Bureaucratic Incompetence and the Coronavirus: New York Edition

Why have so many politicians and bureaucrats responded to the coronavirus pandemic by shutting down so much commerce that millions of Americans have been thrown out of work?

Economist John Cochrane answers that question and doesn’t mince words in describing the government failure that is creating the coronavirus recession.

We should not be shutting down the economy. Where we are is a sign of a great loss of bureaucratic competence, of state capacity. The old joke that the federal government is an immense insurance company with an army has never been so true.

Our government has, apparently, the capacity to spend two trillion dollars in a month. But, with three month’s notice, it cannot procure 50 cent face masks or plastic face shields (properly certified and regulated). (Actually, unemployment insurance and SBA snafus suggest it cannot even disburse the rivers of cash.)

We lack the basic state capacity, bureaucratic, technical infrastructure for anything more nuanced than blanket shut downs—no trace, track and isolate, no apps to check temperature and symptoms, no commonsense that maybe (say) gardeners and tree trimmers can work now. It took Walmart to figure out that taking employee’s temperature every morning might be a good idea.

I hope a lesson that comes out of this is the need to clean up America’s bloated regulatory state, and to re construct a competent effective bureaucracy.

Please do read the whole thing! Cochrane goes on to detail bureaucratic failures at the national level, but we should recognize the lockdown orders that have unemployed so many Americans have been implemented at the state level, by state governments, where incompetence among politicians and bureaucrats is running amok.

Here is an example of the lack of bureaucratic competence Cochrane describes from the state that has experienced the biggest impact of the coronavirus epidemic: New York. Whereas the five counties that makeup New York City have had the highest number of coronavirus cases and deaths in the state, the five New York counties of Hamilton, Schuyler, Lewis, Franklin, and Yates, have had a relatively low number of infections. New York Governor Andrew Cuomo, however, had ordered a lockdown of businesses and residents that applies to every firm and every person in the state.

If there was ever an example of the failure of one-size-fits-all government policy, it’s this one. The risk of coronavirus infections being transmitted within the five counties of New York City is exceptionally high, where implementing the governor’s extreme restrictions might make sense. But the risk of viral transmissions in New York state’s least impacted counties is remarkably low, and the governor’s extreme restrictions there appear to be completely mismatched with the actual conditions on the ground.

The situations and risk profiles in New York state are so different at the county level that that different policy could have been implemented county-by-county and would been just as effective at limiting the spread of infections within the state, without anywhere near the level of economic damage that has been done by the Cuomo’s statewide blanket policies.

But that’s not what happened. Why didn’t that happen? Cochrane’s thesis that today’s governments lack the bureaucratic competence that could tailor appropriate responses within their jurisdictions looks very much like it holds at the state level.

Consequently, the bureaucratic failures of New York exemplify a state in dire need of serious political reform, one that would strongly benefit from the decentralization of power now concentrated in the state government to more local levels of government.

There’s no question that bureaucratic incompetence also exists at these lower levels of government, but at least the damage that might be done by each would be limited by their geography. Combined with giving government at all levels fewer things to regulate, reforms to decentralize government power can significantly reduce the cost of their bureaucratic failures.