Cuomo, Inslee Have the Better Grasp on Reopening Than Trump

(Bloomberg Opinion) -- Two powerful groups of governors are beginning to work on plans to reopen regional economies. A group of a half-dozen governors of northeastern states, led by New York’s Andrew Cuomo, is crafting a plan for ending shutdowns. And on the West Coast, Washington Governor Jay Inslee, along with his counterparts in California and Oregon, have formed a similar pact. Whatever plans they come up with may well serve as models for other states to follow -- or avoid.

This is only the latest way that the coronavirus crisis is showcasing the virtues of federalism. When a country’s policy is entirely determined by the central government, it’s possible for bad leadership to lead to disastrous policy. President Donald Trump's administration has bungled many aspects of this pandemic -- recognizing the danger much too late, failing to implement widespread testing, suggesting unrealistic timelines for reopening the economy, hawking unproven treatments and making various other mistakes. Trump also has declared that the governors have no power to reopen their economies, but as is often the case, he seems to be confused and incorrect.

And it's thanks to the U.S.’s federal structure that Trump’s initial delay and flailing didn't doom the nation’s pandemic response. Some strong state and local leaders have managed to do what the central government has not. One example is the San Francisco Bay Area, where a group of far-sighted mayors led by the city's London Breed, shut down the economy early on, keeping the outbreak small and contained. Various states have also formed regional consortiums to buy medical equipment, after the federal government failed to furnish the necessary supplies. Crucially, some states and cities are even starting their own programs to suppress the virus using contact tracing -- something the Trump administration seems to have ignored.

Reopening is crucial to avoiding an even worse economic setback than the one we already have. But it has to be managed very carefully. To reopen too soon, or without the proper safeguards in place, is to risk the virus roaring back, causing another lockdown and more months of economic devastation.

The first crucial step is to get new infections down to a manageable level. There are early signs that the coronavirus outbreak may have peaked in the northeastern U.S., just as it seems to have peaked in Italy and Spain. But this won’t be known for sure for a week or more. And even if the peak has come, the region will need to wait until new case growth reaches a low level before reopening; because not all infected patients can be relied on to isolate themselves completely, letting them have contact with the uninfected populace would be highly dangerous. This will take at least several more weeks.

Once it has been verified that new infections are at a low level, the economy can start reopening. But this can only happen if the government has a program to suppress new outbreaks before they can explode. The approach that has been successful in South Korea and Taiwan is one that Massachusetts and San Francisco are now trying to emulate: It involves widespread testing combined with vigorous contact tracing and isolation of potentially infected people. All credible plans for reopening the economy before the arrival of treatments or vaccines rely on test-and-trace approaches.

That means the northeastern states will have to make sure they have access to plentiful testing capacity. They will also need some method of contact tracing. Traditionally this is done manually, through interviews and phone calls, but this coronavirus is so contagious that it may require large-scale technical solutions. Companies such as Google and Apple now are working on contact- tracing apps that preserve privacy. The states should all choose the same app, so that infections can be traced across state lines. Finally, the states will need some way to follow up and ensure that people who test positive for the virus are properly isolated.

In addition to the essential test-and-trace approach, the states should consider additional tools to revive their economies. Masks might be required for office work or indoor shopping. Antibody tests may be able to identify people with probable immunity, who can then potentially be allowed to return to work. Large-scale screening for coronavirus symptoms, or at-home testing, might be used to find infectious individuals before test-and-trace systems would otherwise have picked them up. Obviously, approaches like these should only be adopted if experts give the green light.

If and when the Northeast and the West Coast succeed in reopening, it will provide an example for other regions, states, and cities to follow. Alternatively, if the northeast fails, it will yield important lessons that will make the next attempt more likely to succeed. Federalism will thus act as the laboratory of democracy, as it was intended. In the absence of a strong, wise and effective presidential administration, proactive regions are the next best thing.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

©2020 Bloomberg L.P.