​COVID-19 continues to take a toll in the U.S., with more than 13 million cases and over 260,000 deaths. The rise in cases has led to interventions by state governments.

Given that the health threat is real, we should learn from what has worked —and what has not. That means we must work hard on a vaccine, protect the vulnerable, and let most people live their lives.

Michigan, New Mexico, Oregon and Washington have closed most businesses. New Mexico has issued a shelter-in-place order. Other states have started mandating masks. Some Texans are pushing for more interventions even as we’ve had a statewide mask mandate since July 2.

While these interventions are well-intended, blanket and indefinite policies simply aren’t warranted. Such policies have already cost millions of jobs.

During the lockdown that started in March, many Texans’ livelihoods suffered a devastating blow. The state’s economy contracted by a record 29% on an annual basis in the second quarter of 2020. This contributed to at least 8,900 shuttered businesses, losses of 1.3 million jobs in the private sector, and an unemployment rate that skyrocketed to 13.5% through April.

In a survey taken at the end of May, 16% of Texans said they were facing financial ruin, and 22% said it would take them a year or more to recover. These figures likely have worsened since then.

After reopening some businesses in May and then reversing course over the summer, Gov. Abbott changed the method for assessing how and when to expand capacity at certain business venues.

The new system—considering COVID-19 hospitalizations as a share of hospital capacity in each of 22 trauma service areas — allowed a more targeted, timely, and temporary approach. And it reflected the intent of the initial lockdown response to “flatten the curve” so hospitals wouldn’t be overwhelmed.

If a trauma service area has a rate for seven straight days in which less than 15 percent of total hospital capacity has been COVID-19 patients, then most businesses there can expand from 50% to 75% capacity. Currently, 94% of Texans are in areas that can be at 75% capacity—contributing to more economic activity.

But state totals of COVID-19 cases and hospitalizations have been at or near their highest since the pandemic started.

This has initiated calls by the Statesman’s Editorial Board for people to act responsibly, for a new path in Texas’ response that has been “marked by high hopes and half measures,” and for a “serious national strategy.”

But Gov. Abbott rightfully said lockdowns are off the table: “Our focal point is going be working to heal those who have COVID, get them out of hospitals quickly, make sure they get back to their normal lives,” he said.

With several vaccines getting closer to being available and with Pfizer announcing a pilot program to deliver the vaccine quickly in Texas, there is no reason for a lockdown.

Let’s acknowledge we can’t get to zero cases and deaths without eliminating liberty and livelihoods, and let’s better allocate our efforts in a targeted, temporary, and timely way until the vaccine is readily available and population immunity occurs.

https://www.texaspolicy.com/governments-cure-shouldnt-be-worse-than-covid-19/

Read the full newsletter with charts and subscribe here. 

​Hello Friends!
Thank you for reading my Let People Prosper newsletter! Please keep sharing it with others who may be interested in our productive discussions. Many thanks in advance! I hope you have a fantastic week of finding things to be thankful for as we approach Thanksgiving. May you be blessed with good health, prosperity, and wisdom every day.
Keynote Speech: I enjoyed the opportunity to give the keynote speech at the Free Market Institute at Angelo State University on Tuesday, November 17. This presentation was part of the Free Market Institute at Texas Tech University's Public Speaker Series, where I explain the economics of how institutions, tradeoffs, and policy matters when dealing with this situation. You can watch and view my slides at the link in my tweet below. I included a number of slides in my presentation that walked through where we were before COVID-19 hit, where we have been since it hit, where we are now, and where we should head.If you have any information to share along these lines, please send my way. Also, please unsubscribe at any time. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper.
Have a blessed week of thanksgiving. And try to educate yourself on things to tame your fear, and focus instead on your spirit of power, love, and self-discipline.
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper

​Shutdowns and stay-at-home orders across Texas due to COVID-19 have spiked unemployment,  slowed tax receipts, and forced the permanent closure of 8,900 Texas businesses since March. This, from one of the most dynamic and fast-growing economies in the world.

A return to previous success is possible, and necessary, by safely reopening Texas and promptly strengthening its institutions.

The Texas Model of relatively limited government, along with the pro-growth policies of the Trump administration, provided an institutional framework that helped create an attractive economic environment to let people prosper.

