Government might not be up to the challenge — but individuals are

Michael Schaus

If you get the sense that government is not up to the challenge presented by a public health crisis, and the economic fallout that results from it, you’re probably right.

That’s because government is, at its core, a political enterprise — and as most Americans will readily admit, bickering politicians aren’t generally the best at getting things done in an effective and efficient manner.

Worse yet is the fact that the political shenanigans of the last several decades have made government ill-equipped to handle even the limited actions that are deemed necessary in national emergencies. In fact, it often actually makes things worse.

For example, when coronavirus first began appearing outside of mainland China, the Center for Disease Control and the Food and Drug Administration not only failed to utilize every resource at their disposal to diagnose early cases in the United States, they actively banned “unauthorized” tests conducted by healthcare and research professionals. In Seattle, academics studying the common flu contacted the CDC in an effort to help identify possible cases of COVID-19. Not only were they denied permission to move forward, but the researchers were served cease-and-desist orders… after they positively identified coronavirus in a local teenager.

The CDC’s insistence on a “top-down” bureaucratic approach to identifying the virus undoubtedly slowed early identification of patients at a critical moment as the outbreak was accelerating organically throughout the region.

Unfortunately, the problems don’t stop at government’s uncanny ability to burden the system with unnecessary regulation. Thanks to decades of overspending — on both the federal and state level — government now finds itself with little financial wiggle room for any meaningful economic stimulus as well. Nevada’s “rainy day fund,” for example, is unprepared to deal with a long-lasting economic downturn.

Even the Federal Reserve, in reacting to the initial financial fallout of coronavirus, quickly realized that its previous decade of aggressive financial stimulus has left it with few (if any) useful tools to counter a massive Wall Street sell-off.

Thankfully, however, government is not fighting this battle alone. In fact, where the politics of government action fail us, markets are incredibly effective at filling the gap. And sometimes, government begrudgingly seems to recognize this fact.

The CDC eventually realized this truth — at least in part — and even reversed some of its top-down approach to managing the crisis by reducing regulations that had previously kept competent academics and biotech companies sidelined.  Early on, some states lifted licensure restrictions on registered nurses in an effort to allow out-of-state RNs to assist overcrowded local hospitals.

In other words, politicians are occasionally self-aware enough to turn to the market to address the issues government is ill-equipped to handle.

Government officials may very well have a variety of ways they can react to our current crisis. However, we should, given the nature of politics, expect them to do so poorly. Not only because political systems tend to reward the bad behavior of power-grabbing politicians, but also because government itself simply doesn’t have the capacity to singlehandedly fix the types of complex challenges our communities are facing.

Individuals, markets and communities, on the other hand, do have the ability. And that’s one of the greatest features of a decentralized economy such as ours: It empowers people to serve one another without waiting for an official diktat from some central planner in the politburo.

Nonetheless, recognizing this aspect of the American experience is sometimes difficult during times where the public is almost universally calling for government to “do more.” Most voters, spurred on by power-grabbing politicians and the national media, are clamoring for ever-more government-directed action — seemingly unaware that the government is at its most helpful when it merely empowers the market, individuals, and local communities to serve each other unencumbered by arbitrary centrally-planned regulations and restrictions. As we deal with the very real challenges facing us in the months ahead, it would serve us well to remember this basic benefit of decentralized economies.

So, while politicians remain busy pointing fingers at one another and using the crisis to further their political agendas, take comfort in knowing that the rest of America will actually be getting things done.

This article was originally published by the Nevada Business Magazine.