Heritage’s Kay Coles James: On COVID 19 Economic Recovery and Protecting Both “Lives & Livelihoods”

May 22, 2020 Updated: May 26, 2020

How do we protect both the health and the livelihoods of Americans as we emerge out of this coronavirus outbreak?

How should America approach the re-opening of the economy?

And how has “misguided compassion” in our coronavirus response led to some unintended consequences?

In this episode, we sit down with Kay Coles James, President of The Heritage Foundation and chair of the National Coronavirus Recovery Commission. She has worked in the local, state, and federal levels of government, and she previously served as Director of the U.S. Office of Personnel Management under President George W. Bush.

This is American Thought Leaders 🇺🇸, and I’m Jan Jekielek.

Jan Jekielek: Kay Coles James, such a pleasure to have you on American Thought Leaders.

Kay Coles James: Well, thank you. It is a pleasure to be here.

Mr. Jekielek: So Kay, you are the head of the National Coronavirus Recovery Commission. You’re also the head of the Heritage Foundation. You’ve put together a group of some of the most distinguished experts on issues related to recovery. Tell me, where are we at today in terms of this recovery process?

Ms. James: Yes. And thank you. It is an excellent commission. We were delighted to bring together, as your program implies, some of the best thought leaders, both on healthcare and on the economy, from all sectors of the economy. It is a racially, culturally diverse group. And the reason that was important to us is because this virus has such an impact on so many people in so many different ways, and it is a very complex issue and it required thoughtful people to come together, do the hard work of trying to figure out one of the most difficult problems this country has ever faced.

Where are we right now? Well, as you know, states are beginning to open up. The president has turned his attention, not away from the healthcare crisis; it’s still focused there, but also focusing on how to get this country open, running, and the economy going. All of us are very concerned that sometimes the cure might be worse than the disease. So, while people are suffering physically [and] there’s a lot of hurt financially and emotionally, we don’t think on this commission that it has to be either or—either lives or livelihoods. We have to, we must, protect both. And it makes sense; good health policy is good economic policy. Good economic policy is good health policy.

So we’re seeing the country begin to open up. We’re hoping that they will follow the guidelines as they do that, and that it would be done safely so that we won’t see another spike in the numbers on the health side.

Mr. Jekielek: Kay, so how is your commission working with this 200-person recovery panel that the president has put together?

Ms. James: Yes. As you may know, I am also a member of that panel. And as a result of that, we have a straight line into the policymakers at the White House. So we are taking the recommendations as we are producing them. We didn’t wait till the end to produce one set. We are producing recommendations as we go along. And as soon as they are completed, I feed them into the larger commission at the White House, to the President, the Vice President’s office, and to relevant cabinet secretaries. We also make sure that that information is available to the governors, all of them, to the leadership, and all the members and staff on Capitol Hill.

So this isn’t one of those commission reports that is produced and then gathers dust. It is being used by policymakers already.

Mr. Jekielek: Fascinating. Let me try a difficult question here. At least this is difficult for me personally. I had Victor Davis Hanson on the show a little while ago, and one of the things that came out is a concern of many people out there; which is that the recommendations regarding coronavirus keep changing. For example: masks, [experts were saying] no masks, maybe masks, definitely masks. I mean, that was one example that he used. There’s many examples of this, and then of course, at the same time, never mind the recommendations that are coming from the federal government or state governments, there’s also a whole series of more information that’s going around in social media and so forth. How do we make sense of this from your view?

Ms. James: Well, first of all, I never miss an opportunity to say what a fan of Victor’s I am. He is extraordinary, and when he speaks, we all listen. But he’s absolutely right. It is very confusing. We are hearing reports daily coming from the White House report. [inaudible], FDA, we hear the governor speaking, and we even have to sit through and listen to the telephone and conferences coming from the mayors.

So what do we do with all of that? That’s one of the reasons that we believe that our particular commission is so important. It’s because we gather all of that data, all of that information, synthesize it and try to produce it in a format that’s actually usable. And he’s right. The advice that we’re being given changes, sometimes almost daily.

