by Jon Miltimore and Dan Sanchez
For nearly 20 years, Bridget McGinty and her sister ran Tastebuds, a popular lunch spot in downtown Cleveland.
On May 1, she made the torturous decision to close it forever after keeping it on life support for weeks after being closed due to the COVID-19 lockdowns.
McGinty’s story is tragically all too common.
America’s small businesses, the backbone of its economy, have been ravaged by the COVID-19 lockdowns.
A recent survey by Main Street America found that 7.5 million small businesses in America are at risk of closing their doors for good. A more recent survey showed that even with federal loans, close to half of all small business owners say they’ll have to shut down for good.
The toll has already been severe. In New York alone, stay-at-home orders have forced the permanent closure of more than 100,000 small businesses.
“Small businesses are taking a real beating,” Gov. Andrew Cuomo said, adding that minority-owned businesses were the most at-risk. “They are 90 percent of New York’s businesses and they’re facing the toughest challenges.”
Some might argue these closures are regrettable but ultimately acceptable losses in a necessary war against a uniquely deadly virus; but there are problems with this theory.
For starters, there’s no evidence lockdowns even helped tame the virus.
Belgium, the nation with the highest COVID mortality rate in the world, was also one of the first to initiate a strict lockdown. Spain and Italy experienced similar bad results with lockdowns, while other countries fared better in the experiment.
A detailed analysis by Bloomberg News shows there is no correlation between the severity of lockdowns and reduced COVID deaths, and public health officials in other countries are beginning to say the lockdowns weren’t necessary.
Overall, however, there seems to be a great reluctance to acknowledge the failure of the experiment, and for good reason.
For months Americans were told, Yes, lockdowns are painful; but they’re necessary to save lives. Many people stand to look rather foolish and feel rather guilty if they were to accept that the widespread economic and psychological damage Americans endured was for naught.
Secondly, it’s hard to miss how, for the most avid proponents of the lockdowns, their all-overriding necessity vanished once a new cause emerged.
George Floyd’s tragic and senseless death on May 25 has led to mass protests that have swept away the careful social distancing which for months Americans were told was essential for survival. “Stay home; Stay safe; Save lives” quickly gave way to new hashtags.
Now, thousands of protesters in cities across America march in crowds, flouting social distancing orders. To the extent that it’s peaceful, there is nothing wrong with that. Indeed peacefully protesting injustice is to be commended. But what adds insult to injury toward the lives and livelihoods that have been ruined by the lockdowns is that these protests are being applauded by many of the same people who days before were denouncing defiant businesses owners and lockdown opponents as “selfish” and “reckless” for urging lawmakers to open the economy.
Michigan Gov. Gretchen Whitmer has imposed one of the country’s most draconian lockdowns on her state, and when a barber performed civil disobedience by continuing to cut hair to put food on the table, she stripped him of his license. Yet, now she is marching alongside protesters in violation of her own stay-at-home order.
Instead of being smeared as “domestic terrorists,” as a small group of anti-lockdown demonstrators were, protesters crammed shoulder-to-shoulder outside a New York City hospital received a celebration similar to a Roman triumph (even though many were not wearing protective masks).
— Sarah Walton (@SarahWaltonNews) June 2, 2020
In New York, where 40 people were recently arrested for violating state social distancing laws, the Public Health Department even took steps to instruct protesters on how to reduce the spread of COVID-19 while violating the state’s own stay-at-home order. Meanwhile, dozens of public health officials and infectious disease experts signed a letter explaining why the risks of spreading a global contagion shouldn’t keep people from congregating to protest—if the cause is the right one.
“White supremacy is a lethal public health issue that predates and contributes to COVID-19,” the letter reads.
To be clear, what the signatories are saying is that during a pandemic it is unjust, selfish, and a public threat to protest lockdowns that are destroying the livelihoods of millions of Americans, but protesting injustice during that same global pandemic is just, righteous, and not a public threat.
This is the triumph of ideology over reason. The right to assemble and protest doesn’t hinge on the worthiness of a cause (which is subjective); it is inherent in our nature as human individuals, as recognized in the US Constitution.
Business-owners and workers had every right to oppose the unprecedented lockdown regime, which was a knee-jerk reaction incited by collective panic that was carried out by central planners who saw little problem running roughshod over the property rights of millions of Americans.
The rank hypocrisy described above is galling to anyone possessing a modicum of intellectual honesty, principled consistency, and self-awareness. But it must be especially grating to the millions of small business owners watching their dreams get destroyed by lockdown orders.
Daryl Austin spent 10 years of his life building a business with his wife: a small advertising company in Utah that helped other small business owners reach online customers. They were on the verge of getting a taste of the American Dream before the coronavirus arrived.
The COVID-19 lockdowns destroyed his business in eight weeks. His clients simply didn’t have the luxury of online advertising when they could barely stay afloat.
And now the American small business is getting stomped while it’s down, as thousands of businesses are being smashed, looted, and even burned by rioters. In Minnesota alone, more than 360 local businesses were destroyed in the riots that erupted amid the protests following Floyd’s death at the hands of Minneapolis police officers.
“I don’t know what we’re going to do,” cried KB Balla, a black firefighter who put his life savings in a sports bar that was destroyed. “We have worked so hard to get here. So hard.”
Few Americans would deny that small businesses have been ravaged by the lockdowns and riots. Yet there seems to be little visible concern for them (“they have insurance,” some blithely say). In any event, attention is fixed in other directions. The country remains gripped by political anger, accusation, and protest.
The crushing abuse of the American small business may be ignored, but its consequences will not be.
Small businesses account for 44 percent of all US activity, employ 55 percent of the US workforce, and represent nearly 90 percent of US companies. A majority of people use their personal savings to launch their business.
Will Americans continue to take the courageous path of entrepreneurship when they see they can be arbitrarily shut down like Bridget McGinty? Will people like KB Balla continue to put their life savings into a bar business only to watch helplessly as it’s pillaged by looters?
Will Americans continue to pour capital into these enterprises in a climate that seems at turns dismissive and hostile to their existence?
If not, that bodes very ill. As economist Robert Higgs argued, the Great Depression lasted so long chiefly because of “regime uncertainty,” which he defined as, “a pervasive lack of confidence among investors in their ability to foresee the extent to which future government actions will alter their private-property rights.”
Add to that what Stephen Carson has recently called “mob uncertainty,” and that is exactly what we are facing today.
The American economy has shed as many as 40 million jobs since the COVID-19 pandemic began. A recent study suggested 42 percent of US jobs aren’t coming back. That means any recovery will require substantial small business growth to get Americans back to work. If our economic future means anything to us, we need to stop the abuse of small businesses immediately.
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Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune.
Dan Sanchez is the Director of Content at the Foundation for Economic Education (FEE) and the editor of FEE.org.
Photo “Rioters’ Damage in Minnesota” by Lorie Shaull. CC BY-SA 2.0.