Shu-Yi Oei (Boston College) & Diane Ring (Boston College) present Regulating In Pandemic: Evaluating Economic And Financial Policy Responses To The Coronavirus Crisis today as part of the Indiana/Leeds Summer Zoom Tax Workshop Series hosted by Leandra Lederman (Indiana) and Leopoldo Parada (Leeds):
In March of 2020, the United States began to confront a fast-moving public health crisis. Over the next two and a half months, the COVID-19 pandemic killed more than one hundred thousand Americans and wrought unprecedented economic damage across the country. Some forty million U.S. workers filed for unemployment between mid-March, when the first stay-at-home orders were issued, and the end of May, by which point every U.S. state had begun to “reopen” in some capacity.
In responding to the economic aspects of the COVID-19 crisis, U.S. policymakers confronted three interrelated but potentially conflicting policy priorities: (1) providing social insurance and a social safety net to individuals and families in need; (2) managing systemic economic and financial risk; and (3) encouraging critical spatial behaviors to help contain COVID-19 transmission.
This Article first shows how the confluence of these three policy considerations–and the conflicts among them–presented a unique regulatory challenge for policymakers. Second, this Article tracks the major U.S. federal legislative responses to the economic and financial concerns raised by the COVID-19 crisis, including the “Families First Coronavirus Responses Act” (H.R. 6201), and the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES” Act (H.R. 748), and various state initiatives, to reveal how the U.S. balance between these three policy priorities shifted. Initially, the U.S. pursued an injunctive (i.e., lockdown) approach, prioritizing spatial behaviors and enacting economic legislation that supported those behaviors. Over time, however, the U.S. has shifted to more familiar liability-rules approaches, relying on staged and sector-specific direct regulation and private contracting that increasingly prioritizes economic concerns.
Ultimately, this Article argues that though a reversion to injunctive management of the COVID-19 crisis in the U.S. remains possible, the U.S. response represents a case of how, as a high-impact shock loses salience, a regulatory regime reverts to longstanding established tools and preferences. As countries across the globe face similar public health concerns and policy tensions, they too may see shifts in policy formulation across time, though the specific contours will likely reflect the background economic, financial, and social insurance regimes in each jurisdiction, along with baseline preferences and institutional choices that have been made regarding government oversight and regulatory design.