Revisiting introductory economic concepts in light Covid-19

Posted by Joseph Semuta on 3/26/2020 1:00:00 AM

There is not an economic sector that is not being significantly impacted by Covid-19.  In a sense, the story of the virus is its economic impact.  The president himself has suggested that he would like the economy back at full capacity by Easter weekend, against the advice of the medical experts on his Coronavirus impact team.

Regardless of whether of not we are capable of reopening at that time remains to be seen, but the deep impacts on the economy are starting to emerge and they can act as a point of reference in our economic learning and understanding. 

Consider some of the first lessons of the semester and the point that they were trying to drive home which is when you choose one course of action you cannot get the benefit of another course of action.  It is the default mindset of an economist; life is filled with trade-offs.  Their goal is to maximize saitsfaction.  Let's do it!

But first let's ignore the incredible differences we would encounter when we consider benefit maximization and reflect back on the early discussions.

Should we fund a needle exchange program, or would the money be better spent on a different type of treatment facility?  Or maybe not spend our tax dollars on support for drug addicts?  Is cutting grass labor or leisure and how does that impact it perceived value?  How much laboring is too much?  Shoud we spend more on civilian goods or the military?  

Consider where you stood then.  How much has your thinking changed since those early discussions? 

I would guarantee that many who supported a needle exchange program have changed their minds.  How couldn't they?  How could government fund that health crisis when there is a much larger crisis that impacts every citizen? 

I couldn't, and I am supportive of programs in general.  

But not now, there is a more pressing health issue.

I would also bet that many would feel that more should be spent on "butter" and less on "guns"right now.  Jets and drones cannot kill a virus and the lack of medical equipment is disturbing.

If you want to comment, feel free but please keep it clean.