In 2019, Texas led the nation with GDP growth of 4.4% and with the most jobs added of nearly 350,000 (and the fourth-fastest growth rate of 2.7%). Also, Texas had the lowest supplemental poverty measure rate of 13.7%, (the SPM accounts for cost of housing differences across the nation and other key metrics), compared with other large states of New York (14.4%), Florida (15.4%), and California (17.2%)—the highest in the nation.

In addition, the Texas model was strengthened by a voter-approved constitutional ban on a personal income tax last year, property tax relief through reform and reductions, and a track record over the last three sessions of passing conservative budgets.

But these benefits couldn’t withstand the economic destruction of fear.

Fear led the public to decrease their interactions early on during the COVID-19 pandemic, before state and local governments created a whiplash of openings and closures with questionable results.

At the state level, Texas Gov. Greg Abbott issued a disaster proclamation on March 13, near the start of the pandemic, and then a stay-at-home order on March 31.

Some restrictions were lifted on April 17 and more were eased a couple of weeks later before another the rise in COVID-19 cases and positive tests—both have been questionable measures to consider when making policy— over the summer raised concern, resulting in a statewide mask mandate and further restrictions.

This sort of uncertainty makes it practically impossible for entrepreneurs to run a business or for job-seekers to find steady employment.

The recently released GDP by state figures for the second quarter of 2020 accounted for this destruction. Dealing with a U.S. economy contracting by an annualized rate of 5% in the first quarter and 31.4% in the second, Texas’s GDP shrank by a record-breaking 29% in the second quarter. But this put it in the second quintile of best-performing states, if contracting at a record annual pace can be considered “best,” with less loss than Florida (-30.1%), California (-31.5%), and New York (-36.3%).

While the third quarter growth improved dramatically across the U.S., the same is true in Texas as some restrictions were eased.

And on Sept. 17, Texas changed the metric used to evaluate the situation to COVID-19 hospitalizations as a share of all hospitalized patients, which aligns with the initial reasoning for government overreach to avoid overwhelming hospital capacity. This allowed some trauma service areas (TSA) with that metric below 15% for seven consecutive days to open most businesses to 75% capacity.

Then, on  Oct. 7, a new Executive Order was issued that changed the metric to COVID-19 hospitalizations as a share of total hospital capacity, an improvement that better accounts for the flexibility that hospital managers have with beds. This order also expanded most businesses capacity to 75% in TSAs with less than 15% of this metric and allowed bars to open to 50% capacity—assuming a county’s judge approves it, which hasn’t been the case in most large urban counties.

The new metric  results in only three (Amarillo, Lubbock, and El Paso) of 22 TSAs with a hospitalization rate above 15%, as of Nov. 9, meaning that 94% of Texans can have access to 75% of certain business capacity.

As COVID cases rise once more during flu season, calls for a second round of harsh restrictions are sure to happen. What these demands fail to understand is that the re-opening measures in place are not due to a blind indifference to human suffering, but rather a different, better path to evaluate tradeoffs.

In addition, the catastrophic drop in GDP across the state was due in no small part to the swinging pendulum of shutdown to rollback to shut down again, with unemployment rising to a historically high 8.3%. Another statewide shutdown would deal another staggering blow to an economy recovering from the fallout of the pandemic.

The Texas Model was responsible for the economic boom before the pandemic, and what comparative success we’ve had during the COVID-19 crisis was due to efforts to roll back restrictions in line with that model.

If the state is to fully recover, the next steps to do so must be made clear soon as without it the uncertainty and fear will contribute to more job losses and the demise of the once successful Texas Model.

https://www.texaspolicy.com/covid-19-must-not-break-the-successful-texas-model/

Read the full newsletter with figures and subscribe here. 

Hello Friends!
Thank you for reading my Let People Prosper newsletter! Please keep sharing it with others who may be interested in our productive discussions. We’ve got a lot to accomplish together, so I need your help in growing my subscribers. Many thanks in advance!
Humble Yourself: This is an important reminder given the rise again in many politicians’ desire to do something like lockdowns to deal with rising COVID-19 cases but nothing or something much more targeted is best. We can learn a lot from economists Friedrich Hayek and John Maynard Keynes, but more importantly from the Bible.
If you have any information to share along these lines, please send my way. Also, please unsubscribe at any time. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper.
Have a blessed rest of your weekend. And remember to humble yourself this week.
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper



​