Eakinomics: Makin’ (sure there’s) Bacon

Eakinomics: Makin’ (sure there’s) Bacon Yesterday, President Trump surprised me (okay; actually, nothing is a surprise anymore) by announcing his desire “to use the Defense Production Act (DPA) to order [meat-processing] companies to stay open” to keep meat production at current levels. Huh? The DPA is a 1950s-era law (since reauthorized countless times) that gives the president three broad powers: (1) to require that businesses prioritize and accept government purchases of goods deemed necessary for national defense; (2) to allocate goods, materials and facilities to promote national defense; and (3) to control the civilian economy so that materials and goods are available for national defense. So the basic idea sounds like: “Chicken is essential for the national defense; Tyson’s is hereby ordered to produce chicken.” That’s fine, except it doesn’t seem to fall in (1), (2), or (3) because Tyson’s wants to produce chicken. It exists to produce chicken. We do not need a presidential order to produce chicken. Another report, however, indicated that “Trump said the order would address what he called ‘liability problems’ in the food supply chain.” Ah, liability issues might make more sense. But what liability? If a worker becomes sick with COVID-19 and cannot work, their insurance has already been ordered to pick up the health costs. If the infection occurred from a workplace exposure – and the worker could 100 percent show this as a fact – the individual could file for workers' compensation, but that is a liability of the state workers' compensation system, not the individual firm. But there is also the chance of lawsuits arguing that the workplace was unsafe, or other claims stemming from operating an essential business during a pandemic. If so, there should be a standard that limits lawsuits to those situations where the firm knew that the individual would be exposed to COVID-19 and acted in reckless disregard of this fact. Ignore the DPA. The real issue is making sure that there are appropriate legal protections for the operation of essential businesses in the midst of a pandemic. The virus is a big enough economic threat; the legal system should not become one, too.