gas stations be different than any of the other forms of self-service that have organically evolved over time?

If there truly were no costs to labor, then why not demand one attendant for every pump? The answer is that there are costs to labor. What happens when you add an attendant? As Oregon State University economist Patrick Emerson points out, the price of gasoline increases. Whether it is minimum wage, paid leave, or menstrual leave, adding labor costs vis-à-vis government regulation always comes with a tradeoff. I am not going to be surprised if the outcome is more expensive gasoline for Illinoisans or that the supposed health or workforce benefits do not come into fruition. People have mocked the Oregon version of this regulation, and given what we have covered here, rightfully so. Illinois already has a ton of taxes and regulations that are a drag on the economy. Why should the citizens of Illinois have to be subjected to another baseless regulation?