And I like to remind people that there’s a reason that they call it the novel coronavirus. And that’s because it’s brand new. What we know about this virus today is far more than what we knew in late February, early March or even April. And so the body of information and the knowledge base is growing. And so we have to extend a little grace to our policymakers, as they absorb this data as they research, do the fact-checking, do the analysis and try to make sense out of all of this. We’re hoping that at the end of this process with our commission, we will have in one place, a good source where all of that information has been gathered—the most up to date data, the most up to date information. But I think it’s important for the American people to understand, we’re in new territory. We are learning as we go. As the old adage says, we’re building the airplane as we fly it, and we just have to extend grace to our policymakers as they are struggling to catch up. And they will. They will catch up and we will have solid data and solid research that we can depend on, but give us time.

Mr. Jekielek: What do you make of President Trump taking hydroxychloroquine prophylactically?

Ms. James: I think it’s none of my business. [That’s] what I think. What the President does for his own personal health with his physician, that’s their decision, their choice. And I don’t understand why so many people find it necessary to opine about that. I do recognize that he is a leader. And that as a result of that people look to him and they want to either mimic what he does, or they take what he does seriously. But anyone with any grain of intelligence would have that conversation with their own physician and make the best choices for themselves.

Mr. Jekielek: Well, right, exactly. And obviously, these sorts of decisions are only made with the doctor helping figure out your particular health realities. I think this is something that’s bizarrely often glossed over.

So let me go on this hydroxychloroquine vantage point a little bit further. Does the commission have a position on any of the potential treatments for coronavirus including hydroxychloroquine and the antiviral remdesivir?

Ms. James: We do not. We do have some physicians that actually serve on the commission. But that is not our role. We are not prescribers. We are not medical doctors, most of us. And so as a result of that, our recommendations, usually centered around doing the research so that we can get to the bottom of this and figure out what works, what doesn’t work, and let physicians make those decisions with their patients.

Mr. Jekielek: Very interesting. It makes so much sense.

Ms. James: Not rocket science.

Mr. Jekielek: So you have recently published these 12 urgent recommendations just a few days ago and I’m wondering if you could outline those for me. This is basically the newest position of the Commission, as I understand it.

Ms. James: It is. … First of all, allow businesses in counties with low incidents to reopen. … you know, this is a very diverse country. And so the decisions that are made in one state may not necessarily apply to another. It needs to get down to the county and even perhaps the zip code level and where there are high incidents, we should allow them to reopen as soon as possible.

We recommend using stay at home orders sparingly and only when necessary. And sometimes it may be that in a community that is a hotspot, that we do have stay at home orders. But maybe they could be more specific and aligned with those individuals that could most benefit from those stay at home orders—the elderly, those with underlying conditions, and not applied to the entire population.

It makes sense to us that medical offices should be open. And I understand that in the early days, there was a concern about PPEs or the personal protection equipment, and they wanted to reserve that for those individuals who were on the front lines and so they shut everything down. We think those medical offices should get opened again. What one person views as elective surgery—if it’s your life, you may not view it as elective. We have patients suffering from cancer and other debilitating diseases that need to have their doctors appointments and to have their treatments.

We believe that this is a tremendous opportunity, and the president is already acting on this one, to use this as an opportunity to look at all the unnecessary regulations that we have in place. And we’re hoping that those that have been [relaxed] for a period of time, that we look seriously at them, and make a decision about whether or not those regulations should be gotten rid of entirely, particularly [the regulations that inhibited our pandemic response].

And I’ll go through the others rather quickly: Expand our liability protections. The trial lawyers are lining up. And we think we need some liability protections in place for businesses and even churches as people are beginning to look at their lawsuits.

Congress is already looking at the Paycheck Protection Program and some tweaks that they may do to that. So we’re pleased about that.

Tax liability for small businesses; make legislation and regulatory changes to expand access to capital for small businesses, incentivize research and development and infrastructure investments. We think that’s really going to help honor and enforce contractual insurance obligations. This virus has caused a lot of property damage and many businesses are getting their businesses interruption coverage, and we want to make sure that that insurance is available.

And eliminate all tariffs imposed since 2018. Trade freedom is absolutely vital to getting this country back on its economic footing. So in a nutshell, those are the things that we think are really urgent, should happen immediately, and would go a long way towards helping recovery economically.

Mr. Jekielek: The economy has been absolutely decimated by this voluntary economic destruction, so to speak. Let’s pretend that we would implement all of these 12 items robustly, what is the time period to getting back to something like what we had before?

