COVID-19 Underscores Need to Preserve Economic Freedom in a Crisis

The Heritage Foundation’s newly
released 2020 Index of Economic Freedom provides plenty of evidence of the value of economic

People in freer societies
live longer, have much higher levels of income and overall prosperity, and enjoy
better health care, cleaner environments, and greater educational opportunities
than those societies that are less free.

Not all of that may seem relevant in the face of a new virus that crosses borders easily and respects no claims of class or wealth.  Still, there are plenty of indications that freer societies are better placed than more socialist or controlled economies to respond effectively to the health challenges of the COVID-19 coronavirus.

As my colleague Anthony Kim noted last week, “nations with greater levels of economic freedom are clearly better positioned to ensure better outcomes, given their superior overall capacity to prevent, detect, and respond to significant disease outbreaks as defined by the Global Health Security Index.”

In years past, Americans would have faced a health crisis like COVID-19 with support primarily from their family doctor, their extended families, or their religious communities. Those institutions still help millions, but are undeniably weakened in today’s more mobile and heavily regulated society.

As a result, many
Americans are looking primarily to the government for help. That’s not
necessarily a problem. Government is one avenue through which “we the people”
act collectively to address our problems. 

Given the size and scope
of our governments today at the federal, state, and local levels, they
obviously have the means to offer some assistance to those in need. But
government, uniquely among the various institutions of American society, also
has the ability to act with coercion, and the threat to our economic freedom
from coercive government policies or actions is real.

With economic lockdowns,
shelter-at-home orders, and mandatory business closures in place or on the
table, it’s clear that government actions are already having a severe impact on
our economic freedom. 

Such activities, at least,
will pass as the health crisis ebbs.  More
insidious may be the less-direct actions taken by the government to inject
itself more deeply into our economic lives through new regulatory actions, such
as requiring paid sick leave, controlling hiring and firing decisions, or
interfering with long-established supply chains through tariffs or other trade

Finally, while additional
spending measures may seem benign, careless subsidies distort economic decision-making
and hurt efficiency, and leave a legacy of debt that will have a negative
impact on our children for decades to come.

Government regulations and spending programs are a blunt instrument, and we know from experience that government actions—however well-meaning—are rarely without unintended, often negative, consequences. That’s no less true in a crisis.

What’s to be done? The
Heritage Foundation has in recent days put forward suggestions (here and here) for
carefully calibrated and tailored actions that government can take to help
Americans now without compromising the strength and vitality of our economy in
the future. 

The main watchwords are “targeted”
and “temporary.”

What’s not needed, and
indeed what must be avoided at all costs, are programs that will permanently
increase the scope of government and its control of our economic lives.

Before this virus hit, the
U.S. economy had made us the strongest and most prosperous society in the
history of the world. The free-market system underlying that economy remains in
place, but threats abound from politicians across the political spectrum who
would use our current crisis to remake the system into their own particular
version of a socialist or mercantilist nirvana.

The American people are
smarter than that.  Our collective genius
has always been our determination to fight for and preserve our freedom as
individuals to decide for ourselves how to live our lives. 

The wisdom and value of
that determination is validated every day by the immigrants at our borders and,
as shown in the Index of Economic Freedom, the efforts of millions around the
world pressing their own governments to make their countries more like ours.

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Trump Compels GM to Build More Ventilators for Coronavirus Response

President Donald Trump is applying the Defense Production Act to require General Motors to manufacture more ventilators to respond to the coronavirus pandemic.

“Ventilators are a big deal,” the president said at the Friday press briefing.

“This invocation of the DPA should indicate to all that we will not hesitate to use the full authority of the federal government to combat this crisis,” Trump said. “We thought we had a deal with, as an example, General Motors. I guess they thought otherwise. They didn’t agree and now they do agree.”

The president also announced he was naming his trade adviser Peter Navarro as the policy coordinator on Defense Production Act. He will continue to serve in his post as assistant to the president and director of trade and manufacturing policy.

Trump had resisted using the full power of the law that allows the federal government to direct companies to manufacture. However, he said, Friday, “We’ll work with the private sector but we will do what we have to do.”

The president said regarding GM that he thought there was a deal to build 40,000 ventilators. But GM wanted to build fewer.

“Price became a big object, but Peter Navaro is going to handle that and Peter will do a very good job. We’ll see. Maybe they will change their tune,” Trump said. “We didn’t want to play games with them.”

Trump said that GM was wasting time in the midst of a crisis.

In a statement, GM said that it has already been working with medical device supplier Ventec Life Systems.

Ventec, GM and our supply base have been working around the clock for weeks to meet this urgent need.  Our commitment to build Ventec’s high-quality critical care ventilator, VOCSN, has never wavered. 

The partnership between Ventec and GM combines global expertise in manufacturing quality and a joint commitment to safety to give medical professionals and patients access to life-saving technology as rapidly as possible. The entire GM team is proud to support this initiative.

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