Seventy local businesses met Thursday night, agreeing to keep serving customers indoors despite a new state order, a Bradley restaurant owner said.
Thomas Spellman, owner of Hoppy Pig, said his restaurant will continue serving patrons inside, defying Gov. J.B. Pritzker’s new order on some regions to cease indoor dining to lessen the spread of the coronavirus.
“We have families. I have forty employees, you know, they have families, they have houses and they have kids and they have to pay for school,” Spellman said. “The government’s not paying for them. We don’t want the government to pay for us. We just want to do business the way we do business.”
This is from Chris Coffey, “70 Suburban Businesses Meet, Agree to Continue Serving Customers Indoors Despite State Order,” nbc chicago, October 23, 2020.
READER COMMENTS
Monte
Oct 26 2020 at 12:10am
I’m shocked no one has cast any stones. I’m certainly willing to forgive them for colluding.
David Henderson
Oct 26 2020 at 7:17pm
Me too. I meant the post as a slightly humorous one. Clearly, especially from the comments below, it didn’t work.
Thomas Hutcheson
Oct 26 2020 at 8:15am
The issue is not collusion. Is the regulation-violation Pareto-optimal? Or does it at least provide information about how to improve the regulation?
Alan Goldhammer
Oct 26 2020 at 8:59am
There are two rational responses to this:
the restaurant owners have a legitimate grievance against the state who are imperiling their livelihoods by forcing closure (as outlined in the blog post) or,
the state has a public health right to control a pandemic that is causing significant morbidity and mortality
Unfortunately, it appears that the US is way past figuring out a path forward and it comes as now surprise that the President’s Chief of Staff pretty much said that there won’t be many efforts to control the pandemic.
Jon Murphy
Oct 26 2020 at 9:57am
I strongly disagree. From an economic point of view, the US (and, indeed, the world) has been prevented from figuring out paths forward because of:
-So-called public health policies (which are based on horrifically bad data. Or, in the case of the latest Nature pre-print on masks, irrelevant and incorrect data).
-The Planer’s fallacy of assuming there is only “a path forward” as opposed to a multiplicity of paths forward.
-Massive, systemic, and cascading expert failure.
-Mob mentality.
Alan Goldhammer
Oct 26 2020 at 1:29pm
I’m sorry Jon, but you are living in a bubble if you believe what you wrote. I think I have some currency on this issue having put out a daily newsletter since mid-March and spending 5-7 hours a day reading the primary literature. I can’t say that I’ve read every mask or modeling paper that has been posted but I’ve read most of them (my favorites are the Monte Carlo papers have once done some of those calculations years ago for a chemistry project I was working on).
Yes, there are people who believe in The Great Barrington policy paper and there are people who believe in standard epidemiology. You can go down a variety of different roads but it is not apparent that the US is picking the most prudent one. I have yet to hear how you or David address the growing problem of the drain on the healthcare system if you just say let things run. There is ample data from every single geographical area that has been hit with COVID-19 that hospital utilization gets taxed to the limit. This is a public health problem and only secondarily an economic one.
Is it correct policy for colleges and universities to restrict large gatherings of students or to impose mask requirements? Certainly, this is what Purdue University is doing (I follow this school regularly as President Daniels was adamant about reopening back in June and thus far has been successful).
The problem in the US, is we have a President who from the beginning was disinterested in the pandemic other than its impact on his reelection chances. He had an opportunity to lead from the top and ignored it, preferring ‘liberation’ slogans and even now continuing to engage in magical thinking.
I’ve been blunt to my readers about how to move out of the pandemic and back to normalcy, but I’m just a retired drug regulatory and safety expert and not a senior policy maker. Until the 1/3 of the populace who have the kind of disposable income that drives the economy feel safe to go out and about to stores, restaurants, concerts, etc. things are not going to get any better. Look at the price of gasoline, people are not even driving much and that’s a pretty safe activity! Maybe you think this is a ‘mob’ who are not thinking things through but we have friends who are holed up in their homes still today getting everything delivered and not even doing social distance visits. Those over the age of 60 have a very different calculation they are making.
Your third statement on massive failure is accurate and you only have to look to the resident at 1600 Pennsylvania Ave to see why.
Jon Murphy
Oct 26 2020 at 1:39pm
You say I’m living in a bubble, yet you provide evidence of all my points (not the least of which is your newsletter. You report many studies that have massive Stats 101 failures and yet do not address them. You’re reading the stories, yes, but not analyzing them for validity).
David Henderson
Oct 26 2020 at 7:26pm
Rather than replying to Alan Goldhammer below his comment, I’m replying to him here so that others will more easily see it.
Alan wrote:
Two responses.
Pick a lane. Figure out what your objection is and talk about that. It sounds from this comment as if your objection is that the health care system will be overwhelmed.
I actually have addressed that at least twice. I’ve been writing in various venues, so I don’t recall if I’ve written about it here. So I don’t blame you for not knowing. But here’s what I have said, in roughly these words: “When economists and operations researchers notice that there’s a good in short supply, they don’t typically advocate shutting down a huge source of demand. They instead advocate focusing on increasing the amount of the scarce resource.” That’s the thing to do here.
