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‘The Money Doctor’ slams COVID lockdowns as the biggest policy mistake in modern times

Goh Seng Chong—Bloomberg/Getty Images

Stringent COVID-19 lockdown measures were a historic failure by lawmakers, according to “the money doctor” Steve Hanke, with the economist insisting the lives that were saved were heavily outweighed by the harsh fallout shutdown measures created.

After researching lockdowns that were imposed in the spring of 2020—around the time the WHO declared the new coronavirus outbreak a pandemic—Steve Hanke, a professor of applied economics at Johns Hopkins University, labeled the pandemic-induced shutdowns “the biggest policy mistake in modern times.”

“When it comes to COVID, epidemiological models have many things in common: dubious assumptions, hair-raising predictions of disaster that miss the mark, and few lessons learned,” he said. “The lives saved were a drop in the bucket compared to the staggering collateral costs imposed.”

‘A global policy failure’

In a research paper published by conservative think tank the Institute of Economic Affairs (IEA) on Monday, Hanke—along with researchers from Lund University in Sweden and Danish think tank the Center for Political Studies—described lockdowns as “a global policy failure of gigantic proportions” after conducting an analysis of thousands of studies on the impact lockdowns had on COVID-19 mortality rates.

Questions about the IEA’s credibility have been raised in recent years thanks to opacity around its donors, claims of it being a hard-right lobby group, and its ties to former U.K. Prime Minister Liz Truss and her disastrous economic policies—which pushed Britain to the brink of recession in the space of a month.

Hanke himself, however, is a well-respected figure in economics.

He served as a senior economist on then-President Ronald Reagan’s Council of Economic Advisers in the 1980s, and in the 1990s advised several Eastern European countries on economic policy as an academic expert on hyperinflation, successfully predicting the collapse of the Russian ruble in 1998, calling the currency’s major devaluation which led to economic crisis in Russia.

His 50-year career, which has seen him advise heads of state and policymakers in Bulgaria, Venezuela, and Indonesia, has earned him the moniker “the money doctor.”

In more recent years, Hanke has served as a professor at Johns Hopkins University, an institution that spent three years collecting data on COVID cases worldwide and became a well-respected authority on the global transmission of COVID-19.

After comparing government interventions of varying strictness levels, the researchers estimated that the average lockdown imposed across Europe and the U.S. in the spring of 2020 reduced mortality by just 3.2%.

“This translates into approximately 6,000 avoided deaths in Europe and 4,000 in the United States,” they said, describing lockdowns as having had “a negligible effect” when it came to quashing COVID-related deaths. “In comparison, there are approximately 72,000 flu deaths in Europe and 38,000 flu deaths in the United States each year.”

Last year, the U.S. hit a grim milestone of more than 1 million deaths from COVID-19—just over two years after detecting its first case of the virus.

Voluntary changes in behavior, such as social distancing, played “an important role” in mitigating the effects of the pandemic on public health, Monday’s research paper said, while the closure of nonessential businesses appeared to have had a more profound impact than other interventions.

Hanke isn’t the first academic researcher to cast doubt over the efficacy of COVID lockdowns.

In 2021, economist Douglas W. Allen, a professor at Canada’s Simon Fraser University, argued it was possible that “lockdown will go down as one of the greatest peacetime policy failures in Canada’s history,” insisting that lockdowns had had, “at best, a marginal effect on the number of COVID-19 deaths.”

Discussion around the tradeoff between lives saved by lockdowns and the resulting economic downturns they triggered has long been ongoing, with some arguing that even the most draconian restrictions did not go far enough while others have questioned whether the “cure is worse than the disease.”

The U.S. economy suffered one of the sharpest contractions in its history in 2020 as the pandemic took hold, with the crisis sparking long-term changes to the U.S. labor market and the IMF projecting that tens of trillions of dollars will be lost to the global economy by 2024 thanks to COVID-19.

However, in early 2022, a study led by researchers from the University of Michigan found that widespread lockdowns in the U.S. during the first six months of the pandemic potentially saved more lives than the number of lives that were potentially lost to the resulting economic downturn.

Other researchers have concluded, meanwhile, that wide-scale lockdowns did indeed save millions of lives.

This story was originally featured on

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