In battling the coronavirus pandemic, political leaders should heed the Pottery Barn rule: If you break it, you buy it.
It is a mantra used by stores to warn customers of the need to be careful with fragile merchandise. It is also a rule considered by presidents and secretaries of state when deciding whether to overthrow corrupt foreign regimes. Break it if we must, but we also have to fix it. We rebuilt Japan after dropping two nukes.
Out of an abundance of caution, for better or worse, Gov. Jared Polis ordered the suspension of sit-down services in restaurants and bars and the closure of gyms, casinos, theaters, coffeehouses, cigar bars, brewpubs and distilleries. In economic terms, this is a weapon of mass destruction. Polis said Wednesday more restrictions might ensue. Other governors have taken similar measures throughout the country.
No one should fault political leaders for imposing unprecedented measures to protect the public from a deadly and highly contagious disease. We establish and fund governments to protect the health and safety of the governed.
Just as authorities should protect the public’s health, they should protect the economy and commit to rebuilding it after economic disaster.
Everything indicates that Polis understands the need to repair damage caused by closing businesses. The governor applied for and received federal disaster area designation this week. That means small-business owners harmed by the COVID-19 closures can apply for low-interest Small Business Administration loans of up to $2 million.
That’s a good start, but businesses will need more than affordable cash they must repay.
When the Colorado Legislature reconvenes, a decision that should rest on the trajectory of the virus, this will be a different world. As businesses shut down throughout the country, the GDP could drop 10% or more — a decline worse than the depth of the recession in 2008.
The Legislature governed last year and since January as an entity awash in nearly a billion dollars of surplus revenue generated by a bullish market. Legislators had the luxury to protect ethnic hairstyles in the workplace, debate banning straws in restaurants, and torment the oil and gas industry for the sake of appearing woke.
Going forward, the Legislature will have more pressing concerns and a lot less cash to work with. Shuttered businesses don’t pay sales taxes. Furloughed waiters, bartenders, trainers, and other employees don’t generate income tax revenue. Regardless of whatever course the coronavirus takes, the economy will suffer severe, potentially long-term damage. Businesses closed, by a bomb or by fiat, are economic carnage.
The priority of the governor, the Legislature, President Donald Trump and Congress — from this moment forward into the foreseeable future — must be to allow the economy to heal. If it does not recover soon, the government won’t have much to tax. The federal government can send checks to consumers, but the money won’t help the economy or government if people have limited options for spending it on taxable services and goods.
The government can best help businesses by making capital affordable and accessible — even sending checks to businesses hit hardest — and by enacting reductions in taxes and regulations. Politicians should consider lowering or suspending licensing and inspection fees. Enact state and federal income-tax reductions, allowing employees and employers to keep more of what they earn. Suspend recent increases in the state minimum wage, which were suffocating small businesses before the virus invaded. Find barriers to survival and success and lower them.
By all means, stop harassing oil and gas production with onerous regulations. We will need the industry’s tax revenues to fund schools and other government services. This will be readily apparent within months.
Politicians should work together in a nondoctrinaire, bipartisan effort to get businesses up and running and employees back to work. Until that happens, nothing else will matter much.
By necessity, authorities broke a large chunk of the economy with extraordinary measures. They must help repair the damage by any means necessary.