Jon Murphy
Oct 26 2020 at 9:46pm
Regarding the health care system, I have a pop piece at AIER where I show that the actions taken by the US Federal Government and state/local governments actually reduced health care capacity and the quality of data used for the studies. I am preparing a more empirical piece for publication.
Jens
Oct 27 2020 at 4:41am
This kind of reasoning can become an immunizing strategy: Economists (and ORs) shouldn’t advocate shutting down demand. Every form of (infectious) disease creates more demand for treatment. Therefore economists shouldn’t advocate preventing (infectious) diseases.
But I agree with the criticism expressed elsewhere regarding school closings. Schools should stay open as long as possible. If necessary therefore other assembly options must be restricted. In Europe this is and has been the case. I cannot judge the situation in the US. The pandemic means that freedom of movement is (partially and temporary) becoming a scarce good. We now have a kind of traffic light system based on the incidence; the local authorities can take different measures depending on the danger level. Whether this is a good strategy is not yet entirely clear, but it is quite accepted
Diana L Weatherby
Oct 28 2020 at 12:16am
You stated, ” “When economists and operations researchers notice that there’s a good in short supply, they don’t typically advocate shutting down a huge source of demand. They instead advocate focusing on increasing the amount of the scarce resource.”
I am so glad you have all the answers. Please tell me how you are going to increase the supply of highly trained doctors and nurses and all their support staff and have them to my state in a couple weeks as we cannot even hire our usual number of traveling nurses for the winter. I will be so happy you solved this problem for us.
And here I thought the elasticity of supply was relative to time frame and geographic scope. How silly of me.
Jon Murphy
Oct 28 2020 at 11:39am
Elasticity is relative to (among other things) time and geography, but that doesn’t invalidate David’s point at all.
The goal is to increase quantity supplied in a market, specifically in the market of health care in this case. There are two main ways one can increase quantity supplied: increase price or increase supply. Now, if one wants to argue that the quantity supplied of health care is perfectly inelastic over a given time frame, then simply increasing price won’t do. So, one would want to increase supply itself.
Below, you discuss one such way to increase supply: reform/repeal CON legislation. Allowing/encouraging construction of field hospitals, repealing/reforming medical licenses, etc can all help.
There are a number of steps that could be taken immediately as well: cease using the Defense Production Act and state price gouging legislation to promote the production of PPE and other needed equipment. Repeal of tariffs. Allowing already-existing medications to come to market, etc.
Good economics is not about knowing all the answers. Indeed, the market process as emphasized by Armen Alchian, Hayek, Demsetz, and many others is about letting people coordinate and exchange along the margins they so choose. Economics allows for a multiplicity of plans as opposed to a single, all reaching plan. It also allows us to make predictions about what actions will be helpful/harmful. The Defense Production Act imposes price controls on firms. Basic economics tells us that will lead to shortages. That’s precisely what has happened: shortages of PPE and testing equipment. As I discuss here, those shortages led to even worse policies being implemented, prolonging the problem.
In short: we do not need to know what plans will lead to the end of the pandemic. But we can discuss the policies that will hinder desired goals.
Diana Weatherby
Oct 28 2020 at 11:52am
I agree with many of the principles you stated and agree that in the long run, increasing supply is optimal.
I have yet to hear any way in which the supply of doctors and nurses can be increased this fall/winter. There will be shortages. There are already shortages in specific areas.
I believe narrative and an educated and community minded populace would work better than mandates but that ship has sailed long ago.
Jon Murphy
Oct 28 2020 at 12:55pm
Increasing the supply of doctors and nurses is just one element. We could (and should!) also reduce the quantity demanded for them as well. That can be done though the various things I discussed above, namely letting the price mechanism work to encourage more pandemic-friendly behavior like production and distribution of PPE, construction of hospitals, and personal behavior changes. And, as a bonus, it doesn’t rely on “an educated and community minded populace.”
Now, to answer your question about nurses and doctors: if there is a shortage, we need to know why. A shortage, as you know, is when quantity supplied is less than quantity demanded. Basic price theory tells us shortages come about because prices cannot adjust; prices are too low and cannot increase (NB: this is true regardless of elasticity of supply or demand). So, why can’t prices rise? Answer that question and you have your solution(s).
One could also quickly increase supply. Why cannot supply increase? Licensing requirements is one such reason. If the licensing requirements were immediately abolished, that would increase supply. Now, we needn’t let just anyone be a nurse or doctor. If we just opened the med schools immediately and eliminated the rules that forbid nurse practitioners from doing much of the work of doctors (though they are just as qualified), that’d allow a bevy of doctors and nurses to become immediately available.
Just a few thoughts off the top of my head.
Diana L Weatherby
Oct 28 2020 at 1:10am
I will say that this is the perfect time to bring up CON laws and other restrictions in supply though. We can probably agree on that. I just wish that someone in a more recognizable position than I am would seize this opportunity to break the AMA’s stranglehold on the supply of doctors and push for abolishing CON laws.
I just don’t think it will make a difference for this fall.
Comments are closed.