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"Sledgehammer" policies will destroy us; we need open economy says Johns Hopkins professor

Kitco News

Government-mandated policies of self-isolation will cripple the American economy, and the draconian measures taken to contain the pandemic are not necessary, this according to Steve Hanke, professor of applied economics at Johns Hopkins University.

“With the economy shutting down, the cost is going to be absolutely phenomenal,” Hanke told Kitco News.

Hanke likened the response to the virus from the U.S. and many Western European nations to a “sledgehammer.”

“The sledgehammer approach being used in most European countries and the United States is turning out into a very costly mistake. And what I mean by sledgehammer is they haven’t planned anything, they just have a blanket program where we’re all locked in our condos or houses and can’t move, and the economy shuts down,” he said.

Instead, governments should take the model that Sweden has set, Hanke said.

“If you look at some place like Sweden, Sweden has a very laissez-faire, very targeted approach, and they’re doing very well. The kindergartens are still open, the grade schools are still open, most factories are still open in Sweden. They are not imposing this sledgehammer and essentially wiping out the economy,” he said.

“The places that have done well in controlling and counting properly the victims of this pandemic are countries that have small, efficient governments, and free market economies. You look at Singapore, Hong Kong, they’re right up there,” he said.

Additionally, these nations have all practiced the “five P’s”: prior preparation prevents poor performance, Hanke said.

The U.S. is now the country with the highest number of COVID-19 cases in the world, and the majority of the country has not yet been tested.

“Wherever the five P’s have not been applied, you have a disaster,” he said.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.