On the Hidden Benefits of the Coronavirus Epidemic (yes, there are some!)

Boy am I going to get slammed for this post! Oh, well, time to be unpopular.

The job of economists is to focus not just on visible costs and invisible benefits but also hidden costs and hidden benefits. Nowhere is this more important than now as we debate reopening the economy. I would say right now that too much has been made of the visible costs and benefits that would accrue from opening the economy or keeping it closed and not nearly enough is being said about the hidden costs and benefits. As to the hidden costs of maintaining the stay in place orders, we are likely going to see increased mental health issues arising from social distancing and isolation. We are a social species and denying us physical human contact can have a deleterious effect on our health. One study suggested that not holding your baby could lead to issues that span into adulthood by negatively impacting their DNA: https://www.miamiherald.com/news/nation-world/national/article186889938.html

That being said, I want to focus on the hidden benefits that are accruing to us. With fewer cars on the road, we can see the impact on demand for gas with the plunging gas prices (I just paid $1.25 a gallon for gas yesterday). This is good news for most Americans but horrendous news for workers in the oil industry but, on balance, the good that arises from lower gas prices for a country such as ours likely outweighs the ill effects. However, with fewer cars on the roads, we also get fewer traffic accidents. With more social distancing, we were see fewer cases of influenza, a disease that also kills tens of thousands of Americans each year (please note that I am not dismissing the coronavirus epidemic at all-the problem with coronavirus is that it is more virulent than the flu, more deadly, and, unlike the flu, we do not yet have a vaccine for it, but the point is that what works to stop the spread of the coronavirus also stops the spread of the flu). With fewer factories operating, we have lower carbon emissions, which should alleviate concerns (whether they are valid or invalid) over climate change. With more people working at home, we dramatically reduce commute times and with more parents at home, children are receiving better supervision than if they were in the care of others. All of these things benefits from social isolation need to be considered before we reopen the country for business. That being said, the negatives are stark and real as well. We are currently experiencing the greatest reduction in productive capability in world history, an outcome that, in the short-run at least, will dwarf that of even the Great Depression, so no, I am not making an argument to maintain these orders to stay at home.

That being said, however, we need to be careful about when we lift these orders and let data drive our decision-making rather than emotions. We can replace income lost from idling production for a short period of time (now if this goes on for more than a few months, we are definitely going to be in trouble but all indications are that we will be able to relax these restrictions if we can flatten the curve and thus contain the spread of the virus). We cannot replace lives that are lost or time that is lost from being with our children. So use this time that you are staying at home productively and re-connect with your kids if you have been lax about that. The time we spend with our children cannot be replaced, it cannot be deferred, and it will not accrue with compounded interest, unlike your income or wealth.