Yet even the desirability of targeting support, gov’t picking future winners, seems a bit suspect. It’s always an attempt to avoid helping those who don’t need it, or avoid helping too much those wasting it, and corrupt gov’t has mostly proven bad at such targeting of firms.

My guess is that industry targets, rather than firms in an industry, are better spent in helping the survivors of that industry make the needed adjustments, in Specialization and Trade, to survive (live long!) and then prosper in the crisis and post-crisis periods.

So, in Singapore, the government is paying both quarantined employees and their employers for the mandatory absence, because otherwise it would be a public good with private cost, and too many people wouldn’t comply.

And in Texas after Hurricane Harvey, if the Army Corps of engineers needs to flood a thousand homes to save one hundred thousand, then that’s like a “taking”, and those homeowners should receive just compensation for the public use benefiting from the sacrificial destruction of their private property.

In the case of what amounts to mandatory universal homeschooling, that is a big, costly private disruption with huge potential public benefits.

There is nothing un-libertarian or un-American about any of that, it’s the basic idea behind the 5th Amendment takings clause. When the state takes extraordinary action out of compelling public interest that would be unlikely to be coordinated spontaneously in sufficient time, it ought to fairly compensate those individuals who would be especially put out by the measure. An incidental benefit of that compensation might also be to stabilize and smooth consumption and demand.

Also, perhaps at some point, there needs to be a discussion of the government’s regulation of the number of hospital beds through “Certificates of Need” before you can build a new hospital. Maybe the market would still fall short of ICU beds, but what we have is limited supply due to government regulation and monopoly protection by the healthcare regulators.

If it does turn into a recession it would be the first one centered, concentrated in the services sectors rather than the manufacturing sectors. In this case may of the leading, coincidence economic indicators we have long watched for information on the manufacturing sectors may not work as we expect this time. In other words, the level of uncertainty will be greater than usual.

In those cases when private schools are liable for not being open, it’s common for families to get prorated tuition reimbursement as well as reliance-based compensation for costs associated with having to “cover”, especially at the last minute.

Whether to make culpable striking labor potentially jointly or fully liable for these types of costs is a political decision, and many systems are unwilling to do so, regardless of the justice of the claim.

It’s officially illegal for many public servants to ever strike at all, but when they do, non-prosecution agreement is usually part of the strike-ending deal, as well as expungement and compensation for any union strike leaders who may have gotten arrested.

Those deals should be illegal, which would fit in with the effort to rein in content decree / settlement abuse. Otherwise the law is a joke, just another bargaining chip.

Turning to secondary effects, you write: “In theory, what you want is precisely targeted support, aimed at keeping alive the firms that deserve to survive short-term effects.” As you note, it is quite unrealistic to expect this from any actual government. But, in fact, a general stimulus, aimed merely at maintaining overall spending in nominal terms, will suffice: it can be left to the market to sort out which particular firms should fail and which survive.

They can also pay for test kits.

Perhaps a simple rule of thumb is “if doing what we say will help the crisis costs you money, we will make you whole.”