We know employment numbers are bad, but this is historic. After peaking in February 2020 at 129,437,450, the numbers for April 2020 reflected the largest drop in employment in U.S. history at over 20 million — down to 109,052,774. To locate monthly employment that low, you have to reach back to March 2011. Though the cause of the current drop is different, the depth of it outweighs the recession of 2008. And if history is a teacher, things will get worse before they get better.
At the time that the 2008 financial crisis hit, the U.S. employed 115 million and it took two years to reach its low of 107 million. It then took another three years to recover to the 115 million employment level. Though I believe the current collapse was avoidable with a more freedom-oriented approach, we are here now and have to find our way back.
For business leaders to recover, it will require a tactical approach, not unlike the survival of prisoners of war after the Korean conflict. They inform us that the prisoners of war that died were the pessimists and the optimists. The soldiers that lived were the realists. They understood and accepted that it was going to take a while to be released. They did not despair, and they did not have an unrealistic hope. This combination helped them make it through.
Getting our strong economy back will likely be a slog. I am encouraging the operator of my recent business investment to learn from the Great Depression success stories; to remember that today’s best-selling beers survived both the Prohibition and the Great Depression. They focused on tactical maneuvers adopting a “last man standing mindset.” They directed their energy to short-term cash flow, accepted small wins and endured.
Political leaders also have a part to play in getting our economy back on track — now and in the future. Here are three suggestions.
First, admit that groupthink prevailed, and that the shutdown policy was a colossal mistake. The government added a new risk to engaging in business. With a deeper belief in private property rights and an honest look at the CDC’s limitations we would have executed a more modest use of emergency powers. For example, we now know that 66% of the COVID-19 hospitalizations in New York resulted from people who were at home! The government can request the quarantine of the sick, provide suggestions and supplies, but lockdowns and quarantining the healthy should not have been on the table.
Second, limit the emergency powers of the executive branch in Colorado through a state constitutional amendment. Former Gov. Ritter said the use of emergency powers by Gov. Polis was “unprecedented." Initially, we were told that the extraordinary intervention would be limited to “buy some time to fix the supply chain,” but it kept expanding, limiting constitutionally protected freedoms. With a check against expanding emergency powers, Colorado’s businesses, families and places of worship would have been better served.
Third, limit the duration for emergency powers and require legislative approval for an extension. In this scenario, for example, a super-majority of the legislative branch would have been required to approve the extension and the governor would not have had such far-reaching power to shutter businesses. The state could still support the hospitals with ventilators and the front line with masks, but the constitutional rights of the people would have more quickly returned.
Other benefits to this approach? Countless businesses that have gone under would have survived. And, we would have developed more herd immunity. And, the other mental and physical health casualties which are now predicted to far outnumber COVID-19 deaths would have been lower.
It is our deep desire to see the economy come roaring back, but it will be difficult since a business does not know what to expect. Government should improve the odds of a quick recovery by expressing some remorse for its overreach and providing a defined path to limit its power in the future.
Barry Farah was a Republican candidate for Colorado governor in 2018. He has successfully launched 12 businesses and authored three books.