A few people have suggested I should respond directly to Professor Foster's arguments on #qanda last night rather than just saying I was appalled.

I thought the other panelists did an excellent job of explaining why her arguments were unsound. There's no need to say more.

But fwiw here are some reasons why I think Prof. Foster is wrong.

1) There is no feasible way to quarantine the high-risk, even if one could identify *all* high-risk. Inevitable mixing of the high- and the low-risk would lead to the pandemic devastating the high-risk population
2) In economic terms, the virus is a deadly negative externality, and a rapidly growing one at that . Because of the negative externality, one cannot expect individually-optimal risk-taking decisions to lead to a socially optimal outcome.

(feels wrong to even use that jargon)
This dynamic underlies the quantitative results in recent economics papers that find very large economic losses from letting the pandemic get out of control

(please email me if you want a list of such papers)
3) While it is true that one wants to take broad notions of well-being into account when thinking of the costs of the shutdown, one also needs to take broad notions of well-being into account when thinking of the benefits of the shutdown in terms of reduced illness and death.
It is misleading to emphasise broad notions of well being only for the costs saved and not for the benefits forgone.
4) The precautionary principle suggests that we should be very careful when the the consequences of getting the calculation wrong on one side (a prolonged recession *and* a rampant pandemic) are worse than getting the calculation wrong on the other side (a prolonged recession)
More generally, economists should be more humble.

We should help create *space* for public health experts to craft the policy (as they have been doing with great success) and in light of the health policy help craft economic policies that best mitigate the economic fall out.
Even though it is imperfect, wage subsidies like JobKeeper are a part of such response. But there are many other things we can do to improve the safety net.
In my view, as economists, we should be focused on the use of economic tools to mitigate all the suffering caused by this crisis, not just the narrowly economic but also the broader loss of well-being.
That is what we can best contribute.

We should not be using spurious economic arguments to undermine the views of public health experts.
Disclaimer: these views owe a lot to my conversations with @SHamiltonian @BruceJPreston @profholden over recent weeks.

But they shouldn't be help responsible for any mistakes or omissions here.
or held responsible either.
You can follow @chrisedmond.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: