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Time will tell whether selective business closures, and shelter in place orders by governors around the country will have been any more effective than pleas for voluntary actions requested in most states. More certain is the immediate impact on laid off employees, lost business income, and loss of freedom. There are steps we can take to minimize those negative impacts.
In Delaware, the Governor has declared a State of Emergency, and Delaware Code states in part, "During an emergency or disaster, the Governor may, subject to any applicable requirements for compensation, utilize any private, public, or quasi-public property if necessary to cope with the emergency or disaster" (Title 20, Chapter 31, Subchapter III, §3115, (b) (1)). It is unclear how closing businesses is "using" private property in this context. It is a stretch to find any legal basis for such an action.
State employees, including teachers, are still getting paid even though schools, and many state offices, are closed. However, restaurants, entertainment venues, and many retail stores have been ordered to close for up to two months representing about 8-percent of our economy. These are some of the very businesses paying the lowest average wages, and their employee's incomes are being sacrificed to keep the rest of us safer.
Priority should be placed on full compensation to closed businesses, and employees for lost income. For decades, Delaware has added to a Rainy Day Fund, and to other contingency funds. The fund has never been touched even during the Great Recession. Employees should be reimbursed with cash payments for any income loss beyond what is covered by unemployment insurance. Employers need to be reimbursed for lost income, and low interest loans should be made available. Employers should not see their unemployment insurance rates rise as a result of layoffs caused by the State of Emergency. The state funds can be reimbursed from eventual incoming federal aid. The state should be able to act faster to move money to those in need than the feds.
In Delaware, the Governor has declared a State of Emergency, and Delaware Code states in part, "During an emergency or disaster, the Governor may, subject to any applicable requirements for compensation, utilize any private, public, or quasi-public property if necessary to cope with the emergency or disaster" (Title 20, Chapter 31, Subchapter III, §3115, (b) (1)). It is unclear how closing businesses is "using" private property in this context. It is a stretch to find any legal basis for such an action.
State employees, including teachers, are still getting paid even though schools, and many state offices, are closed. However, restaurants, entertainment venues, and many retail stores have been ordered to close for up to two months representing about 8-percent of our economy. These are some of the very businesses paying the lowest average wages, and their employee's incomes are being sacrificed to keep the rest of us safer.
Priority should be placed on full compensation to closed businesses, and employees for lost income. For decades, Delaware has added to a Rainy Day Fund, and to other contingency funds. The fund has never been touched even during the Great Recession. Employees should be reimbursed with cash payments for any income loss beyond what is covered by unemployment insurance. Employers need to be reimbursed for lost income, and low interest loans should be made available. Employers should not see their unemployment insurance rates rise as a result of layoffs caused by the State of Emergency. The state funds can be reimbursed from eventual incoming federal aid. The state should be able to act faster to move money to those in need than the feds.
Lost freedom might be the biggest long term consequence from the government response to the coronavirus. Markets will recover, people will go back to work, and we will eventually have a vaccination, or become immune to this virus by catching it. However, the extreme invasion of personal freedom from forced business closures, and forcing people to stay in their homes will hang there as a precedent for some future malevolent president, or governor to use as a political tool over some manufactured state of emergency.
If you think this is crazy you haven't kept up with dictators from the past, and present. Steps similar to these are being used routinely in places like China, and Venezuela. Ask a Muslim Uighur in western China about lockdowns, re-education camps, forced labor, and the physical destruction of neighborhoods all in the name of a state of emergency blamed on a handful of individual acts of terrorism. In Venezuela police cordons, and pro-government ruffians keep the elected legislature from assembling, and undermine protests in the street that threaten to topple a corrupt regime.
To be clear, I am not advocating letting people die to save money. Americans rise to the occasion during tough times. Voluntary actions may have resulted in similar outcomes of social distancing without draconian actions that reflect no confidence in the people to simply do the right thing.
We have an example of an alternative strategy that worked in South Korea. South Korea has brought the virus under control with massive voluntary testing, and limited mandatory isolation of those infected, and most at risk. With schools closed, companies allowing flex time for parents were compensated by the government. South Korea eschewed the forced actions being used in the United States as un-democratic, and as un-necessarily harmful to the economy.
There are real health impacts from a broken economy, and increased poverty that are not being considered, such as higher infant mortality, and higher overall mortality caused by lower access to health care. CNN recently reported about 5,000 people committed suicide after the 2008 market crash.
Think about how many people have died to protect our hard won freedom spelled out in the Constitution. This is what we celebrate every July 4th, and Memorial Day. Over time, laws and regulations have already infringed these rights, but now we see freedom abridged. A key provision in the Bill of Rights is "Congress shall make no law respecting ... the right of the people to peaceably assemble". It is perfectly acceptable for the government to make recommendations to avoid crowds, and to self-isolate. It is quite another to violate the freedom to assemble outright by requiring restaurants and movie theaters to close, and to force people to stay in their homes as is happening in several states with progressive governors who naturally lean toward more government control.
This week Governor Carney closed the beaches after visiting the beach and seeing too many people. I visited the same beaches the same day and saw lots of people gathered in family groups with a lot more than six foot separation from other groups. A state of emergency can only last 30 days. Since the State of Emergency began March 13, the end date would be April 12. Any extension requires a new emergency declaration. The Governor's closure of the beaches, schools, and businesses until May, 15, does not follow the law.
Finally, the Governor has declared Delaware residents shelter in place effective March 24, at 8 am. He cites no specific enumerated section of Title 20, Chapter 31 that asserts his power to do so, and I can find none. Such an order is extreme overstep of personal freedom. A call for voluntary compliance is as far as the Governor's power extends.
We all want to save lives in the short run, but also need to protect our freedom for the long run. The Governor needs to meticulously follow the Emergency Management law, and its limits.
By David T. Stevenson, Policy Director
Caesar Rodney Institute
3/23/2020