Gavin Newsom Cites Dubious Evidence That His Lockdowns Saved California’s Economy

California Gov. Gavin Newsom is, at last, putting an end date on the public health emergency he declared over two years ago to fight COVID-19. The governor isn't letting his order go without trying to convince the world yet again that the dictatorial powers he claimed during the pandemic saved both lives and jobs.

"Throughout the pandemic, we've been guided by the science and data—moving quickly and strategically to save lives," said Newsom in a Monday press release. "The State of Emergency was an effective and necessary tool that we utilized to protect our state, and we wouldn't have gotten to this point without it."

The emergency is now set to sunset on February 28, 2023.

Every state in the country issued some sort of emergency declaration in response to the pandemic. What makes California conspicuous is the length of its emergency declaration and the breadth of powers Newsom claimed under it.

Only 12 states still have states of emergency in effect, according to the National Academy for State Health Policy's tracker. That includes states like Texas and Georgia which started easing off their COVID security state pretty soon into the pandemic.

California didn't do that.

Over the course of 2020 and much of 2021, the Golden State governor issued a number of "reopening" frameworks that shut down some industries almost completely and allowed others to remain open only under strict protocols of masking, social distancing, and capacity restrictions.

The most controversial of them all was the second stay-at-home order Newsom issued in December 2020. That dictate reimposed a near-lockdown on the state. It prohibited activities that were considered largely safe by that point, including attending public parks and eating at outdoor restaurants.

That order kicked off a wave of rebellions and noncompliance among retailers and restauranteurs and created a surge in support for the recall election against Newsom.

The pandemic was a mass death event. It was also a very messy one for determining the effects of particular public policy interventions on COVID transmission, death, and economic performance. It'll take years of research to get anywhere close to definitively answering big questions about what policies worked and what didn't.

As Newsom's Monday press release notes, California can boast a COVID death rate significantly lower than less restrictive states like Texas and Florida. As Newsom's press release doesn't note, California also has a lower COVID death rate than leading lockdown states like New York, Pennsylvania, and Michigan.

But the governor goes beyond claiming he kept more Californians alive. His press release also argues he kept the state's economy alive with his regime of business closures and restrictions. And the evidence he cites for this is thin indeed.

It includes a UCLA study from June 2021 that found that large states with more stringent "nonpharmaceutical interventions"—including business closures and mask mandates—performed better on average than states with less stringent interventions. By controlling the virus, people were more willing to engage in economic activity, the argument goes.

There's reason to think the UCLA study doesn't tell the whole story, however.

COVID, and COVID mitigation measures, obviously had varying effects on different industries. The authors of that study did exclude small states that might skew results by being overly reliant on one industry but otherwise didn't correct for a state's economic composition.

Plausibly, Texas did worse economically during 2020 because COVID-19 tanked demand for the oil and gas that the state produces. Likewise, tourism-dependent Florida isn't going to fare too well during a pandemic when far fewer people are going on vacation. The pandemic's shift to a world of working from home, grocery delivery, and binge-watching Netflix was probably a boon to California's tech sector.

And while California did better than Texas and Florida economically under the UCLA measure, Texas and Florida also outperformed harshly locked down New York.

An April 2022 working paper that adjusts a state's economic performance by industry composition finds Texas and Florida outperformed California.

Newsom's press release also throws in some incredibly silly stats that allegedly prove the state's tough approach to the pandemic produced good economic results. It claims that the state created the most businesses of any state since the start of 2019. It's odd to rope in a full year of pre-pandemic stats to prove that the state created a lot of businesses during the pandemic. That measurement also doesn't adjust for California's larger population or the other half of the ledger—the number of businesses that failed in the state. A quick look at the numbers shows that Texas gained more businesses and lost fewer per capita than California during the pandemic.

The focus on the economic variation in performance between states obviously doesn't account for the impacts that lockdown orders had on individual liberty, constitutionally limited government, and people's general psychological well-being. On all three metrics, we were clearly made worse off by the COVID leviathan.

The pandemic was a messy time. It will take lots of time and research to truly parse its impact and the impacts of policy responses to it.

But if Newsom is going to claim that his decision to close whole swaths of the economy by executive fiat was costless, he should try to find more convincing evidence.

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