Ms. James: One of the things that I have learned from the expert economists that are serving on our commission is that even they hesitate to make those kinds of predictions. So I certainly won’t, but we do know that the road to recovery is going to be a difficult one and probably longer than we anticipated initially. I don’t think that the real economic damage that has been done to this country is as evident or clear as it should be to the American people. Some of these measures that need to happen and need to take place will take months and perhaps some even years before we are fully reestablished and returned.

But I am optimistic about that. I believe that with the economic policies of this administration, that given the opportunity to get this economy open and running again, I am very optimistic about the eventual outcomes.

Mr. Jekielek: A while back I remember reading a column which I thought was very interesting. It talked about a state where there were restaurants that were looking to get back into business. But it turned out that the unemployment insurance that the people were getting, that the workers at the restaurants was actually getting more than what they made before. So it was very hard for the owners to entice the people to go back to work. And the University of Chicago’s Becker Friedman Institute released a report where they’re saying that the majority of people that are getting unemployment benefits, [those benefits] actually exceed the wages that they lost. In this kind of a scenario, how do people go back to work?

Ms. James: We need to fix that, and at the Heritage Foundation, we’re asking Congress to address that. There’s a phrase that I have used in other contexts, which I say “the unintended consequences of your misguided compassion.” You know, it was done for all the best and most compassionate reasons. But we know that it is best for the country, for the individual, for the businesses, to keep those individuals connected to their employers. And so when you institute policies, which are disincentives from going back to work, it really doesn’t help anyone. And I think that’s what we’re seeing right now with that particular policy. So we’re asking Congress to take a look at that and to put a fix in place so that it isn’t more profitable to stay home and gather a check from the government than it is to go out and earn a paycheck.

And let me add quickly to that, because I think it’s important to say. I would dare say most people would rather work than sit at home and gather a check. I don’t think this is a problem of blaming the worker, I think it is a policy problem and it needs to be fixed. People enjoy the motivation of getting up, getting dressed, going to work being useful and contributing to our country. So it needs to be fixed, but not because we want to punish the worker, but because it’s just good economic policy.

Mr. Jekielek: What do you make of this new stimulus package which is being proposed at present that’s being discussed?

Ms. James: Well, as I said around the virtual Mother’s Day dinner table as we celebrated by way of some of the technology that exists today: I hate to think of what I’m doing to my grandchildren— with the amount of that debt, to my great-grandchildren—because they will be assuming that. It is out of control. I think, and at Heritage, we talk about the fact that anything that we do should be targeted, should be limited to the coronavirus and should be transparent so that the American people can see exactly where that money is going.

It disturbs me greatly that every crazy liberal program is seizing upon the opportunity to fund it on the backs of coronavirus victims. This is not an opportunity to open the government coffers and fund every liberal experiment. It’s just not right. We as a people, we as Americans, are generous. We are kind; we want to help each other. That should be evident. But what’s happening through that bill is anything but. Well, it’s not a bill yet, but the suggestions of where the House Democrats want to take that. It’s mind-boggling. And I think we have to take a firm stand and make sure that we are not contributing even more to the debt for our children, our grandchildren—and the numbers are so high now—our great-grandchildren.

Mr. Jekielek: Okay, let me jump back to the point that stuck out to me from the 12 that we were discussing earlier, which was the 2018 tariffs. I’m thinking of course about tariffs pertaining to China, the ones I’m most familiar with. The purpose of the tariffs wasn’t to stop free trade, but to create a more free playing field. The argument is that the Chinese Communist Party has stacked things in its favor, dramatically abusing the rules of free trade, for its own benefit. So these tariffs are supposed to even the playing field. I’ve heard arguments back and forth in both directions. So I’m wondering, are you talking about those tariffs? Are you talking about something else?

Ms. James: Well we’re talking about the fact that so many US jobs are at stake here. And as we look at our tariff policy, we need to make sure that we are doing things that bring those jobs back home; of course, free trade, of course fair trade. And we’re talking more specifically about the administration removing section 201 and section 232 and section 301; those tariffs that would benefit all parties. We think that that would be a good policy move to make at this particular point in time.

Mr. Jekielek: So here we are in this very interesting moment. We have Georgia, which is opened up completely.

Ms. James: I don’t think that’s entirely fair, because the governor, when you say open up completely, that implies to people without any safety precautions in place. So they have opened up, but I think that the governor has done it responsibly by saying that where it makes sense, we still have to have social distancing and wearing a mask, and still encouraging us to use good health protocols by washing their hands and doing all the things that we know. So we say open up, but to open up safely. And all indications are that’s what’s happened in Georgia. So I think that caveat always has to be put in.

Mr. Jekielek: No, absolutely. And thanks for mentioning that. The new normal isn’t going to be exactly like what was in the past. I think that’s a very good point you’re making.

Ms. James: You know, it isn’t for a while, and I think all of us have got to come to terms with that. So what that means is that we will be changing how we operate, how we do business. We will be requiring things from clients as they come and go in our buildings in our restaurants in our offices, and it’s going to be that way for a while. And that’s what’s coming to be known as the new normal.

I think that there is a tendency of some of us to see that as an infringement upon our personal liberties and freedoms and responsibilities; I more than anyone am concerned about what I have seen from some of our government officials, as they have been overbearing, overreaching, autocratic, and have assumed upon themselves authority which they just do not have, constitutionally.

That’s not what I’m talking about here. I’m talking about what your grandmother told you anyway. Your grandmother told you to cover your mouth when you cough, your grandmothers said wash your hands frequently and often. And so, with a few more of those common sense health things added to our daily rituals, I think we can get this country open and running again, using common sense, using courtesy. We can do this.

Mr. Jekielek: Heritage Foundation supports deregulation, you’re supporting small business, and you see small business as the engine of building the country up—am I reading that right?

Ms. James: Oh, you certainly are. We really do believe that the small businesses in this country are the backbone of this country. And we know that so many people have their pathway to their dreams through opening up their businesses. So that’s Main Street in America and we care desperately about them and their ability to operate and get their business up and running again.

Mr. Jekielek: What is your advice? What would you say to the millions of small business owners right now who are suffering and are concerned that they’re not going to make it?

Ms. James: You know, that’s a tough one for me because just looking at the data, I can tell you, some of them are not going to make it. But even if they don’t, I have such hope and such aspiration for those individuals who out of true grit, put together a business and got it going.

It’s difficult. I’m not gonna say we’re all in the same boat because we’re not. Some are suffering more than others. But I think that with the things that make this country great; the ability to have a dream and to see it to fruition, even if it fails in a time like this, we as a country have got to surround those businesses, those individuals, be there. I’m hoping that the capital and liquidity opens up so that they can start over if necessary. I have great hope; I have great optimism about the future, but it’s not going to be without some very, very, very tough and dark days. But sometimes it’s darkest right before the dawn. So I am an eternal optimist. What can I say?

Mr. Jekielek: You’ve spoken a bit to the folks that are worried that we’re staying hunkered down too long. What would you say to the people that are worried that we don’t want to open too fast, or more people will die?

Ms. James: Certainly, and I understand that. I am in one of those high-risk categories. I am over 70. I have some underlying health issues. I get it. I understand how important it is. And I’m going to do everything that I can to protect my health. And I would encourage them to do that.

But I have never lived in fear. And I’ve never let anxiety rule. And so as a result of that, I think we have to go forward in confidence and in recognizing that there will be some risk involved. But you know, if we do what this commission is suggesting, that we protect lives and livelihoods, I think that we can get this country back on track. I know of individuals, and know personally people who have suffered horribly because of this disease; it’s nothing that I would wish on my worst enemy. And I wish people, some people would take that a little more seriously. But I also recognize the horrible, horrible situation that some of our individuals are going through financially and with their businesses. There’s no easy answer here. All I know is we must protect lives and we must protect livelihoods. And we can and we must, we must do both.

Mr. Jekielek: Some powerful words. Any final words before we finish up?

Ms. James: No, except that this is a great country. We’ve come through worse than this before. And I tend to be optimistic because I love the ideal that is America and I love the American spirit. It’s going to be difficult, difficult, difficult, but we’re going to get through this.

Mr. Jekielek: Kay Coles James, such a pleasure to have you on the show.

Ms. James: Oh, thank you. The pleasure is mine.

This interview has been edited for clarity and brevity.

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Follow Jan on Twitter: @JanJekielek